Document:

EX-10.4

  Exhibit 10.4

   

  EXECUTION VERSION

   

   

  AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

   

  This	AMENDMENT	NO.	1	TO	LOAN	AND	SECURITY	AGREEMENT	(this

  “Amendment”) is dated effective as of November 4, 2022 and entered into by and among, ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (“Company”), GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin limited liability company (“Great Lakes”), CLEAN ENERGY SOLUTIONS, LLC, a Wisconsin limited liability company (“Clean Energy”), ORION ASSET MANAGEMENT, LLC, a Wisconsin limited liability company (“Asset Management”), ORION TECHNOLOGY VENTURES, LLC, a Wisconsin limited liability company (“Orion Technology”) and together with the Company, Great Lakes, Clean Energy and Asset Management, collectively, “Existing Borrowers), STAY-LITE LIGHTING, INC., a Wisconsin corporation ("Stay-Lite") and VOLTREK, LLC, a Massachusetts limited liability company ("Voltrek" and together with Stay- Light, the "Additional Borrowers"), and BANK OF AMERICA, N.A., a national banking association, as Lender (“Lender”). Capitalized terms used herein but not otherwise defined shall have their respective meanings as defined in the Loan Agreement (defined below).

   

  RECITALS

   

  WHEREAS, the Existing Borrowers, the Guarantors and the Lender have entered into that certain Loan and Security Agreement dated as of December 29, 2020 (as amended, restated, extended, supplemented or otherwise modified, the “Loan Agreement”).

   

  WHEREAS, the Obligors have requested that (i) the Additional Borrowers be joined to the Loan Agreement as "Borrowers" thereunder (the "Joinder") and (ii) the Lender agree to certain amendments to the Loan Agreement as set forth herein.

   

  WHEREAS, as of the Amendment Effective Date (defined below), the Lender consents to the Joinder and agrees to amend the Loan Agreement, all on the terms and conditions set forth herein.

   

  AGREEMENT

   

  NOW THEREFORE, for and in consideration of the premises and the mutual covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Existing Borrowers, the Additional Borrowers and the Lenders agree as follows:

   

  1.AMENDMENTS TO THE LOAN AGREEMENT.

  1.1Loan Agreement Amendments. As of the Effective Date (as defined below), the Loan Agreement is hereby amended (a) to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text), all as set forth in the pages of a conformed copy of the Loan Agreement attached as Annex I hereto and (b) to amend and restate Schedules 7.8.1, 8.5, 8.6.1, 9.1.4., 9.1.11, 9.1.14 and 10.2.2 to the Loan Agreement as set forth on Annex II hereto (the “Amended Loan Agreement”).

   

  1.2No Novation. The execution and delivery of this Amendment shall not constitute a novation or termination of the Loan Agreement or of the credit facility or any other Loan Document thereunder or in respect thereof. Notwithstanding that the cover page of the Loan Agreement is dated “as of December 29, 2020”, the changes to the Loan Agreement effected by this Amendment shall be effective as of the satisfaction of the conditions to effectiveness set forth in Section 3 of this Agreement.

   

   

   

   

  

  The signature pages to the Loan Agreement may be omitted or modified, however to reflect the parties to the Amended Loan Agreement, and the execution and delivery of this Amendment shall be deemed to be an execution and delivery of the Amended Loan Agreement

   

  2.JOINDER OF ADDITIONAL BORROWERS.

  2.1Loan Agreement. Each Additional Borrower agrees to, and does hereby, become a “Borrower” under the Loan Agreement and become bound by the Loan Agreement with the same force and effect as if it were an original party to the Loan Agreement. Each party hereto hereby acknowledges and agrees that each reference in the Loan Agreement to a “Borrower” shall also mean and be a reference to each Additional Borrower.

   

  2.2Joint and Several Liability. Without limiting the generality of the foregoing, subject to and in accordance with the Loan Agreement, each Additional Borrower hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Lender the prompt payment and performance of, all Obligations of each Borrower to Lender arising under the Loan Agreement and any other Loan Document (and, for the avoidance of doubt, each of the Existing Borrowers hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Lender the prompt payment and performance of, all Obligations of each Additional Borrower to Lender arising under the Loan Agreement and any other Loan Document).

   

  2.3Security Interests. Without limiting the generality of the foregoing, subject to and in accordance with Section 7 of the Loan Agreement, each Additional Borrower hereby assigns and pledges to Lender, its successors and assigns, for the ratable benefit of the Secured Parties and hereby grants to Lender, as security for the payment or performance in full of the Obligations, a security interest in and Lien on all right, title and interest of each Additional Borrower in, to and under any and all of the Collateral now owned or at any time hereafter acquired by each Additional Borrower or in which each Additional Borrower now has or at any time in the future may acquire any right, title or interest.

   

  2.4Representations and Warranties. Each Additional Borrower represents, warrants, acknowledges and affirms with respect to itself and its properties, that each of the representations and warranties contained in the Loan Agreement and the other Loan Documents as it relates to such Additional Borrower is true and correct in all material respects (except where any such representation or warranty is otherwise qualified by materiality, in which case such representation or warranty is true and correct in all respects) as of the date hereof, with the same effect as though such representation had been made on and as of the date hereof after giving effect to the joinder of each Additional Borrower as an additional Borrower and Obligor under the Loan Agreement and the other Loan Documents.

   

  2.5Loan Documents. Each Additional Borrower agrees to be obligated and bound by all the terms, provisions and covenants under each of the Loan Documents which are binding on each Existing Borrower.

   

  2.6Acknowledgement. Each Existing Borrower hereby acknowledges and consents to the Loan Documents, as supplemented by this Joinder Agreement, and confirms and ratifies in all respects the Obligations of each Existing Borrower under the Loan Documents to which it is a party, as so supplemented, which shall remain in full force and effect.

   

  2.7Borrower Agent. The Additional Borrower hereby appoints the Borrower Agent as representative and agent for all purposes under the Loan Documents as further specified in Section 4.3 of the Loan Agreement.

   

   

  2

  

  3.CONDITIONS.

   

  3.1Effectiveness. This Amendment shall become effective upon receipt by the Lender of the following in form and substance acceptable to the Lender (the “Amendment Effective Date”):

   

  (a)a duly executed counterpart of this Amendment which, when taken together, bears the authorized signatures of each Existing Borrower, each Additional Borrower and the Lender;

   

  (b)with respect to each Additional Borrower, Lender shall have received, in proper form for filing or recording, all filings or recordations necessary to perfect its Liens in the Collateral, as well as UCC and Lien searches and other evidence satisfactory to Lender that such Liens are the only Liens upon the Collateral, except Permitted Liens;

   

  (c)Lender shall have received a certificate, in form and substance satisfactory to it, from a knowledgeable officer of the Borrower Agent certifying that, after giving effect to this Amendment, (i) no Default or Event of Default exists and (ii) the representations and warranties set forth in the Loan Agreement are true and correct in all material respects;

   

  (d)Lender shall have received a certificate of a duly authorized officer of each Borrower, certifying (i) that the copies thereto attached of the Borrower’s organization documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that a thereto attached copy of resolutions authorizing the Joinder and the execution and delivery of this Amendment is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified, revoked or contradicted by any other resolution; and (iii) to the title, name and signature of each Person authorized to sign this Amendment and other Loan Documents;

   

  (e)Lender shall have received a written opinion of Reinhart Boerner Van Deuren s.c., as counsel to Borrowers, as well as of any local counsel to the Borrowers, in form and substance reasonably satisfactory to Lender;

   

  (f)Lender shall have received good standing certificates for each Additional Borrower issued by the Secretary of State or other appropriate official of such Additional Borrower’s jurisdiction of organization and each jurisdiction where such Additional Borrower’s conduct of business or ownership of Property necessitates qualification and where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

   

  (g)Lender shall have received, in satisfactory form and substance, all documentation and information required to comply with any obligations under any "know your customer," anti-money laundering or other requirements of Applicable Law or other requirements set forth in Section 12.17 of the Loan Agreement; and

   

  (h)copies of such other documents and information as the Lender may reasonably request.

   

  4.Post-Closing Covenants.

   

  (a)Within ten (10) days of the Effective Date, the Borrowers shall deliver evidence of property insurance and liability insurance in form and substance satisfactory to the Lender in its sole discretion, which shall list the Lender, as Lender Loss Payee and an Additional Insured, respectively.

   

   

  3

  

  (b)Within thirty (30) days of the Effective Date (or such longer period of time as the Lender may agree in writing in its sole discretion), Voltrek shall either (i) deliver or cause to be delivered to the Lender the fully-executed Deposit Account Control Agreement with respect to the checking account maintained at Enterprise Bank, duly executed by Enterprise Bank, Voltrek and the Lender or (ii) deliver evidence of the establishment of standing instructions that require Enterprise Bank to sweep, on a weekly basis, all funds in the checking account maintained at Enterprise Bank in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) to a Controlled Account, in each case, in form and substance satisfactory to Lender in its sole discretion.

   

  5.REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.	In order to

  induce the Lender to enter into this Amendment, each Obligor that is party to this Amendment represents and warrants to the Lender that the following statements are true, correct and complete as of the Amendment Effective Date after giving effect to this Amendment:

   

  5.1Power and Authority. Each Obligor has all corporate power and authority to enter into this Amendment.

   

  5.2Corporate Action. The execution and delivery of this Amendment and the performance of the obligations of each Obligor hereunder and under the Amended Loan Agreement have been duly authorized by all necessary corporate action on the part of such Obligor.

   

  5.3No Conflict or Violation or Required Consent or Approval. The execution and delivery of this Amendment and each Obligor’s performance of this Amendment and the Amended Loan Agreement do not (a) require any consent or approval of any holders of Equity Interests of such Obligor, other than those already obtained, (b) contravene the Organic Documents of any Obligor, (c) violate or cause a default under any Applicable Law or Material Contract, or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Obligor.

   

  5.4Execution, Delivery and Enforceability. This Amendment has been duly executed and delivered by each Obligor and is the legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms, except as enforceability may be affected by applicable bankruptcy, insolvency, and similar proceedings affecting the rights of creditors generally.

   

  5.5No Default or Event of Default. No event or circumstance has occurred and is continuing that constitutes a Default or Event of Default.

   

  5.6Representations and Warranties. Each of the representations and warranties contained in the Loan Documents is and will be true and correct in all material respects, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects as of such earlier date.

   

  6.EFFECT OF AMENDMENT; RATIFICATION. From and after the Amendment Effective Date, all references in the Loan Documents to the Loan Agreement shall mean the Loan Agreement as amended hereby. Except as expressly set forth herein, the Loan Agreement and the other Loan Documents, including the Liens granted thereunder, shall remain in full force and effect, and all terms and provisions thereof are hereby ratified and confirmed.

   

  7.APPLICABLE LAW.

   

   

  4

  

  7.1THIS AMENDMENT AND ALL CLAIMS, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS

   

  7.2EACH OBLIGOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER COOK COUNTY, ILLINOIS AND THE NORTHERN DISTRICT OF ILLINOIS, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. OF THE LOAN AGREEMENT.

   

  8.NO WAIVER. The execution, delivery and effectiveness of this Amendment does not constitute a waiver of any Default or Event of Default, amend or modify any provision of any Loan Document except as expressly set forth herein or constitute a course of dealing or any other basis for altering the Obligations of any Obligor.

   

  9.COMPLETE AGREEMENT. This Amendment constitutes a Loan Document and, together with all other Loan Documents, sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter.

   

  10.CAPTIONS; COUNTERPARTS. The headings and captions herein are intended solely for convenience of reference and shall not be used to interpret or construe the provisions hereof. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by telecopy), all of which taken together shall constitute but one and the same instrument.

   

  11.REAFFIRMATION. Each Obligor hereby consents to the Joinder and this Amendment and the transactions contemplated hereby and hereby confirms its respective pledges, grants of security interests and other obligations (including, with respect to the Guarantors, their guaranty obligations) under the Loan Agreement and each Loan Document to which such Obligor is a party, as applicable, under and subject to the terms of the Loan Agreement and the other Loan Documents, and agrees that, notwithstanding the effectiveness of the Amendment, such pledges, grants of security interests and other obligations, and the terms of the Loan Agreement and the other Loan Documents, are not impaired or affected in any manner whatsoever, except as expressly set forth herein, and shall continue to be in full force and effect and shall also secure all obligations as amended, reaffirmed, increased or otherwise modified pursuant to the Amendment.

   

  12.RELEASE. For and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Obligor (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge the Lenders and each of its Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent

   

   

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  or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Amendment Effective Date arising out of, connected with or related in any way to this Amendment, the Loan Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of the Lender contained therein, or the possession, use, operation or control of any of the assets of each Obligor, or the making of any Loans or other advances, or the management of such Loans or advances or the Collateral on or prior to the Amendment Effective Date. As to each and every claim released hereunder, each Obligor hereby represents that it has received the advice of legal counsel with regard to the releases contained herein.

   

  [Signatures follow; remainder of page intentionally left blank]

   

   

  6

  

  IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.

   

  EXISTING BORROWERS:

   

  ORION ENERGY SYSTEMS, INC.

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Chief Financial Officer

   

   

  GREAT LAKES ENERGY TECHNOLOGIES, LLC

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Chief Financial Officer

   

   

  CLEAN ENERGY SOLUTIONS, LLC

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Chief Financial Officer

   

   

  ORION ASSET MANAGEMENT, LLC

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Chief Financial Officer

   

   

  ORION TECHNOLOGY VENTURES, LLC

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Chief Financial Officer

   

   

  Signature Page to Amendment No. 1 to Loan and Security Agreement

  

  ADDITIONAL BORROWERS:

   

  STAY-LITE LIGHTING, INC.

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Treasurer and Secretary

   

   

  VOLTREK, LLC

   

  By:  /s/ Per Brodin	 Name: Per Brodin

  Title: Treasurer and Secretary

   

   

  Signature Page to Amendment No. 1 to Loan and Security Agreement

  

  LENDER:

   

  BANK OF AMERICA, N.A.

   

   

  By:  /s/ Jonah Vogt	 Name: Jonah Vogt

  Title:_ Vice President	

   

   

  Signature Page to Amendment No. 1 to Loan and Security Agreement

  

  ANNEX I

   

  Amended Loan Agreement

   

  See attached

   

   

  

  [EXECUTION VERSION]ANNEX I

  to First Amendment to Loan and Security Agreement

   dated November 4, 2022

   

   

   

   

   

   

   

   

   

   

   

   

  LOAN AND SECURITY AGREEMENT

   

  Dated as of December 29, 2020

   

   

  ORION ENERGY SYSTEMS, INC., GREAT LAKES ENERGY TECHNOLOGIES, LLC,

  CLEAN ENERGY SOLUTIONS, LLC, ORION ASSET MANAGEMENT, LLC,

  and

  ORION TECHNOLOGY VENTURES, LLC, STAY-LITE LIGHTING, INC.

  and

  VOLTREK, LLC

  as Borrowers,

   

   

  BANK OF AMERICA, N.A.,

   

  as Lender

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  

  TABLE OF CONTENTS

   

  Page

  SECTION 1.	DEFINITIONS; RULES OF CONSTRUCTION	1

  1.1.Definitions	1

  1.2.Accounting Terms	23

  1.3.Uniform Commercial Code	2324

  1.4.Certain Matters of Construction	2324

  1.5.Division	24

  1.6.Currency Equivalents	24

  SECTION 2.	CREDIT FACILITIES	25

  2.1.Loan Commitment	25

  2.2.Letter of Credit Facility	25

  SECTION 3.	INTEREST, FEES AND CHARGES	2627

  3.1.Interest.	2627

  3.2.Fees.	2728

  3.3.Computation of Interest, Fees, Yield Protection	28

  3.4.Reimbursement Obligations	28

  3.5.Illegality	2829

  3.6.Inability to Determine Rates; Replacement of LIBORTerm SOFR	29

  3.7.Increased Costs; Capital Adequacy.	3130

  3.8.Mitigation	3231

  3.9.Funding Losses	3231

  3.10.Maximum Interest	32

  SECTION 4.	LOAN ADMINISTRATION	32

  4.1.Manner of Borrowing and Funding Loans	32

  4.2.Number and Amount of LIBORTerm SOFR Loans; Determination of Rate	3332

  4.3.Borrower Agent	33

  4.4.One Obligation	33

  4.5.Effect of Termination	33

  SECTION 5.	PAYMENTS	3433

  5.1.General Payment Provisions	3433

  5.2.Repayment of Loans	34

  5.3.Payment of Other Obligations	34

  5.4.Marshaling; Payments Set Aside	34

  5.5.Dominion Account	34

  5.6.Account Stated	34

  5.7.Taxes.	3534

  5.8.Nature and Extent of Each Borrower’s Liability	36

  SECTION 6.	CONDITIONS PRECEDENT	38

  6.1.Conditions Precedent to Initial Loans	38

  6.2.Conditions Precedent to All Credit Extensions	39

  SECTION 7.	COLLATERAL	40

  7.1.Grant of Security Interest	40

  7.2.Lien on Deposit Accounts; Cash Collateral.	4140

  7.3.[Reserved].	41

   

   

  i -i-

  

  TABLE OF CONTENTS

  (continued)

  Page

   

  7.4.Other Collateral	41

  7.5.Limitations	41

  7.6.Further Assurances; Extent of Liens	4241

  7.7.Foreign Subsidiary Stock	4241

  7.8.Pledge Equity Interest and Pledge Debt Instruments. 4241 SECTION 8.		COLLATERAL ADMINISTRATION	43

  8.1.Borrowing Base Reports	43

  8.2.Accounts.	43

  8.3.Inventory.	44

  8.4.Equipment.	4544

  8.5.Deposit Accounts	45

  8.6.General Provisions	45

  8.7.Power of Attorney	46

  SECTION 9.	REPRESENTATIONS AND WARRANTIES	4746

  9.1.General Representations and Warranties	4746

  9.2.Complete Disclosure	51

  SECTION 10.	COVENANTS AND CONTINUING AGREEMENTS	51

  10.1.Affirmative Covenants	51

  10.2.Negative Covenants	54

  10.3.Financial Covenants 5857 SECTION 11.		EVENTS OF DEFAULT; REMEDIES ON DEFAULT	58

  11.1.Events of Default	58

  11.2.Remedies upon Default	59

  11.3.License	60

  11.4.Setoff	60

  11.5.Remedies Cumulative; No Waiver	60

  SECTION 12.	MISCELLANEOUS	6160

  12.1.Amendments and Waivers.	6160

  12.2.Indemnity	6160

  12.3.Notices and Communications	61

  12.4.Performance of Borrowers’ Obligations	62

  12.5.Credit Inquiries	62

  12.6.Severability	62

  12.7.Cumulative Effect; Conflict of Terms	62

  12.8.Execution; Electronic Records	62

  12.9.Entire Agreement	63

  12.10.No Control; No Advisory or Fiduciary Responsibility	63

  12.11.Confidentiality	63

  12.12.[Reserved.]	6463

  12.13.GOVERNING LAW	64

  12.14.Consent to Forum	64

  12.15.Waivers by Borrowers	64

  12.16.Acknowledgement Regarding Supported QFCs	6564

   

   

  	-ii-

  

  TABLE OF CONTENTS

  (continued)

  Page

   

  12.17.Patriot Act Notice; Beneficial Ownership Regulation	65

  12.18.NO ORAL AGREEMENT	6665

   

   

  	-3-

  

  TABLE OF CONTENTS

  Page

  LIST OF SCHEDULES

   

  Schedule 7.8.1	Pledged Interests

  Schedule 8.5	Deposit Accounts

  Schedule 8.6.1	Business Locations Schedule 9.1.4	Names and Capital Structure

  Schedule 9.1.5	Real Estate in Special Flood Hazard Zone Schedule 9.1.11	Patents, Trademarks, Copyrights and Licenses Schedule 9.1.14	Environmental Matters

  Schedule 9.1.15	Restrictive Agreements Schedule 9.1.16	Litigation

  Schedule 9.1.18	Pension Plans

  Schedule 10.2.2	Existing Liens

  Schedule 10.2.17	Existing Affiliate Transactions

   

   

  	-4-

  

  LOAN AND SECURITY AGREEMENT

   

  THIS LOAN AND SECURITY AGREEMENT is dated as of December 29, 2020, among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (“Company”), GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin limited liability company (“Great Lakes”), CLEAN ENERGY SOLUTIONS, LLC, a Wisconsin limited liability company (“Clean Energy”) and ORION ASSET MANAGEMENT, LLC, a Wisconsin limited liability company (“Asset Management”), ORION TECHNOLOGY VENTURES, LLC, a Wisconsin limited liability company (“Orion Technology”), STAY-LITE LIGHTING, INC., a Wisconsin corporation ("Stay-Lite") and VOLTREK, LLC, a Massachusetts limited liability company ("Voltrek" and together with the Company, Great Lakes and Clean Energy, Asset Management, Orion Technology and Stay-Lite, collectively, “Borrowers”), and BANK OF AMERICA, N.A., a national banking association (including any Lending Office, “Lender”).

   

  R E C I T A L S:

   

  Borrowers have requested that Lender provide a credit facility to Borrowers to finance their mutual and collective business enterprise. Lender is willing to provide the credit facility on the terms and conditions set forth in this Agreement.

   

  NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:

   

  SECTION 1.  DEFINITIONS; RULES OF CONSTRUCTION

   

  1.1.Definitions

   

  . As used herein, the following terms have the meanings set forth below:

   

  Accounts Formula Amount: 85% of the Value of Eligible Accounts; provided, however, that, notwithstanding the proviso to the definition of "Borrowing Base", until an initial field examination is conducted with respect to the Accounts owned by Stay-Lite and Voltrek (the “Initial Examination”), 80% of the Value of Eligible Accounts of Stay-Lite and Voltrek shall be included in the calculation of the Accounts Formula Amount and after the completion of the Initial Examination, 85% of the Value of Eligible Accounts of Stay-Lite and Voltrek shall be included in the calculation of the Accounts Formula Amount; provided further, however, that if the Initial Examination is not completed prior to June 30, 2023, the Value of all Eligible Accounts of Stay-Lite and Voltrek not subject to a completed Initial Examination shall be excluded from the calculation of Accounts Formula Amount until such Initial Examination is completed.

   

  Acquisition: a transaction or series of transactions resulting in (a) acquisition of a business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the Equity Interests of a Person; or (c) merger, consolidation or combination of a Borrower or Subsidiary with another Person.

   

  Affiliate: with respect to a specified Person, any other Person that directly, or indirectly through intermediaries, Controls, is Controlled by or is under common Control with the specified Person.

   

  Allocable Amount: as defined in Section 5.8.3.

   

  	Amendment Effective Date: as defined in the Amendment No. 1.

   

  Amendment No. 1: that certain Amendment No. 1 to Loan and Security Agreement, by and among the Borrowers and the Lender.

   

   

  

  1

   

   

  

  Anti-Corruption Law: any law relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 and Patriot Act.

   

  Anti-Terrorism Law: any law relating to terrorism or money laundering, including the Patriot

  Act.

   

  Applicable Concentration Percentage: with respect to (a) a Specified Account Debtor, 100%, (b) Tier I Account Debtors, 70%, (c) Tier II Account Debtors, 40% and (d) Tier III Account Debtors, 30%. All percentages set forth in this definition may be increased or decreased from time to time by Lender in its Permitted Discretion.

   

  Applicable Law: all laws, rules, regulations and governmental guidelines applicable to the Person or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

   

  Applicable Margin: the margin set forth below, as determined by the average daily Availability for the last Fiscal Quarter:

   

  				
	 
Level
	 
Average Availability
	 
LIBORTerm SOFR Loans
	Base Rate Loans

	I
	> 66% of the Borrowing Base
	1.50%
	0.50%

	II
	> 33% of the Borrowing Base and < 66% of the Borrowing Base
	1.75%
	0.75%

	III
	< 33% of the Borrowing Base
	2.00%
	1.00%

   

  Until receipt of the Borrowing Base Report for the calendar month ending March 31, 2021, margins shall be determined as if Level II were applicable. Thereafter, margins shall be subject to increase or decrease by Lender on the first day of the calendar month following each Fiscal Quarter end based upon the Average Availability for such Fiscal Quarter. If Lender is unable to calculate Average Availability for a Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Report as of the last day of the calendar month for the Fiscal Quarter then ending when required hereunder, then, at the option of Lender, margins shall be determined as if Level III were applicable until the first day of the calendar month following its receipt.

   

  Asset Disposition: a sale, lease, license, consignment, transfer or other disposition of Property, including any disposition in connection with a sale-leaseback transaction, synthetic lease or statutory division of a limited liability company.

   

  Availability: the Borrowing Base minus Revolver Usage.

   

  Availability Reserve: the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) liabilities secured by Liens upon Collateral that are or may be senior to Lender’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (e) the Dilution Reserve; and (f) additional reserves, in such amounts and with respect to such matters, as Lender in its Permitted Discretion may elect to impose from time to time.

   

  Average Availability: for any period, the result, expressed as a percentage, of (a) the average daily Borrowing Base during such period minus the average daily Revolver Usage during such period, divided by (b) the average daily Borrowing Base during such period.

   

   

  2

  

  Bank Product: any of the following products or services extended to an Obligor or Affiliate of an Obligor by Lender or any of its Affiliates: (a) Cash Management Services; (b) Swaps; (c) commercial credit card and merchant card services; and (d) supply chain finance, credit insurance, leases and other banking products or services, other than Letters of Credit.

   

  Bank Product Debt: Debt, obligations and other liabilities of an Obligor or Affiliate of an Obligor with respect to Bank Products.

   

  Bank Product Reserve: the aggregate amount of reserves established by Lender from time to time in its Permitted Discretion with respect to Bank Product Debt.

   

  Bankruptcy Code: Title 11 of the United States Code.

   

  Base Rate: for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day;

  (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBORTerm SOFR for a one month interest period as of such day, plus 1.0%; provided, that in no event shall the Base Rate be less than zero.

   

  Base Rate Loan: any Loan that bears interest based on the Base Rate.

   

  Beneficial Ownership Certification: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in form and substance satisfactory to Lender.

   

  Beneficial Ownership Regulation: 31 C.F.R. §1010.230.

   

  Benefit Plan: any (a) employee benefit plan (as defined in ERISA) subject to Title I of ERISA,

  (b) plan (as defined in and subject to Section 4975 of the Code), or (c) Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such employee benefit plan or plan.

   

  Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Obligor, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or

  (iv) was issued or assumed as full or partial payment for Property; (b) Finance Leases; (c) letter of credit reimbursement obligations; and (d) guaranties of any of the foregoing owing by another Person.

   

  Borrower Agent: as defined in Section 4.3.

   

  Borrower Materials: Borrowing Base Reports, Compliance Certificates, Notices of Borrowing, Notices of Conversion/Continuation, and other information, reports, financial statements and materials delivered by Obligors under the Loan Documents.

   

  Borrowing: Loans made or converted together on the same day, with the same interest option and, if applicable, Interest Period.

   

  Borrowing Base: on any date of determination, an amount equal to (a) the lesser of (i) the Commitment; or (ii) the sum of (A) the Accounts Formula Amount, plus (B) the Inventory Formula Amount, plus (cC) the Eligible Cash Amount minus (b) Availability Reserves established by the Lender from time to time; provided, however, that no Accounts or Inventory acquired in a Permitted Acquisition, other Investment or otherwise outside the ordinary course of business shall be included in the calculation of the Borrowing Base until completion of an initial field examination or appraisal with respect to such Inventory and Accounts, as applicable (which initial field examination or appraisal shall not be included in the limits on the number of examinations and appraisals provided in Section 10.1.1(b).

   

   

  3

  

  Borrowing Base Report: a report of the Borrowing Base, in form and substance satisfactory to

  Lender.

   

  Business Day: any day that is not a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, North Carolina and Illinois; and if such day relates to a LIBOR Loan, is a day on which dealings in Dollar deposits are conducted in the London interbank market.

   

  Capital Expenditures: all expenditures made by a Borrower or Subsidiary for the acquisition of fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one year, but excluding expenditures (a) made in connection with the replacement, substitution or restoration of assets to the extent (i) financed from insurance proceeds or awards of compensation (or other similar recoveries) used to replace or restore an asset as set forth in Section 8.6.2, or (ii) financed with cash proceeds of Asset Dispositions of similar assets permitted under this Agreement, to the extent consummated substantially contemporaneously with receipt of such proceeds or (b) constituting the capitalization of non-cash leasehold improvements.

   

  Cash Collateral: cash delivered to Lender to Cash Collateralize any Obligations, and all interest, dividends, earnings and other proceeds relating thereto.

   

  Cash Collateralize: the delivery of cash to Lender, as security for the payment of Obligations, in an amount equal to (a) 105% of LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including fees, expenses, indemnification obligations and Obligations arising under Bank Products), Lender’s good faith estimate of the amount due or to become due. “Cash Collateralization” has a correlative meaning.

   

  Cash Equivalents: (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the U.S. government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by Lender or a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described in clauses (a) and (b) entered into with any bank described in clause (b); (d) commercial paper issued by Lender or rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody’s or S&P.

   

  Cash Management Services: services relating to operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

   

  CERCLA: the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.).

   

  Change in Law: the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any

   

   

  4

  

  Governmental Authority; provided, that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.

   

  Change of Control: (a) Company ceases to own and control, beneficially and of record, directly or indirectly, all Equity Interests in each other Borrower; (b) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the beneficial owner (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) directly or indirectly of 30% or more of the Equity Interests of Company having the right to vote for the election of members of the Board of Directors of Company; (c) a majority of the members of the Board of Directors of each Borrower do not constitute Continuing Directors; or (d) the sale or transfer of all or substantially all assets of a Borrower, except to another Borrower.

   

  Claims: all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to

  (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

   

  Closing Date: as defined in Section 6.1.

   

  CME: CME Group Benchmark Administration Limited.

   

  Code: the Internal Revenue Code of 1986.

   

  Collateral: all Property described in Section 7.1, all Property described in any Security Documents as security for any Obligations, and all other Property, in each case other than to the extent constituting Excluded Property, that now or hereafter secures (or is intended to secure) any Obligations.

   

  Commitment: Lender’s obligation to make Loans and to issue Letters of Credit in an aggregate amount up to $25,000,000.

   

  Commodity Exchange Act: the Commodity Exchange Act (7 U.S.C. §1 et seq.).

   

  Compliance Certificate: a certificate, in form and substance satisfactory to Lender in its Permitted Discretion, by which Borrowers certify (a) compliance with Section 10.3 (or, if a Fixed Charge Trigger Period is not in effect, limited to a certified calculation of (and not compliance with) the Fixed Charge Coverage Ratio), (b) that no Default or Event of Default has occurred and (c) that no Obligor has changed its name, organizational form or jurisdiction of organization except as disclosed in writing in such certificate.

   

  Conforming Changes: with respect to use, administration of or conventions associated with SOFR, Term SOFR or any proposed Successor Rate, as applicable, any conforming changes to the definitions of Base Rate, SOFR, Term SOFR and Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters

   

   

  5

  

  (including, for the avoidance of doubt, the definitions of Business Day and U.S. Government Securities Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of lookback periods) as may be appropriate, in Lender's discretion, to reflect the adoption and implementation of such applicable rate(s) and to permit the administration thereof by Lender in a manner substantially consistent with market practice (or, if Lender determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as Lender determines is reasonably necessary in connection with the administration of any Loan Document).

   

  Communication: any notice, request, election, representation, certificate, report, disclosure, authorization, or other statement or information relating hereto, including any Loan Document or Borrower Materials.

   

  Connection Income Taxes: Other Connection Taxes that are imposed on or measured by net income (however denominated), or are franchise or branch profits Taxes.

   

  Contingent Obligation: any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“primary obligation”) of another obligor (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; or (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.

   

  Continuing Director: (a) any member of the Board of Directors who was a director (or comparable manager) of Company on the date of this Agreement and (b) any individual who becomes a member of the Board of Directors of Company after the date of this Agreement if such individual was approved, appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, excluding any such individual originally proposed for election in opposition to the Board of Directors in office on the date of this Agreement in an actual or threatened election contest relating to the election of directors (or comparable managers) of Company and whose initial assumption of office resulted from such contest or the settlement thereof.

   

  Control: possession, directly or indirectly, of the power to direct or cause direction of a Person’s management or policies, whether through the ability to exercise voting power, by contract or otherwise.

   

  Covered Entity: (a) a “covered entity,” as defined and interpreted in accordance with 12 C.F.R.

  §252.82(b); (b) a “covered bank,” as defined in and interpreted in accordance with 12 C.F.R. §47.3(b); or

  (c) a “covered FSI,” as defined in and interpreted in accordance with 12 C.F.R. §382.2(b).

   

  Daily Simple SOFR: with respect to any applicable determination date, SOFR published on such date on the FRBNY website (or any successor source satisfactory to Lender).

   

  Debt: as applied to any Person, without duplication, (a) all items that would be included as liabilities on a balance sheet in accordance with GAAP, excluding trade payables incurred and being paid

   

   

  6

  

  in the Ordinary Course of Business, accrued expenses incurred in the Ordinary Course of Business, deferred revenue incurred in the Ordinary Course of Business and Operating Leases (but including Finance Leases); (b) all Contingent Obligations; (c) all reimbursement obligations in connection with letters of credit issued for the account of such Person; and (d) in the case of a Borrower, the Obligations. The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer.

   

  Default: an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.

   

  Default Rate: for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.

   

  Deposit Account Control Agreement: control agreement satisfactory to Lender executed by an institution maintaining a Deposit Account for an Obligor, to perfect Lender’s Lien on such account.

   

  Dilution Percent: the percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross sales.

   

  Dilution Reserve: a reserve established by the Lender in its Permitted Discretion in an amount not greater than the Value of all Eligible Accounts multiplied by 1.0% for each percentage point (or fraction thereof) that the Dilution Percent exceeds 5.0%.

   

  Distribution: any declaration or payment of a distribution, interest or Dividend on any Equity Interest (other than payment-in-kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.

   

  Dividend: as defined in Section 7.8.4. Dollars: lawful money of the United States.

  Dominion Account: a special account established by Borrowers at Lender or a bank acceptable to Lender, over which Lender has exclusive control for withdrawal purposes.

   

  Dominion Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs or (ii) Availability is at any time is less than the greater of (A) 15% of the Commitment or (B)

  $3,000,000 and (b) continuing until the date that, during each of the preceding 30 consecutive days both

  (i) no Event of Default has occurred and (ii) Availability has been greater than the greater of (A) 15% of the Commitment and (B) $3,000,000 for each such day, provided that Dominion Trigger Periods shall not end more than two times in any calendar year.

   

  EBITDA: determined on a consolidated basis for Borrowers and Subsidiaries for any period, an amount equal to the sum of the following for such period (a) net income calculated before interest expense (net of interest income), provision for income taxes (net of refunds), depreciation and amortization expense, gains or losses arising from the sale of capital assets, gains arising from the write-up of assets, losses arising from the write-down of assets (other than write-down or write-off of inventory), any extraordinary gains, and any extraordinary losses, plus (b) one-time fees costs and expenses incurred in connection with the consummation of the transactions contemplated hereby in an amount not to exceed $225,000 plus (c) non-cash Equity Interest based compensation expense plus (d) the Voltrek and Stay-Lite Earn-Out Obligations minus (d) any non-cash gains or income, in each case for all of the foregoing, to the extent included in determining net income.

   

  7

  

  Electronic Copy: as defined in Section 12.8.

   

   

  8

  

  Eligible Account: an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods or rendition of services, is payable in Dollars and is deemed by Lender, in its Permitted Discretion, to be an Eligible Account. Without limiting the foregoing, no Account shall be an Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 90 days after the original invoice date; (b) 20% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it exceeds the Applicable Concentration Percentage of the aggregate of all Eligible Accounts; (d) it does not conform in all material respects with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is the target of any Sanction or on any specially designated nationals list maintained by OFAC; or the Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Lender) or credit insurance satisfactory in all respects to Lender; (h) it is owing by a Governmental Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Lender in compliance with the federal Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien in favor of Lender, or is subject to any other Lien other than Permitted Liens that do not have priority over the Lender’s Lien; (j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended or the Account Debtor has made a partial payment; (m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale or return, sale on approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; (n) it represents a progress billing or retainage other than Eligible Progress Billings or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 90 days old will be excluded.

  Eligible Cash Amount: the lesser of (a) the balance of all cash and cash equivalents of the Borrowers deposited in a Qualified Account and (b) 25% of the Borrowing Base determined without giving effect to the Eligible Cash Amount.

   

  Eligible Inventory: Inventory owned by a Borrower that Lender, in its Permitted Discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished goods or raw materials, and not work-in-process, packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from an entity that is the target of any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute hazardous materials under any Environmental Law; (f) conforms, in all material respects, with the covenants and representations herein; (g) is subject to Lender’s duly perfected, first priority Lien, and no other Lien other than Permitted Liens that do not have priority over the Lender’s Lien; (h) is within the continental United States or Canada, is not in transit except between locations of Borrowers, and is not consigned to any Person; (i) is not subject to any warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts such Borrower’s or Lender’s right to dispose of such

   

   

  9

  

  Inventory, unless Lender has received an appropriate Lien Waiver; (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

   

  Eligible Progress Billings: Accounts that otherwise would constitute Eligible Accounts but for the fact they represent progress billings or retainage and as to which any applicable work order has been completed and any applicable certificate of completion or substantial completion has been issued or commissioning has occurred.

   

  Enforcement Action: any action to enforce any Obligations or Loan Documents or to realize upon any Collateral, whether by judicial action, self-help, notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu of foreclosure, action in an Insolvency Proceeding or otherwise.

   

  Environmental Laws: Applicable Laws (including programs, permits and guidance promulgated by regulators) relating to public health (other than occupational safety and health regulated by OSHA) or the protection or pollution of the environment, including the Resource Conservation and Recovery Act (42 U.S.C. §§6991-6991i), Clean Water Act (33 U.S.C. §1251 et seq.) and CERCLA.

   

  Environmental Notice: a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.

   

  Environmental Release: a release as defined in CERCLA or under any other Environmental Law.

   

  Equity Interest: the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or

  (d) other Person having any other form of equity security or ownership interest.

   

  ERISA: the Employee Retirement Income Security Act of 1974.

   

  ERISA Affiliate: any trade or business (whether or not incorporated) under common control with an Obligor within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

   

  ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) withdrawal of an Obligor or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) complete or partial withdrawal of an Obligor or ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) filing of a notice of intent to terminate, treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or institution of proceedings by the PBGC to terminate a Pension Plan; (e) determination that a Pension Plan is considered an at-risk plan or a plan in critical or endangered status under the Code or ERISA; (f) an event or condition that constitutes grounds under Section 4042 of ERISA for termination of, or appointment of a trustee to administer, any Pension Plan; (g) imposition of any liability on an Obligor or ERISA Affiliate under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; or (h) failure by an Obligor or ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or to make a required contribution to a Multiemployer Plan.

   

   

  10

  

  Event of Default: as defined in Section 11.

   

  Excluded Deposit Account: any Deposit Account of an Obligor that is used as (a) a payroll, pension, trust, or employee benefits or related employee benefit account, to the extent used solely for such purposes, (b) a withholding, tax, escrow, and fiduciary account, to the extent used solely for such purposes, (c) zero balance disbursement accounts and (d) petty cash or similar accounts in which the amounts deposited do not exceed $50,000 in such accounts.

   

  Excluded Property: collectively, (a) United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law; provided, that upon submission and acceptance by the United States Patent and Trademark Office of such intent-to-use trademark applications, such intent-to-use trademark applications shall automatically be included in the definition of Collateral and shall automatically be included in the grant of security interest under Section 5.1 hereof), (b) all Excluded Deposit Accounts, (c) any lease, license, contract, permit, letter of credit, instrument, agreement or other property right to which a Obligor is a party or any of its rights or interests thereunder if and to the extent that the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of a Obligor therein or (ii) result in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, permit, agreement or other property right (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 Uniform Commercial Code of any relevant jurisdiction or any other applicable law); provided, however, that such security interest or lien (x) shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall no longer exist or be remedied, (y) to the extent severable, shall attach immediately to each term of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) above and (z) shall attach immediately to each such lease, license, contract, property rights or agreement to which the account debtor or a Obligor’s counterparty has consented to such attachment, and (d) so long as no Event of Default exists, more than sixty-five percent (65%) of the equity interests of a Foreign Subsidiary. For the avoidance of doubt, and the foregoing to the contrary notwithstanding, no Account or Proceeds shall be Excluded Property for purposes hereof.

   

  Excluded Swap Obligation: with respect to an Obligor, each Swap Obligation as to which, and only to the extent that, such Obligor’s guaranty of or grant of a Lien as security for such Swap Obligation is or becomes illegal under the Commodity Exchange Act because the Obligor does not constitute an “eligible contract participant” as defined in the act (determined after giving effect to any keepwell, support or other agreement for the benefit of such Obligor and all guarantees of Swap Obligations by other Obligors) when such guaranty or grant of Lien becomes effective with respect to the Swap Obligation. If a hedge agreement governs more than one Swap Obligation, only the Swap Obligation(s) or portions thereof described in the foregoing sentence shall be Excluded Swap Obligation(s) for the applicable Obligor.

   

  Excluded Taxes: (a) Taxes imposed on or measured by a Recipient’s net income (however denominated), franchise Taxes and branch profits Taxes (i) as a result of such Recipient being organized under the laws of, or having its principal office or applicable Lending Office located in, the jurisdiction imposing such Tax, or (ii) constituting Other Connection Taxes; and (b) U.S. federal withholding Taxes imposed pursuant to FATCA. In no event shall “Excluded Taxes” include any withholding Tax imposed on amounts paid by or on behalf of a foreign Obligor.

   

  Extraordinary Expenses: all costs, expenses or advances incurred by Lender during a Default or Event of Default or an Obligor’s Insolvency Proceeding, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for

   

   

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  sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Lender, any Obligor, any creditor(s) of an Obligor or any other Person) in any way relating to any Collateral, Lender’s Lien, Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) exercise of any rights or remedies of Lender in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, reasonable legal fees, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.

   

  FATCA: Sections 1471 through 1474 of the Code (including any amended or successor version if substantively comparable and not materially more onerous to comply with), and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

   

  Federal Funds Rate: (a)for any day, the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System on the applicable day (or the preceding Business Day, if such day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if the rate is not so published, the average per annum rate (rounded up to the nearest 1/8 of 1%) charged to Lender on the applicable day on such transactions, as determined by Lenderper annum rate calculated by FRBNY based on such day's federal funds transactions by depository institutions (as determined in such manner as FRBNY shall set forth on its public website from time to time) and published on the next Business Day by FRBNY as the federal funds effective rate; provided, that in no event shall the Federal Funds Rate be less than zero.

   

  Fee Letter: the Fee Letter dated as of the date hereof between Borrower Agent and Lender.

   

  Finance Lease: any lease which qualifies as a finance lease in accordance with ASC 842 under

  GAAP.

   

  Financial Covenant Trigger Period: the period (a) commencing on any day that Availability at any time is less than the greater of (i) 15% of the Revolver Commitments or (ii) $3,000,000 and (b) continuing until the date that, during each of the preceding 30 consecutive days, (i) Availability has been greater than the greater of (A) 15% of the Commitment and (B) $3,000,000 for each such day and (ii) no Event of Default has occurred.

  Fiscal Quarter: each period of three months, commencing on the first day of a Fiscal Year. Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes,

  ending on March 31 of each year.

   

  Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for Borrowers and Subsidiaries for the most recent 12 months, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Loans) minus cash income taxes paid minus Distributions paid in cash to (b) Fixed Charges.

   

  Fixed Charges: the sum of cash interest expense (other than payment-in-kind) and scheduled principal payments made on Borrowed Money.

   

  Flood Laws: the National Flood Insurance Act of 1968, Flood Disaster Protection Act of 1973 and related laws.

   

   

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  FLSA: the Fair Labor Standards Act of 1938.

   

  Foreign Plan: any employee benefit plan or arrangement (a) maintained or contributed to by any Obligor or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a government other than the United States for employees of any Obligor or Subsidiary.

   

  Foreign Subsidiary: a Subsidiary that is a “controlled foreign corporation” under Section 957 of the Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to secure the Obligations would result in material tax liability to Borrowers.

   

  FRBNY: Federal Reserve Bank of New York.

   

  Full Payment: with respect to any Obligations, (a) the full cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding), but excluding contingent indemnification obligations for which no claim has been asserted;

  (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Lender in its Permitted Discretion, in the amount of required Cash Collateral); and (c) a release of any Claims of Obligors against Lender arising on or before the payment date. The Loans shall not be deemed to have been paid in full unless the Commitment is terminated.

  GAAP: generally accepted accounting principles in effect in the United States from time to time. Governmental Approvals: all authorizations, consents, approvals, licenses and exemptions of,

  registrations and filings with, and required reports to, all Governmental Authorities.

   

  Governmental Authority: any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality, political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions for any governmental, judicial, investigative, regulatory or self-regulatory authority (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or European Central Bank).

   

  Guarantor Payment: as defined in Section 5.8.3.

   

  Guarantors: each Person that guarantees payment or performance of Obligations, including pursuant to Section 10.1.9.

   

  Guaranty: each guaranty agreement executed by a Guarantor in favor of Lender.

   

  Indemnified Taxes: (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.

   

  Indemnitees: Lender, other Secured Parties, and their officers, directors, employees, Affiliates and Lender Professionals.

   

  Insolvency Proceeding: any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

   

  Inspection Trigger Event: (a) an Event of Default occurs or (b) Availability at any time is less than 

   

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  the greater of (A) 20% of the Commitment and (B) $4,000,000.

   

   

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  Intellectual Property: all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.

   

  Intellectual Property Claim: any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

   

  Interest Payment Date: (a) for each LIBOR Loan, the last day of the applicable Interest Period and, if the Interest Period is more than three months, each three month anniversary of the beginning of the Interest Period; and (b) for all other Loans,means the first day of each calendar month.

   

  Interest Period: as defined in Section 3.1.3.

   

  Inventory: as defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).

   

  Inventory Formula Amount: the lesser of (a) 65% of the Value of Eligible Inventory or (b) 85% of the NOLV Percentage of the Value of Eligible Inventory.

   

  Inventory Reserve: reserves established by Lender in its Permitted Discretion to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

   

  Investment: an Acquisition, an acquisition of record or beneficial ownership of any Equity Interests of a Person, or an advance or capital contribution to or other investment in a Person.

   

  IP Assignment: a collateral assignment or security agreement pursuant to which an Obligor grants a Lien on its Intellectual Property to Lender, as security for any Obligations.

   

  IRS: the United States Internal Revenue Service.

   

  ISDA Definitions: 2006 ISDA Definitions (or successor definitional booklet for interest rate derivatives) published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time.

   

  LC Application: an application by Borrower Agent to Lender for issuance of a Letter of Credit, in form and substance satisfactory to Lender.

   

  LC Conditions: upon giving effect to issuance of a Letter of Credit, (a) the conditions in Section 6 are satisfied; (b) total LC Obligations do not exceed the Letter of Credit Subline and Revolver Usage does not exceed the Borrowing Base; (c) the Letter of Credit and payments thereunder are denominated in Dollars or other currency satisfactory to Lender; and (d) the purpose and form of the Letter of Credit are satisfactory to Lender in its Permitted Discretion.

   

  LC Documents: all documents, instruments and agreements (including requests and applications) delivered by any Borrower or other Person to Lender in connection with a Letter of Credit.

   

   

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  LC Obligations: the sum of (a) all amounts owing by Borrowers for draws under Letters of Credit; and (b) the Stated Amount of all outstanding Letters of Credit.

   

  LC Request: a request by Borrower Agent for issuance of a Letter of Credit, in form satisfactory to Lender.

   

  Lender Professionals: attorneys, accountants, appraisers, auditors, advisors, consultants, agents, service providers, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals, experts and representatives retained or used by Lender.

   

  Lending Office: any office (including a domestic or foreign Affiliate or branch) used by Lender to fulfill any of its obligations hereunder.

   

  Letter of Credit: any standby or documentary letter of credit, foreign guaranty, documentary bankers’ acceptance, indemnity, reimbursement agreement or similar instrument issued by Lender for the account or benefit of a Borrower or Affiliate of a Borrower.

   

  Letter of Credit Subline: $2,000,000.

   

  LIBOR: the per annum rate of interest (rounded up to the nearest 1/8th of 1%) determined by Lender at or about 11:00 a.m. (London time) two Business Days prior to an interest period, for a term equivalent to such interest period, equal to the London interbank offered rate, or comparable or successor rate approved by Lender, as published on the applicable Reuters screen page (or other available source designated by Lender from time to time); provided, that any comparable or successor rate shall be applied by Lender, if administratively feasible, in a manner consistent with market practice; and provided further, that in no event shall LIBOR be less than 0.25%.

   

  LIBOR Loan: a Loan that bears interest based on LIBOR.

   

  LIBOR Replacement Date: as defined in Section 3.6.2.

   

  LIBOR Screen Rate: the LIBOR quote on the applicable screen page that Lender designates to determine LIBOR (or such other commercially available source providing such quotations as designated by Lender from time to time).

   

  LIBOR Successor Rate: as defined in Section 3.6.2.

   

  LIBOR Successor Rate Conforming Changes: with respect to any proposed LIBOR Successor Rate, any conforming changes to this Agreement, including changes to Base Rate, Interest Period, timing and frequency of determining rates and payments of interest, and other technical, administrative or operational matters (including, for the avoidance of doubt, the definition of Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of look-back periods) as may be appropriate, in Lender’s discretion, to reflect the adoption and implementation of such LIBOR Successor Rate and to permit its administration by Lender in a manner substantially consistent with market practice (or, if Lender determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as Lender determines is reasonably necessary in connection with administration of this Agreement or any other Loan Document).

   

  License: any license or agreement under which an Obligor is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.

  Licensor: any Person from whom an Obligor obtains the right to use any Intellectual Property.

   

   

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  Lien: an interest in Property securing an obligation or claim, including any lien, security interest, pledge, hypothecation, assignment, trust, reservation, assessment right, encroachment, easement, right-of-way, covenant, condition, restriction, lease, or other title exception or encumbrance.

   

  Lien Waiver: an agreement, in form and substance satisfactory to Lender, by which (a) for any material Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and allows Lender to enter the premises and remove, store and dispose of Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for Lender, and agrees to deliver Collateral to Lender upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges Lender’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver Collateral to Lender upon request; and (d) for any Collateral subject to a Licensor’s Intellectual Property rights, the Licensor grants to Lender the right, vis-à-vis such Licensor, to enforce Lender’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License.

   

  Loan: a loan made by Lender under the credit facility established by this Agreement. Loan Documents: this Agreement, Other Agreements and Security Documents.

  Margin Stock: as defined in Regulation U of the Federal Reserve Board of Governors.

   

  Material Adverse Effect: the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, Properties or financial condition of Obligors taken as a whole, the value of any material Collateral, the enforceability of any Loan Document, or the validity or priority of Lender’s Lien on any Collateral; (b) impairs the ability of an Obligor to perform its material obligations under the Loan Documents, including repayment of any Obligations; or (c) otherwise impairs Lender’s ability to enforce or collect any Obligations or to realize upon any material portion of the Collateral.

   

  Material Contract: any agreement or arrangement to which a Borrower or Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a material contract under any securities law applicable to such Person, including the Securities Act of 1933; (b) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or

  (c) that relates to Subordinated Debt, or to any Debt in an aggregate amount of $250,000 or more.

   

  Material License: as defined in Section 10.1.8.

   

  Moody’s: Moody’s Investors Service, Inc. or any successor acceptable to Lender.

   

  Mortgage: a mortgage or deed of trust in which an Obligor grants a Lien on its Real Estate to Lender, as security for any Obligations.

   

  Multiemployer Plan: any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

   

  Multiple Employer Plan: a Plan with two or more contributing sponsors, including an Obligor or ERISA Affiliate, at least two of whom are not under common control, as described in Section 4064 of ERISA.

   

   

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  Net Proceeds: with respect to an Asset Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Borrower or Subsidiary in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection therewith, including legal fees and sales commissions; (b) amounts applied to repayment of Debt secured by a Permitted Lien senior to Lender’s Liens on Collateral sold; (c) transfer or similar taxes; and (d) reserves for indemnities, until such reserves are no longer needed.

   

  NOLV Percentage: the net orderly liquidation value of Inventory, expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of Borrowers’ Inventory performed by an appraiser and on terms satisfactory to Lender.

   

  Notice of Borrowing: a request by Borrower Agent for a Borrowing, in form satisfactory to

  Lender.

   

  Notice of Conversion/Continuation: a request by Borrower Agent for conversion or continuation of a Loan as a LIBORTerm SOFR Loan, in form satisfactory to Lender.

   

  Obligations: all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Claims and other amounts payable by Obligors under Loan Documents, (d) Bank Product Debt, and (e) other Debts, obligations and liabilities of any kind owing by any Obligor to Lender, in each case whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several; provided, that Obligations of an Obligor shall not include its Excluded Swap Obligations.

   

  Obligor: each Borrower, Guarantor or other Person that is liable for payment of any Obligations or that has granted a Lien on its assets in favor of Lender to secure any Obligations.

   

  OFAC: Office of Foreign Assets Control of the U.S. Treasury Department.

   

  Operating Lease: any lease which qualifies as an operating lease in accordance with ASC 842 under GAAP.

   

  Ordinary Course of Business: the ordinary course of business of any Borrower or Subsidiary, consistent with Applicable Law and past practices.

   

  Organic Documents: with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.

   

  OSHA: the Occupational Safety and Hazard Act of 1970.

   

  Other Agreement: the Fee Letter, each LC Document, Lien Waiver, Related Real Estate Document (if any), Borrower Material, or other document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Lender in connection with any transactions relating hereto.

   

   

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  Other Connection Taxes: Taxes imposed on a Recipient due to a present or former connection between it and the taxing jurisdiction (other than connections arising from the Recipient having executed, delivered, become party to, performed obligations or received payments under, received or perfected a Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any Loan or Loan Document).

   

  Other Taxes: all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except Other Connection Taxes imposed with respect to an assignment and Excluded Taxes.

  Overadvance: the amount by which Revolver Usage exceeds the Borrowing Base at any time. Patriot Act: the Uniting and Strengthening America by Providing Appropriate Tools Required to

  Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

   

  Payment Conditions: with respect to any Specified Transaction, the satisfaction of the following conditions:

   

  (a)as of the date of any such Specified Transaction and immediately after giving effect thereto, no Default or Event of Default has occurred and is continuing;

   

  (b)Availability (after giving pro forma effect to such Specified Transaction) each day during the thirty (30) consecutive day period ending on and including the date of such Specified Transaction shall be not less than the greater of (i) 15% of the Commitment and (ii) $3,000,000 as of each such date;

   

  (c)the Fixed Charge Coverage Ratio as of the end of the most recently ended 12 month period for which financial statements were delivered hereunder prior to the making of such Specified Transaction, calculated on a pro forma basis, shall be equal to or greater than 1.00 to 1.00; provided that, the Consolidated Fixed Charge Coverage Ratio test described in this clause (c) shall not apply if Availability (calculated in order to give pro forma effect to such Specified Transaction) each day during the thirty (30) consecutive day period ending on and including the date of such Specified Transaction is not less than the greater of (i) 20% of the Commitment and (ii) $4,000,000, as each of such date; and

   

  (d)the Lender shall have received a certificate of an authorized officer of the Borrower Agent certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereby.

   

  Payment Item: each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.

   

  PBGC: the Pension Benefit Guaranty Corporation.

   

  Pension Funding Rules: Code and ERISA rules regarding minimum required contributions (including installment payments) to Pension Plans set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

   

  Pension Plan: any employee pension benefit plan (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by an Obligor or ERISA Affiliate or to which the Obligor or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five plan years.

   

   

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  Permitted Acquisition: any Acquisition as long as (a) no Default or Event of Default exists or is caused thereby; (b) the Acquisition is consensual; (c) the assets, business or Person being acquired is useful or engaged in the business of Borrowers and Subsidiaries, is located or organized within the United States, and had positive EBITDA for the 12 month period most recently ended; (d) no Debt or Liens are assumed or incurred, except as permitted by Sections 10.2.1(f), 10.2.1(i) and 10.2.2(j); (e) the Payment Conditions are satisfied with respect thereto; and (f) Borrowers deliver to Lender, at least 10 Business Days prior to the Acquisition, copies of all material agreements relating thereto and a certificate, in form and substance satisfactory to Lender, stating that the Acquisition is a “Permitted Acquisition” and demonstrating compliance with the foregoing requirements.

   

  Permitted Asset Dispositions: (a) sales of Inventory in the Ordinary Course of Business, (b) sales or transfers of Property by a Subsidiary or Obligor to a Borrower, (c) dispositions of Equipment under Section 8.4.2(b), (d) non-exclusive licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering with the business of Obligors or any of their Subsidiaries and not adversely impacting the Collateral or Lender’s rights therein; (e) a disposition approved in writing by Lender, (f) the Sentry Transactions and (g) as long as no Default or Event of Default exists and all Net Proceeds are remitted to a Dominion Account, (i) dispositions of Equipment up to a fair market or book value (whichever is more) of $250,000 in the aggregate during any 12 month period; (ii) dispositions of obsolete, unmerchantable or otherwise unsalable Inventory; (iii) terminations of leases of real or personal Property not necessary for the Ordinary Course of Business, which could not reasonably be expected to have a Material Adverse Effect and which do not result from an Obligor’s default and (iv) sales or discounts, in each case without recourse, of past due Accounts in the Ordinary Course of Business in connection with the compromise or collection thereof.

   

  Permitted Contingent Obligations: Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the Ordinary Course of Business; (b) relating to Swaps permitted hereunder; (c) existing on the Closing Date, and any extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment permitted hereunder; (f) arising under the Loan Documents; (g) arising with respect to customary indemnification obligations in connection with a Permitted Acquisition (other than obligations for Debt or earn-out obligations), or (h) arising from other customary indemnification obligations in commercial agreements entered into in the Ordinary Course of Business or otherwise in an aggregate amount of $500,000 or less at any time.

   

  Permitted Discretion: a determination made in the exercise of reasonable (from the perspective of an asset-based lender) credit judgment.

   

  Permitted Lien: as defined in Section 10.2.2.

   

  Permitted Purchase Money Debt: Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed

  $500,000 at any time and its incurrence does not violate Section 10.2.3.

   

  Person: any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity of any kind.

   

  Plan: any Benefit Plan maintained for employees of an Obligor or ERISA Affiliate, or to which an Obligor or ERISA Affiliate is required to contribute on behalf of its employees.

   

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  Platform: as defined in Section 12.3.3. Pledged Interests: as defined in Section 7.8.1.

   

   

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  Pre-Adjustment Successor Rate: as defined in Section 3.6.2.

   

  Prime Rate: the rate of interest announced by Lender from time to time as its prime rate. Such rate is set by Lender on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Lender shall take effect at the opening of business on the day specified in the announcement.

   

  Properly Contested: with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on assets of the Obligor, unless bonded and stayed to the satisfaction of Lender; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.

   

  Property: any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

   

  PTE: a prohibited transaction class exemption issued by the U.S. Department of Labor, as amended from time to time.

   

  Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets; (b) Debt (other than the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.

   

  Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt or a purchase money security interest under the UCC.

   

  Qualified Account: any investment or other non-operating account of a Borrower maintained by the Lender and subject to a Deposit Account Control Agreement in favor of Lender providing for sole control of the disposition of the amounts held in such account, without regard to whether a Dominion Trigger Period is in effect.

   

  Qualified ECP: an Obligor with total assets exceeding $10,000,000, or that constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” under Section 1a(18)(A)(v)(II) of such act.

   

  Real Estate: all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

   

  Recipient: Lender or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.

   

  Refinancing Conditions: no Default or Event of Default exists upon giving effect to the Refinancing Debt and such Debt, when compared to the Debt being extended, renewed or refinanced, (a) does not have a greater principal amount or interest rate, earlier final maturity or shorter weighted average life, (b) is subordinated to the Obligations to at least the same extent, (c) has representations, covenants, defaults and other terms no less favorable to Borrowers and Lender, and (d) has no additional obligor, guarantor, Lien, or other recourse to any Person or Property.

   

   

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  Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).

   

  Reimbursement Date: as defined in Section 2.2.2.

   

  Related Adjustment: in determining any LIBOR Successor Rate, the first relevant available alternative set forth in the order below that can be determined by Lender applicable to such LIBOR Successor Rate: (a) the spread adjustment, or method for calculating or determining such spread adjustment, that has been selected or recommended by the Relevant Governmental Body for the relevant Pre-Adjustment Successor Rate (taking into account the interest period, interest payment date or payment period for interest calculated and/or tenor thereto) and which adjustment or method (i) is published on an information service selected by Lender from time to time in its discretion, or (ii) solely with respect to Term SOFR, if not currently published, which was previously so recommended for Term SOFR and published on an information service acceptable to Lender; or (b) the spread adjustment that would apply (or has previously been applied) to the fallback rate for a derivative transaction referencing the ISDA Definitions (taking into account the interest period, interest payment date or payment period for interest calculated and/or tenor thereto).

   

  Related Real Estate Documents: with respect to any Real Estate subject to a Mortgage, the following, in form and substance satisfactory to Lender and received by Lender for review: (a) at least 45 days prior to the effective date of the Mortgage, all information requested by Lender for due diligence pursuant to Flood Laws; and (b) at least 15 days prior to the effective date of the Mortgage: (i) a mortgagee title policy (or binder therefor) covering Lender’s interest under the Mortgage, by an insurer acceptable to Lender, which must be fully paid on such effective date; (ii) such assignments of leases, estoppel letters, attornment agreements, consents, waivers and releases as Lender may require with respect to other Persons having an interest in the Real Estate; (iii) a current, as-built survey of the Real Estate, containing a metes-and-bounds property description and certified by a licensed surveyor acceptable to Lender; (iv) a life-of-loan flood hazard determination and, if any Real Estate is located in a special flood hazard zone, flood insurance documentation and coverage satisfactory to Lender; (v) a current appraisal of the Real Estate, prepared by an appraiser, and in form and substance satisfactory to Lender; (vi) an environmental assessment, prepared by environmental engineers acceptable to Lender, an environmental indemnity agreement if appropriate, and such other reports, certificates, studies or data as Lender may reasonably require; and (vii) such other information, documents, instruments or agreements as Lender may reasonably request.

   

  Relevant Governmental Body: the Federal Reserve Board and/or FRBNY, or a committee officially endorsed or convened by the Federal Reserve Board and/or FRBNY.

   

  Rent and Charges Reserve: the aggregate of (a) all past due rent and other amounts owing by an Obligor to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve at least equal to three months rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

   

  Reportable Event: an event set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.

   

  Reporting Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs or (ii) Availability at any time is less than the greater of (A) 15% of the Commitment or (B)

  $3,000,000 and (b) continuing until the date that, during each of the preceding 30 consecutive days (i) no Event of Default has occurred and (ii) Availability has been greater than the greater of (A) 15% of the Commitment and (B) $3,000,000 for each such day.

   

   

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  Restricted Investment: any Investment by a Borrower or Subsidiary, other than (a) Investments in Subsidiaries to the extent existing on the Closing Date; (b) Cash Equivalents that are subject to Lender’s Lien and control, pursuant to documentation in form and substance satisfactory to Lender, or otherwise permitted by Lender hereunder; (c) loans and advances permitted under Section 10.2.7; (d) Permitted Acquisitions and (e) Investments not otherwise permitted under clauses (a) through (d) above, so long as the Payment Conditions are satisfied with respect thereto.

   

  Restrictive Agreement: an agreement (other than a Loan Document) that conditions or restricts the right of any Borrower, Subsidiary or other Obligor to incur or repay Borrowed Money, to grant Liens on any assets, to declare or make Distributions, to modify, extend or renew any agreement evidencing Borrowed Money, or to repay any intercompany Debt.

   

  Revolver Usage: the aggregate amount of outstanding Loans plus the Stated Amount of outstanding Letters of Credit.

   

  S&P: Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., or any successor acceptable to Lender.

   

  Sanction: any sanction administered or enforced by the U.S. government (including OFAC), United Nations Security Council, European Union, U.K. government or other sanctions authority.

   

  Scheduled Unavailability Date: as defined in Section 3.6.2. Secured Parties: Lender and providers of Bank Products.

  Security Documents: the Guaranties, Mortgages, IP Assignments, Deposit Account Control Agreements, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.

   

  Senior Officer: the chairman of the board, president, chief executive officer, chief financial officer or controller of the applicable Obligor.

   

  Sentry: Sentry Financial Corporation.

   

  Sentry Related Assets: as defined in the definition of Sentry Transactions.

   

  Sentry Transactions: the transactions contemplated by that certain purchase agreements and schedules thereto entered into from time to time between Sentry and Company on terms consistent with past practice, which transactions relate to the transfer and assignment of certain leased lighting equipment and payment rights of the Company under that certain energy service agreements (or similar agreements entered into from time to time) with Ford Motor Company (as amended, supplemented or replaced from time to time, collectively, the “Ford ESA Agreements”), pursuant to which the company has assigned to Sentry its rights to the leased lighting equipment and its payment rights under the Ford ESA Agreements (collectively, the “Sentry Related Assets”). All Sentry Related Assets, including all Accounts owing from Ford Motor Company arising in connection the Ford ESA Agreements (whether or not subject to assignment to Sentry, except to the extent otherwise agreed by Lender), shall be excluded from Eligible Accounts and Eligible Inventory and not otherwise included in the calculation of the Borrowing Base.

   

  Side Letter Agreement: Thatthat certain Side Letter Agreement dated as of the date hereof by and between Lender and Borrowers.

   

   

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  SOFR: with respect to any Business Day, the secured overnight financing rate that is published for such dayas administered by FRBNY as administrator of the benchmark (or a successor administrator) on FRBNY’s website (or any successor source) at approximately 8:00 a.m. (New York City time) on the next Business Day and, in each case, that has been selected or recommended by the Relevant Governmental Body.

   

  SOFR Adjustment: means 0.10%.

   

  Solvent: as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates. “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.

   

  Specified Account Debtor: each Account Debtor identified as such in the Side Letter Agreement; provided that each such Account Debtor shall remain a Specified Account Debtor only until written notice from Lender to Borrower Agent that such Account Debtor is no longer an acceptable Specified Account Debtor in its Permitted Discretion.

   

  Specified Debt Payment: any payment or prepayment of Debt made pursuant to the proviso to

  Section 10.2.8.

   

  Specified Distribution: any Distribution made pursuant to Section 10.2.4(a)(ii).

   

  Specified Investment: any Investment made pursuant to clauses (d) or (e) of the definition of Restricted Investment.

   

  Specified Obligor: an Obligor that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 5.8.3).

   

  Specified Transaction: each Specified Debt Payment, Specified Investment and Specified Distribution.

   

  Spot Rate: the exchange rate, as determined by Lender, that is applicable to conversion of one currency into another currency, which is (a) the exchange rate reported by Bloomberg (or other commercially available source designated by Lender) as of the end of the preceding business day in the financial market for the first currency; or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding business day in Lender’s principal foreign exchange trading office for the first currency.

   

  Stated Amount: the outstanding amount of a Letter of Credit, including any automatic increase or tolerance (whether or not then in effect) provided by the Letter of Credit or related LC Documents.

   

   

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  Subordinated Debt: Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Lender.

   

  Subsidiary: any entity at least 50% of whose voting securities or Equity Interests is owned by a Borrower or combination of Borrowers (including indirect ownership through other entities in which a Borrower directly or indirectly owns 50% of the voting securities or Equity Interests).

   

  Successor Rate: as defined in Section 3.6.2.

   

  Swap: as defined in Section 1a(47) of the Commodity Exchange Act. Swap Obligations: obligations under an agreement relating to a Swap.

  Taxes: 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.

   

   

  Term SOFR: the forward-looking term rate for any period that is approximately (as determined by Lender) as long as any interest period option set forth in the definition of “Interest Period” and that is based on SOFR and has been selected or recommended by the Relevant Governmental Body, in each case as published on an information service selected by Lender from time to time in its discretion. (a) for any Interest Period relating to a Term SOFR Loan, a per annum rate equal to the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to such Interest Period, with a term equivalent to such Interest Period (or if such rate is not published prior to 11:00 a.m. on the determination date, the applicable Term SOFR Screen Rate on the U.S. Government Securities Business Day immediately preceding such date), plus the SOFR Adjustment for such Interest Period; and (b) for any Interest Period relating to a Base Rate Loan on any day, a per annum rate equal to the Term SOFR Screen Rate with a term of one month commencing that day; provided, that in no event shall Term SOFR be less than 0.25%.

   

  Term SOFR Loan: a Loan that bears interest based on clause (a) of the definition of Term SOFR.

   

  Term SOFR Screen Rate: the forward-looking SOFR term rate administered by CME (or any successor administrator satisfactory to Lender) and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by Lender from time to time).

   

  Termination Date: December 29, 2025, or such earlier date on which the Commitment terminates hereunder.

   

  Tier I Account Debtors: Account Debtors (a) with a credit rating of at least Baa3 from Moody’s or BBB- from S&P or (b) with an acceptably strong credit profile, as determined by the Lender in its sole Permitted Discretion, including, as of the Closing Date, the Tier I Account Debtors identified in the Side Letter Agreement, and such other Account Debtors as may be approved in writing by Lender from time to time (following written request from Borrower Agent) as meeting its requirements for Tier I Account Debtors. All Tier I Account Debtors included under clause (b) above shall remain Tier I Account Debtors until written notice from Lender to Borrower Agent that such Account Debtor is no longer an acceptable Tier I Account Debtor.

   

  Tier II Account Debtor: one Account Debtor identified by Borrower Agent for any one month period as being a Tier II Account Debtor. Each Tier II Account Debtor shall remain a Tier II Account

   

   

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  Debtor only for such one month period (but may be re-designated for a consecutive or any subsequent month) but shall cease to be a Tier II Account Debtor prior to the end of such month (and for any subsequent month) if Lender delivers written notice to Borrower Agent that such Account Debtor is no longer an acceptable Tier II Account Debtor.

   

  Tier III Account Debtors: all Account Debtors other than a Specified Account Debtor, Tier I Account Debtors and Tier II Account Debtors.

   

  UCC: the Uniform Commercial Code as in effect in the State of Illinois or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

   

  Unrestricted Cash: Cash Equivalents not subject to Lender’s Lien and control under documents satisfactory to Lender.

   

  Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to the Code, ERISA or the Pension Protection Act of 2006 for the applicable plan year.

   

  Unused Line Fee Rate: a per annum rate equal to 0.25%.

   

  Upstream Payment: a Distribution by a Subsidiary of a Borrower to such Borrower.

   

  U.S. Government Securities Business Day: any Business Day, except any day on which the Securities Industry and Financial Markets Association, New York Stock Exchange or FRBNY is not open for business because the day is a legal holiday under New York law or U.S. federal law.

   

  Value: (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first out basis, and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person and net of all premiums with respect to any applicable credit insurance or cost associated with applicable supporting letters of credit or costs associated with similar applicable credit support therefor.

   

  Voltrek and Stay-Lite Earn-Out Obligations: means the earn out obligations described in (i) that certain Stock Purchase Agreement dated as of December 31, 2021 by and between Company and Kirk Tuson and (ii) that certain Membership Interest Purchase Agreement dated as of October 5, 2022 by and among Company, Final Frontier, LLC and the Members of Final Frontier, LLC, all in a maximum aggregate amount not in excess of $14,350,000;

   

  WAB Credit Card Program: the credit card program outstanding on the Closing Date provided by Western Alliance Bank to the Company, to the extent such program is terminated within 90 days of the Closing Date.

   

  1.2.Accounting Terms

   

  . Under the Loan Documents (except as otherwise specified therein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Borrowers delivered to Lender before the Closing Date and using the same inventory valuation method and lease accounting treatment as used in such financial statements; provided, that Borrowers may adopt

   

   

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  a change required or permitted by GAAP after the Closing Date as long as Borrowers’ certified public accountants concur in such change, it is disclosed to Lender and the Loan Documents are amended in a manner satisfactory to Lender to address the change. Upon request by Lender, Borrowers’ financial statements and Borrower Materials shall set forth a reconciliation between calculations made before and after giving effect to any change in GAAP.

   

  1.3.Uniform Commercial Code

   

  . As used herein, the following terms are defined in accordance with the UCC in effect in the State of Illinois: “Account,” “Account Debtor,” “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Investment Property,” “Letter-of-Credit Right” and “Supporting Obligation.”

   

  1.4.Certain Matters of Construction

   

  . The rules of construction and interpretation included in this Section apply to all Loan Documents. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to the applicable document as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and the rule of ejusdem generis shall not apply to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of a Loan Document. Reference to any (a) law includes all related regulations, interpretations, supplements, amendments and successor provisions; (b) document, instrument or agreement includes any amendment, extension, supplement, waiver, replacement and other modification thereto (to the extent permitted by the Loan Documents); (c) section means, unless the context otherwise requires, a section of the applicable document; (d) exhibit or schedule means, unless the context otherwise requires, an exhibit or schedule to the applicable document, which is thereby incorporated by reference; (e) Person includes its permitted successors and assigns; (f) time of day means the time at Lender’s notice address under Section 12.3.1; or (g) discretion of Lender means its sole and absolute discretion exercised at any time. All determinations (including calculations of Borrowing Base and financial covenants) made from time to time by an Obligor under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Lender (and not necessarily calculated in accordance with GAAP). Obligors have the burden of establishing any alleged negligence, misconduct or lack of good faith by any Indemnitee under a Loan Document. No provision of a Loan Document shall be construed against a party by reason of it having, or being deemed to have, drafted the provision. Reference to an Obligor’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.

  1.5.Division

   

  . Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation) as if it were a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder.

   

  1.6.Currency Equivalents.

   

   

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  1.6.1.Calculations. All references in the Loan Documents to Loans, Letters of Credit, Obligations, Borrowing Base components and other amounts shall be denominated in Dollars, unless expressly provided otherwise. The Dollar equivalent of any amounts denominated or reported under a Loan Document in a currency other than Dollars shall be determined by Lender on a daily basis, based on the current Spot Rate. Borrowers shall report Value and other Borrowing Base components to Lender in the currency invoiced by Borrowers (for Accounts) or shown in Borrowers’ financial records (for all other assets), and unless expressly provided otherwise, shall deliver financial statements and calculate financial covenants in Dollars. Notwithstanding anything herein to the contrary, if any Obligation is funded or expressly denominated in a currency other than Dollars, Borrowers shall repay such Obligation in such other currency.

   

  1.6.2.Judgments. If, in connection with obtaining judgment in any court, it is necessary to convert a sum from the currency provided under a Loan Document into another currency, the Spot Rate shall be used as the rate of exchange. Notwithstanding any judgment in a currency different from that specified in a Loan Document, a Borrower shall discharge its obligation in respect of the sum due under the Loan Document only if, on the Business Day following Lender’s receipt of the payment in the judgment currency, Lender can use the amount paid to purchase the sum originally due in the Loan Document currency. If the purchased amount is less than the sum originally due, Borrowers agree, as a separate obligation and notwithstanding any such judgment, to indemnify Lender against such loss. If the purchased amount is greater than the sum originally due, Lender shall return the excess amount to the applicable Borrower (or to the Person legally entitled thereto).

   

  SECTION 2.	CREDIT FACILITIES

   

  2.1.Loan Commitment.

   

  2.1.1.Commitment. Lender agrees, on the terms set forth herein, to make Loans to Borrowers in an aggregate amount up to the Commitment, from time to time through the Termination Date. The Loans may be repaid and reborrowed as provided herein. In no event shall Lender have any obligation to honor a request for a Loan if Revolver Usage at such time plus the requested Loan would exceed the Borrowing Base. Lender may fulfill its obligations under the Loan Documents through one or more Lending Offices, and this shall not affect any obligations of Obligors under the Loan Documents or with respect to any Obligations.

   

  2.1.2.Use of Proceeds. The proceeds of Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for other lawful corporate purposes of Borrowers, including working capital. Borrowers shall not, directly or indirectly, use any Letter of Credit or Loan proceeds, nor use, lend, contribute or otherwise make available any Letter of Credit or Loan proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities of or business with any Person, or in any country, territory or jurisdiction, that, at the time of issuance of the Letter of Credit or funding of the Loan, is the target of any Sanction; or (ii) in any manner that would result in a violation of a Sanction, Anti-Corruption Law or other Applicable Law by any Person (including any Secured Party or other individual or entity participating in any transaction).

   

  2.1.3.Voluntary Reduction or Termination. Upon at least 90 days prior written notice to Lender at any time after the first anniversary of this Agreement, Borrowers may terminate or reduce the Commitment. Each reduction shall be in an increment of $1,000,000, but not less than $3,000,000, and shall be specified in the notice. Any notice of termination or reduction by Borrowers shall be irrevocable.

   

   

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  2.1.4.Overadvances. Any Overadvance shall be repaid by Borrowers on the earlier of demand by Lender or the first Business Day after any Borrower has knowledge thereof, and shall constitute an Obligation secured by the Collateral, entitled to all benefits of the Loan Documents. No funding or sufferance of an Overadvance shall constitute a waiver by Lender of the Event of Default caused thereby.

   

  2.2.Letter of Credit Facility.

   

  2.2.1.Issuance of Letters of Credit. Lender agrees to issue Letters of Credit from time to time until 30 days prior to the Termination Date, on the terms set forth herein, including the following:

   

  (a)Each Borrower acknowledges that Lender’s willingness to issue any Letter of Credit is conditioned upon its receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Lender may customarily require for issuance of a letter of credit of similar type and amount. Lender shall have no obligation to issue any Letter of Credit unless (i) it receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied.

   

  (b)Letters of Credit may be requested by a Borrower to support obligations incurred in the Ordinary Course of Business or as otherwise approved by Lender in its Permitted Discretion. Increase, renewal or extension of a Letter of Credit shall be treated as issuance of a new Letter of Credit, but Lender may require a new LC Application in its discretion.

   

  (c)Borrowers assume all risks of beneficiaries’ acts, omissions or misuses of Letters of Credit. Lender shall not be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial, incomplete or failed shipment of any goods referred to in a Letter of Credit or Documents; deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; misapplication by a beneficiary of a Letter of Credit or proceeds thereof; or consequences arising from causes beyond the control of Lender, including any act or omission of a Governmental Authority. No Indemnitee shall be liable to any Obligor or other Person for any action taken or omitted to be taken in connection with any Letter of Credit or LC Documents except as a result of the Indemnitee’s gross negligence or willful misconduct.	Borrowers shall take all action (including enforcement of available rights against a beneficiary) to avoid and mitigate damages relating to Letters of Credit or claimed against Lender. Lender shall be fully subrogated to all rights and remedies of a beneficiary whose claims are discharged through a Letter of Credit.

   

  (d)In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Lender shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or other Communication in whatever form believed by Lender, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Lender may use legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act (and shall be fully protected in any action taken in good faith reliance) upon any advice given by such experts. Lender may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

   

   

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  2.2.2.Reimbursement. If Lender honors any request for payment under a Letter of Credit, Borrowers shall pay to Lender, on the same day (“Reimbursement Date”), the amount paid under such Letter of Credit, together with interest at the interest rate for Base Rate Loans from the Reimbursement Date until payment by Borrowers. The obligation of Borrowers to reimburse Lender for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Loans in an amount necessary to pay all amounts due on any Reimbursement Date.

   

  2.2.3.Cash Collateral. At Lender’s request, Borrowers shall Cash Collateralize outstanding Letters of Credit if an Event of Default exists, the Termination Date is scheduled to occur within 20 Business Days or the Termination Date occurs.

   

  SECTION 3.	INTEREST, FEES AND CHARGES

   

  3.1.Interest.

   

  3.1.1.Rates and Payment of Interest.

   

  (a)The Loans shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin; and (ii) if a LIBORTerm SOFR Loan, at LIBORTerm SOFR for the applicable Interest Period, plus the Applicable Margin. Other payment Obligations not paid when due (including, to the extent permitted by law, interest not paid when due), shall bear interest at the Base Rate in effect from time to time, plus the Applicable Margin for Base Rate Loans, subject to clause (b) below.

   

  (b)During an Insolvency Proceeding with respect to any Obligor, or during any other Event of Default if Lender in its discretion so elects, Obligations shall bear interest at the Default Rate (whether before or after any judgment), payable on demand.

   

  (c)Interest shall accrue from the date a Loan is advanced or, with respect to other payment Obligations, the date due and payable, as applicable, until paid in full by Borrowers, and shall in no event be less than zero at any time. Interest accrued on the Loans is due and payable in arrears (i) on each Interest Payment Date; (ii) concurrently with prepayment of any LIBORTerm SOFR Loan, with respect to the principal amount being prepaid; and (iii) on the Termination Date.

   

  3.1.2.Application of LIBORTerm SOFR to Outstanding Loans. Borrowers may elect to convert any portion of Base Rate Loans to, or to continue any LIBORTerm SOFR Loan at the end of its Interest Period as, a LIBORTerm SOFR Loan.	Borrower Agent shall give Lender a Notice of Conversion/Continuation no later than 11:00 a.m. at least two Business Days before the requested conversion or continuation date. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be one month if not specified). If, at expiration of an Interest Period for a LIBORTerm SOFR Loan, Borrowers have failed to deliver a Notice of Conversion/Continuation, the Loan shall convert to a Base Rate Loan. Lender does not warrant or accept responsibility for, nor shall it have any liability with respect to, administration, submission or any other matter related to any reference rate used in determining LIBORreferred to herein or with respect to any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternate or, replacement for or successor to any such rate (including any Successor Rate) (or any component of any of the foregoing), or

   

   

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  the effect of any of the foregoing or of any Conforming Changes. Lender may select information source(s) in its discretion to ascertain any reference rate referred to herein or any alternative, successor or replacement rate (including any Successor Rate), or any component thereof, in each case pursuant to the terms hereof, and shall have no liability to Borrowers or any other Person for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise, and whether at law or in equity) for any error or other act or omission related to or affecting the selection, determination or calculation of any rate (or component thereof) provided by such information source(s). During a Default or Event of Default, Lender may elect not to make, convert or continue a Loan as a LIBORTerm SOFR Loan.

   

  3.1.3.Interest Periods. Borrowers shall select an interest period (“Interest Period”) of one, two or three or six months (in each case, subject to availability) to apply to each LIBORTerm SOFR Loan; provided, that (a) the Interest Period shall begin on the date the Loan is made or continued as, or converted into, a LIBORTerm SOFR Loan, and shall expire on the numerically corresponding day in the calendar month at its endone, three or six months thereafter, as applicable; (b) if any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of the end month, then the Interest Period shall expire on such month’s last Business Day; and if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall expire on the next Business Day; and (c) no Interest Period shall extend beyond the Termination Date.

   

  3.2.Fees.

   

  3.2.1.Unused Line Fee. Borrowers shall pay to Lender a fee equal to the Unused Line Fee Rate times the amount by which the Commitment exceeds the average daily Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the Termination Date.

   

  3.2.2.LC Facility Fees.	Borrowers shall pay to Lender (a) a fee equal to the Applicable Margin in effect for LIBORTerm SOFR Loans times the average daily Stated Amount of Letters of Credit, payable in arrears on the first day of each month; (b) a fronting fee equal to 0.50% per annum on the Stated Amount of each Letter of Credit, payable in arrears on the first day of each month; and (c) all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (a) shall be increased by 2% per annum.

   

  3.2.3.Closing Fee. On the Closing Date, Borrowers shall pay to Lender a closing fee as set forth in the Fee Letter.

   

  3.2.4.Collateral Administration Fee. On the Closing Date and on each anniversary thereof, Borrowers shall pay to Lender, in advance, a collateral administration fee as set forth in the Fee Letter. Such fee shall be deemed fully earned upon becoming due hereunder and shall not be reimbursable for any reason.

   

  3.3.Computation of Interest, Fees, Yield Protection

   

  . All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days. Each determination by Lender of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate as to amounts

   

   

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  payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.7 that is submitted to Borrower Agent by Lender shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.

   

  3.4.Reimbursement Obligations

   

  . Borrowers shall pay all Claims promptly upon request. Borrowers shall also reimburse Lender for all reasonable legal, accounting, appraisal, consulting, and other fees and expenses incurred by it in connection with (a) negotiation and preparation of Loan Documents, including any modification thereof;

  (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Lender’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), any examination or appraisal with respect to any Obligor or Collateral by Lender’s personnel or a third party. All reasonable legal, accounting and consulting fees shall be charged to Borrowers by Lender’s professionals at their full hourly rates, regardless of any alternative fee arrangements that Lender or any of its Affiliates may have with such professionals that otherwise might apply to this or any other transaction. Borrowers acknowledge that counsel may provide Lender with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with Lender, including fees paid hereunder. If, for any reason (including inaccurate information in Borrower Materials), it is determined that (y) a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Lender an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid or (z) a lower Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall be entitled to a credit from Lender in an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section shall be due on demand.

   

  3.5.Illegality

   

  . Subject to Section 3.6, ifIf Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for Lender or its applicable Lending Office to perform any of its obligations hereunder, to make, maintain, issue, fund, or commit to or charge applicable interest or fees with respect to any Loan or Letter of Credit whose interest or fee is determined by reference to SOFR or Term SOFR, or to determine or charge interest or fees based on LIBOR,SOFR or any Governmental Authority has imposed material restrictions on the authority of Lender to purchase or sell, or to take deposits of, Dollars in the London interbank marketTerm SOFR, then, on notice thereof by Lender to Borrower Agent, (a) any obligation of Lender to perform such obligations, to make, maintain, issue, fund or commit to the Loan or Letter of Credit (or to charge interest or fees otherwise applicable thereto), or to continue or convert Loans as LIBORTerm SOFR Loans, shall be suspended, and Borrowers shall make such appropriate accommodations regarding affected Letters of Credit as Lender may reasonably request, and (b) if Lender cannot lawfully make or maintain Base Rate Loans whose interest rate is determined by reference to Term SOFR, the interest rate applicable to Base Rate Loans shall, as necessary to avoid illegality, be determined without reference to Term SOFR component of Base Rate, in each case until Lender notifies Borrower Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrowers shall prepay the applicable Loan, Cash Collateralize the applicable LC Obligations or, if applicable,or convert LIBOR Loan(s)Term SOFR Loans to Base Rate Loan(s)Loans, either on the last day of the Interest Period therefor, if Lender may lawfully continue to maintain the Loan and charge applicable interest to such day, or immediately, if Lender cannot so maintain the Loan. Upon any such prepayment or conversion of a Loan pursuant to this Section, Borrowers shall also pay accrued interest on the amount so prepaid or converted.

   

   

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  3.6.Inability to Determine Rates; Replacement of LIBORTerm SOFR.

   

  3.6.1.Inability to Determine Rate

   

  . Lender will promptly notify Borrower Agent if,If in connection with any Loan or request for a Term SOFR Loan or a conversion to or continuation thereof, as applicable, (a) Lender determines (which determination shall be conclusive absent manifest error) that (i) no Successor Rate has been determined in accordance with Section 3.6.2, and the circumstances under Section 3.6.2(a) or the Scheduled Unavailability Date has occurred (as applicable), or (ii) adequate and reasonable means do not otherwise exist for determining Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan or in connection with an existing or proposed Base Rate Loan, or (b) Lender determines that

  (a)Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable Loan amount or Interest Period; or (b) LIBOR for thefor any reason Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan does not adequately and fairly reflect the cost to Lender of funding or maintaining thesuch Loan, Lender will promptly so notify Borrower Agent. Thereafter, Lender’s(x) the obligation of Lender to make or, maintain, or convert Base Rate Loans to, Term SOFR Loans shall be suspended (to the extent of the affected LIBORTerm SOFR Loans andor Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of Base Rate, the utilization of the LIBORsuch component (if affected) in determining Base Rate shall be suspended, in each case until Lender withdraws therevokes such notice. Upon receipt of thesuch notice, (i) Borrower Agent may revoke any pending request for fundinga Borrowing, conversion or continuation of a LIBOR LoanTerm SOFR Loans (to the extent of the affected Term SOFR Loans or Interest Periods) or, failing that, will be deemed to have requestedconverted such request into a request for Base Rate LoanLoans, and Lender may immediately(ii) any outstanding Term SOFR Loans shall convert any affected LIBOR Loan to a Base Rate Loan. Notwithstanding the foregoing, Lender may propose an alternative interest rate for the applicable Loan, which Borrower Agent may elect to apply to the LoanLoans at the end of their respective Interest Periods.

   

  3.6.2.Replacement of LIBORSuccessor Rates. Notwithstanding anything to the contrary in any Loan Document, if Lender determines (which determination shall be conclusive absent manifest error), or Borrower Agent notifies Lender that Borrowers have determined, that:

   

  (a)(a) adequate and reasonable means do not exist for ascertaining LIBOR for any Interest Period hereunder or any other tenorsone, three and six month interest periods of LIBORTerm SOFR, including because the LIBORTerm SOFR Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or

   

  (b)the(b) CME or any successor administrator of the LIBORTerm SOFR Screen Rate or a Governmental Authority having jurisdiction over Lender, CME or such administrator with respect to its publication of Term SOFR, in each case acting in such capacity, has made a public statement identifying a specific date after which LIBORone, three and six month interest periods of Term SOFR or the LIBORTerm SOFR Screen Rate shall or will no longer be made available or permitted to be used for determining the interest rate of U.S. dollar denominated loans, or shall or will otherwise cease, provided, that, at the time of such statement, there is no successor administrator satisfactory to Lender that will continue to provide LIBORsuch interest periods of Term SOFR after such specific date (such specificthe latest date on which one, three and six month interest periods of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely, “Scheduled Unavailability Date”); or

   

  (c)the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over such administrator has made a public statement announcing that all Interest Periods and other tenors of LIBOR are no longer representative; or

   

   

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  (d)commercial loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR;

   

  then, in the case of clauses (a) through (c) above, on a date and time determined by Lender (any such date, “LIBORTerm SOFR Replacement Date”), which date shall be at the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and shall occur reasonably promptly upon the occurrence of any of the events or circumstances under clauses (a), (b) or (c) above and, solely with respect to clause (b) above, no later than the Scheduled Unavailability Date, LIBORTerm SOFR will be replaced hereunder and under theany other applicable Loan DocumentsDocument with, subject to the proviso below, the first available alternative set forth in the order below Daily Simple SOFR plus the SOFR Adjustment for any payment period for interest calculated that can be determined by Lender, in each case, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document (“LIBOR Successor Rate”; and any such rate before giving effect to the Related Adjustment, “Pre-Adjustment). If the Successor Rate”):

   

  (x)	Term is Daily Simple SOFR plus the Related Adjustment; and

   

  (y) SOFR plus the Related Adjustment; , all interest will be payable on a monthly basis.

   

  and in the case of clause (d) above, Lender may amend this Agreement solely for the purpose of replacing LIBOR under this Agreement and the other Loan Documents in accordance with the definition of “LIBOR Successor Rate” and such amendment will become effective at 5:00 p.m. on the fifth Business Day after Lender has notified Borrower Agent of the occurrence of the circumstances described in clause (d) above; provided that if Lender determines that Term SOFR has become available, is administratively feasible for Lender and would have been identified as the Pre-Adjustment Successor Rate in accordance with the foregoing if it had been so available at the time that the LIBOR Successor Rate then in effect was so identified, and notifies Borrower Agent of such availability, then from and after the beginning of the Interest Period, relevant interest payment date or payment period for interest calculated, in each case, commencing no less than 30 days after the date of such notice, the Pre-Adjustment Successor Rate shall be Term SOFR and the LIBOR Successor Rate shall be Term SOFR plus the relevant Related Adjustment.

   

  Lender will promptly (in one or more notices) notify Borrower Agent of (x) any occurrence of any events, periods or circumstances under clauses (a) through (c) above, (y) a LIBOR Replacement Date, and (z) the LIBOR Successor Rate. Any LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for Lender, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by Lender. Notwithstanding anything to the contrary in any Loan Document, if at any time any LIBOR Successor Rate as so determined would otherwise be less than 0.25%, the LIBOR Successor Rate will be deemed to be 0.25% for the purposes of this Agreement and the other Loan Documents.

   

  In connection with the implementation of a LIBOR Successor Rate, Lender will have the right to make LIBOR Successor Rate Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such LIBOR Successor Rate Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, Lender shall deliver each amendment implementing such LIBOR Successor Rate Conforming Changes to Borrower Agent reasonably promptly after such amendment becomes effective.

   

   

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  If events or circumstances of the type described in clauses (a) through (c) above occur with respect to any LIBOR Successor Rate then in effect, the successor rate thereto shall be determined in accordance with the definition of “LIBOR Successor Rate.”

   

  3.6.3.Alternate Benchmark Rate.   Notwithstanding anything to the contrary herein, (ax) after any such determination by Lender or receipt by Lender of any such notice described in Section 3.6.2(a) through (c), as applicable, if Lender determines that none of the LIBOR Successor RatesDaily Simple SOFR is not available on or prior to the LIBORTerm SOFR Replacement Date, or (ii) if the events or circumstances described in Section 3.6.2(d) have occurred but none of the LIBOR Successor Rates is available, or (iiiy) if the events or circumstances of the type described in Section 3.6.2clauses (a) throughor (c)b) above have occurred with respect to the LIBOR Successor Rate then in effect and Lender determines that none of the LIBOR Successor Rates is available, then in each case, Lender and Borrowers may amend this Agreement solely for the purpose of replacing LIBORTerm SOFR or any then current LIBOR Successor Rate in accordance with this Section at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with another alternatean alternative benchmark rate giving due consideration to any evolving or then existing convention for such alternative benchmark in similar U.S. dollar denominated commercial credit facilities for such alternative benchmarksin the United States and, in each case, including any Related Adjustments and any other mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for such benchmark in similar U.S. dollar denominated commercial credit facilities for such benchmarksin the United States, which adjustment or method for calculating such adjustment shall be published on an information service as selected by Lender from time to time in its discretion and may be periodically updated. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a LIBOR Successor Rate.

   

  3.6.4.No Successor Rate. If, at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, no LIBOR Successor Rate has been determined in accordance with Section 3.6.2 or 3.6.3 and the circumstances under Section 3.6.2(a) or (c) exist or the Scheduled Unavailability Date has occurred (as applicable), Lender will promptly so notify Borrower Agent. Thereafter, (a) the obligation of Lender to make or maintain LIBOR Loans shall be suspended (to the extent of the affected LIBOR Loans, Interest Periods, interest payment dates or payment periods), and

  (b)the LIBOR component shall no longer be utilized in determining Base Rate, until the LIBOR Successor Rate has been determined in accordance with Section 3.6.2 or 3.6.3. Upon receipt of such notice, Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Loans (to the extent of the affected Loans, Interest Periods, interest payment dates or payment periods) or, failing that, will be deemed to have converted such request into a request for Base Rate Loans (subject to clause (b) above)

   

  Lender will promptly (in one or more notices) notify Borrowers of implementation of any Successor Rate. A Successor Rate shall be applied in a manner consistent with market practice; provided, that to the extent market practice is not administratively feasible for Lender, the Successor Rate shall be applied in a manner as determined by Lender in its discretion. If a Successor Rate includes a SOFR-based rate, then as of the Term SOFR Replacement Date, the Unused Line Fee Rate shall increase by percentage points equal to the SOFR Adjustment for a one month interest period. Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than 0.25%, the Successor Rate will be deemed to be 0.25% for all purposes of the Loan Documents.

   

  3.7.Increased Costs; Capital Adequacy.

   

  3.7.1.Increased Costs Generally. If any Change in Law shall:

   

   

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  (a)impose modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, Lender (except any reserve requirement reflected in calculating LIBOR);

   

  (b)subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes described in clause (b) of the definition of Excluded Taxes, and (iii) Connection Income Taxes) with respect to any Loan, Letter of Credit, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

   

  (c)impose on Lender or any interbank market any other condition, cost or expense affecting any Loan, Letter of Credit, Commitment or Loan Document;

   

  and the result thereof shall be to increase the cost to Lender of making or maintaining any Loan or the Commitment, or converting to or continuing any interest option for a Loan, or to increase the cost to Lender of issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue a Letter of Credit), or to reduce the amount of any sum received or receivable by Lender hereunder (whether of principal, interest or any other amount) then, upon request by Lender, Borrowers will pay to Lender such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.

   

  3.7.2.Capital Requirements. If Lender determines that a Change in Law affecting it or its holding company regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on Lender’s or such holding company’s capital as a consequence of this Agreement, Commitment, Loans or Letters of Credit to a level below that which Lender or such holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrowers will pay to Lender such additional amounts as will compensate it or its holding company for the reduction suffered.

   

  3.7.3.LIBOR Loan Reserves. If Lender is required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits, Borrowers shall pay additional interest to Lender on each LIBOR Loan equal to the costs of such reserves allocated to the Loan by Lender (as determined by it in good faith, which determination shall be conclusive). The additional interest shall be due and payable on each interest payment date for the Loan; provided, that if Lender notifies Borrowers of the additional interest less than 10 days prior to the payment date, such interest shall be payable 10 days after Borrowers’ receipt of the notice.

   

  3.7.3. 3.7.4. Compensation. Failure or delay on the part of Lender to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation, but Borrowers shall not be required to compensate Lender for any increased costs or reductions suffered more than nine months (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that Lender notifies Borrower Agent of the applicable Change in Law and of Lender’s intention to claim compensation therefor.

   

  3.8.Mitigation

   

  . If Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrowers are required to pay any Indemnified Taxes or additional amounts under Section 5.7, then at the request of Borrower Agent, Lender shall use reasonable efforts to designate or assign its obligations hereunder to a different Lending Office, if, in the judgment of Lender, such designation or assignment would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, and would not subject Lender to any unreimbursed cost or expense, and would not otherwise be disadvantageous to it or unlawful. Borrowers shall pay all reasonable costs and expenses incurred by Lender in connection with any such designation or assignment.

   

   

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  3.9.Funding Losses

   

  . If for any reason (a) any Borrowing, conversion or continuation of a LIBORTerm SOFR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of a LIBORTerm SOFR Loan occurs on a day other than the end of its Interest Period, or (c) Borrowers fail to repay a LIBORTerm SOFR Loan when required, then Borrowers shall pay to Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding.  For purposes of calculating such amounts, Lender shall be deemed to have funded a LIBOR Loan by a matching deposit or other borrowing in the London interbank market for a comparable amount and period, even if the Loan was not in fact so funded.

   

  3.10.Maximum Interest

   

  . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“maximum rate”). If Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrowers. In determining whether the interest contracted for, charged or received by Lender exceeds the maximum rate, Lender may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread (in equal or unequal parts) the total amount of interest throughout the contemplated term of the Obligations hereunder.

   

  SECTION 4.  LOAN ADMINISTRATION

   

  4.1.Manner of Borrowing and Funding Loans.

   

  4.1.1.Notice of Borrowing.

   

  (a)To request a Loan, Borrower Agent shall give Lender a Notice of Borrowing by 11:00 a.m. (i) on the requested funding date for a Base Rate Loan, and (ii) at least two Business Days prior to the requested funding date for a LIBORTerm SOFR Loan. Notices received by Lender after such time shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the Borrowing amount, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a Base Rate Loan or LIBORTerm SOFR Loan, and (D) in the case of a LIBORTerm SOFR Loan, the applicable Interest Period (which shall be deemed to be one month if not specified).

   

  (b)Unless payment is otherwise made by Borrowers, the becoming due of any Obligation (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt) shall be deemed to be a request for a Base Rate Loan on the due date in the amount due and the Loan proceeds shall be disbursed as direct payment of such Obligation. In addition, Lender may, at its option, charge such amount against any operating, investment or other account of a Borrower maintained with Lender or any of its Affiliates.

   

  (c)If a Borrower maintains a disbursement account with Lender or any of its Affiliates, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for a Base Rate Loan on the presentation date, in the amount of the Payment Item. Proceeds of the Loan may be disbursed directly to the account.

   

   

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  4.1.2.Notices. If Borrowers request, convert or continue Loans, select interest rates, or transfer funds based on telephonic or electronic instructions to Lender, Borrowers shall confirm the request by prompt delivery to Lender of a Notice of Borrowing or Notice of Conversion/Continuation, as applicable. Lender is not liable for any loss suffered by a Borrower as a result of Lender acting on its understanding of telephonic or electronic instructions from a person believed in good faith to be authorized to give instructions on a Borrower’s behalf.

   

  1.1.1.Conforming Changes

   

   

   

  . Lender may make Conforming Changes from time to time with respect to SOFR, Term SOFR or any Successor Rate. Notwithstanding anything to the contrary in any Loan Document, any amendment implementing such changes shall be effective without further action or consent of any party to any Loan Document. Lender shall post or provide each such amendment to Borrower Agent reasonably promptly after it becomes effective.

   

  4.2.Number and Amount of LIBORTerm SOFR Loans; Determination of Rate

   

  . Each Borrowing of LIBORTerm SOFR Loans when made shall be in a minimum amount of

  $1,000,000, plus an increment of $100,000 in excess thereof. No more than six (6) Borrowings of LIBORTerm SOFR Loans may be outstanding at any time, and all LIBORTerm SOFR Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose. Upon determining LIBORTerm SOFR for any Interest Period requested by Borrowers, Lender shall promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice in writing. Notwithstanding anything to the contrary set forth herein, all Loans outstanding on the Amendment Effective Date which are LIBOR Loans (as defined in this Agreement immediately before giving effect to the Amendment No. 1) shall be permitted to continue as LIBOR Loans for the duration of such LIBOR Loans’ respective Interest Periods and, upon expiration of such Interest Periods, such Loans shall be converted to a Term SOFR Loan and/or a Base Rate Loan pursuant to and in accordance with the terms hereof.

   

  4.3.Borrower Agent

   

  . Each Borrower hereby designates the Company (“Borrower Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for and receipt of Loans and Letters of Credit, designation of interest rates, delivery or receipt of Communications, delivery of Borrowing Base and financial information and reports, payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Lender. Borrower Agent hereby accepts such appointment. Lender shall be entitled to rely upon any Communication (including any notice of borrowing) delivered by or to Borrower Agent on behalf of any Borrower and shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. Each Borrower agrees that any Communication, delivery, action, omission or undertaking by Borrower Agent hereunder shall be binding upon and enforceable against such Borrower.

   

  4.4.One Obligation

   

  . The Loans, LC Obligations and other Obligations shall constitute one general obligation of Borrowers and are secured by Lender’s Lien on all Collateral; provided, that Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.

   

  4.5.Effect of Termination

   

   

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  . On the effective date of the termination of the Commitment, the Obligations shall be immediately due and payable, and each Secured Party may terminate its Bank Products. Until Full Payment of the Obligations, all undertakings of Borrowers contained in the Loan Documents shall continue, and Lender shall retain its Liens in the Collateral and all rights and remedies under the Loan Documents. Lender shall not be required to terminate its Liens unless it receives Cash Collateral or a written agreement, in each case satisfactory to it, protecting it from dishonor or return of any Payment Item previously applied to the Obligations. Sections 2.2, 3.4, 3.6, 3.7, 3.9, 5.4, 5.7, 12.2, this Section, and each indemnity or waiver given by an Obligor in any Loan Document, shall survive any assignment by Lender of rights or obligations hereunder, termination of the Commitment, and any repayment, satisfaction, discharge or Full Payment of any Obligations.

   

  SECTION 5.  PAYMENTS

   

  5.1.General Payment Provisions

   

  . All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes, and in immediately available funds, not later than 12:00 noon on the due date. Any payment after such time shall be deemed made on the next Business Day. Any payment of a LIBORTerm SOFR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Sections 3.1.1(c) and 3.9. Lender shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against Obligations, at Lender’s discretion, but whenever possible (provided no Default or Event of Default exists) any prepayment shall be applied to Base Rate Loans before LIBORTerm SOFR Loans.

   

  5.2.Repayment of Loans

   

  . Loans may be prepaid from time to time, without penalty or premium. Loans shall be due and payable in full on the Termination Date, unless payment is sooner required hereunder, and any Overadvance shall be due and payable as provided in Section 2.1.4. If an Asset Disposition includes Accounts or Inventory (other than collection of Accounts in the Ordinary Course or Business and sales of Inventory in the Ordinary Course of Business), Borrowers shall apply Net Proceeds to repay Loans equal to the greater of

  (a) the net book value (or fair market value, if higher) of such Accounts and Inventory, or (b) the reduction in Borrowing Base resulting from the disposition.

   

  5.3.Payment of Other Obligations

   

  . Obligations other than Loans, including LC Obligations and Claims, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.

   

  5.4.Marshaling; Payments Set Aside

   

  . Lender shall have no obligation to marshal any assets in favor of any Obligor or against any Obligations. If any payment by or on behalf of Borrowers is made to Lender or if Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.

   

  5.5.Dominion Account

   

  . The ledger balance in the main Dominion Account as of the end of a Business Day shall be applied to the Obligations at the beginning of the next Business Day, during any Dominion Trigger Period. Any

   

   

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  resulting credit balance shall not accrue interest in favor of Borrowers and shall be made available to Borrowers as long as no Default or Event of Default exists. In no event shall monies and collateral proceeds obtained from an Obligor be applied to pay its Excluded Swap Obligations.

   

  5.6.Account Stated

   

  . Lender shall maintain, in accordance with its customary practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any failure of Lender to record anything in a loan account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Entries in a loan account shall be presumptive evidence of the information contained therein. If information in a loan account is provided to or inspected by or on behalf of a Borrower, the information shall be conclusive and binding on Borrowers for all purposes absent manifest error, except to the extent Borrower Agent notifies Lender in writing within 30 days of specific information subject to dispute.

   

  5.7.Taxes.

   

  5.7.1.Payments Free of Taxes; Obligation to Withhold; Tax Payment.

   

  (a)All payments of Obligations by Obligors shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If Applicable Law (as determined by Lender in its discretion) requires the deduction or withholding of any Tax from any such payment by a Recipient or Obligor, then the Recipient or Obligor shall be entitled to make such deduction or withholding based on information and documentation provided pursuant to this Section. For purposes of this Section, “Applicable Law” shall include FATCA.

   

  (b)If a Recipient or Obligor is required by the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then the Recipient shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to the Code. If a Recipient or Obligor is required by any Applicable Law other than the Code to withhold or deduct Taxes from any payment, then the Recipient or Obligor, to the extent required by Applicable Law, shall timely pay the full amount to be withheld or deducted to the relevant Governmental Authority. In each case, to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

   

  (c)Without limiting the foregoing, Borrowers shall timely pay all Other Taxes to the relevant Governmental Authority in accordance with Applicable Law or, at Lender’s option, timely reimburse Lender for payment thereof.

   

  5.7.2.Tax Indemnification. Borrowers shall indemnify and hold harmless, on a joint and several basis, each Recipient against any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or paid by a Recipient or required to be withheld or deducted from a payment to a Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Borrowers shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate delivered to Borrowers by Lender (for itself or on behalf of a Recipient) as to the amount of such payment or liability, shall be conclusive absent manifest error.

   

  5.7.3.Evidence of Payments. As soon as practicable after payment by an Obligor of any Taxes pursuant to this Section, Borrower Agent shall deliver to Lender the original or a certified

   

   

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  copy of a receipt issued by the appropriate Governmental Authority evidencing the payment, a copy of any return required by Applicable Law to report the payment or other evidence of payment reasonably satisfactory to Lender.

   

  5.7.4.Treatment of Certain Refunds. If Lender determines in its discretion that it or another Recipient has received a refund of Taxes that were indemnified by Borrowers or with respect to which a Borrower paid additional amounts pursuant to this Section, the Recipient shall pay the amount of such refund to Borrowers (but only to the extent of indemnity payments or additional amounts actually paid by Borrowers with respect to the Taxes giving rise to the refund), net of all out-of-pocket expenses (including Taxes) incurred by the Recipient and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund). Borrowers shall, upon request by Lender, repay to the Recipient such amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if the Recipient is required to repay such refund to the Governmental Authority. Notwithstanding anything herein to the contrary, no Recipient shall be required to pay any amount to Borrowers if such payment would place it in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. In no event shall any Recipient be required to make its tax returns (or any other information relating to its taxes that it deems confidential) available to any Obligor or other Person.

   

  5.7.5.Status of Lender. If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations, it shall deliver to Borrowers properly completed and executed documentation reasonably requested by Borrowers as will permit such payments to be made without or at a reduced rate of withholding. In addition, Lender, if reasonably requested by Borrowers, shall deliver such other documentation prescribed by Applicable Law as is necessary to enable Borrowers to determine whether Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, such documentation shall not be required if Lender believes delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position.

   

  5.7.6.Documentation. Without limiting the foregoing, Lender shall deliver to Borrowers, from time to time upon reasonable request, executed copies of IRS Form W-9, certifying that Lender is exempt from U.S. federal backup withholding Tax. If payment of any Obligation to Lender would be subject to U.S. federal withholding Tax imposed by FATCA if Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code), Lender shall deliver to Borrowers at the time(s) prescribed by law and otherwise upon reasonable request, such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be appropriate for Borrowers to comply with their obligations under FATCA and to determine that Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of the preceding sentence, “FATCA” shall include any amendments made to FATCA after the date hereof. If any form or certification delivered by Lender pursuant to this Section expires or becomes obsolete or inaccurate in any respect, Lender shall update the form or certification or notify Borrowers in writing of its inability to do so.

   

  5.8.Nature and Extent of Each Borrower’s Liability.

   

  5.8.1.Joint and Several Liability. Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Lender and any other Secured Party the prompt payment and performance of, all Obligations, except its Excluded Swap Obligations. Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and

   

   

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  performance and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by any Secured Party with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for any Obligations or any action or inaction of any Secured Party in respect thereof (including the release of any security or guaranty); (d) insolvency of any Obligor; (e) election by any Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) disallowance of any claims of a Secured Party against any Obligor for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, other than Full Payment of the Obligations.

   

  5.8.2.Waivers.

   

  (a)Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Lender to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower. Each Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is a Borrower. It is agreed among each Borrower and Secured Party that the provisions of this Section are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Lender would decline to make Loans and issue Letters of Credit. Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.

   

  (b)Secured Parties may, in their discretion, pursue such rights and remedies as it deems appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section. If, in taking any action in connection with the exercise of any rights or remedies, a Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had. Any election of remedies that results in denial or impairment of the right of a Secured Party to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations. Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for Obligations, even though that election of remedies destroys such Borrower’s rights of subrogation against any other Person. Lender may bid Obligations, in whole or part, at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Lender but may be credited against the Obligations. The amount of the successful bid at any such sale, whether Lender or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which a Secured Party might otherwise be entitled but for such bidding at any such sale.

   

   

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  5.8.3.Extent of Liability; Contribution.

   

  (a)Notwithstanding anything herein to the contrary, each Borrower’s liability under this Section shall not exceed the greater of (i) all amounts for which such Borrower is primarily liable, as described in clause (c) below, or (ii) such Borrower’s Allocable Amount.

   

  (b)If any Borrower makes a payment under this Section of any Obligations (other than amounts for which such Borrower is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The “Allocable Amount” for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.

   

  (c)This Section shall not limit the liability of any Borrower to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC Obligations relating to Letters of Credit issued to support its business, Bank Products incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder. Lender shall have the right, at any time in its Permitted Discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of Loans and Letters of Credit to a Borrower based on that calculation.

   

  (d)Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Swap Obligation becomes effective hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP’s obligations and undertakings under this Section voidable under any applicable fraudulent transfer or conveyance act). The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until Full Payment of all Obligations. Each Obligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.

   

  5.8.4.Joint Enterprise. Each Borrower has requested that Lender make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically. Borrowers’ business is a mutual and collective enterprise, and the successful operation of each Borrower is dependent upon the successful performance of the integrated group. Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the facility, all to their mutual advantage. Borrowers acknowledge that Lender’s willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.

   

   

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  5.8.5.Subordination. Each Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of its Obligations.

   

  SECTION 6.	CONDITIONS PRECEDENT

   

  6.1.Conditions Precedent to Initial Loans

   

  . In addition to the conditions set forth in Section 6.2, Lender shall not be required to fund any requested Loan, issue any Letter of Credit or otherwise extend credit to Borrowers hereunder, until the date (“Closing Date”) that each of the following conditions has been satisfied:

   

  (a)Each Loan Document shall have been duly executed and delivered to Lender by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof.

   

  (b)Lender shall have received acknowledgments of all filings or recordations necessary to perfect its Liens in the Collateral, as well as UCC and Lien searches and other evidence satisfactory to Lender that such Liens are the only Liens upon the Collateral, except Permitted Liens.

   

  (c)Lender shall have received duly executed agreements establishing each Dominion Account and related lockbox, in form and substance, and with financial institutions, satisfactory to Lender.

   

  (d)Lender shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default exists; (iii) the representations and warranties set forth in Section 9 are true and correct; and (iv) such Borrower has complied with all agreements and conditions to be satisfied by it under the Loan Documents.

   

  (e)Lender shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility; and (iii) to the name, title and signature of each Person authorized to sign the Loan Documents. Lender may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.

   

  (f)Lender shall have received a written opinion of Reinhart Boerner Van Deuren s.c., as well as any local counsel to Borrowers or Lender, in form and substance satisfactory to Lender.

   

  (g)Lender shall have received copies of the charter documents of each Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization. Lender shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization and each jurisdiction where such Obligor’s conduct of business or ownership of Property necessitates qualification.

   

  (h)Lender shall have received copies of policies or certificates of insurance for the insurance policies carried by Borrowers, all in compliance with the Loan Documents.

   

   

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  (i)Each Borrower shall have provided, in form and substance satisfactory to Lender, all documentation and other information as Lender deems appropriate in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act and Beneficial Ownership Regulation. If any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, it shall have provided a Beneficial Ownership Certification to Lender in relation to such Borrower.

   

  (j)Lender shall have completed its business, financial and legal due diligence of Obligors, including a roll-forward of its previous field examination, with results satisfactory to Lender. No material adverse change in the financial condition of any Obligor or in the quality, quantity or value of any Collateral shall have occurred since March 31, 2020.

   

  (k)Borrowers shall have paid all fees and expenses to be paid to Lender on the

  Closing Date.

   

  (l)Lender shall have received a Borrowing Base Report prepared as of November 30, 2020. Upon giving effect to the initial funding of Loans and issuance of Letters of Credit, and the payment by Borrowers of all fees and expenses incurred in connection herewith as well as any payables stretched beyond their customary payment practices, Availability shall be at least $20,000,000.

   

  6.2.Conditions Precedent to All Credit Extensions

   

  . Lender shall not be required to make any credit extension hereunder (including funding any Loan, issuing any Letter of Credit, or granting any other accommodation to or for the benefit of any Borrower), if the following conditions are not satisfied on such date and upon giving effect thereto:

   

  (a)No Default or Event of Default exists;

   

  (b)The representations and warranties of each Obligor in the Loan Documents are true and correct in all material respects (except for those representations and warranties that are qualified by materiality, Material Adverse Effect or a dollar basket in which case such representations and warranties shall be true and correct in all respects), provided, that representations and warranties made as of a particular date shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, Material Adverse Effect or a dollar basket in which case such representations and warranties shall be true and correct in all respects) as of such date;

   

  (c)All conditions precedent in any Loan Document are satisfied;

   

  (d)No event has occurred or circumstance exists that has or could reasonably be expected to have a Material Adverse Effect; and

   

  (e)With respect to a Letter of Credit issuance, all LC Conditions are satisfied.

   

  Each request (or deemed request) by a Borrower for any credit extension shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of the credit extension. As an additional condition to a credit extension, Lender may request any other information, certification, document, instrument or agreement as it deems reasonably appropriate.

   

  SECTION 7.  COLLATERAL

   

  7.1.Grant of Security Interest

   

   

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  . To secure the prompt payment and performance of its Obligations, each Obligor hereby grants to Lender a continuing Lien on all Property of such Obligor, including the following, whether now owned or hereafter acquired, and wherever located:

   

  (a)all Accounts;

   

  (b)all Chattel Paper, including electronic chattel paper;

   

  (c)all Commercial Tort Claims, including those shown on Schedule 9.1.16;

   

  (d)all Deposit Accounts;

   

  (e)all Documents;

   

  (f)all General Intangibles, including Intellectual Property;

   

  (g)all Goods, including Inventory, Equipment and fixtures;

   

  (h)all Instruments;

   

  (i)all Investment Property;

   

  (j)all Letter-of-Credit Rights;

   

  (k)all Supporting Obligations;

   

  (l)all monies, whether or not in the possession or under the control of Lender, including any Cash Collateral;

   

  (m)all accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and

   

  (n)all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records) pertaining to the foregoing.

   

  Notwithstanding the foregoing, no Obligor shall be deemed to have granted to Lender an security interest in any Excluded Property.

   

  7.2.Lien on Deposit Accounts; Cash Collateral.

   

  7.2.1.Deposit Accounts. Lender’s Lien encumbers all amounts credited to any Deposit Account of an Obligor (other than Excluded Deposit Accounts), including sums in any blocked, lockbox, sweep or collection account. Each Obligor hereby authorizes and directs each bank or other depository to deliver to Lender, upon request, all balances in any Deposit Account (other than Excluded Deposit Accounts) maintained for such Obligor, without inquiry into the authority or right of Lender to make such request.

   

  7.2.2.Cash Collateral. Cash Collateral may be invested, at Lender’s discretion (with the consent of Borrowers, provided no Event of Default exists), but Lender shall have no duty to do so, regardless of any agreement or course of dealing with any Borrower, and shall have no responsibility for any investment or loss. As security for its Obligations, each Borrower hereby grants to Lender a security 

   

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  interest in and Lien upon all Cash Collateral delivered hereunder from time to time, whether held in a

   

   

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  segregated cash collateral account or otherwise. Lender may apply Cash Collateral to the payment of such Obligations as they become due, in such order as Lender may elect. All Cash Collateral and related deposit accounts shall be under the sole dominion and control of Lender, and no Borrower or other Person shall have any right to any Cash Collateral until Full Payment of the Obligations.

   

  7.3.[Reserved].

   

  7.4.Other Collateral.

   

  7.4.1.Commercial Tort Claims. Obligors shall promptly notify Lender in writing if any Borrower has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $250,000), shall promptly amend Schedule 9.1.16 to include such claim, and shall take such actions as Lender deems appropriate to subject such claim to a duly perfected, first priority Lien in favor of Lender.

   

  7.4.2.Certain After-Acquired Collateral. Obligors shall (a) promptly notify Lender if a Borrower obtains an interest in any Deposit Account, Chattel Paper, Document, Instrument, Intellectual Property, Investment Property or Letter-of-Credit Right, and (b) upon request, take such actions as Lender deems appropriate to effect its perfected, first priority Lien on Collateral, including obtaining any possession, control agreement or Lien Waiver. If Collateral is in the possession of a third party, Obligors shall obtain an acknowledgment (in form and substance satisfactory to Lender) from such party that it holds the Collateral for the benefit of Lender.

   

  7.5.Limitations

   

  . The Lien on Collateral granted hereunder is given as security only and shall not subject Lender to, or in any way modify, any obligation or liability of Obligors relating to any Collateral. In no event shall any Obligor’s grant of a Lien under any Loan Document secure its Excluded Swap Obligations.

   

  7.6.Further Assurances; Extent of Liens

   

  .	All Liens granted to Lender under the Loan Documents are for the benefit of Secured Parties. Promptly upon request, Obligors shall deliver such instruments and agreements, and shall take such actions, as Lender deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement. Each Obligor authorizes Lender to file any financing statement that describes the Collateral as “all assets” or “all personal property” of such Obligor, or words to similar effect, and ratifies any action taken by Lender before the Closing Date to effect or perfect its Lien on any Collateral.7.7.

   

  7.7.Foreign Subsidiary Stock

   

  . Notwithstanding Section 7.1, the Collateral shall include only 65% of the voting stock of any Foreign Subsidiary.

   

  7.8.Pledge Equity Interest and Pledge Debt Instruments.

   

  7.8.1.Pledged Interests. Schedule 7.8.1 sets forth all Equity Interests and Investment Property owned by each Obligor to the extent included in the Collateral (as such schedule shall be updated in accordance with this section, the “Pledged Interests”). Each Obligor shall promptly notify Lender of any change to Schedule 7.8.1 and, with the consent of Lender, will promptly amend or supplement Schedule 7.8.1 to reflect same, which consent shall not be required if the Schedule is being amended to reflect the consummation of a Permitted Acquisition.

   

   

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  7.8.2.Delivery of Certificates. All certificates representing or evidencing any Investment Property or Equity Interests constituting Collateral shall be delivered to and held by or on behalf of Lender, shall be in suitable form for further transfer by delivery, and shall be accompanied by all instruments of transfer or assignment requested by Lender, duly executed in blank and in form and substance acceptable to Lender. The Pledged Interests consisting of Equity Interests pledged hereunder have been duly authorized and validly issued and are fully paid and, to the extent applicable, non-assessable.

   

  7.8.3.Issuer Agreements. Each Obligor that is the issuer of any Pledged Interests hereby (a) acknowledges the security interest and Lien of Lender in such Collateral granted by the Obligor owning such Pledged Interests and (b) agrees that, with respect to any such Pledged Interests, following the occurrence and during the continuance of an Event of Default, it will comply with the instructions originated by Lender without further consent of any other Obligor.

   

  7.8.4.Distributions on Investment Property and other Equity Interests. In the event that any cash dividend or cash distribution (a “Dividend”) paid in accordance with this Agreement on any Pledged Interests of any Obligor at a time when no Event of Default has occurred and is continuing, such Dividend may be paid directly to the applicable Obligor. If an Event of Default has occurred and is continuing, then any such Dividend or payment shall be paid directly to Lender for the benefit of the Secured Parties.

   

  7.8.5.Voting Rights with respect to Equity Interests. So long as no Event of Default has occurred and is continuing, Obligors shall be entitled to exercise any and all voting and other consensual rights pertaining to any of the Pledged Interests or any part thereof for any purpose not prohibited by the terms of this Agreement. If an Event of Default shall have occurred and be continuing and the Lender has provided at least one (1) Business Day’s prior written notice to the Borrower Agent, all rights of Obligors to exercise the voting and other consensual rights that it would otherwise be entitled to exercise shall, at Lender’s option, be suspended, and all such rights shall, at Lender’s option, thereupon become vested in Lender for the benefit of the Secured Parties during the continuation of such Event of Default, and Lender shall, at its option, thereupon have the sole right to exercise such voting and other consensual rights during the continuation of such Event of Default and Lender shall thereupon have the right to act with respect thereto as though it were the outright owner thereof. After all Events of Default have been waived in accordance with the provisions hereof, and so long as the Obligations shall not have been accelerated, each Obligor shall have the right to exercise the voting and other consensual rights and powers that it would have otherwise been entitled to pursuant to this Section 7.8.5.

   

  7.8.6.Waiver of Certain Provisions of Organic Documents. Each Obligor irrevocably waives any and all of its rights under those provisions of the Organic Documents or any equity holders agreement of each of its Subsidiaries that (i) prohibit, restrict, condition, or otherwise affect the grant hereunder of any Lien on any of the Pledged Interests or any enforcement action (including the sale, transfer or disposition of such Pledged Interests to the Lender or a third party) which may be taken in respect of any such Lien or (ii) otherwise conflict with the terms of this Agreement. Each Obligor represents and warrants to the Lender that written waivers of any such restrictions have been executed by all holders of Pledged Interests that are not Obligors and that all such written waivers have been delivered to the Lender, and if any such written waivers have not been previously executed by all holders of Pledged Interests that are not Obligors then the Obligors shall obtain the same upon written request by Lender. The Obligors hereby agree that the Lender shall be deemed to be the “holder of record” with respect the Pledged Interests in the event that, during the continuance of any Event of Default, it elects to exercise remedies or otherwise transfer of any Pledged Interests.

   

  SECTION 8.	COLLATERAL ADMINISTRATION

   

  8.1.Borrowing Base Reports

   

   

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  . Borrowers shall deliver to Lender a Borrowing Base Report (i) by the 20th of each month, reporting as of the close of business of the previous accounting month, (ii) during a Reporting Trigger Period, by Wednesday of each week, reporting as of the close of business of the previous week, and (iii) otherwise at such other times and for such periods as Lender may reasonably request. All information (including calculation of Availability) in a Borrowing Base Report shall be certified by Borrowers. Lender may from time to time adjust such report (a) to reflect Lender’s reasonable estimate of declines in value of Collateral, due to collections received in the Dominion Account, reductions in Eligible Cash Amount balances or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (bc) to the extent any information or calculation does not comply with this Agreement.

   

  8.2.Accounts.

   

  8.2.1.Records and Schedules of Accounts. Each Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to Lender sales, collection, reconciliation and other reports in form satisfactory to Lender, on such periodic basis as Lender may request. Each Borrower shall also provide to Lender (a) on or before the 20th day of each month, a detailed aged trial balance of all Accounts as of the end of the preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and (b) promptly but in any event within 5 Business Days of written request, proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as Lender may reasonably request (or samplings of such information as may reasonably be requested by Lender). If Accounts in an aggregate face amount of $250,000 or more cease to be Eligible Accounts (other than through the payment thereof in the Ordinary Course of Business), Borrowers shall notify Lender of such occurrence promptly (and in any event within one Business Day) after any Borrower has knowledge thereof.

   

  8.2.2.Taxes. If an Account of any Borrower includes a charge for any Taxes, Lender is authorized, in its Permitted Discretion, to pay the amount thereof to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided, that Lender shall not be liable for any Taxes that may be due from Borrowers or relate to any Collateral.

   

  8.2.3.Account Verification. Lender shall have the right when conducting audits and appraisals as set forth in Section 10.1.1 (and at any time during the continuance of a Default or Event of Default), in the name of Lender, any designee of Lender or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers by mail, telephone or otherwise. Borrowers shall cooperate fully with Lender in an effort to facilitate and promptly conclude any such verification process.

   

  8.2.4.Maintenance of Dominion Account. Borrowers shall maintain Dominion Accounts pursuant to lockbox or other arrangements acceptable to Lender. Borrowers shall obtain an agreement (in form and substance satisfactory to Lender) from each lockbox servicer and Dominion Account bank, establishing Lender’s control over and Lien in the lockbox or Dominion Account (which may be exercised by Lender only during a Dominion Trigger Period) requiring immediate deposit of all remittances received in the lockbox to a Dominion Account, and waiving offset rights of such servicer or bank, except for customary administrative charges. If a Dominion Account is not maintained with Lender, Lender may, during any Dominion Trigger Period, require immediate transfer of all funds in such account to a Dominion Account maintained with Lender. Lender assumes no responsibility to Borrowers for any lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.

   

   

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  8.2.5.Proceeds of Collateral. Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Lender and promptly (not later than the next Business Day) deposit same into a Dominion Account.

   

  8.3.Inventory.

   

  8.3.1.Records and Reports of Inventory. Each Borrower shall keep accurate and complete records of its Inventory, including costs, withdrawals and additions, and shall submit to Lender inventory and reconciliation reports in form satisfactory to Lender, on such periodic basis as Lender may request. Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested by Lender when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to Lender a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as Lender may request. Lender may observe each physical count.

   

  8.3.2.Returns of Inventory. No Borrower shall return any Inventory to a supplier, vendor or other Person, whether for cash, credit or otherwise, unless (a) such return is in the Ordinary Course of Business; (b) no Default, Event of Default or Overadvance exists or would result therefrom;

  (c) Lender is promptly notified if the aggregate Value of all Inventory returned in any month exceeds

  $250,000; and (d) any payment received by a Borrower for a return is promptly remitted to Lender for application to the Obligations.

   

  8.3.3.Acquisition, Sale and Maintenance. No Borrower shall acquire or accept any Inventory on consignment or approval, and shall take all steps to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA. No Borrower shall sell any Inventory on consignment or approval or any other basis under which the customer may return or require a Borrower to repurchase such Inventory. Borrowers shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law, and shall make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located.

   

  8.4.Equipment.

   

  8.4.1.Records and Schedules of Equipment. Each Borrower shall keep materially accurate and complete records of its Equipment, including kind, quality, quantity, cost, acquisitions and dispositions thereof. Promptly upon request, Borrowers shall deliver to Lender evidence of their ownership or interests in any Equipment.

   

  8.4.2.Dispositions of Equipment. No Borrower shall sell, lease or otherwise dispose of any Equipment, without the prior written consent of Lender, other than (a) a Permitted Asset Disposition; and (b) replacement of Equipment that is worn, damaged or obsolete with Equipment of like function and value, if the replacement Equipment is acquired substantially contemporaneously with such disposition and is free of Liens other than Permitted Liens.

   

  8.4.3.Condition of Equipment. The Equipment is in good operating condition and repair, and all necessary replacements and repairs have been made so that its value and operating efficiency are preserved at all times, reasonable wear and tear excepted. Each Borrower shall take commercially reasonable steps to ensure that the Equipment is mechanically and structurally sound, and capable of performing the functions for which it was designed, in accordance with manufacturer specifications. No Borrower shall permit any Equipment to become affixed to Real Estate unless any landlord or mortgagee delivers a Lien Waiver.

   

   

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  8.5.Deposit Accounts

   

  . Schedule 8.5 lists all Deposit Accounts maintained by Borrowers, including Dominion Accounts. Each Borrower shall take all actions necessary to establish Lender’s first priority Lien on each Deposit Account (other than Excluded Deposit Accounts). Borrowers shall be the sole account holder(s) of each Deposit Account and shall not allow any Person (other than Lender) to have control over their Deposit Accounts or any Property deposited therein. Borrowers shall promptly notify Lender of any opening or closing of a Deposit Account and, with the consent of Lender, will amend Schedule 8.5 to reflect same.

   

  8.6.General Provisions.

   

  8.6.1.Location of Collateral. All tangible items of Collateral, other than Inventory in transit, shall at all times be kept by Borrowers at the business locations set forth in Schedule 8.6.1, except that Borrowers may (a) make sales or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move Collateral to another location in the United States, upon 30 Business Days prior written notice to Lender.

   

  8.6.2.Insurance of Collateral; Condemnation Proceeds.

   

  (a)Each Borrower shall maintain insurance with respect to the Collateral, covering casualty, hazard, theft, malicious mischief, flood and other risks, in amounts, with endorsements and with insurers (with a Best rating of at least A+, unless otherwise approved by Lender in its discretion) satisfactory to Lender. All flood hazard diligence, documentation and insurance for any Real Estate constituting Collateral shall comply with all Flood Laws and be satisfactory to Lender. All proceeds under each policy shall be payable to Lender. From time to time upon request, Borrowers shall deliver to Lender the originals or certified copies of its insurance policies and updated flood plain searches. Each policy shall include endorsements satisfactory to Lender (i) showing Lender as lender’s loss payee; (ii) requiring 30 days prior written notice to Lender of cancellation of the policy for any reason whatsoever (other than for non-payment of premium in which 10-day notice is required); and (iii) specifying that the interest of Lender shall not be impaired or invalidated by any act or neglect of any Borrower or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy. If any Borrower fails to provide and pay for any insurance, Lender may, in its discretion, procure the insurance and charge Borrowers therefor. Each Borrower agrees to deliver to Lender, promptly as rendered, copies of all reports made to insurance companies. While no Event of Default exists, Borrowers may settle, adjust or compromise any insurance claim, provided the proceeds are delivered to Lender. If an Event of Default exists, only Lender may settle, adjust and compromise such claims.

   

  (b)Any proceeds of insurance (other than workers’ compensation) and awards from condemnation of Collateral shall be paid directly to Lender for application to the Obligations, unless reinvested as described in the definition of “Capital Expenditure” or as permitted under clause (c) below.

   

  (c)If requested by Borrowers in writing within 15 days after Lender’s receipt of any insurance proceeds or condemnation awards relating to any loss or destruction of Equipment or Real Estate, Borrowers may use such proceeds or awards to repair or replace such Equipment or Real Estate (and until so used, the proceeds shall be held by Lender as Cash Collateral) as long as (i) no Event of Default exists; (ii) such repair or replacement is promptly undertaken and concluded, in accordance with plans satisfactory to Lender; (iii) replacement buildings are constructed on the sites of the original casualties and are of comparable size, quality and utility to the destroyed buildings; (iv) the repaired or replaced Property is free of Liens, other than Permitted Liens that are not Purchase Money Liens; (v) Borrowers comply with disbursement procedures for such repair or replacement as Lender may reasonably require; and (vi) the aggregate amount of such proceeds or awards from any single casualty or condemnation does not exceed $250,000.

   

   

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  8.6.3.Protection of Collateral. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Lender to any Person to realize upon any Collateral, shall be borne and paid by Borrowers. Lender shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Lender’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Borrowers’ sole risk.

   

  8.6.4.Defense of Title. Each Borrower shall defend its title to Collateral and Lender’s Liens therein against all Persons, claims and demands, except Permitted Liens.

   

  8.7.Power of Attorney

   

  . Each Borrower hereby irrevocably constitutes and appoints Lender (and all Persons designated by Lender) as such Borrower’s true and lawful attorney (and agent-in-fact) for the purposes provided in this Section. Lender, or Lender’s designee, may (in its discretion), without notice and in either its or a Borrower’s name, but at the cost and expense of Borrowers:

   

  (a)Endorse a Borrower’s name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Lender’s possession or control; and

   

  (b)During the existence of an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts, by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Lender deems advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or investment accounts, and take control, in any manner, of proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Borrower, and notify postal authorities to deliver any such mail to an address designated by Lender; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use a Borrower’s stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral; (x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other instrument for which a Borrower is a beneficiary; (xii) exercise any voting or other rights relating to Investment Property; and (xiii) take all other actions as Lender deems appropriate to fulfill any Borrower’s obligations under the Loan Documents.

   

  SECTION 9.  REPRESENTATIONS AND WARRANTIES

   

  9.1.General Representations and Warranties

   

  . To induce Lender to enter into this Agreement and to make available the Commitment, Loans and Letters of Credit, each Borrower represents and warrants that:

   

  9.1.1.Organization and Qualification.	Each Borrower and Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Borrower and Subsidiary is duly qualified, authorized to do business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to

   

   

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  have a Material Adverse Effect. No Obligor is, or is a subsidiary of, a credit institution, investment firm, or parent company of a credit institution or investment firm, in each case that is established in a member state of the European Union, Iceland, Liechtenstein or Norway, and no Obligor is a Covered Entity. The information included in the most recently provided Beneficial Ownership Certification is true and complete in all material respects.

   

  9.1.2.Power and Authority. Each Obligor is duly authorized to execute, deliver and perform its Loan Documents. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action, and do not (a) require any consent or approval of any holders of Equity Interests of any Obligor, except those already obtained; (b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any Applicable Law or Material Contract; or (d) result in or require imposition of a Lien (other than a Permitted Lien) on any Obligor’s Property.

   

  9.1.3.Enforceability. Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

   

  9.1.4.Capital Structure. Schedule 9.1.4 shows, for each Borrower (other than Company) and Subsidiary, its name, jurisdiction of organization, authorized and issued Equity Interests, holders of its Equity Interests, and agreements binding on such holders with respect to such Equity Interests. Except as disclosed on Schedule 9.1.4, in the five years preceding the Closing Date, no Borrower or Subsidiary has acquired any substantial assets from any other Person nor been the surviving entity in a merger or combination. Each Borrower has good title to its Equity Interests in its Subsidiaries, subject only to Lender’s Lien, and all such Equity Interests are duly issued, fully paid and, to the extent applicable, non-assessable. There are no outstanding purchase options, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to Equity Interests of any Borrower or Subsidiary.

   

  9.1.5.Title to Properties; Priority of Liens. Each Borrower and Subsidiary has good and marketable title to (or valid leasehold interests in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements delivered to Lender, in each case free of Liens except Permitted Liens. No Real Estate owned by a Borrower is located in a special flood hazard zone, except as disclosed on Schedule 9.1.5. Each Borrower and Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All Liens of Lender in the Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority over Lender’s Liens.

   

  9.1.6.Accounts. Lender may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto. Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing Base Report, that:

   

  (a)it is genuine and in all respects what it purports to be;

   

  (b)it arises out of a completed, bona fide sale and delivery of goods or rendition of services in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto;

   

  (c)it is for a sum certain, maturing as stated in the applicable invoice, a copy of which has been furnished or is available upon request to Lender;

   

  (d)it is not subject to any offset, Lien (other than Lender’s Lien), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of

   

   

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  Business and disclosed to Lender; and it is absolutely owing by the Account Debtor, without contingency of any kind;

   

  (e)no purchase order, agreement, document or Applicable Law restricts assignment of the Account to Lender (regardless of whether, under the UCC, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;

   

  (f)no extension, compromise, settlement, modification, credit, deduction or return has been authorized or is in process with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Lender hereunder; and

   

  (g)to Borrowers’ knowledge, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrower’s customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a material adverse effect on the Account Debtor’s financial condition.

   

  9.1.7.Financial Statements. The consolidated balance sheet, and related statements of income, cash flow and shareholders equity, of Borrowers and Subsidiaries that have been and are hereafter delivered to Lender, are prepared in accordance with GAAP (excluding the financial statements for the months ending October 31, 2022 through and including February 29, 2023), and fairly present the financial positions and results of operations of Borrowers and Subsidiaries at the dates and for the periods indicated. All projections delivered from time to time to Lender have been prepared in good faith, based on reasonable assumptions in light of the circumstances at such time it being understood that projections are subject to the uncertainties inherent in estimating the future performance of a business enterprise and are not a guarantee of future financial performance. Since March 31, 2020, there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected to have a Material Adverse Effect. No financial statement delivered to Lender at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading. The Borrowers, taken as a whole on a consolidated basis, are Solvent.

   

  9.1.8.Surety Obligations. No Borrower or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assures payment or performance of any obligation of any Person, except as permitted hereunder.

   

  9.1.9.Taxes. Each Borrower and Subsidiary has filed all federal, state and local tax returns and other reports that it is required by law to file, and has paid, or made provision for the payment of, all Taxes upon it, its income and its Properties that are due and payable, except to the extent being Properly Contested. The provision for Taxes on the books of each Borrower and Subsidiary is adequate for all years not closed by applicable statutes and for its current Fiscal Year.

   

  9.1.10.Brokers. There are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents.

   

  9.1.11.Intellectual Property. Each Borrower and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without material conflict with any rights of others. There is no pending or, to any Borrower’s knowledge, threatened Intellectual Property Claim with respect to any Borrower, any Subsidiary or any of their Property (including any

   

   

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  Intellectual Property). Except as disclosed on Schedule 9.1.11, no Borrower or Subsidiary pays or owes any royalty or other compensation to any Person with respect to any Intellectual Property. All Intellectual Property owned, used or licensed by, or otherwise subject to any interests of, any Borrower or Subsidiary is shown on Schedule 9.1.11.

   

  9.1.12.Governmental Approvals. Each Borrower and Subsidiary has, is in compliance with, and is in good standing with respect to, all Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties, except where the failure to be in compliance or good standing could not reasonably be expected to result in a Material Adverse Effect. All necessary import, export or other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured and are in effect, and Borrowers and Subsidiaries have complied with all foreign and domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.

   

  9.1.13.Compliance with Laws. Each Borrower and Subsidiary has duly complied, and its Properties and business operations are in compliance, in all material respects with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect. There have been no citations, notices or orders of material noncompliance issued to any Borrower or Subsidiary under any Applicable Law. No Inventory has been produced in violation of the FLSA.

   

  9.1.14.Compliance with Environmental Laws. Except as disclosed on Schedule 9.1.14, no Borrower’s or Subsidiary’s past or present operations, Real Estate or other Properties are subject to any federal, state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous material or environmental clean-up. No Borrower or Subsidiary has received any Environmental Notice. No Borrower or Subsidiary has any contingent liability with respect to any Environmental Release, environmental pollution or hazardous material on any Real Estate now or previously owned, leased or operated by it.

   

  9.1.15.Burdensome Contracts. No Borrower or Subsidiary is a party or subject to any contract, agreement or charter restriction that could reasonably be expected to have a Material Adverse Effect. No Borrower or Subsidiary is party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15. No such Restrictive Agreement prohibits the execution, delivery or performance of any Loan Document by an Obligor.

   

  9.1.16.Litigation. Except as shown on Schedule 9.1.16, there are no proceedings or investigations pending or, to any Borrower’s knowledge, threatened against any Borrower or Subsidiary, or any of their businesses, operations, Properties or financial condition, that (a) relate to any Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected to have a Material Adverse Effect if determined adversely to any Borrower or Subsidiary. Except as shown on such Schedule, no Obligor has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $250,000). No Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.

   

  9.1.17.No Defaults. No event or circumstance has occurred or exists that constitutes a Default or Event of Default. No Borrower or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a material default, under any Material Contract or in the payment of any Borrowed Money. There is no basis upon which any party (other than a Borrower or Subsidiary) could terminate a Material Contract prior to its scheduled termination date.

   

  9.1.18.ERISA. Except as disclosed on Schedule 9.1.18:

   

   

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  (a)Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and other federal and state laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification. Each Obligor and ERISA Affiliate has met all applicable requirements under the Code, ERISA and the Pension Protection Act of 2006, and no application for a waiver of the minimum funding standards or an extension of any amortization period has been made with respect to any Plan.

   

  (b)There are no pending or, to the knowledge of Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or could reasonably be expected to have a Material Adverse Effect. No Borrower is or will be using “plan assets” (within the meaning of ERISA Section 3(42) or otherwise) of one or more Benefit Plans with respect to its entrance into, participation in, administration of and performance of the Loans, Letter of Credits, Commitments or Loan Documents.

   

  (c)No ERISA Event has occurred or is reasonably expected to occur. As of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and no Obligor or ERISA Affiliate knows of any reason that such percentage could reasonably be expected to drop below 60%. No Obligor or ERISA Affiliate has incurred any liability to the PBGC except for the payment of premiums, and no premium payments are due and unpaid. No Obligor or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. No Pension Plan has been terminated by its plan administrator or the PBGC, and no fact or circumstance exists that could reasonably be expected to cause the PBGC to institute proceedings to terminate a Pension Plan.

   

  (d)With respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and (iii) it has been registered as required and has been maintained in good standing with applicable regulatory authorities.

   

  9.1.19.Trade Relations. There exists no actual or threatened termination, limitation or modification of any business relationship between any Borrower or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material to the business of such Borrower or Subsidiary. There exists no condition or circumstance that could reasonably be expected to materially impair the ability of any Borrower or Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Closing Date.

   

  9.1.20.Labor Relations. No Borrower or Subsidiary is party to or bound by any collective bargaining agreement, management agreement or consulting agreement. There are no material grievances, disputes or controversies with any union or other organization of any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or threatened strikes, work stoppages or demands for collective bargaining.

   

   

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  9.1.21.Payable Practices. No Borrower or Subsidiary has made any material change in its historical accounts payable practices from those in effect on the Closing Date.

   

  9.1.22.Not a Regulated Entity. No Obligor is (a) an “investment company” or “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act, Interstate Commerce Act, any public utilities code or other Applicable Law regarding its authority to incur Debt.

   

  9.1.23.Margin Stock. No Borrower or Subsidiary is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Federal Reserve Board of Governors.

   

  9.1.24.OFAC; Anti-Corruption Laws. No Obligor or Subsidiary, or director, officer, employee, agent, affiliate or representative thereof, is or is owned or controlled by an individual or entity that is currently the target of any Sanction or is located, organized or resident in a country, territory or jurisdiction that is the subject of a Sanction. Each Obligor and Subsidiary has conducted its business in compliance with all applicable Anti-Corruption Laws.

   

  9.2.Complete Disclosure

   

  . No Loan Document contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make the statements contained therein not materially misleading. There is no fact or circumstance that any Obligor has failed to disclose to Lender in writing that could reasonably be expected to have a Material Adverse Effect.

   

  SECTION 10. COVENANTS AND CONTINUING AGREEMENTS

   

  10.1.Affirmative Covenants

   

  . As long as the Commitment or any Obligations are outstanding, each Borrower shall, and shall cause each Subsidiary to:

   

  10.1.1.Inspections; Appraisals.

   

  (a)Permit Lender from time to time, subject (unless a Default or Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Borrower or Subsidiary, inspect, audit and make extracts from any Borrower’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Borrower’s or Subsidiary’s business, financial condition, assets, prospects and results of operations. Lender shall have no duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. Borrowers acknowledge that all inspections, appraisals and reports are prepared by Lender for its purposes, and Borrowers shall not be entitled to rely upon them.

   

  (b)Reimburse Lender for all its charges, costs and expenses in connection with (i) examinations of any Obligor’s books and records or any other financial or Collateral matters as Lender deems appropriate, up to one time in any twelve month period, plus one additional examination in any twelve month period following the occurrence of an Inspection Trigger Event and (ii) appraisals of Inventory up to one time in any twelve month period, plus one additional appraisal in any twelve month period following the occurrence of an Inspection Trigger Event. Notwithstanding the foregoing limitations, if any examination or appraisal of any Property is initiated during a Default or Event of

   

   

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  Default, all charges, costs and expenses relating thereto shall be reimbursed by Borrowers without regard to the limits set forth above. Subject to and without limiting the foregoing, Borrowers agree to pay Lender’s then standard charges for examination activities, including charges of Lender’s internal examination and appraisal groups, as well as the charges of any third party used for such purposes. No Borrowing Base calculation shall include Collateral acquired in a Permitted Acquisition or outside the Ordinary Course of Business until completion of applicable field examinations and appraisals (which shall not be included in the limits provided above) satisfactory to Lender.

   

  10.1.2.Financial and Other Information. Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Lender:

   

  (a)as soon as available, and in any event within 120 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders equity for such Fiscal Year, on consolidated basis for Borrowers and Subsidiaries, which consolidated statements shall be audited and certified (without qualification) by a firm of independent certified public accountants of recognized standing selected by Borrowers and acceptable to Lender, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Lender;

   

  (b)as soon as available, and in any event within 30 days after the end of each month (but within 60 days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on consolidated basis for Borrowers and Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP (excluding the financial statements for the months ending October 31, 2022 through and including February 29, 2023) and fairly presenting the financial position and results of operations for such month and period, subject to normal year-end adjustments and the absence of footnotes;

   

  (c)concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently if requested by Lender while a Default or Event of Default exists, a Compliance Certificate executed by the chief financial officer of Borrower Agent;

   

  (d)concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted to Borrowers by their accountants in connection with such financial statements;

   

  (e)not later than 30 days following the end of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations, cash flow and Availability for the next Fiscal Year, month by month, and for the next three Fiscal Years, year by year;

   

  (f)at Lender’s request (but no more frequently than monthly so long as no Default or Event of Default exists), a listing of each Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form satisfactory to Lender;

   

  (g)promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Borrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses that any Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange; and copies of any press releases or other statements made available by a Borrower to the public concerning material changes to or developments in the business of such Borrower;

   

   

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  (h)promptly after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan or Foreign Plan; and

   

  (i)such other reports and information (financial or otherwise) as Lender may reasonably request from time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition, ownership or business.

   

  10.1.3.Notices. Notify Lender in writing, promptly after a Borrower’s obtaining knowledge thereof, of any of the following that affects an Obligor: (a) the threat or commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse determination could have a Material Adverse Effect; (b) any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract; (c) any material default under or termination of a Material Contract; (d) the existence of any Default or Event of Default; (e) any judgment in an amount exceeding

  $250,000; (f) the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect; (g) any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect; (h) any Environmental Release by an Obligor or on any Property owned, leased or occupied by an Obligor; or receipt of any Environmental Notice; (i) the occurrence of any ERISA Event;

  (j)the discharge of or any withdrawal or resignation by Borrowers’ independent accountants; (k) any opening of a new office or place of business, at least 30 days prior to such opening, or (l) any transaction with an Affiliate involving amounts, property or payments in excess of $100,000 individually or

  $500,000 in the aggregate in any Fiscal Year.

   

  10.1.4.Landlord and Storage Agreements. Upon request, provide Lender with copies of all existing agreements, and promptly after execution thereof provide Lender with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.

   

  10.1.5.Compliance with Laws. Comply with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Each Borrower and Subsidiary shall maintain policies and procedures designed to promote and achieve compliance with applicable Anti-Corruption Laws and Sanctions. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Borrower or Subsidiary, it shall act promptly and diligently to investigate and report to Lender and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not directed to do so by any Governmental Authority.

   

  10.1.6.Taxes. Pay and discharge all Taxes prior to the date on which they become delinquent or penalties attach, unless such Taxes are being Properly Contested.

   

  10.1.7.Insurance. In addition to the insurance required hereunder with respect to Collateral, maintain insurance in form and substance and with insurers (with a Best rating of at least A+, unless otherwise approved by Lender in its discretion) satisfactory to Lender, (a) with respect to the Properties and business of Borrowers and Subsidiaries of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated; and (b) business interruption insurance in an amount not less than $6,000,000, in each case with deductibles, endorsements and assignments satisfactory to Lender.

   

   

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  10.1.8.Licenses. (a) Keep each License affecting any material portion of the Collateral (including manufacture, distribution or disposition of Inventory) or the services provided by the Borrowers and Subsidiaries (each a “Material License”) in full force and effect; (b) promptly notify Lender of any proposed material modification to any such Material License, or entry into any new License that would be a Material License, in each case, to the extent such modification or new License would require the consent of any Person other than the Borrowers (i) to the assignment thereof to the Lender or (ii) to permit the Lender to sell inventory pursuant to the terms of such License; (c) pay all royalties and other amounts when due under any Material License; and (d) notify Lender of any default or breach asserted by any Person to have occurred under any Material License, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

   

  10.1.9.Future Subsidiaries. Promptly notify Lender upon any Person becoming a Subsidiary and deliver any know-your-customer or other background diligence information requested by Lender with respect to such Subsidiary; and (provided it is not a Foreign Subsidiary) cause it to guaranty the Obligations in a manner satisfactory to Lender, and to execute and deliver such documents, instruments and agreements and to take such other actions as Lender shall require to evidence and perfect a Lien in favor of Lender on all assets of such Person and pledge and assignment of its equity interests, including delivery of such legal opinions, in form and substance satisfactory to Lender deems appropriate.

   

  10.1.10.Depository Bank.

   

  (a)Maintain Lender as its principal depository bank, including for the maintenance of all operating, collection, disbursement and other deposit accounts and for all Cash Management Services.

   

  (b)Within 60 days of the Closing Date, cause all Deposit Accounts (other than Excluded Deposit Accounts) with any financial institution other than Bank of America to be closed or become subject to a Deposit Account Control Agreement.

   

  10.2.Negative Covenants

   

  . As long as the Commitment or any Obligations are outstanding, each Borrower shall not, and shall cause each Subsidiary not to:

   

  10.2.1.Permitted Debt. Create, incur, guarantee or suffer to exist any Debt, except:

   

  (a)the Obligations;

   

  (b)Subordinated Debt;

   

  (c)Permitted Purchase Money Debt;

   

  (d)existing Borrowed Money not satisfied with the initial Loan proceeds;

   

  (e)Bank Product Debt incurred in the Ordinary Course of Business;

   

  (f)Debt that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by a Borrower or Subsidiary, as long as such Debt was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed $250,000 in the aggregate at any time;

   

  (g)Permitted Contingent Obligations;

   

   

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  (h)Debt among Borrowers constituting loans and advances permitted pursuant to

  Section 10.2.7(d);

   

  (i)Refinancing Debt as long as each Refinancing Condition is satisfied;

   

  (j)[reserved.]Voltrek and Stay-Lite Earn-Out Obligations;

   

  (k)unpaid insurance premiums (not in excess of one (1) years’ premiums) owing to insurance companies and insurance brokers incurred in connection with the financing of insurance premiums in the ordinary course of business;

   

  (l)to the extent constituting Debt, the Sentry Transactions;

   

  (m)the WAB Credit Card Program; and

   

  (n)other unsecured Debt up to $250,000 in the aggregate at any time.

   

  10.2.2.Permitted Liens. Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted Liens”):

   

  (a)Liens in favor of Lender and Secured Parties;

   

  (b)Purchase Money Liens securing Permitted Purchase Money Debt;

   

  (c)Liens for Taxes not yet due or being Properly Contested;

   

  (d)statutory Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;

   

  (e)Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of government tenders, bids, contracts, statutory obligations and other similar obligations, as long as such Liens are at all times junior to Lender’s Liens and are required or provided by law;

   

  (f)Liens arising in the Ordinary Course of Business and subject to Lien Waivers;

   

  (g)Liens arising by virtue of a judgment or judicial order against any Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens are (i) in existence for less than 20 consecutive days or being Properly Contested, and (ii) at all times junior to Lender’s Liens;

   

  (h)easements, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;

   

  (i)normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;

   

  (j)Liens on assets (other than Accounts and Inventory) acquired in a Permitted Acquisition, securing Debt permitted by Section 10.2.1(f);

   

  (k)attachments, appeal bonds, judgments and other similar liens, related to judgments not constituting an Event of Default under Section 11.1(g);

   

   

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  (l)Liens arising from precautionary uniform commercial code financing statements (or equivalent filings or registrations in foreign jurisdictions) filed under any Operating Lease;

   

  (m)non-exclusive licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering with the business of Obligors or any of their Subsidiaries and not adversely impacting the Collateral or Lender’s rights therein;

   

  (n)Liens on Sentry Related Assets securing the Sentry Transactions;

   

  (o)Liens on cash collateral in an amount of up to $330,000 provided to secure the WAB Credit Card Program; and

   

  (p)existing Liens shown on Schedule 10.2.2.

   

  10.2.3.[Reserved.]

   

  10.2.4.Distributions; Upstream Payments.

   

  (a)Declare or make any Distributions, except (i) Upstream Payments and (ii) other Distributions made when the Payment Conditions are met; or

   

  (b)Create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make an Upstream Payment, except for restrictions under the Loan Documents, under Applicable Law, as permitted by Section 10.2.14 or in effect on the Closing Date as shown on Schedule 9.1.15.

   

  10.2.5.Investments. Make any Restricted Investment or have Unrestricted Cash in excess of $250,000 in the aggregate for Borrowers and Subsidiaries at any time that Loans are outstanding.

   

  10.2.6.Disposition of Assets. Make any Asset Disposition, except a Permitted Asset

  Disposition.

   

  10.2.7.Loans. Make any loans or other advances of money to any Person, except (a) advances to an officer or employee for salary, travel expenses, commissions and similar items in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business; (c) deposits with financial institutions permitted hereunder; (d) intercompany loans by an Obligor to another Obligor; and (e) as long as no Default or Event of Default exists, intercompany loans by an Obligor to any subsidiary that is not an Obligor in an aggregate outstanding amount of up to

  $250,000 at any time.

   

  10.2.8.Restrictions on Payment of Certain Debt. (a) Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Subordinated Debt, except regularly scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating to such; or (b) Borrowed Money (other than the Obligations) permitted hereunder prior to its due date under the agreements evidencing or governing such Debt as in effect on the Closing Date (or as amended thereafter or incurred with the consent of Lender); provided, however, that prepayments otherwise restricted under clauses (a) or (b) above may be made so long as the Payment Conditions are satisfied with respect thereto.

   

  10.2.9.Fundamental Changes. Change its name or conduct business under any fictitious name or change its tax, charter or other organizational identification number, in each case, without giving Lender at least 30 days prior written notice; change its organizational form or state of organization;

   

   

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  liquidate, wind up its affairs or dissolve itself; or consummate (or unwind) a statutory division; or merge, combine or consolidate with any Person, whether in a single transaction or in a series of related transactions, except for (a) mergers or consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary or into an Obligor (so long as if such transaction involves a Borrower, the Borrower is the surviving Person) or (b) Permitted Acquisitions.

   

  10.2.10.Subsidiaries. Form or acquire any Subsidiary after the Closing Date, except in accordance with Sections 10.1.9, 10.2.5 or 10.2.9; or permit any existing Subsidiary to issue any additional Equity Interests except to a Borrower or directors’ qualifying shares.

   

  10.2.11.Organic Documents. Amend, modify or otherwise change any of its Organic Documents, except in any manner that is materially adverse to Lender, including in connection with a transaction permitted under Section 10.2.9.

   

  10.2.12.Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Borrowers and Subsidiaries.

   

  10.2.13.Accounting Changes. Make any material change in accounting treatment or reporting practices, except in accordance with Section 1.2; or change its Fiscal Year.

   

  10.2.14.Restrictive Agreements. Become a party to any Restrictive Agreement, except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder, as long as the restrictions apply only to collateral for such Debt; or (c) constituting customary restrictions on assignment in leases and other contracts.

   

  10.2.15.Swaps. Enter into any Swap, except to hedge risks arising in the Ordinary Course of Business and not for speculative purposes.

   

  10.2.16.Conduct of Business. Engage in any business, other than its business as conducted on the Closing Date and any activities incidental thereto.

   

  10.2.17.Affiliate Transactions. Enter into or be party to any transaction with an Affiliate, except (a) transactions expressly permitted by the Loan Documents; (b) payment of reasonable compensation to officers and employees for services actually rendered, and payment of customary directors’ fees and indemnities; (c) transactions solely among Obligors; (d) transactions with Affiliates consummated prior to the Closing Date, as shown on Schedule 10.2.17; and (e) transactions with Affiliates in the Ordinary Course of Business, upon fair and reasonable terms and no less favorable than would be obtained in a comparable arm’s-length transaction with a non-Affiliate.

   

  10.2.18.Plans. Become party to any Multiemployer Plan or Foreign Plan, other than any in existence on the Closing Date.

   

  10.2.19.Amendments to Subordinated Debt or Material Debt. Amend, supplement or otherwise modify any document, instrument or agreement relating to any Material Debt or Subordinated Debt if such modification (a) increases the principal balance of such Debt, or increases any required payment of principal or interest; (b) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (c) shortens the final maturity date or otherwise accelerates amortization; (d) increases the interest rate; (e) increases or adds any fees or charges; (f) modifies any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect for any Borrower or Subsidiary, or that is otherwise materially adverse to any Borrower, any Subsidiary or Lender; or (g) results in the Obligations not being fully benefited by the subordination provisions thereof.

   

   

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  10.3.Financial Covenants

   

   

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  . As long as the Commitment or any Obligations are outstanding, Borrowers shall:

   

  10.3.1.Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio for each 12 month period of at least 1.0 to 1.0 while a Financial Covenant Trigger Period is in effect, measured for the most recent period for which financial statements were delivered hereunder prior to the Financial Covenant Trigger Period and each period ending thereafter until the Financial Covenant Trigger Period is no longer in effect.

   

  SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT

   

  11.1.Events of Default

   

  . Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:

   

  (a)Any Borrower fails to pay its Obligations when due (whether at stated maturity, on demand, upon acceleration or otherwise);

   

  (b)Any representation, warranty or other written statement of an Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given;

   

  (c)A Borrower breaches or fails to perform any covenant contained in Sections 8.2.4, 8.2.5, 8.5, 8.6.2(a), 10.1.1, 10.2 or 10.3, or a Borrower breaches or fails to perform any covenant contained in Sections 7.4.2, 8.1 or 10.1.2 and such breach of failure continues uncured for three Business Days;

   

  (d)An Obligor breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured within 15 Business Days after a Senior Officer of such Obligor has knowledge thereof or receives notice thereof from Lender, whichever is sooner; provided, that such notice and opportunity to cure shall not apply if the breach or failure to perform is not capable of being cured within such period or is a willful breach by an Obligor;

   

  (e)A Guarantor repudiates, revokes or attempts to revoke its Guaranty; an Obligor or third party denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection or priority of any Lien granted to Lender; it is unlawful for an Obligor to perform any of its obligations under a Loan Document; or any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by Lender);

   

  (f)Any breach or default of an Obligor occurs under (i) any Swap; or (ii) any instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $250,000, if the maturity of or any payment with respect to such Debt may be accelerated or demanded due to such breach;

   

  (g)Any judgment or order for the payment of money is entered against an Obligor in an amount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Obligors, $250,000 (net of insurance coverage therefor that has not been denied by the insurer), unless a stay of enforcement of such judgment or order is in effect;

   

  (h)A loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $250,000;

   

   

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  (i)An Obligor is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any material part of its business; an Obligor suffers the loss, revocation or termination of any Material License, permit, lease or agreement necessary to its business; there is a cessation of any material part of an Obligor’s business for a material period of time; any material Collateral or Property of an Obligor is taken or impaired through condemnation; an Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs; or the Obligors, taken as a whole on a consolidated basis, are not Solvent;

   

  (j)An Insolvency Proceeding is commenced by an Obligor; an Obligor makes an offer of settlement, extension or composition to its unsecured creditors generally; a trustee is appointed to take possession of any substantial Property of or to operate any of the business of an Obligor; or an Insolvency Proceeding is commenced against an Obligor and: the Obligor consents to institution of the proceeding, the petition commencing the proceeding is not timely contested by the Obligor, the petition is not dismissed within 60 days after filing, or an order for relief is entered in the proceeding;

   

  (k)An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of an Obligor to a Pension Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan;

   

  (l)An Obligor or any of its Senior Officers is criminally indicted or convicted for

  (i) a felony committed in the conduct of the Obligor’s business, or (ii) violating any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral; or

   

  (m)A Change of Control occurs.

   

  11.2.Remedies upon Default

   

  . If an Event of Default described in Section 11.1(j) occurs with respect to any Borrower, then to the extent permitted by Applicable Law, all Obligations shall become automatically due and payable and the Commitment shall terminate, without any action by Lender or notice of any kind. In addition, or if any other Event of Default occurs and has not been waived by Lender, Lender may in its discretion do any one or more of the following from time to time:

   

  (a)declare any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers to the fullest extent permitted by law;

   

  (b)terminate, reduce or condition the Commitment or adjust the Borrowing Base;

   

  (c)require Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other Obligations that are contingent or not yet due and payable; and

   

  (d)exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Lender at a place designated by Lender; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the

   

   

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  premises are owned or leased by a Borrower, Borrowers agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Lender, in its discretion, deems advisable. Each Borrower agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by Lender shall be reasonable, and that any sale conducted on the internet or to a licensor of Intellectual Property shall be commercially reasonable. Lender may conduct sales on any Obligor’s premises, without charge, and any sales may be adjourned from time to time in accordance with Applicable Law. Lender shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Lender may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off the amount of such price against the Obligations.

   

  11.3.License

   

  .  Lender is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Borrowers, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral. Each Borrower’s rights and interests under Intellectual Property shall inure to Lender’s benefit.

   

  11.4.Setoff

   

  . At any time during the existence of an Event of Default, Lender and its Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.

   

  11.5.Remedies Cumulative; No Waiver.

   

  11.5.1.Cumulative Rights. All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Lender under the Loan Documents are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.

   

  11.5.2.Waivers. No waiver or course of dealing shall be established by (a) the failure or delay of Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event of Default or other failure to satisfy any conditions precedent; or (c) acceptance by Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein. Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.

   

   

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  SECTION 12. MISCELLANEOUS

  12.1.Amendments and Waivers.

   

  12.1.1.Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Borrowers, Lender, and their respective successors and assigns, except that no Obligor may assign or delegate its rights or obligations under any Loan Documents.

   

  12.1.2.Amendments and Other Modifications. No modification of any Loan Document, including any amendment, supplement or extension of a Loan Document or waiver of a Default or Event of Default, shall be effective without the prior written agreement of Lender and each Obligor party to such Loan Document; provided, that if Real Estate secures any Obligations, no modification of a Loan Document shall add, increase, renew or extend any credit line hereunder until completion of flood diligence and documentation as required by Flood Laws and satisfactory to Lender; and provided further, that only the consent of the parties to a Bank Product agreement shall be required for any modification of such agreement. Notwithstanding anything in any Loan Document to the contrary, LIBOR and related matters may be modified in accordance with Section 3.6 and noLender may make or adopt Conforming Changes from time to time and any amendment implementing such changes will become effective without further action or consent byof any other party; provided, that Lender shall be requiredpost or otherwise provide each such amendment to Borrowers reasonably promptly after it becomes effective. Any waiver or consent granted by Lender shall be effective only if in writing, and only for the matter specified.

   

  12.2.Indemnity

   

  . EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR

  ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.

   

  12.3.Notices and Communications.

   

  12.3.1.Notice Address. Subject to Section 12.3.2, all Communications by or to a party hereto shall be in writing and shall be given to any Borrower, at Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof, or at such other address as a party may hereafter specify by notice in accordance with this Section 12.3. Each Communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the U.S. mail, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Lender pursuant to Section 2.1.3, 2.2, 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Lender such notice is required to be sent. Any written Communication not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower Agent shall be deemed received by all Borrowers.

   

  12.3.2.Communications. Electronic and telephonic Communications (including e-mail, messaging, voice mail and websites) may be used only in a manner acceptable to Lender. Lender makes no assurance as to the privacy or security of electronic or telephonic Communications. E-mail and voice mail shall not be effective notices under the Loan Documents.

   

   

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  12.3.3.Platform.	Borrower Materials shall be delivered by Borrowers pursuant to procedures approved by Lender, including electronic delivery (if requested by Lender) to an electronic system maintained by it (“Platform”).	Borrowers shall notify Lender of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Lender only upon its receipt of such notice. The Platform is provided “as is” and “as available.” Lender does not warrant the adequacy or functioning of the Platform, and expressly disclaims liability for any issues involving the Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY	OF	MERCHANTABILITY,	FITNESS	FOR	A	PARTICULAR	PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY LENDER WITH RESPECT TO THE PLATFORM. No Indemnitee

  shall have any liability to Obligors or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of any information via the Platform, internet, e-mail, or any other electronic platform or messaging system.

   

  12.3.4.Non-Conforming Communications. Lender may rely on any Communication purportedly given by or on behalf of an Obligor even if it was not made in a manner specified herein, incomplete or not confirmed, or if the terms thereof, as understood by the recipient, varied from an earlier Communication or later confirmation. Each Borrower shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any electronic or telephonic Communication purportedly given by or on behalf of any Obligor.

   

  12.4.Performance of Borrowers’ Obligations

   

  . Lender may, in its discretion at any time and from time to time, at Borrowers’ expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Lender to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Lender’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Lender under this Section shall be reimbursed by Borrowers, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to Base Rate Loans. Any payment made or action taken by Lender under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.

   

  12.5.Credit Inquiries

   

  . Lender may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.

   

  12.6.Severability

   

  . Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.

   

  12.7.Cumulative Effect; Conflict of Terms

   

  . The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided.  Except as otherwise provided in

   

   

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  another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.

   

  12.8.Execution; Electronic Records

   

  . A Communication, including any required to be in writing, may be in the form of an Electronic Record and may be executed using Electronic Signatures. An Electronic Signature on or associated with a Communication shall be valid and binding on each Obligor and other party thereto to the same extent as a manual, original signature, and any Communication entered into by Electronic Signature shall constitute the legal, valid and binding obligation of each party, enforceable to the same extent as if a manually executed original signature were delivered. A Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. The parties may use or accept manually signed paper Communications converted into electronic form (such as scanned into pdf), or electronically signed Communications converted into other formats, for transmission, delivery and/or retention. Lender may, at its option, create one or more copies of a Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Person’s business, and may destroy the original paper document. Any Communication in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything herein, (a) Lender is under no obligation to accept an Electronic Signature in any form unless expressly agreed by it pursuant to procedures approved by it; (b) Lender is entitled to rely on any Electronic Signature purportedly given by or on behalf of an Obligor without further verification; and (c) upon request by Lender, an Electronic Signature shall be promptly followed by a manually executed counterpart. “Electronic Record” and “Electronic Signature” are used herein as defined in 15 U.S.C. § 7006.

   

  12.9.Entire Agreement

   

  . Time is of the essence with respect to all Loan Documents and Obligations. The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.

   

  12.10.No Control; No Advisory or Fiduciary Responsibility

   

  . Nothing in any Loan Document and no action of Lender pursuant to any Loan Document shall be deemed to constitute control of any Obligor by Lender. In connection with all aspects of each transaction contemplated by any Loan Document, Borrowers acknowledge and agree that (a)(i) this credit facility and all related services by Lender or its Affiliates are arm’s-length commercial transactions between Borrowers and such Person; (ii) Borrowers have consulted their own legal, accounting, regulatory, tax and other advisors to the extent they have deemed appropriate; and (iii) Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Lender and its Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrowers, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Lender and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their Affiliates, and have no obligation to disclose any of such interests to Borrowers or their Affiliates. To the fullest extent permitted by Applicable Law, each Borrower hereby waives and releases any claims that it may have against Lender and its Affiliates with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.

   

   

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  12.11.Confidentiality

   

  .	Lender agrees to maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and its and their partners, directors, officers, employees and Lender Professionals (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self-regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any potential or actual transferee of any interest in a Loan Document or any actual or prospective party (or its advisors) to any Bank Product or to any swap, derivative or other transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information is (i) publicly available other than as a result of a breach of this Section, (ii) available to Lender or its Affiliates on a nonconfidential basis from a source other than Borrowers, or (iii) independently discovered or developed by a party hereto without utilizing any Information or violating this Section; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower Agent.	Borrowers consent to the publication by Lender of customary advertising material relating to transactions contemplated hereby, using the names, product photographs, logos or trademarks of Borrowers and Subsidiaries. Lender may disclose information regarding this Agreement and the credit facility hereunder to market data collectors, similar service providers to the lending industry, and Lender’s service providers in connection with the Loan Documents and Commitment. As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business, that is identified as confidential when delivered. A Person required to maintain confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information. Lender acknowledges that (i) Information may include material non-public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non-public information in accordance with Applicable Law.

  12.12.[Reserved.]

   

  12.13.GOVERNING LAW

   

  . UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

   

  12.14.Consent to Forum.

   

  12.14.1.Forum. EACH BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF ILLINOIS, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR

  NOTICES IN SECTION 12.3.1.  A final judgment in any proceeding of any such court shall be

   

   

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  conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.

   

  12.14.2.Other Jurisdictions. Nothing herein shall limit the right of Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by Lender of any judgment or order obtained in any forum or jurisdiction.

   

  12.15.Waivers by Borrowers

   

  . To the fullest extent permitted by Applicable Law, each Borrower waives (a) the right to trial by jury (which each Secured Party hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Lender on which a Borrower may in any way be liable, and hereby ratifies anything Lender may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Lender to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against an Indemnitee on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Borrower acknowledges that the foregoing waivers are a material inducement to Lender entering into this Agreement and that Lender is relying upon the foregoing in its dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

   

  12.16.Acknowledgement Regarding Supported QFCs

   

  . To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

   

  12.16.1.Covered Party. If a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regimes if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. If a Covered Party or BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regimes if

   

   

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  the Supported QFC and Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a defaulting lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

   

  12.16.2.Definitions. As used in this Section, (a) “BHC Act Affiliate” means an “affiliate,” as defined in and interpreted in accordance with 12 U.S.C. §1841(k); (b) “Default Right” has the meaning assigned in and interpreted in accordance with 12 C.F.R. §§252.81, 47.2 or 382.1, as applicable; and (c) “QFC” means a “qualified financial contract,” as defined in and interpreted in accordance with 12 U.S.C. §5390(c)(8)(D).

   

  12.17.Patriot Act Notice; Beneficial Ownership Regulation

   

  . Lender hereby notifies Borrowers that pursuant to the Patriot Act, Lender is required to obtain, verify and record information that identifies each Borrower, including its legal name, address, tax ID number and other information that will allow Lender to identify it in accordance with the Patriot Act. Lender will also require information regarding any personal guarantor and may require information regarding Borrowers’ management and owners, such as legal name, address, social security number and date of birth. Borrowers shall, promptly upon request, provide all documentation and information as Lender may request from time to time for purposes of complying with any “know your customer,” anti-money laundering or other requirements of Applicable Law, including the Patriot Act and Beneficial Ownership Regulation.

   

  12.18.NO ORAL AGREEMENT

   

  . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

   

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  7phasebio-ex101tochiesiap

EXHIBIT 10.1  EXECUTION VERSION                            ASSET PURCHASE AGREEMENT      BY AND BETWEEN      PHASEBIO PHARMACEUTICALS, INC.,      AND      CHIESI FARMACEUTICI S.P.A        DATED AS OF NOVEMBER 4, 2022    

 

  i  TABLE OF CONTENTS    ARTICLE I THE ACQUISITION .............................................................................................................. 1  Section 1.1. Acquired Assets ................................................................................................................ 1  Section 1.2. Excluded Assets ................................................................................................................ 3  Section 1.3. Assumed Liabilities .......................................................................................................... 4  Section 1.4. Excluded Liabilities .......................................................................................................... 4  Section 1.5. Assignment of Assigned Contracts ................................................................................... 6  Section 1.6. Purchase Price; Deposit Funds .......................................................................................... 8  Section 1.7. Withholding .................................................................................................................... 12  Section 1.8. Purchase Price Allocation ............................................................................................... 12  ARTICLE II THE CLOSING ................................................................................................................... 13  Section 2.1. Closing ............................................................................................................................ 13  Section 2.2. Deliveries at the Closing ................................................................................................. 13  ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER ............................................ 14  Section 3.1. Qualification, Organization, Subsidiaries ....................................................................... 14  Section 3.2. Authority of Seller .......................................................................................................... 15  Section 3.3. Consents and Approvals ................................................................................................. 15  Section 3.4. No Violations .................................................................................................................. 15  Section 3.5. Financial Statements; Books and Records ...................................................................... 15  Section 3.6. Title to Property; Sufficiency of Assets .......................................................................... 16  Section 3.7. Absence of Certain Changes ........................................................................................... 16  Section 3.8. Brokers or Finders .......................................................................................................... 17  Section 3.9. Litigation ......................................................................................................................... 17  Section 3.10. Intellectual Property ........................................................................................................ 17  Section 3.11. Privacy and Data Protection ............................................................................................ 20  Section 3.12. Real Property Leases ...................................................................................................... 21  Section 3.13. Material Contracts ........................................................................................................... 21  Section 3.14. Compliance with Laws; Permits ..................................................................................... 23  Section 3.15. Employee Benefit Matters .............................................................................................. 25  Section 3.16. Labor Matters .................................................................................................................. 26  Section 3.17. Environmental Matters.................................................................................................... 27  Section 3.18. Regulatory Matters ......................................................................................................... 27  Section 3.19. Taxes ............................................................................................................................... 29  Section 3.20. Suppliers ......................................................................................................................... 30  Section 3.21. Inventory ......................................................................................................................... 30  Section 3.22. Insurance ......................................................................................................................... 31  Section 3.23. CFIUS ............................................................................................................................. 31  Section 3.24. Disclaimer ....................................................................................................................... 31  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER .................................... 31  Section 4.1. Qualification; Organization ............................................................................................ 31  Section 4.2. Authority of Purchaser .................................................................................................... 32  Section 4.3. Consents and Approvals ................................................................................................. 32  Section 4.4. No Violations .................................................................................................................. 32  Section 4.5. Brokers or Finders .......................................................................................................... 32  Section 4.6. Financing ........................................................................................................................ 33  Section 4.7. Adequate Assurances Regarding Assigned Contracts .................................................... 33  Section 4.8. Disclaimer ....................................................................................................................... 33  

 

  ii  ARTICLE V COVENANTS ..................................................................................................................... 33  Section 5.1. Conduct of Business Pending the Closing ...................................................................... 33  Section 5.2. Access and Information .................................................................................................. 36  Section 5.3. Approvals and Consents; Cooperation; Notification ...................................................... 37  Section 5.4. Further Assurances ......................................................................................................... 38  Section 5.5. Assets Held by Other Persons ......................................................................................... 39  Section 5.6. The Sale Motion .............................................................................................................. 39  Section 5.7. Cooperation with Respect to Bankruptcy Court Approvals ............................................ 39  Section 5.8. Non-Solicitation of Stalking Horse Bidders ................................................................... 39  Section 5.9. Bankruptcy Court Filings ................................................................................................ 40  Section 5.10. Not a Back Up Bidder ..................................................................................................... 40  Section 5.11. Employee Matters ........................................................................................................... 40  Section 5.12. Seller Confidentiality Agreements; Post-Closing Confidentiality .................................. 41  Section 5.13. Use of Names and Marks ................................................................................................ 41  Section 5.14. Permits ............................................................................................................................ 41  Section 5.15. Reporting ........................................................................................................................ 41  Section 5.16. Additional Actions .......................................................................................................... 41  Section 5.17. Restrictive Covenants ..................................................................................................... 42  Section 5.18. Transitional Support; Phase 3 Trial Sponsorship ............................................................ 43  ARTICLE VI CONDITIONS PRECEDENT ........................................................................................... 44  Section 6.1. Conditions Precedent to Obligation of Seller and Purchaser .......................................... 44  Section 6.2. Conditions Precedent to Obligation of Seller ................................................................. 44  Section 6.3. Conditions Precedent to Obligation of Purchaser ........................................................... 45  ARTICLE VII INDEMNIFICATION ...................................................................................................... 46  Section 7.1. Indemnification ............................................................................................................... 46  Section 7.2. Claim Procedure ............................................................................................................. 47  Section 7.3. Limitations on Indemnification ....................................................................................... 49  Section 7.4. Tax Treatment of Indemnification Payments .................................................................. 50  Section 7.5. Exclusive Remedy .......................................................................................................... 50  Section 7.6. Effect of Investigation..................................................................................................... 50  ARTICLE VIII TERMINATION ............................................................................................................. 50  Section 8.1. Termination ..................................................................................................................... 50  Section 8.2. Effect of Termination ...................................................................................................... 51  ARTICLE IX GENERAL PROVISIONS ................................................................................................. 54  Section 9.1. Tax Matters ..................................................................................................................... 54  Section 9.2. Bulk Sales ....................................................................................................................... 55  Section 9.3. Public Announcements ................................................................................................... 55  Section 9.4. Notices ............................................................................................................................ 55  Section 9.5. Descriptive Headings; Interpretative Provisions ............................................................. 56  Section 9.6. No Strict Construction .................................................................................................... 57  Section 9.7. Entire Agreement; Assignment ....................................................................................... 57  Section 9.8. Governing Law; Submission of Jurisdiction; Waiver of Jury Trial ................................ 57  Section 9.9. Expenses ......................................................................................................................... 57  Section 9.10. Amendment ..................................................................................................................... 57  Section 9.11. Waiver ............................................................................................................................. 57  Section 9.12. Counterparts; Effectiveness ............................................................................................ 58  Section 9.13. Severability; Validity; Parties in Interest ........................................................................ 58  Section 9.14. Specific Performance ...................................................................................................... 58  Section 9.15. Time of the Essence ........................................................................................................ 58  

 

  iii  Section 9.16. Remedies Cumulative ..................................................................................................... 58  Section 9.17. Conflicts; Deal Communications. ................................................................................... 58  ARTICLE X DEFINITIONS ..................................................................................................................... 59    EXHIBITS    Exhibit A Form of Bill of Sale & Assignment and Assumption Agreement  Exhibit B Forms of Intellectual Property Assignment Agreements  Exhibit C Form of Bidding Procedures Order  Exhibit D Form of Sale Order  Exhibit E DIP Loan Documents and DIP Budget  Exhibit F Form of Escrow Agreement   Exhibit G Form of Transition Services Agreement      SCHEDULES     Schedule 1.1(c)  Assigned Contracts  Schedule 1.1(e)  Seller Intellectual Property  Schedule 1.1(m) Designated Parties  Schedule 1.1(r)  Acquired Seller Assets & Rights  Schedule 1.2(l)  Excluded Seller Assets & Rights  Schedule 1.4(f)  Excluded Liabilities  Schedule 1.5(a)  Cure Costs  Schedule 2.2(a)(ii)  Tangible Acquired Assets Deliveries   Schedule 5.1(a)  Conduct of Business Pending Closing  Schedule 5.1(b)  Seller Interim Operating Covenants  Schedule 6.3(c)  Required Consents  Schedule 6.3(i)  Contract Amendment  

 

  1  ASSET PURCHASE AGREEMENT    THIS ASSET PURCHASE AGREEMENT, dated as of November 4, 2022 (this “Agreement”),  is made by and between PhaseBio Pharmaceuticals, Inc., a Delaware corporation (“Seller”), and Chiesi  Farmaceutici S.p.A., a private limited company organized under the Laws of Italy (“Purchaser”). Seller and  Purchaser are referred to individually herein as a “party” and collectively as the “parties.” Capitalized terms  used herein and not otherwise defined shall have the respective meanings set forth in ARTICLE X.  WHEREAS, Seller is engaged in the business of, directly or indirectly, Exploiting the Product  (such business the “Business”);  WHEREAS, on October 23, 2022 (the “Petition Date”), Seller filed a voluntary petition for relief  commencing a case (the “Chapter 11 Case”) under Chapter 11 of Title 11 of the United States Code (the  “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy  Court”);  WHEREAS, Purchaser desires to purchase and accept, and Seller desires to sell, convey, assign,  transfer and deliver, or cause to be sold, conveyed, assigned, transferred and delivered, to Purchaser, all of  the Acquired Assets, and Purchaser is willing to assume, and Seller desires to assign and delegate to  Purchaser, all of the Assumed Liabilities, all in the manner and subject to the terms and conditions set forth  herein and in accordance with Sections 105, 363 and 365 of the Bankruptcy Code, subject to Purchaser’s  right to assign its rights and obligations hereunder to one of more of its Affiliates (such sale and purchase  of the Acquired Assets and such assignment and assumption of the Assumed Liabilities, the “Acquisition”);  WHEREAS, the parties acknowledge and agree that the purchase by Purchaser of the Acquired  Assets and the assumption by Purchaser of the Assumed Liabilities are being made at arm’s length and in  good faith and without intent to hinder, delay or defraud creditors of Seller or their Affiliates;  WHEREAS, the execution and delivery of this Agreement and Seller’s ability to consummate the  Transactions are subject to, among other things, the entry of the Sale Order under, inter alia, Sections 363  and 365 of the Bankruptcy Code; and  WHEREAS, the parties desire to consummate the proposed transaction as promptly as practicable  after the Bankruptcy Court enters the Sale Order.  NOW, THEREFORE, in consideration of the foregoing and the respective representations,  warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the  receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:  ARTICLE I  THE ACQUISITION  Section 1.1. Acquired Assets. On the terms and subject to the conditions set forth in this  Agreement and, subject to approval of the Bankruptcy Court, pursuant to Sections 105, 363 and 365 of the  Bankruptcy Code, at the Closing, the Seller shall sell, assign, transfer, convey and deliver, or cause to be  sold, assigned, transferred, conveyed and delivered, to Purchaser, and Purchaser shall purchase and accept  from Seller, free and clear of all Encumbrances of any and every kind, nature and description, other than  Permitted Post-Closing Encumbrances, all right, title and interest of the Seller in, to or under all of the  assets, properties and rights of every kind and nature, in each case, as of the Closing, whether real, personal  or mixed, tangible or intangible (including goodwill), wherever located and whether now existing or  hereafter acquired (other than the Excluded Assets), in each case which are Primarily Related to the  

 

  2  Business (collectively, the “Acquired Assets”). Without limiting the foregoing, the Acquired Assets shall  include, and Seller shall sell, assign, transfer, convey and deliver, or cause to be sold, assigned, transferred,  conveyed and delivered, to Purchaser at the Closing free and clear of all Encumbrances of any and every  kind, nature and description, other than Permitted Post-Closing Encumbrances, the following:  (a) the Product;  (b) all credits, claims for refunds, deposits for the benefit of third parties and prepaid  expenses of Seller (other than credits, claims for refunds, deposits and prepaid amounts exclusively related  to the Excluded Assets or the Excluded Liabilities);  (c) the Contracts listed, described or otherwise identified on Schedule 1.1(c), as such  schedule may be amended from time to time pursuant to Section 1.5(e) (such Contracts, the “Assigned  Contracts”) and the rights thereunder;  (d) all raw materials, active pharmaceutical ingredients, excipients, work-in-process,  semi-finished and finished goods, supplies (including clinical drug supplies), samples (including samples  held by sales representatives), components, packaging materials, and other inventories that are in the  possession of Seller or any third party that are Primarily Related to the Product or the Business (collectively,  “Inventory”);  (e) all Seller Intellectual Property, including Seller Registered Intellectual Property  (including the items listed on Schedule 1.1(e)) and all of Seller’s rights therein, including all rights to sue  for and recover and retain damages for present and past infringement thereof and, in the case of Trademarks  that are Seller Intellectual Property, all goodwill appurtenant thereto;  (f) all rights under non-disclosure or confidentiality, invention and Intellectual  Property assignment agreements executed for the benefit of Seller with current or former employees,  consultants or contractors of Seller or with third parties Primarily Related to the Product or the Business;  (g) all Books and Records, other than Retained Books and Records;  (h) all Regulatory Documentation;  (i) all Permits (including pending applications therefor) Primarily Related to the  Product or the Business;  (j) rights to receive any royalties, milestones or other contingent payments under any  Contracts Primarily Related to the Business that are not Assigned Contracts but pursuant to which the  applicable licensee elects to retain its intellectual property license rights under Section 365(n) of the  Bankruptcy Code;  (k) all goodwill and other intangible assets associated with the Business, the Acquired  Assets and the Assumed Liabilities;  (l) all rights, claims, rebates, refunds, causes of action, actions, suits or proceedings,  hearings, audits, rights of recovery, rights of setoff, rights of recoupment, rights of reimbursement, rights  of indemnity or contribution and other similar rights (known and unknown, matured and unmatured,  accrued or contingent, regardless of whether such rights are currently exercisable) against any Person,  including all warranties, representations, guarantees, indemnities and other contractual claims (express,  

 

  3  implied or otherwise) to the extent Primarily Related to the Business, the Acquired Assets or the Assumed  Liabilities (including any claims for past infringement or misappropriation);  (m) except as provided in Section 1.2, all avoidance claims or causes of action available  to Seller under Chapter 5 of the Bankruptcy Code (including Sections 544, 545, 547, 548, 549, 550 and  553) or any similar actions under any other applicable Law (collectively, “Avoidance Actions”) against the  designated parties and their respective Affiliates set forth on Schedule 1.1(m) (collectively, the “Designated  Parties”); provided, however, that it is understood and agreed by the parties that Purchaser will not pursue  or cause to be pursued any Avoidance Actions;  (n) all proceeds of any settlement from and after the date hereof through the Closing  of any claims, counterclaims, rights of offset or other causes of action of Seller against any of the Designated  Parties;  (o) any and all insurance proceeds, condemnation awards or other compensation in  respect of loss or damage to any of the Acquired Assets to the extent occurring on or after the date hereof,  and all rights and claims of Seller to any such insurance proceeds, condemnation awards or other  compensation not paid by the Closing;   (p) all security and utility deposits, credits, allowance or other assets, or charges,  setoffs, prepaid expenses, and other prepaid items to the extent Primarily Related to the Acquired Assets,   (q) the laboratory-related assets and rights located on the premises leased pursuant to  the Malvern Lease, to the extent that Purchaser notifies Seller in writing no later than the Designation  Deadline that such assets and rights (or any of them) shall be included in the Acquired Assets (the “Specified  Laboratory Equipment”); and  (r) the assets and rights set forth in Schedule 1.1(r).  Section 1.2. Excluded Assets. Notwithstanding anything contained in this Agreement to the  contrary, the Acquired Assets shall not include the following (collectively, the “Excluded Assets”):  (a) all Cash, other than any and all rights of Seller in and to any restricted cash, security  deposits, escrow deposits and cash collateral (including cash collateral given to obtain or maintain letters  of credit and cash drawn or paid on letters of credit) that are Primarily Related to the Assumed Liabilities  or the Acquired Assets;  (b) subject to Section 1.1(o), all insurance policies of Seller (including all current and  prior director and officer or similar fiduciary or errors and omissions insurance policies and all rights  thereunder and all proceeds thereof or other insurance policies as set forth on Section 3.22 of the Seller  Disclosure Schedule);  (c) any Tax credits, Tax refunds, Tax deposits, Tax attributes of Seller and prepaid  Tax amounts of the Seller;  (d) any shares of capital stock or other equity interests of Seller, any Affiliate thereof  or any other Person or any securities convertible into, exchangeable for or exercisable for shares of capital  stock or other equity interests of Seller, any Affiliate thereof or any other Person;  (e) the Retained Books and Records;  

 

  4  (f) (i) all Avoidance Actions, or any other causes of action under any other applicable  Law, against SFJ Pharmaceuticals X, Ltd. or any of its Affiliates or any Person other than any of the  Designated Parties, (ii) any proceeds of any settlement from and after the date hereof through the Closing  of any claims, counterclaims, rights of offset or other causes of action of Seller against any Person other  than any Designated Party, and (iii) all claims or causes of action of Seller other than those identified in  Section 1.1(l) and Section 1.1(m);  (g) all rights, claims or causes of action of Seller arising under this Agreement or the  Ancillary Documents, including (subject to Section 9.16) Deal Communications;  (h) all rights, claims or causes of action by or in the right of Seller against any current  or former director or officer of any Seller;  (i) all Benefit Plans, all assets of such Benefit Plans and all trust agreements,  administrative service contracts, insurance policies and other Contracts related thereto and all rights of  Seller with respect to any of the foregoing;  (j) all real property of Seller and all leases, subleases or Contracts under which Seller  occupies any real property, except to the extent specifically included as an Assigned Contract;  (k) all Contracts that are disclosed or required to be disclosed pursuant to Section 3.8;  and  (l) the other assets and rights set forth in Schedule 1.2(l).  Section 1.3. Assumed Liabilities. On the terms and subject to the conditions set forth in this  Agreement, at the Closing, in consideration for the sale, assignment, conveyance, transfer and delivery of  the Acquired Assets to Purchaser, Purchaser shall assume from Seller and agree to pay, perform and  discharge, when due, in accordance with their respective terms and subject to the respective conditions  thereof, only the following Liabilities of Seller (collectively, the “Assumed Liabilities”):  (a) all Liabilities arising under the Assigned Contracts, but only to the extent that such  Liabilities thereunder arise and are required to be performed following the Closing and do not relate to any  failure to perform, improper performance, breach of warranty or other breach, default or violation by Seller  or its Affiliates on or prior to the Closing (other than Cure Costs); and  (b) Cure Costs in an aggregate amount not to exceed the Cure Costs Cap.  The Transactions shall in no way expand the rights or remedies of any third party against Purchaser or  Seller as compared to the rights and remedies that such third party would have had against Seller absent the  Chapter 11 Case had Purchaser not assumed such Assumed Liabilities.  Section 1.4. Excluded Liabilities. Notwithstanding anything contained in this Agreement to the  contrary, neither Purchaser nor any of its Affiliates shall assume, be obligated to assume, be deemed to  have assumed, or be obliged to pay, perform or otherwise discharge, and Seller shall be solely and  exclusively liable with respect to, any Liabilities (of any nature, and whether based in common law or  statute or arising under written Contract or otherwise, known or unknown, fixed or contingent, accrued or  unaccrued, liquidated or unliquidated, asserted or unasserted) of Seller and any Affiliate thereof other than  the Assumed Liabilities (such Liabilities other than Assumed Liabilities, the “Excluded Liabilities”).  Without limiting the foregoing, Purchaser does not (nor does any of its Affiliates) assume or agree to pay,  perform or otherwise discharge the Liabilities (whether known or unknown, fixed or contingent, accrued  

 

  5  or unaccrued, liquidated or unliquidated, asserted or unasserted) of Seller or its Affiliates with respect to,  arising out of or relating to, the following Excluded Liabilities:  (a) other than the Cure Costs, any Liability arising out of facts or circumstances in  existence at or prior to the Closing or from or related to any breach, default under, failure to perform, torts  related to the performance of, violations of Law, infringements or indemnities under, guaranties pursuant  to and overcharges, underpayments or penalties on the part of Seller or any of its Affiliates under any  Contract to which Seller or any of its Affiliates is a party prior to the Closing;  (b) other than the Cure Costs, any Liability arising from or related to any Action  against Seller or its Affiliates, or related to the Business, the Acquired Assets or the Assumed Liabilities,  pending or threatened or based on facts, actions, omissions, circumstances or conditions existing, occurring  or accruing on or prior to the Closing Date even if instituted after the Closing Date;  (c) other than the Cure Costs, any Liability arising from or related to the Product or  the operation or condition of the Acquired Assets or the Assumed Liabilities at or prior to the Closing or  facts, actions, omissions, circumstances or conditions existing, occurring or accruing at or prior to the  Closing;  (d) all Indebtedness of Seller;  (e) all guarantees of third-party Indebtedness made by Seller and reimbursement  obligations to guarantors of Seller’s obligations or under letters of credit or other similar agreements or  instruments;  (f) all Liabilities arising out of or related to the matters set forth on Schedule 1.4(f);  (g) all Liabilities to any current or former owner of capital stock or other equity  interests of Seller or any securities convertible into, exchangeable or exercisable for shares of capital stock  or other equity interests of Seller, any current or former holder of indebtedness for borrowed money of  Seller or, in respect of obligations for indemnification or advancement of expenses, any current or former  officer or director of Seller;  (h) all drafts or checks outstanding at the Closing under which Seller is obligated;  (i) all Liabilities of Seller under futures contracts, options on futures, swap  agreements or forward sale agreements;  (j) all Liabilities for or in respect of Excluded Taxes;  (k) all Liabilities relating to (i) the Benefit Plans (whether arising prior to, on or after  the Closing Date) or (ii) the employment or termination of any current or former employee of Seller  (including any Transferred Employees), and including any current, threatened or potential claims for  compensation or benefits, in each such case, to the extent related to employment with Seller or termination  thereof, whether arising prior to, on or after the Closing Date;  (l) all fees, charges, expenditures, expenses, costs and other payments incurred or  otherwise payable by Seller or its affiliates, or for which Seller or its affiliates is liable, in connection with  the administration of the Chapter 11 Case or the negotiation, execution and consummation of the  Transactions (including any preparation for a transaction process, bankruptcy process, any sale process  involving other potential purchasers or any contemplated public offering or financing), including the fees  

 

  6  and expenses of financial advisors, accountants, legal counsel, consultants, brokers and other advisors with  respect thereto, whether incurred, accrued or payable on, prior to or after the date of this Agreement or the  Closing Date;  (m) any Liabilities to any (i) owner or former owner of capital stock or other equity  interests of Seller or (ii) current or former officer, director or employee of Seller;   (n) all Liabilities to the extent relating to the ownership, possession or use of the  Excluded Assets;  (o) all Liabilities (x) under Environmental Laws to the extent relating to (i) facts,  actions, omissions, circumstances or conditions existing, occurring or accruing, or noncompliance with or  violations of Environmental Laws by Seller, on or before the Closing Date, (ii) the transportation, off-site  storage or off-site disposal of any Hazardous Substances generated by or on behalf of Seller on or before  the Closing Date or (iii) real property owned, operated or leased by Seller at any time and (y) for toxic torts  arising as a result of or in connection with loss of life or injury to Persons (whether or not such loss or injury  was made manifest on or after the Closing Date); and  (p) all Liabilities of Seller or its Affiliates under this Agreement, the Ancillary  Documents and the Confidential Disclosure Agreement or from the consummation of the Transactions.  Section 1.5. Assignment of Assigned Contracts.  (a) Schedule 1.5(a) sets forth, with respect to each Contract of Seller, the amount  required to be paid with respect to each Contract to cure all monetary defaults under such Contract to the  extent required by Section 365(b) and otherwise satisfy all requirements imposed by Sections 365(b) and  (d) of the Bankruptcy Code (the actual amount of such costs with respect to the Assigned Contracts, the  “Cure Costs”). Prior to the Sale Hearing, Seller shall notify non-Seller counterparties to such Assigned  Contracts listed on Schedule 1.1(c) as of the date hereof of the deadline to object to the Cure Costs, if any,  and the Bankruptcy Court shall have determined the Cure Costs with respect to any Assigned Contract  entered into prior to the Petition Date. Notwithstanding the foregoing, prior to the Designation Deadline,  Purchaser may identify any Contract that Purchaser desires to have included as, or excluded from being, an  Assigned Contract in accordance with Section 1.5(e).  (b) To the maximum extent permitted by the Bankruptcy Code and subject to the other  provisions of this Section 1.5 (including the Cure Costs Cap), on the Closing Date, Seller shall assign the  Assigned Contracts pursuant to Section 365 of the Bankruptcy Code and the Sale Order, subject to the  provision of adequate assurance by Purchaser as may be required under Section 365 of the Bankruptcy  Code and payment by Purchaser of the Cure Costs, in respect of the Assigned Contracts.  (c) To the maximum extent permitted by the Bankruptcy Code and subject to the other  provisions of this Section 1.5, Seller shall assume and transfer and assign all of the Acquired Assets to  Purchaser and Purchaser shall assume all of the Acquired Assets from Seller, as of the Closing Date,  pursuant to Sections 363 and 365 of the Bankruptcy Code. Notwithstanding any other provision of this  Agreement or in any Ancillary Document to the contrary, this Agreement shall not constitute an agreement  to assign any asset or any right thereunder if an attempted assignment without the consent of a third party,  which consent has not been obtained prior to the Closing (after giving effect to the Sale Order and the  Bankruptcy Code), would constitute a breach or in any way adversely affect the rights of Purchaser or Seller  thereunder.  

 

  7  (d) Notwithstanding anything in this Agreement to the contrary, to the extent that the  sale, transfer, assignment, conveyance or delivery or attempted sale, transfer, assignment, conveyance or  delivery to Purchaser of any asset that would be an Acquired Asset or any claim or right or any benefit  arising thereunder or resulting therefrom is prohibited by any applicable Law or would require any consent  from any Governmental Entity or any other third party and such consents shall not have been obtained prior  to the Closing (after giving effect to the Sale Order and the Bankruptcy Code), the Closing shall proceed  without any reduction in Purchase Price without the sale, transfer, assignment, conveyance or delivery of  such asset unless there is a failure of one or more of the conditions set forth in ARTICLE VI; in which case,  the Closing shall proceed only if each failed condition is waived by the party entitled to the benefit thereof.  In the event that any failed condition is waived and the Closing proceeds without the transfer or assignment  of any such asset, then following the Closing, Purchaser and Seller shall use its reasonable best efforts,  subject to any approval of the Bankruptcy Court that may be required, and shall cooperate with the other  party, to obtain such consent as promptly as practicable following the Closing. Pending the receipt of such  consent, the parties shall, subject to any approval of the Bankruptcy Court that may be required, reasonably  cooperate with each other to provide Purchaser with all of the benefits of use of such asset. Once consent  for the sale, transfer, assignment, conveyance or delivery of any such asset not sold, transferred, assigned,  conveyed or delivered at the Closing is obtained, Seller shall promptly transfer, assign, convey and deliver  such asset to Purchaser. To the extent that any such asset cannot be transferred or the full benefits or use of  any such asset cannot be provided to Purchaser, then as promptly as practicable following the Closing,  Purchaser and Seller shall enter into such arrangements (including subleasing, sublicensing or  subcontracting), and shall reasonably cooperate with each other to provide Purchaser with all of the benefits  of use of such asset. Seller shall hold in trust for, and pay to Purchaser, promptly upon receipt thereof, all  income, proceeds and other monies received by Seller derived from their use of any asset that would be an  Acquired Asset in connection with the arrangements under this Section 1.5(d). The parties agree to treat  any asset the benefits of which are transferred pursuant to this Section 1.5(d) as having been sold to  Purchaser for Tax purposes to the extent permitted by Law. Seller and Purchaser agree to notify the other  promptly in writing if it determines that such treatment (to the extent consistent with the relevant  arrangement agreed to by Seller and Purchaser pursuant to this Section 1.5(d)) is not permitted for Tax  purposes under applicable Law. Where such treatment is not so permitted, and subject to the terms of any  relevant arrangement agreed to by Seller and Purchaser pursuant to this Section 1.5(d) (and without  duplication of any such Taxes economically borne by Purchaser or any of its Affiliates pursuant thereto),  Purchaser shall indemnify and hold harmless Seller for any Taxes imposed on Seller or any of its Affiliates  with respect to any such Acquired Asset for any Post-Closing Tax Period (determined on a “with and  without” basis).  (e) Notwithstanding anything in this Agreement to the contrary, Purchaser may, in its  sole and absolute discretion, amend or revise Schedule 1.1(c) setting forth the Assigned Contracts, in order  to add any Contract to, or eliminate any Contract from, such schedule at any time during the period  commencing from the date hereof and ending two (2) Business Days before the commencement of the  Auction (or if no Auction occurs, the date that is two (2) Business Days before the commencement of the  Sale Hearing) (the “Designation Deadline”). Automatically upon the addition of any Contract to  Schedule 1.1(c), it shall be an Assigned Contract for all purposes of this Agreement. If Purchaser adds one  or more Contracts to Schedule 1.1(c) after the date hereof and Seller has not previously notified the non- Seller counterparties to such Contracts pursuant to Section 1.5(a) (such Contracts, the “Additional Assigned  Contracts”), Seller shall file any supplemental motion required to assume and assign such Additional  Assigned Contracts and shall provide such supplemental notice as is required, and the hearing with respect  to the assumption and assignment of such Additional Assigned Contracts may occur after the Sale Hearing.  Automatically upon the removal of any Contract from Schedule 1.1(c), such Contract shall be an Excluded  Asset (and for the avoidance of doubt shall cease to be an Assigned Contract) for all purposes of this  Agreement, and no Liabilities arising thereunder shall be assumed or borne by Purchaser.  

 

  8  Section 1.6. Purchase Price; Deposit Funds.  (a) In consideration for the Acquired Assets, Purchaser shall, in addition to the  assumption of the Assumed Liabilities by Purchaser, pay the following amounts (the “Purchase Price”):  (i) Closing Consideration. (x) $40,000,000 in cash, minus (y) the Cure Costs  Deduction (the “Closing Consideration”), net of any Deposit Funds paid to Seller at the Closing pursuant  to Section 1.6(b)(i), which Closing Consideration shall be paid to Seller at the Closing.  If the Closing shall occur, at the Closing, Purchaser and Seller shall provide joint written  instructions, executed by their respective authorized representatives under the Escrow Agreement, to the  Escrow Agent that instruct the Escrow Agent to release the Deposit Funds to Seller on the Closing Date.  The Deposit Funds received by Seller shall be applied at the Closing toward the payment of the Closing  Consideration portion of the Purchase Price.  (ii) Contingent Consideration.  (A) Subject to this Section 1.6(a)(ii), in addition to the Closing  Consideration, if any of the following events (each, a “Milestone Event,” the Milestone Event set  forth in row (1) of the table below, the “FDA Accelerated Approval Milestone,” and the Milestone  Event set forth in row (2) of the table below, the “FDA Full Approval Milestone”) is achieved or  occurs, Purchaser shall pay, or cause to be paid, to Seller the amount indicated in such table  corresponding to such Milestone Event (each such payment, a “Milestone Payment” and,  collectively, the “Milestone Payments”), subject to reduction as set forth below and Purchaser’s  right to set off as set forth in Section 1.6(a)(ii)(E) and Section 7.2(d).   Milestone Event Milestone Payment  Row 1 FDA Accelerated Approval of the Product with a label  that includes both the Surgical Indication and the  Bleeding Indication.   $30,000,000  Row 2 FDA Full Approval of the Product with a label that  includes both the Surgical Indication and the Bleeding  Indication.  $30,000,000    (1) In the event that the FDA Accelerated Approval  Milestone is achieved prior to August 1, 2024, then the amount of the Milestone Payment  with respect to the achievement of the FDA Accelerated Approval Milestone (the “FDA  Accelerated Approval Milestone Payment”) shall be $30,000,000. In the event that the  FDA Accelerated Approval Milestone is achieved between August 1, 2024 and July 1,  2027, inclusive, then the FDA Accelerated Approval Milestone Payment payable by  Purchaser to Seller shall be reduced by $833,333.33 on the first day of each month during  the period from August 1, 2024 through the date of achievement of the FDA Accelerated  Approval Milestone. In the event that the FDA Accelerated Approval Milestone is achieved  on or after July 1, 2027, no amounts shall be payable with respect to the FDA Accelerated  Approval Milestone.   

 

  9  (2) If not previously achieved, the FDA Accelerated  Approval Milestone shall be deemed to be achieved immediately upon achievement of the  FDA Full Approval Milestone, and the FDA Accelerated Approval Milestone Payment in  such instance shall be as set forth in Section 1.6(a)(ii)(A)(1).   (3) In the event that the FDA Accelerated Approval  Milestone is achieved (or is deemed to be achieved) on or prior to August 1, 2027, then the  Milestone Payment payable upon achievement of the FDA Full Approval Milestone (the  “FDA Full Approval Milestone Payment”) shall be $30,000,000. In the event that the FDA  Accelerated Approval Milestone is achieved (or is deemed to be achieved) between August  1, 2027 and July 1, 2030, inclusive, then the FDA Full Approval Milestone Payment  payable by Purchaser to Seller shall be reduced by $833,333.33 on the first day of each  month during the period from August 1, 2027 through the date of achievement (or deemed  achievement) of the FDA Accelerated Approval Milestone. In the event that the FDA  Accelerated Approval Milestone is achieved (or is deemed to be achieved) on or after July  1, 2030, no amounts shall be payable with respect to the FDA Full Approval Milestone.   (4) By way of example and not of limitation, if the FDA Full  Approval Milestone is achieved on July 1, 2025 and the FDA Accelerated Approval  Milestone had not separately been achieved prior to such date, then the FDA Accelerated  Approval Milestone Payment would be $20,000,000 and FDA Full Approval Milestone  Payment would be $30,000,000; if the FDA Full Approval Milestone is achieved on July  1, 2027 and the FDA Accelerated Approval Milestone had not separately been achieved  prior to such date, then no amount would be payable for the FDA Accelerated Approval  Milestone and the FDA Full Approval Milestone Payment would be $30,000,000; and if  the FDA Full Approval Milestone is achieved on July 1, 2028 and the FDA Accelerated  Approval Milestone had not separately been achieved prior to such date, then no amount  would be payable for the FDA Accelerated Approval Milestone and the FDA Full Approval  Milestone Payment would be $20,000,000.  (5) In the event that Seller issues a Cost Concern Notice  pursuant to Section 1.6(a)(ii)(G), then notwithstanding any other provision of this  Agreement to the contrary, the obligation to pay the applicable Milestone Payment shall  not be deemed to have been triggered until such dispute is resolved in accordance with  Section 1.6(a)(ii)(G).   (6) For the avoidance of doubt, in no event will any Milestone  Payment be payable more than once with respect to either Milestone Event, and the  maximum total Milestone Payments payable hereunder shall equal $60,000,000.  (B) Promptly (and, in any event, no later than fifteen (15) Business  Days) following achievement of a Milestone Event, Purchaser shall notify Seller in writing of such  achievement. Each Milestone Payment shall be paid promptly (and, in any event, no later than  thirty (30) days after receipt by Purchaser of a written invoice from Seller requesting payment of  the relevant Milestone Payment, including a reference to the Milestone Event, the amount  requested to be paid and the bank account to which payment should be made).  (C) From and after the Closing, Purchaser (either itself or through its  Affiliates, licensees or sublicensees) shall use Diligent Efforts to achieve each of the Milestone  Events.  

 

  10  (D) Solely for so long as at least one of the Milestone Payments may  reasonably become payable in accordance herewith, Purchaser shall provide reasonable written  updates (at least once annually following Closing) to Seller regarding the status of Purchaser’s  efforts to attempt to achieve each Milestone Event.  (E) In the event that the FDA requires, or otherwise conditions its  approval upon, the conduct of any Additional Approval Requirements in order to obtain the  Regulatory Authorization contemplated by the FDA Accelerated Approval Milestone or the FDA  Full Approval Milestone, then Purchaser shall have the right to set off 100% of all out-of-pocket  fees, charges, expenditures, expenses, costs and other payments reasonably incurred or that will  be (or that Purchaser estimates in its reasonable discretion to be) reasonably incurred by Purchaser  or any of its Affiliates with respect to the Additional Approval Requirements (“AAR Costs”)  against the Milestone Payments payable hereunder. The exercise of such right of setoff by  Purchaser in good faith, whether or not ultimately determined to be justified, will not constitute  an event of default hereunder. Neither the exercise of nor the failure to exercise such right of setoff  will, in and of itself, constitute an election of remedies or limit any Purchaser Indemnified Party  in any manner in the enforcement of any remedies that may be available to it. In the event  Purchaser exercises such right of setoff, Purchaser and Seller shall cooperate to draft adequate  supporting documents, where needed, including invoices or credit/debit notes.   (F) Concurrent with Purchaser’s notice of each Milestone Event  provided to Seller pursuant to Section 1.6(a)(ii)(B), Purchaser shall provide Seller with a  reasonably detailed calculation (to the extent then known) of Purchaser’s AAR Costs with respect  to such Milestone Event (“AAR Cost Calculation”). If Purchaser fails to provide such AAR Cost  Calculation within twenty (20) Business Days of such notice submitted by Purchaser pursuant to  Section 1.6(a)(ii)(B) for such Milestone Event, then Seller shall provide Purchaser written notice  of such failure, and thereafter Purchaser shall have an additional five (5) Business Days from  Purchaser’s receipt of such notice from Seller to deliver such AAR Cost Calculation to Seller.  Thereafter, in the event that Purchaser fails to deliver the AAR Cost Calculation to Seller prior to  expiration of such additional five (5)-Business Day period, then Purchaser shall not be permitted  to setoff such AAR Costs (that would otherwise have been included within such AAR Cost  Calculation) from the corresponding Milestone Payment for such Milestone Event. Upon the  reasonable written request of Seller, Purchaser shall make available to Seller reasonable  supporting documentation with respect to the AAR Cost Calculation set forth therein within ten  (10) Business Days of such request. For the avoidance of doubt, Purchaser's failure to include  AAR Costs in the AAR Cost Calculation for the first Milestone Event achieved by Purchaser will  not limit in any way Purchaser's right to include such AAR Costs in the AAR Cost Calculation  with respect to the second Milestone Event.  (G) If Seller reasonably believes that Purchaser’s AAR Cost  Calculation is overstated as compared to the AAR Costs actually or estimated in Purchaser’s  reasonable discretion to be incurred based on Purchaser’s supporting documentation (the  “Documented AAR Costs”), Seller may give written notice to Purchaser to that effect within thirty  (30) days of such AAR Cost Calculation hereunder (“Cost Concern Notice”). In the event Seller  fails to deliver the Cost Concern Notice within such thirty (30) day period, Seller shall be deemed  to have accepted the amount of the AAR Cost Calculation identified by Purchaser and shall thus  waive any further objections to such AAR Cost Calculation. If Seller timely delivers the Cost  Concern Notice to Seller, the parties shall discuss in good faith to resolve Seller’s concerns. If the  parties are unable to resolve the dispute within fifteen (15) days (or such other period as may be  mutually agreed by the parties in writing) after Seller has delivered the Cost Concern Notice to  Purchaser, either party may submit such dispute in writing to the Financial Officers for resolution,  

 

  11  specifying the nature thereof with sufficient specificity to permit adequate consideration by such  Financial Officers. The Financial Officers shall diligently and in good faith attempt to resolve the  referred dispute within a ten (10) Business Day period (or such other period as may be mutually  agreed by the parties in writing). Any final decision mutually agreed to by the Financial Officers  in writing shall be conclusive and binding on the parties. In the event the Financial Officers are  unable to resolve any such dispute within such ten (10) Business Day period (or such other period  as may be mutually agreed by the parties in writing), the parties shall jointly engage the  Independent Accountant to examine the books and records of Purchaser as may be reasonably  necessary to determine or verify the AAR Cost Calculation. The Independent Accountant shall  conduct such examination, and Purchaser shall make its employees and books and records  reasonably available for such purpose, during normal business hours at the facilities where such  books and records are maintained. Purchaser may require the Independent Accountant to sign a  reasonably acceptable non-disclosure agreement before providing the Independent Accountant  with access to Purchaser’s or its Affiliates’ facilities or records. The Independent Accountant will  prepare and provide to each party a written report as soon as reasonably practicable. Seller shall  be responsible for all the fees and expenses charged by the Independent Accountant for purposes  of this Section 1.6(a)(ii)(G), unless such audit reveals that the amount of the AAR Cost Calculation  was at least 10% higher than the Documented AAR Costs incurred and estimated to be incurred  as identified by Purchaser, in which case Purchaser will be responsible for all the fees and expenses  charged by the Independent Accountant for purposes of this Section 1.6(a)(ii)(G). If the  Documented AAR Costs are finally determined by the Independent Accountant to be less than the  AAR Cost Calculation (the “Final Documented AAR Costs”), then, Purchaser shall promptly  update the AAR Cost Calculation previously provided to Seller to reflect the Final Documented  AAR Costs and Seller shall issue an invoice thereon and Purchaser make such Milestone Payment  (with offset for such Final Documented AAR Costs) in accordance with Section 1.6(a)(ii)(B) and  Section 1.6(a)(ii)(E). To the extent Purchaser exercised such setoff right with respect to a given  Milestone Payment and the portion of the actual AAR Costs Purchaser incurred with respect to  such Milestone Event (the “Actual Costs”) that correspond to the estimated costs within the final  and binding AAR Cost Calculation or Final Documented AAR Cost schedule for such Milestone  Event (the “Estimated Costs”) are less than such Estimated Costs (such excess Estimated Costs,  the “Excess Setoff Costs”), then provided such Excess Setoff Costs are in excess of $10,000,  Purchaser shall notify and coordinate with Seller to provide Seller with a cash true-up in the  amount of such Excess Setoff Costs. The foregoing true-up shall only apply with respect to Actual  Costs that are incurred within twelve (12) months of the date of Purchaser’s payment of the  applicable Milestone Payment to which such Excess Setoff Costs relate.  (H) All Milestone Payments shall be (i) made in United States dollars  by wire transfer of immediately available funds to an account designated by Seller and (ii) unless  otherwise required by applicable Law, treated as adjustments to the Purchase Price for all Tax  purposes. The right of Seller to receive the Milestone Payments, if and when such Milestone  Payments become due and payable, (i) does not give Seller dividend rights, voting rights,  liquidation rights, preemptive rights or other rights of holders of equity of Purchaser following the  Closing; (ii) shall not be evidenced by a certificate or other instrument; (iii) shall be freely  transferable or distributable by Seller, on written notice to Purchaser; and (iv) does not represent  any right other than the right of Seller (or its successors or assigns) to receive, and to enforce, the  Milestone Payments in accordance with this Section 1.6(a)(ii)(F). If Seller transfers or assigns its  right to receive the Milestone Payments to a third party, all of Purchaser’s obligations pursuant to  Section 1.6(a)(ii)(D) shall immediately cease, effective upon such transfer or assignment. For the  avoidance of doubt, any assignment of the right of Seller to receive the Milestone Payments to a  third party covers only money due or to become due pursuant to this Agreement.  

 

  12  (b) Within three (3) Business Days following the execution of this Agreement, subject  to the execution of the escrow agreement substantially in the form attached hereto as Exhibit F (the “Escrow  Agreement”), with Acquiom Clearinghouse LLC (the “Escrow Agent”), Purchaser shall deposit into escrow  with the Escrow Agent an amount equal to $4,000,000 (such amount, together with all interest and other  earnings accrued thereon, the “Deposit Funds”), by wire transfer of immediately available funds pursuant  to the terms of the Escrow Agreement. The Deposit Funds shall be released by the Escrow Agent and  delivered to either (x) Purchaser or (y) Seller, as follows:  (i) if the Closing shall occur, the Deposit Funds shall be applied towards the  portion of the Purchase Price payable by Purchaser to Seller pursuant to Section 1.6(a)(i) and in such  case, the Deposit Funds shall be released to Seller within three (3) Business Days following the Closing;  (ii) if this Agreement is terminated by Seller (A) pursuant to Section 8.1(b)(iii)  or (B) pursuant to Section 8.1(a) in any circumstance where Purchaser is not entitled to terminate  pursuant to Section 8.1(a) because the failure of the Closing to occur results from the material breach  by Purchaser of its obligations under Section 5.3 required to be performed by it at or prior to the Closing,  in each case unless at the time of such termination Purchaser would have been entitled to terminate this  Agreement, then the Deposit Funds shall be released to Seller within five (5) Business Days following  such termination; or  (iii) if this Agreement is terminated other than in a manner provided by Section  1.6(b)(ii), in addition to Purchaser’s rights pursuant to Section 8.2(b) and Section 8.2(c), the Deposit  Funds shall be released to Purchaser within five (5) Business Days after such termination.  Section 1.7. Withholding. Notwithstanding anything to the contrary in this Agreement,  Purchaser shall be entitled to deduct and withhold from any consideration payable hereunder such amounts  as are required to be deducted and withheld with respect thereto under the Code or any other Tax Law,  provided that, absent a change in applicable Law after the date hereof, no amounts shall be deducted or  withheld under the Tax Laws of Italy. To the extent that amounts are so deducted and withheld, such  amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of  which such deduction or withholding was made. Notwithstanding the foregoing, Purchaser shall: (i) consult  with Seller in good faith prior to withholding any amounts payable to Seller, (ii) promptly, and in any event  no later than five (5) Business Days prior to the date of the applicable payment, notify Seller in writing if  Purchaser determines that any withholding or deduction is required under the Code or any applicable Law  with respect to any portion of payment to Seller, (iii) provide Seller with reasonable opportunity to provide  such forms or other evidence that would eliminate or reduce any such required deduction or withholding,  and (iv) if a change in applicable Law requires amounts to be deducted or withheld under the Tax Laws of  Italy, use commercially reasonable efforts to reduce or eliminate such required deduction or withholding,  including by establishing eligibility for a reduced withholding rate under the Tax treaty between the United  States and Italy.  Section 1.8. Purchase Price Allocation. The parties agree to allocate for Tax purposes (and, as  applicable, to cause their respective Affiliates to allocate for Tax purposes) the Purchase Price and any other  amounts treated as additional consideration for Tax purposes among the Acquired Assets in accordance  with the following procedures and, to the extent applicable, in accordance with Section 1060 of the Code  and the Treasury Regulations promulgated thereunder. Within ninety (90) days after the Closing Date,  Purchaser shall deliver to Seller a proposed allocation of the Purchase Price, the Assumed Liabilities (to  the extent properly taken into account for income Tax purposes) and any other amounts treated as additional  consideration for income Tax purposes as of the Closing Date (the “Allocation”). If Seller notifies Purchaser  in writing of any reasonable objections to one or more items reflected in the Allocation within thirty (30)  days after Purchaser’s delivery thereof, Seller and Purchaser shall negotiate in good faith to resolve such  

 

  13  dispute. If Purchaser and Seller cannot resolve such dispute within twenty (20) days after Seller notifies  Purchaser of such objections, such dispute shall be promptly resolved by the Independent Accountant. The  fees and expenses of the Independent Accountant shall be borne equally by Seller and Purchaser. The  Allocation (including as finally determined by the Independent Accountant) shall be final and binding on  the parties, and each of the parties (a) shall (and shall cause its Affiliates to) prepare and file all Tax Returns  (and Internal Revenue Service Forms 8594) in a manner consistent with the Allocation and (b) shall not  (and shall cause its Affiliates not to) take any position on any Tax Return or in connection with any Tax  proceeding inconsistent with the Allocation, in each case, except to the extent otherwise required by a  “determination” within the meaning of Section 1313(a) of the Code (or any analogous provision of  applicable state, local or non-U.S. Law).  ARTICLE II  THE CLOSING  Section 2.1. Closing. Upon the terms and subject to the conditions hereof, the closing of the  sale of the Acquired Assets and the assumption of the Assumed Liabilities contemplated hereby (the  “Closing”) shall take place remotely by exchange of documents and signatures via email or other manner  as may be mutually agreed upon by Purchaser and Seller, at 10:00 a.m. Eastern Time as soon as possible  (and in any event within two (2) Business Days) after the conditions set forth in ARTICLE VI have been  satisfied or (if permissible) waived (except for such conditions that, by their nature, are to be satisfied at  the Closing, but subject to the satisfaction or (if permissible) waiver thereof at the Closing), or at such time,  date and place as the parties may mutually agree (the date of the Closing being herein referred to as the  “Closing Date”). For financial, accounting and economic purposes, including risk of loss, and for all other  purposes under this Agreement, upon the occurrence of the Closing, the Closing shall be deemed to have  occurred at 12:01 a.m. Eastern Time, on the Closing Date.  Section 2.2. Deliveries at the Closing.  (a) At the Closing, Seller shall deliver to Purchaser:  (i) a duly executed bill of sale and assignment and assumption agreement  substantially in the form of Exhibit A (the “Bill of Sale & Assignment and Assumption Agreement”),  transferring the Acquired Assets and Assumed Liabilities to Purchaser (or its designated Affiliate or  Affiliates);  (ii) the Acquired Assets; provided, that with respect to tangible Acquired  Assets, delivery shall, unless the parties otherwise mutually agree, be as set forth in Schedule 2.2(a)(ii);  (iii) duly executed assignments of Seller Intellectual Property, including the  Seller Registered Intellectual Property, substantially in the forms of Exhibit B (the “Intellectual Property  Assignment Agreements”);  (iv) a duly executed and properly completed IRS Form W-9 or other  certification meeting the requirements of Treasury Regulation section 1.1445-2(b);  (v) the certificates described in Section 6.3(f);  (vi) a copy of the Sale Order entered by the Bankruptcy Court;   

 

  14  (vii) a duly executed transition services agreement to be entered into between  Seller and Purchaser (or its designated Affiliate or Affiliates) substantially in the form of Exhibit G (the  “Transition Services Agreement”);   (viii) the Closing Inventory Schedule; and  (ix) such other instruments of sale, transfer and conveyance consistent with the  terms and provisions of this Agreement as Purchaser may reasonably request in writing no later than  three (3) Business Days prior to the Closing Date in order to give effect to the Acquisition.  (b) At the Closing, Purchaser shall deliver to Seller:  (i) the Closing Consideration (including any portion of the Purchase Price to  be paid by release of the Deposit Funds to Seller) by wire transfer of immediately available funds to an  account or accounts designated by Seller;  (ii) the Intellectual Property Assignment Agreements, duly executed by  Purchaser (or its designated Affiliate or Affiliates);  (iii) the certificate(s) described in Section 6.2(d);  (iv) the Bill of Sale & Assignment and Assumption Agreement, duly executed  by Purchaser (or its designated Affiliate or Affiliates);  (v) the Transition Services Agreement, duly executed by Purchaser;  (vi) evidence of the payment, satisfaction, compromise or waiver of all Cure  Costs to the applicable Assigned Contract counterparties; and  (vii) such other instruments of sale, transfer and conveyance consistent with the  terms and provisions of this Agreement as Seller may reasonably request in writing no later than three  (3) Business Days prior to the Closing Date in order to give effect to the Acquisition.  (c) At the Closing, Seller and Purchaser shall deliver to the Escrow Agent, the joint  written instructions contemplated by Section 1.6(b)(i), duly executed by Seller and Purchaser.  ARTICLE III  REPRESENTATIONS AND WARRANTIES OF SELLER  Seller represents and warrants to Purchaser, as of the date hereof and as of the Closing, as  follows:  Section 3.1. Qualification, Organization, Subsidiaries. Seller is a legal entity duly organized,  validly existing and in good standing under the Laws of Delaware and has all requisite corporate power and  authority to own, lease and operate its properties and assets and to carry on its business as presently  conducted, subject to the provisions of the Bankruptcy Code. Seller is qualified to do business and is in  good standing (with respect to jurisdictions that recognize such concept) as a foreign corporation or other  entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct  of its business requires such qualification, except where the failure to be so qualified or, where relevant, in  good standing, has not had and would not reasonably be expected to have, individually or in the aggregate,  a Material Adverse Effect. Seller has made available to Purchaser a complete and accurate copy of the  

 

  15  organizational documents of Seller as in effect on the date hereof. Seller is not in violation of any of the  provisions of its certificate of incorporation or bylaws. Seller does not have any Subsidiaries.  Section 3.2. Authority of Seller. Seller has all requisite corporate power and authority to  execute and deliver and, subject to the entry and effectiveness of the Bidding Procedures Order and Sale  Order, to perform its obligations under this Agreement and each of the Ancillary Documents to which Seller  is a party. The execution, delivery and performance of this Agreement and such Ancillary Documents by  Seller and the consummation of the Transactions have been duly and validly authorized and approved by  all requisite corporate action of Seller, and no other corporate proceedings (pursuant to Seller’s  organizational documents or otherwise) on the part of Seller is necessary to authorize the consummation  of, and to consummate, the Transactions. Subject to the entry and effectiveness of the Bidding Procedures  Order and Sale Order, this Agreement and each such Ancillary Document have been duly and validly  executed and delivered by Seller, and, assuming the due authorization, execution and delivery of this  Agreement and each such Ancillary Document by Purchaser, as applicable, constitute a valid and binding  agreement of Seller, enforceable against Seller in accordance with its terms.  Section 3.3. Consents and Approvals. No consent, approval, permit or authorization of, or  declaration, filing or registration with, any Governmental Entity is necessary or required to be made or  obtained by Seller or its Affiliates in connection with the execution, delivery and performance of this  Agreement and the Ancillary Documents to which Seller is a party and the consummation of the  Transactions, except in connection with or compliance with any applicable requirements of the Chapter 11  Case.  Section 3.4. No Violations. Except as described in Section 3.4 of the Seller Disclosure  Schedule, neither the execution, delivery or performance of this Agreement and the Ancillary Documents  by Seller nor the consummation by Seller of the Transactions will (a) conflict with or result in any violation  or breach of any provisions of the certificate of incorporation, bylaws or other organizational documents of  Seller, (b) with or without notice or lapse of time or both, conflict with or result in any breach or violation  of or constitute a default or change of control under, or give rise to a right of, or result in, termination,  modification, cancellation, first offer, first refusal or acceleration of any obligation or to the loss of a benefit  under any Contract to which Seller is a party or by or to which any of its properties, rights or assets are  bound or subject, (c) conflict with or violate any Order or Law applicable to Seller, the Business or the  Acquired Assets or (d) result in the creation or imposition of any Encumbrance on any Acquired Asset  other than (i) with respect to the execution and delivery of this Agreement, Permitted Pre-Closing  Encumbrances and (ii) with respect to the execution and delivery of the Ancillary Documents and with  respect to the performance of this Agreement and the Ancillary Documents and the consummation of the  Transactions, the Permitted Post-Closing Encumbrances, except in the case of the foregoing clauses (b) and  (c), for breaches, violations, defaults or terminations that (y) would not reasonably be expected to be  material to the Acquired Assets or the Business or (z) are excused by or unenforceable as a result of the  entry or effectiveness of the Sale Order.  Section 3.5. Financial Statements; Books and Records.  (a) The financial statements (including all related notes and schedules) of Seller  included or incorporated by reference in Seller SEC Documents (the “Financial Statements”) when filed,  complied in all material respects with the applicable accounting requirements and the published rules and  regulations of the SEC with respect thereto and fairly present in all material respects the consolidated  financial position of Seller, as at the respective dates thereof, and the results of its operations and its cash  flows for the respective periods then ended (subject, in the case of the unaudited quarterly financial  statements, to normal year-end audit adjustments that are not material and the absence of notes) in  conformity with GAAP, applied on a consistent basis during the periods involved (except as indicated in  

 

  16  the notes thereto including, in the case of the unaudited quarterly financial statements, for normal and  recurring year-end adjustments that are not material and for the absence of notes).  (b) Seller has established and maintains, and at all times since January 1, 2019 has  maintained, disclosure controls and procedures and internal control over financial reporting (as such terms  are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by  Rule 13a-15 under the Exchange Act designed to provide reasonable assurance regarding the reliability of  financial reporting and the preparation of financial statements for external purposes in accordance with  GAAP, and which includes policies and procedures that: (a) pertain to the maintenance of records that in  reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Seller, (b)  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial  statements in conformity with GAAP and that receipts and expenditures are being made only in accordance  with authorizations of management and directors of Seller and (c) provide reasonable assurance regarding  prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Seller that  could have a material effect on the financial statements. Since January 1, 2019, Seller’s principal executive  officer and its principal financial officer have disclosed to Seller’s auditors and the audit committee of  Seller’s Board of Directors (which disclosure (if any) and significant facts learned during the preparation  of such disclosure have been made available to Purchaser prior to the date hereof) (i) any significant  deficiencies and material weaknesses in the design or operation of internal controls over financial reporting,  (ii) any fraud, whether or not material, that involves management or other employees and (iii) any claim or  allegation regarding any of the foregoing. Since January 1, 2019, Seller has not received any material,  unresolved, complaint, allegation, assertion or claim regarding the accounting or auditing practices,  procedures, methodologies or methods of Seller or its internal accounting controls.  (c) The Books and Records maintained with respect to the Business and used in the  preparation of the Financial Statements accurately and fairly reflect, in all material respects, the transactions  and the assets and Liabilities of Seller with respect to the Business.  Section 3.6. Title to Property; Sufficiency of Assets.  (a) Seller has good, valid, and marketable title to, a valid leasehold interest in or all  rights to use, all of the Acquired Assets, free and clear of all Encumbrances other than Permitted Pre- Closing Encumbrances. In furtherance and not in limitation of the foregoing, Seller exclusively owns (or at  Closing will exclusively own) all right, title and interest in and to the Trial Data Package (as defined in that  certain Co-Development Agreement dated January 9, 2020 between Seller and SFJ Pharmaceuticals X  Limited), free and clear of all Encumbrances. Upon the entry and effectiveness of the Sale Order, Seller  will have the power and right to sell, assign, transfer, convey and deliver, as the case may be, to Purchaser  the Acquired Assets, and at the Closing, Seller will sell, assign, transfer, convey and deliver to Purchaser  good, valid and marketable title to, or, in the case of personal property leased by Seller, a valid leasehold  interest in, or all rights to use, the Acquired Assets, free and clear of all Encumbrances other than Permitted  Post-Closing Encumbrances.  (b) The Acquired Assets (x) constitute all of the assets, rights and properties Primarily  Related to the Product or the Business and (y) are sufficient to conduct the Business in all material respects  as it is currently conducted and as proposed to be conducted.  Section 3.7. Absence of Certain Changes.  (a) Except as set forth on Section 3.7 of the Seller Disclosure Schedule, since June 30,  2022, (i) the Business has been conducted in all material respects in the Ordinary Course of Business, except  

 

  17  for the filing of the Chapter 11 Case, and (ii) Seller has not taken any action that, if taken after the date  hereof, would constitute a breach of, or require the consent of Purchaser under, Section 5.1.  (b) Since June 30, 2022, except for the consequences arising from the filing of the  Chapter 11 Case, there has not occurred any Effect that has had, or would reasonably be expected to have,  individually or in the aggregate, a Material Adverse Effect.  (c) Since June 30, 2022, Seller has not sold or transferred any portion of its assets or  property that would be material to the Business as a whole, except for sales of inventory and transfers of  cash in payment of trade payables in the Ordinary Course of Business.  Section 3.8. Brokers or Finders. Other than as set forth on Section 3.8 of the Seller Disclosure  Schedule, Seller has not employed or engaged any investment banker, broker or finder who is entitled to  any fee or any commission in connection with this Agreement, the Ancillary Documents or the  Transactions.  Section 3.9. Litigation. Except as set forth in Section 3.9 of the Seller Disclosure Schedule,  there are no Actions pending or, to the Knowledge of Seller, threatened against Seller or relating to the  Business or the Acquired Assets by or before, and there are no orders, judgments or decrees of or settlement  agreements with, any Governmental Entity.  Section 3.10. Intellectual Property.  (a) (1) Section 3.10(a)(1) of the Seller Disclosure Schedule sets forth a true, accurate,  and complete list, as of the date hereof, of all Patents owned by Seller and included in the Seller Intellectual  Property, (2) Section 3.10(a)(2) of the Seller Disclosure Schedule sets forth a true, accurate, and complete  list, as of the date hereof, of all Patents exclusively licensed to Seller and included in the Seller Intellectual  Property, (3) Section 3.10(a)(3) of the Seller Disclosure Schedule sets forth a true, accurate, and complete  list, as of the date hereof, of all registered and material unregistered Trademarks and Copyrights owned by,  or exclusively licensed to Seller and included in the Seller Intellectual Property, and (4) Section 3.10(a)(4)  of the Seller Disclosure Schedule sets forth a true, accurate, and complete list, as of the date hereof, of all  material Internet Properties owned by, or exclusively licensed to Seller and included in the Seller  Intellectual Property, in each case ((1), (2) and (3)) including the jurisdiction in which each item has been  registered or filed, application or serial number or similar identifier, the filing date, the applicable issuance,  registration or grant date, and with respect to the foregoing Seller Intellectual Property that is exclusively  licensed to Seller, the applicable Contract pursuant to which such license to Seller is granted. Without  limiting the generality of the foregoing:   (i) No Trademark (whether registered or unregistered) or trade name used by  Seller in connection with the Product or the conduct of the Business conflicts or interferes with any  Trademark (whether registered or unregistered) or trade name owned, used or applied for by any Third  Party.  (ii) All necessary filing, examination, registration, maintenance, annuity and  renewal fees due or actions required (including proofs and working or use) in connection with the Seller  Registered Intellectual Property listed or required to be listed on Section 3.10(a) of the Seller Disclosure  Schedule and having a due date on or before the date hereof have been paid or taken, as the case may  be, and except as set forth in Section 3.10(a)(ii) of the Seller Disclosure Schedule, none of the Seller  Registered Intellectual Property is subject to any filing, examination, registration, maintenance, annuity  and renewal fees falling due or actions required (including proofs of working or use) within six (6)  months after Closing.  

 

  18  (iii) Seller has complied in all material respects with all applicable Law in  filing and prosecuting each item of the Seller Intellectual Property owned or licensed by Seller and all  filings, payments and other actions required to be made or taken to maintain each item thereof in full  force and effect have been made by the applicable deadline.  (iv) No interference, opposition, reissue, reexamination or other Action of any  nature is or has been pending or, to Knowledge of the Seller, threatened, in which the scope, validity or  enforceability of any Seller Intellectual Property is being, has been or could reasonably be expected to  be contested or challenged.  (v) All necessary documents, recordations and certificates necessary to  establish, secure and perfect the rights of Seller in the Seller Intellectual Property have been validly  executed, delivered and to the extent applicable, filed in a timely manner with the relevant Governmental  Entity in all applicable jurisdictions for the purposes of maintaining rights to such Seller Intellectual  Property.  (b) Seller exclusively owns, or has exclusively licensed from the applicable third party  with the right to sublicense, all right, title and interest in and to all Seller Intellectual Property, including all  Seller Registered Intellectual Property, free and clear of any Encumbrances, except for Permitted Pre- Closing Encumbrances. Following the Closing, Purchaser will exclusively own, or have an exclusive  license from the applicable third party with the right to sublicense, all right, title and interest in and to all  Seller Intellectual Property, including all Seller Registered Intellectual Property, free and clear of any  Encumbrances, except for Permitted Post-Closing Encumbrances. Without limiting the generality of the  foregoing, all Seller Intellectual Property is fully exercisable, transferable, alienable and licensable and  sublicensable by Seller, and following the Closing, will be fully exercisable, transferable, alienable and  licensable and sublicensable by Purchaser without restriction and without payment of any kind to any third  party. No Seller Intellectual Property is or was subject to any Action, Order, or settlement agreement that  restricts in any material respect the exercise, use, provision, transfer, assignment or licensing and  sublicensing thereof, as the case may be, by Seller or that may affect the exercise, validity, ownership, use,  enforceability, or defense of any Seller Intellectual Property. Each item of Seller Registered Intellectual  Property is subsisting, and to the Knowledge of Seller, not unenforceable or invalid.  (c) Seller is not a party to nor has Seller initiated or threatened any Action that  challenges the legality, validity, enforceability, registration, use or ownership of a third party’s Intellectual  Property.  (d) Seller has not granted, conveyed, or transferred (and is not obligated to grant,  convey, or transfer) to any Person and is not obligated to permit any Person to retain an ownership interest,  including any joint ownership interest, or any exclusive rights in any Intellectual Property that is or was  Seller Intellectual Property.  (e) No Actions are pending or, to the Knowledge of Seller, threatened against Seller  or any third party who may be entitled to be indemnified, defended, held harmless or reimbursed by Seller  with respect to such Action, alleging that Seller or such third party is infringing, misappropriating, diluting  or otherwise violating the Intellectual Property of any Person. Neither the operation of the Business, nor  the Product or Exploitation thereof, (i) infringes, misappropriates, or violates (or has in the past infringed,  misappropriated, or violated to the extent there is any current Liability therefor or a Liability is reasonably  expected to arise) any Intellectual Property of any Person and (ii) following the Closing will (when  conducted in substantially the same manner by Purchaser), infringe or misappropriate any Intellectual  Property of any Person, in each case except as would not result in any material Liability to Seller. Seller  has not received any written offer to license, charge, complaint, claim, demand, notice or other written  

 

  19  communication or notice from any Person that would reasonably be construed to be claiming that the  operation of the Business, or the Product or Exploitation thereof, conflicts with, infringes, misappropriates,  or violates any Intellectual Property of any Person or constitutes unfair competition or trade practices under  the Laws of any jurisdiction.  (f) Seller has not brought, or threatened in writing to bring, any Action against a third  party alleging infringement or, misappropriation or violation of any Seller Intellectual Property. To the  Knowledge of Seller, none of the Seller Intellectual Property have been or are being infringed,  misappropriated or otherwise violated by any Person.  (g) In each case in which Seller has engaged or hired an officer, employee, consultant  or contractor (whether current or former) who has or had or does have access to Seller Intellectual Property,  or who contributes or contributed to developing or creating any Seller Intellectual Property, Seller has  entered into a written agreement with such Person regarding the protection of proprietary information and  obtained a written assignment or transfer of (and waiver of such Person’s moral rights in) all such  Intellectual Property to Seller or Seller otherwise is the owner of such Intellectual Property by operation of  Law, including all right, title and interest therein. Seller has taken commercially reasonable actions to  maintain and protect the confidentiality and trade secret status of all Know-How of Seller, or any third  party, in its possession or used or held for use in the Business or Exploitation of the Product in any  jurisdiction. To the Knowledge of Seller, there has been no unauthorized disclosure of any Know-How that  constitutes Seller Intellectual Property.  (h) (x) Section 3.10(h)(x) of the Seller Disclosure Schedule sets forth a true, accurate  and complete list of all Contracts that grant Seller a license (including covenants not to sue), whether  exclusive or non-exclusive, ownership rights, or other rights in or to (1) any Seller Intellectual Property or  (2) any other Intellectual Property or technology (including any Software) owned by a third party that is  material to the operation of the Business or Exploitation of the Product, other than Ordinary Course  Licenses, and (y) Section 3.10(h)(y) of Seller Disclosure Schedule sets forth a true and complete list of all  material Contracts to which Seller is a party under which Seller grants any third party a license or sublicense  (including covenants not to sue), whether exclusive or non-exclusive, or other rights in or to any Seller  Intellectual Property, other than non-material non-exclusive licenses or sublicenses pursuant to written  agreements entered into in the Ordinary Course of Business (the foregoing ((x) and (y)), together with the  Ordinary Course Licenses, the “IP Contracts”).  (i) The consummation of the Transactions will not result in (i) a material breach,  violation, modification, cancellation, termination, or suspension of any rights under the IP Contracts set  forth on Schedule 1.1(c), (ii) the grant of (or requirement to grant) any material license, covenant not to  assert, release, agreement not to enforce or prosecute, or other immunity to any Seller Intellectual Property  (or any Intellectual Property of Purchaser) to any Person, or (iii) Purchaser being obligated to perform any  material obligations for, or pay any material royalties, or other material amounts, to any third party in excess  of those payable or performable by, or required to be offered by, any of them, respectively, in the absence  of this Agreement or the Transactions.  (j) All IP Contracts that are Assigned Contracts, set forth on Schedule 1.1(c) of the  Seller Disclosure Schedule, are in full force and effect, and are fully transferable and assumable by  Purchaser pursuant to the Transactions and shall remain in full force and effect and transferable and  assumable following the Closing in accordance with their terms, and, as of immediately after the Closing,  Purchaser will be entitled to exercise all of Seller’s rights under all IP Contracts to the same extent as prior  to the Closing.  

 

  20  (k) Except as set forth on Section 3.10(k) of the Disclosure Schedule, Seller is not  obligated to pay to any Person any royalties, fees, commissions or other amounts for the use by Seller of  any Seller Intellectual Property, other than as provided in the Assigned Contracts.  Section 3.11. Privacy and Data Protection.  (a) Seller’s receipt, collection, maintenance, transmission, use, analysis, disclosure,  storage and disposal of Protected Information and, to the Knowledge of Seller, any such activities  performed by third parties on Seller’s behalf, has complied in all material respects with (i) applicable  Information Privacy and Security Laws and (ii) all applicable policies and procedures (which meet or  exceed applicable industry standards) adopted by Seller relating to Protected Information, including the  Privacy Statements. Seller has executed Business Associate Agreements (as such agreements are defined  in HIPAA) with any Business Associate (as defined in HIPAA), in compliance with HIPAA. Seller has  obtained all consents and authorizations necessary to receive, access, use, disclose, and transfer to Purchaser  the Protected Information in its possession or under its control in connection with the operation of the  Business. Seller has complied in all material respects with its published privacy policies as in effect from  time to time.  (b) There has been no material data security breach or unauthorized access to, as the  case may be, any of Seller’s material systems, networks or information technology that transmits or  maintains Protected Information or other incidents involving the unauthorized access, acquisition, use or  disclosure of any Protected Information, owned, used, maintained or controlled by Seller, including any  such unauthorized access, acquisition, use or disclosure of Protected Information that would constitute a  breach for which notification to individuals or Governmental Entities is required under any applicable  Information Privacy and Security Laws or Contracts to which Seller is a party. Seller has not and, to the  Knowledge of Seller, none of Seller’s vendors, suppliers and subcontractors, or Seller, have (i) suffered any  breach that has resulted in any unauthorized access to, use of, disclosure of or other loss of any Protected  Information, (ii) materially breached any Contracts with Seller relating to Protected Information or (iii)  materially violated any Information Privacy and Security Laws.  (c) Seller has implemented and maintained a written information security program  reasonably designed to (i) identify and address internal and external risks to the security of any proprietary  or confidential information in its possession, including Protected Information, (ii) implement  administrative, technical and physical safeguards to control such risks and (iii) maintain notification  procedures in compliance with applicable Information Privacy and Security Laws in the case of any  applicable breach of security compromising data containing Protected Information. Seller has made  available to Purchaser true and complete copies of all currently effective privacy policies under which Seller  collects, uses or stores any Protected Information.  (d) No Person has (i) provided a written notice or audit request to Seller, (ii) made any  written claim against Seller or (iii) commenced any Action against Seller or, to the Knowledge of the Seller,  any party acting on behalf of Seller, in each case, with respect to (A) any alleged violation of Information  Privacy and Security Laws by Seller or any authorized third party acting on Seller’s behalf or (B) Seller’s  privacy or data security practices, including any loss, damage or unauthorized access, acquisition, use,  disclosure, modification or other misuse of any Protected Information maintained by or on behalf of Seller.  No Person has provided a complaint (written or otherwise) to Seller, nor, to the Knowledge of Seller, to  any third party, regarding the improper disclosure of Protected Health Information (as defined in HIPAA)  by Seller. The execution, delivery, and performance of this Agreement will not cause, constitute, or result  in a breach or violation of any contractual obligation of Seller relating to Protected Information.  

 

  21  (e) In connection with its collection, storage, transfer (including transfer across  national borders) or use of any Protected Information, Seller is and has been in compliance in all material  respects with all Information Privacy and Security Laws in relevant jurisdictions. Seller has commercially  reasonable physical, technical, organizational and administrative security measures in place to protect all  Protected Information collected by it or on its behalf from and against unauthorized access, use or disclosure  in accordance with applicable Information Privacy and Security Law. Seller is and has been in compliance  in all material respects with all Information Privacy and Security Laws relating to data loss, theft and breach  of security notification obligations. All Protected Information included in the Acquired Assets is freely  transferrable in accordance with Seller’s existing privacy policies and applicable Law, and no impediments  to the sale, transfer, conveyance and assignment to Purchaser (or a Purchaser designee) at Closing exist.  (f) Seller has maintained a cyber insurance policy that is adequate and suitable for the  nature and volume of Protected Information processed by or on behalf of Seller in the conduct of the  Business and is sufficient for compliance with all applicable Information Privacy and Security Laws and  Contracts to which the Seller is a party or by which it is bound. Section 3.11(f) of the Seller Disclosure  Schedules sets forth a complete and accurate list of all pending claims and the claims history for Seller  under such cyber insurance policy. Seller has delivered or made available to Purchaser a true, complete,  and correct copy of such cyber insurance policy.  Section 3.12. Real Property Leases.  (a) Seller does not own any real property.  (b) Section 3.12(b) of the Seller Disclosure Schedule sets forth a complete and correct  list, as of the date hereof, of each Contract pursuant to which Seller leases, subleases or occupies any real  property (the “Leases”). Complete and correct copies of the Leases have been made available to Purchaser  prior to the date hereof. Seller has not subleased, licensed or otherwise granted any Person the right to use  or occupy any real property subject to a Lease or any material portion thereof. Each Lease is valid, binding  and in full force and effect, and no uncured default of a material nature on the part of Seller or, to the  Knowledge of Seller, the landlord thereunder exists with respect to any Lease. Seller has good and valid  leasehold interest in or contractual right to use or occupy, subject to the terms of the applicable Lease, each  real property subject to the Leases.  Section 3.13. Material Contracts.  (a) Section 3.13(a) of the Seller Disclosure Schedule contains a true, accurate and  complete list (organized and labeled in a manner consistent with the categories set forth below) of each  Contract (other than any Benefit Plan) described below in this Section 3.13(a) under which any of the  Acquired Assets are bound or affected, or that are otherwise Primarily Related to the Product or the Business  to which Seller is a party or has rights or by which it is bound in connection with the Business, Product or  the Acquired Assets (all Contracts of the type described in this Section 3.13 being referred to herein as the  “Material Contracts”):  (i) each Contract that limits the freedom of Seller or any of its Affiliates to  compete or engage in any line of business or geographic region or with any Person, sell, supply or  distribute any product or service or that otherwise has the effect of restricting Seller or any of its  Affiliates from the development, marketing or distribution of products and services, in each case, in any  geographic area;  

 

  22  (ii) any Contract that creates or purports to create any partnership, joint  venture, collaboration, strategic alliance, limited liability company agreement, sharing of profits or  losses by Seller with any third party, or any similar Contract;  (iii) (A) any Contract that relates to the acquisition, disposition or divestiture  by Seller of any operating business or assets, or (B) any Contract that contains “earnout” or other  contingent payment obligations that would reasonably be expected to result in the receipt or making by  Seller of any future payments;  (iv) each IP Contract (other than Ordinary Course Licenses);  (v) any Contract (A) with a third party that imposes operational restrictions  on the Business or with respect to the Product (or Exploitation thereof) or (B) with a Governmental  Entity;  (vi) each Contract not otherwise described in any other subsection of this  Section 3.13(a) pursuant to which Seller is obligated to pay, or entitled to receive, payments in excess  of $75,000 in the twelve (12)-month period following the date hereof;  (vii) any Contract that obligates Seller to make any capital investment or capital  expenditure outside the Ordinary Course of Business and in excess of $75,000;  (viii) each Contract with any Material Supplier or that is otherwise material to  Seller, the conduct of the Business, the Product or the Exploitation thereof;  (ix) (A) each Contract that grants any option, right of first refusal, right of first  offer or similar rights to any customer, vendor, supplier, distributor, contractor, collaborator or other  Person, or (B) any Contract that otherwise limits the ability of Seller or any of its Affiliates to own,  operate, sell, transfer, pledge or otherwise dispose of any material, or material amount of, businesses or  assets;  (x) any Contract (A) containing covenants restricting or purporting to restrict  competition which, in either case, have, would have or purport to have the effect of prohibiting Seller  from engaging in any business or activity in any geographic area or other jurisdiction; (B) in which  Seller has granted “exclusivity” or that requires Seller to deal exclusively with, or grant exclusive rights  or rights of first refusal to, any customer, vendor, supplier, distributor, contractor or other Person; (C)  containing a “most-favored-nation,” best pricing or other similar term or provision by which another  party to such Contract or any other Person is, or may become, entitled to any benefit, right or privilege  which, under the terms of such Contract, must be at least as favorable to such party as those offered to  another Person; or (D) containing any “non-solicitation” or “no-hire” provisions or covenants running  in favor of another Person operating in the industry in which Seller or any of its Affiliates operates;  (xi) any Contract for the purchase or sale of goods or services, materials,  supplies or equipment that involved or is reasonably expected to involve the payment of more than  $75,000;   (xii) each Lease;  (xiii) any Contract that if terminated, or if it expired without being renewed,  would have a Material Adverse Effect;  

 

  23  (xiv) each Contract relating to outstanding Indebtedness (or commitments in  respect thereof) of Seller (whether incurred, assumed, guaranteed or secured by any asset) in an amount  in excess of $75,000;  (xv) any Contract that relates to the research, development (including pre- clinical and clinical research and clinical trials), commercialization, distribution, marketing, supply or  manufacturing of the Product, including any manufacturing or supply agreements (and associated  quality agreements), sponsored research agreements, collaboration agreements, grant agreements,  pharmacovigilance agreements, clinical study and clinical trial agreements, medical information  agreements, any agreements with a contract research organization or other provider of clinical trial or  related services (excluding non-disclosure agreements with any such contract research organization or  other provider of clinical trial or related services), or any other agreement related to research, studies  and tests conducted by or on behalf of Seller in connection with the Product or Business;   (xvi) any power of attorney; and  (xvii) any Contract under which any of the Acquired Assets are bound or  affected, or that are otherwise Primarily Related to the Business, Product, Acquired Assets or Assumed  Liabilities not otherwise described in any other subsection of this Section 3.13(a) that would constitute  a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with  respect to Seller.  (b) True, accurate and complete copies of each Material Contract and each Assigned  Contract in effect as of the date hereof, including all material amendments, modifications and waivers  relating thereto, have been made available to Purchaser prior to the date hereof. Seller is not in breach of or  default under the terms of any Material Contract or any Assigned Contract. To the Knowledge of Seller, no  other party to any Material Contract or Assigned Contract is in breach of or default under the terms of any  such Contract and no event exists which upon notice or the passage of time, or both, would reasonably be  expected to (i) give rise to any material default, in the performance by Seller, or, to the Knowledge of the  Seller, by any other party under any of the Material Contracts or (ii) cause or permit the acceleration or  other changes of any right or obligation or the loss of any benefit thereunder. Each of the Material Contracts  and the Assigned Contracts is a legal, valid, binding and enforceable obligation of Seller and, to the  Knowledge of Seller, of each other party thereto, and is in full force and effect. Seller has not given any  notice to any such Third Party that is a party to any Material Contract that it intends to terminate such  Material Contract and has not received any notice from a third party stating that such third party intends to  terminate any Material Contract or intends to submit to Seller any claim of breach with respect to the  performance of Seller’s obligations under any such Material Contract.  (c) Section 3.13(c) of the Seller Disclosure Schedule sets forth a true and complete list  of each Material Contract and each other Assigned Contract, if any, for which consent is required to assign  such Contract to Purchaser (or one or more of its designated Affiliates)  (d) Section 3.13(d) of the Seller Disclosure Schedule sets forth a true and complete  list of each Material Contract and each other Assigned Contract, if any, that is set to expire or terminate  prior to Closing, or within six (6) months following Closing, and which would not automatically renew.   Section 3.14. Compliance with Laws; Permits.  (a) Seller is and has been in compliance in all material respects with and is not and has  not been in default under or in violation of any Laws (including Environmental Laws), in each case, as  applicable to the Acquired Assets, the Assumed Liabilities or the Business.  

 

  24  (b) Seller, with respect to operation of the Business and the ownership and use of the  Acquired Assets, is and has been in possession of all Permits necessary for Seller to own, lease and use its  their properties and assets or to carry on its businesses at the relevant time. All Permits are in full force and  effect; no default (with or without notice, lapse of time or both) has occurred under any such Permit; and  Seller has not received any written notice from any Governmental Entity threatening to suspend, revoke,  withdraw or modify any such Permit.  (c) Neither Seller nor, to the Knowledge of Seller, any other Person (including any of  Seller’s Representatives) acting on behalf of Seller, has (i) taken any action in violation of any applicable  Anti-Corruption Law, (ii) offered, authorized, provided or given any payment or thing of value to any  Person for the purpose of influencing any act or decision of such Person to unlawfully obtain or retain  business or other advantage or (iii) taken any other action that would constitute an offer to pay, a promise  to pay or a payment of money or anything else of value, or an authorization of such offer, promise or  payment, directly or indirectly, to any Representative of another company or entity in the course of their  business dealings with Seller, in order to unlawfully induce such Person to act against the interest of his or  her employer or principal.  (d) Seller is not and has not been, in any way relating to the Business, the Acquired  Assets or the Assumed Liabilities, subject to any actual, pending, or, to the Knowledge of Seller, threatened  civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation,  investigations, proceedings, demand letters, settlements, or enforcement actions, or made any voluntary or  mandatory disclosures to any Governmental Entity, involving Seller in any way relating to applicable Anti- Corruption Laws. Seller has established and maintains a compliance program and reasonable internal  controls and procedures appropriate to the requirements of applicable Anti-Corruption Laws.  (e) Seller is conducting and has conducted, in any way relating to the Business, the  Acquired Assets or the Assumed Liabilities, its businesses in all material respects in accordance with United  States economic sanctions Laws administered by the Office of Foreign Assets Control of the U.S.  Department of the Treasury (“OFAC”), the Bureau of Industry and Security of the U.S. Department of  Commerce (“BIS”) and all other applicable Import Restrictions and Export Controls in any countries in  which Seller conducts business. Seller is maintaining and has maintained all records required to be  maintained in Seller’s possession as required under the Import Restrictions and Export Controls.  (f) Seller has not, in any way relating to the Business, the Acquired Assets or the  Assumed Liabilities, sold, exported, reexported, transferred, diverted, or otherwise disposed of any  products, or technology to any destination, entity, or Person prohibited by the Laws of the United States or  any other country, without obtaining prior authorization from the competent Governmental Entities as  required by those Laws. Seller has, in any way relating to the Business, the Acquired Assets or the Assumed  Liabilities, complied in all material respects with all terms and conditions of any license issued or approved  by the Directorate of Defense Trade Controls, BIS, or OFAC. Except pursuant to valid licenses, Seller has  not released or disclosed controlled technical data or technology to any foreign national whether in the  United States or abroad.  (g) Neither Seller nor, to the Knowledge of Seller, any director, officer, agent,  employee or Affiliate of Seller: (x) is, or is owned or controlled by, a Person or entity subject to the sanctions  administered by OFAC, BIS or included on the List of Specially Designated Nationals and Blocked Persons  or Foreign Sanctions Evaders, Denied Persons List, Entities List, Debarred Parties List, Excluded Parties  List and Terrorism Exclusion List, or any other lists of known or suspected terrorists, terrorist organizations  or other prohibited Persons made publicly available or provided to Seller by any Governmental Entity (such  Persons, collectively, the “Restricted Parties”) or (y) has conducted any business with or engaged in any  transaction or arrangement with or involving, directly or indirectly, any Restricted Parties or countries  

 

  25  subject to economic or trade sanctions in violation of applicable Law, or has otherwise been in violation of  any such sanctions, restrictions or any similar Law. Seller is not subject to any pending or, to the Knowledge  of Seller, threatened action by any Governmental Entity that would restrict its ability to engage in export  transactions, bar it from exporting or otherwise limit in any material respect its exporting activities or sales  to any Governmental Entity. Seller has not received any written notice of material deficiencies in  connection with any export controls, trade embargoes or economic sanctions matter from OFAC, BIS or  any other Governmental Entity in its compliance efforts nor made any voluntary disclosures to OFAC, BIS  or any other Governmental Entity of facts that could result in any material action being taken or any material  penalty being imposed by a Governmental Entity against Seller.  (h) Subject to the entry of the Bidding Procedures Order and Sale Order, Seller is  complying and has complied in all material respects with all requirements of the Bankruptcy Code and the  Federal Rules of Bankruptcy Procedure in connection with obtaining approval of the sale of the Acquired  Assets (including the assumption and assignment to Purchaser of any Assigned Contracts) to Purchaser  pursuant to this Agreement.  Section 3.15. Employee Benefit Matters.  (a) Section 3.15(a) of the Seller Disclosure Schedule sets forth a complete and correct  list of each Benefit Plan (other than at-will employment offer letters on Seller’s standard form that may be  terminated without notice and with no penalty to Seller, agreements with consultants entered into in the  Ordinary Course of Business, and individual compensatory equity award agreements made pursuant to  Seller’s standard forms, in which case only representative standard forms of such agreements shall be  scheduled) as of the date hereof. Seller has delivered or made available to Purchaser copies of documents  embodying each of the Benefit Plans including all plan documents current summary plan descriptions,  summaries of material modification, and any trust agreements, funding arrangements, insurance contracts  or policies and any other similar document governing the operation and administration of said Benefit Plan.  In the case of any unwritten Benefit Plan, Seller has made available to Purchaser a written description  thereof, including any amendments thereto. Each Benefit Plan that is intended to be qualified under Section  401(a) of the Code is so qualified and each corresponding trust of such tax-qualified Benefit Plan is exempt  from Tax under the provisions of Section 501(a) of the Code. Each Benefit Plan qualified under Section  401(a) of the Code has received an Internal Revenue Service determination or opinion letter issued with  respect to each such Benefit Plan and, to the Knowledge of Seller, nothing has occurred since the issuance  of each such determination or opinion letter that could be expected to cause the loss of the tax-qualified  status of such Benefit Plan. Seller has provided or made available a copy of the most recent IRS  determination or opinion letter and have also provided or made available to Purchaser the three (3) most  recent annual reports required to be filed, or such similar reports, statements, information returns or material  correspondence required to be filed with or delivered to any Governmental Authority, if any, with respect  to each Benefit Plan (including reports filed on Form 5500 and accompanying schedules and attachments,  as applicable).  (b) (i) Each Benefit Plan has been administered in all material respects in accordance  with its terms and in compliance in all material respects with applicable Law; (ii) none of the Benefit Plans  promises or provides retiree medical or other retiree welfare benefits to any person except as required by  applicable Law; (iii) all contributions, premiums, or payments required to be made by Seller or any ERISA  Affiliate of Seller to any Benefit Plan or corresponding trust or other funding arrangement have been paid  when due under the terms of such Benefit Plan and applicable Law; (iv) there have been no prohibited  transactions or breaches of any of the duties imposed on “fiduciaries” (within the meaning of Section 3(21)  of ERISA) by ERISA with respect to the Benefit Plans and (v) no Action (other than routine claims for  benefits) is currently pending or, to the Knowledge of Seller, is currently threatened, against or with respect  

 

  26  to any Benefit Plan, including any audit, investigation, or inquiry by the Internal Revenue Service, the  United States Department of Labor, or other Governmental Entity.  (c) Neither Seller, nor any ERISA Affiliate of Seller, maintains, sponsors, participates  in, or contributes to, or has any obligation to contribute to, or has, within the last six (6) years, maintained,  sponsored, participated in, contributed to, or been obligated to contribute to, or otherwise incurred any  Liability (including any contingent Liability) under any (i) “multiemployer plan” (as defined in Section  3(37) of ERISA or Section 414(f) of the Code); (ii) any defined benefit plan or other “pension plan” (as  defined in Section 3(2) of ERISA) subject to Title IV of ERISA or Section 412 of the Code; (iii) “multiple  employer plan” (as defined in Section 210(a) of ERISA or Section 413(c) of the Code); (iv) a “multiple  employer welfare arrangement” or “MEWA” (as defined in Section 3(40) of ERISA); or (v) a “voluntary  employees’ beneficiary association” or “VEBA” pursuant to Section 501(c)(9) of the Code. Neither Seller,  nor any ERISA Affiliate of any Seller, has any actual or potential withdrawal Liability for any complete or  partial withdrawal (as defined in Sections 4203 and 4205 of ERISA) from any multiemployer plan or has  engaged in any transaction which could give rise to Liability of Seller or any ERISA Affiliate of Seller  under Section 4069 or Section 4212 of ERISA.  (d) All Benefit Plans subject to Section 409A of the Code comply in all material  respects in both form and operation with Section 409A of the Code and the rules and regulations thereunder.  No Benefit Plan includes any obligation to compensate any Person for excise Taxes payable pursuant to  Section 4999 of the Code or Section 409A of the Code.  (e) The consummation of the Acquisition, whether alone or in combination with any  other event, will not (i) entitle any current or former employee of Seller or any ERISA Affiliate to severance  benefits or any other payment (including golden parachute, bonus or benefits) under any Benefit Plan; (ii)  accelerate the time of payment or vesting of any such benefits or increase the amount of compensation due  any such current or former employee under any Benefit Plan; or (iii) result in any “excess parachute  payments” within the meaning of Section 280G(b) of the Code.  (f) Seller and all ERISA Affiliates of Seller as well as all applicable Benefit Plans  have at all times complied in all material respects with all provisions of the Patient Protection and  Affordable Care Act, to the extent applicable, including the employer shared responsibility provisions  relating to the offer of “affordable” health coverage that provides “minimum essential coverage” to “full- time” employees (as those terms are defined in Section 4980H of the Code and related regulations), and the  payment of the applicable penalty, and the applicable employer information reporting provisions under  Section 6055 of the Code and Section 6056 of the Code and related regulations. Neither Seller, nor any  ERISA Affiliates of Seller, is reasonably expected to incur or be subject to, any material Tax, penalty or  other Liability that may be imposed under the Patient Protection and Affordable Care Act and the Health  Care and Education Reconciliation Act of 2010, as amended.  (g) No Benefit Plan is maintained outside of the United States.  Section 3.16. Labor Matters.  (a) Section 3.16(a) of the Seller Disclosure Schedule sets forth a complete and correct  list of each employee who has been involved in the Business (each, a “Business Employee”), including the  following information for each Business Employee: name, date of hire, position, full/part-time status,  exempt/non-exempt status, leave status (if applicable), respective salaries and other compensation and wage  rates, bonus arrangements, benefits and retirement arrangements and whether Seller has any individual  written employment agreement with such Business Employee (other than at-will employment offer letters  on Seller’s standard form that may be terminated without notice and with no penalty to the Seller). Seller  

 

  27  has not made any representations regarding equity incentive compensation from Purchaser to any Business  Employee.  (b) Seller is not a party to, nor bound by, any agreement with respect to employees  with any labor union or any other employee organization, group or association organized for purposes of  collective bargaining. There are and have been no labor union organizing activities with respect to any  employees of Seller. There is no pending or, to the Knowledge of Seller, threatened labor strike, slowdown,  lockout or work stoppage involving Seller or any of its employees.  (c) Seller is and, during the preceding one hundred eighty (180) days, has been, in  compliance in all material respects with the Worker Adjustment and Retraining Notification Act of 1988,  as amended, and any similar state, local or foreign Law relating to plant closings or mass layoffs.  Section 3.17. Environmental Matters. Seller is, and has been since January 1, 2019, in  compliance in all material respects with all applicable Environmental Laws imposing obligations on or  otherwise related to the Business, Product, Assumed Liabilities and Acquired Assets. Seller possesses all  material permits and approvals issued pursuant to any applicable Law relating to the protection of the  environment or, as such relates to exposure to Hazardous Substances, to health and safety that are required  to conduct the Business, and are, and have been since January 1, 2019, in compliance in all material respects  with all such permits and approvals. No releases of Hazardous Substances have occurred at, on, from or  under any real property currently or, to the Knowledge of Seller, formerly owned or operated by Seller in  a manner that would reasonably be expected to result in a material Liability under any Environmental Laws.  Seller has not received any written claim or notice from any Governmental Entity or other Person alleging  that Seller is or may be in violation of or liable, in each case in any material respect, under, any  Environmental Law. Seller has not entered into or agreed to any consent decree or order and is not subject  to any judgment, decree or judicial order relating to compliance with Environmental Laws or the  investigation, sampling, monitoring, treatment, remediation, removal or clean-up of Hazardous Substances.  Section 3.18. Regulatory Matters.  (a) Seller has made available to Purchaser true, accurate, and complete copies of all  material Regulatory Documentation and Regulatory Authorizations from or with the FDA, the EMA and  all other applicable Regulatory Authorities filed, submitted, exchanged, or held by Seller relating to the  Product (or the Exploitation thereof) or necessary or useful to conduct the Business. All such Regulatory  Authorizations, if any, are (i) in full force and effect, (ii) validly registered and on file with applicable  Regulatory Authorities, (iii) in compliance with all material filing and maintenance requirements, and (iv)  in good standing, valid and enforceable. Seller has fulfilled and performed all of its material obligations  with respect to such Regulatory Authorizations, and no event has occurred which allows, or after notice or  lapse of time would allow, lapse, revocation, or termination thereof. Seller has submitted, filed, maintained  or furnished with the applicable Regulatory Authorities all required filings, declarations, listings,  registrations, fees, submissions, amendments, modifications, notices and responses to notices, applications  and supplemental applications, reports (including all adverse event/experience reports) and other  information (collectively, the “Health Care Submissions”) with the FDA, the EMA and all other applicable  Regulatory Authorities and all such Health Care Submissions were complete and accurate and in  compliance with applicable Health Laws when filed (or were corrected or completed in a subsequent filing).  (b) (i) Seller is in compliance in all material respects with all applicable Health Laws  that affect the Acquired Assets, the Assumed Liabilities or the Business, (ii) as of the date of this  Agreement, Seller has not received any written or oral notice or other communication from any Regulatory  Authority (A) withdrawing or placing any application or authorization applicable to the Product on “clinical  hold” or requiring the termination or suspension or investigation of any pre-clinical studies or clinical trials  

 

  28  of the Product or (B) alleging any violation of any Health Law and (iii) there are no investigations, suits,  claims, actions or proceedings pending, or to the Knowledge of Seller, threatened against Seller with respect  to the Product or alleging any violation by Seller or any third party engaged by Seller with respect to the  Product of any such Health Law.  (c) All pre-clinical studies and clinical trials conducted or being conducted with  respect to the Products by or at the direction of Seller have been and are being conducted in compliance in  all respects with the required experimental protocols, procedures and controls and in all material respects  with applicable good laboratory practice and good clinical practice standards, human subject protection and  animal welfare standards, environmental impact standards, and all applicable Health Laws and Information  Privacy and Security Laws. With respect to the Product, Seller has made available to Purchaser complete  and accurate copies of all clinical and preclinical data in the possession of Seller and all written  correspondence between Seller and the applicable Regulatory Authorities (including letters, memoranda  and emails). The descriptions of, protocols for, and data and other results of, the studies, tests, development  and trials conducted by or on behalf of Seller with respect to the Product that have been made available to  Seller are accurate and complete in all material respects. None of the results of the studies, tests,  development or trials, and no information regarding the conduct of the studies or the qualifications or  financial interests of the individuals conducting the studies, reasonably calls into question the reliability or  results of the studies, tests, development and trials conducted by or on behalf of Seller with respect to the  Product, and Seller has not received any written or oral notices or other correspondence from any  Regulatory Authority or other Governmental Entity or any institutional review board or comparable  authority requiring the termination, suspension or modification of any studies, tests, preclinical  development or clinical trials conducted by or on behalf of Seller. No clinical trial conducted by or, on  behalf of, Seller has been terminated or suspended by any Regulatory Authority and Seller has not received  any notification or other communication from any institutional review board, ethics committee or safety  monitoring committee raising any issues that may result in a clinical hold or otherwise delay, materially  restrict or otherwise limit or impair the use of any clinical studies proposed or currently conducted by, or  on behalf of, Seller, or in which Seller has participated and, to the Knowledge of Seller, no such action has  been threatened. To the Knowledge of Seller, no Additional Approval Requirements will or are expected  to be required with respect to the FDA Accelerated Approval Milestone or the FDA Full Approval  Milestone  (d) All manufacture of the Products, including any clinical supplies used in any  clinical trials, by or on behalf of Seller has been conducted in compliance in all material respects with the  applicable test methods, specifications and other requirements of current Good Manufacturing Practice and,  to the extent applicable, the Quality System (QS) regulation with respect to any and all device components  or constituents that are part of the Product or that are intended specifically for use with the Product, and  applicable Health Law. None of Seller or, to the Knowledge of Seller, any Person acting on Seller’s behalf  has, with respect to the Product, (i) been subject to a Regulatory Authority shutdown or import or export  prohibition or (ii) received any FDA Form 483, or other written Regulatory Authority notice of inspectional  observations, “warning letters,” “untitled letters” or written demand or written request to make any change  to any Product or any processes or procedures, or any similar correspondence from any Regulatory  Authority alleging or asserting non-compliance with any applicable Health Law or Regulatory  Authorization and, to the Knowledge of Seller, no Regulatory Authority is considering such action.  (e) None of Seller or, to the Knowledge of Seller, any of its officers, employees, or  agents, or any clinical investigator acting for Seller has (i) made an untrue statement of a material fact or  fraudulent statement to any Regulatory Authority or any other Governmental Entity, (ii) failed to disclose  a material fact required to be disclosed to any Regulatory Authority or any other Governmental Entity, or  (iii) committed an act, made a statement, or failed to make a statement, including with respect to any  scientific data or information, that, at the time such disclosure was made or failure to disclose occurred,  

 

  29  would reasonably be expected to provide a basis for the FDA or any other Governmental Entity to invoke  its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth  in 56 Fed. Reg. 46191 (September 10, 1991), and any amendments thereto, or any similar policy or any  other statute or regulation regarding the communication or submission of false information to any  applicable Regulatory Authority or Governmental Entity. None of Seller or, to the Knowledge of Seller,  any of its officers, employees, or agents, or any clinical investigator or other Person acting by or on behalf  of Seller has committed or engaged in any fraud, falsification or forgery of any research or development  data, report, studies or publications or of any document or statement voluntarily submitted or required to  be submitted to any Regulatory Authority or any other Governmental Entity, including the Centers for  Medicare and Medicaid Services, the U.S. Department of Health and Human Services, HHS Office of  Inspector General or the Center for Medicare and Medicaid Innovation. None of Seller or, to the Knowledge  of Seller, any of its officers, employees, agents, or, any clinical investigator acting for Seller, is or has been  convicted of any crime or engaged in any conduct that has resulted in, or would reasonably be expected to  result in, debarment from participation in any program related to pharmaceutical products pursuant to 21  U.S.C. Section 335a (a) or (b) or exclusion from participation in any federal health care program pursuant  to 42 U.S.C. Section 1320a-7.  (f) No product that is or has been manufactured, tested, distributed, held or marketed  by or on behalf of Seller has been recalled, withdrawn or suspended (whether voluntarily or otherwise) or,  to the Knowledge of Seller, is or has been adulterated or misbranded. No Actions (whether complete or  pending) seeking the recall, withdrawal, suspension or seizure of any such Product or pre-market approvals  or authorizations or marketing authorizations are pending or, to the Knowledge of Seller, threatened against  Seller, nor have any such Actions been pending at any time. Seller has made available to Purchaser all  information about adverse drug events or experiences obtained or otherwise received by Seller from any  source, in the United States or outside of the United States as of the date hereof, including information  derived from clinical investigations, surveillance studies or registries, reports in the scientific literature and  unpublished scientific papers relating to any Product that is or has been manufactured, tested, distributed,  held or marketed by or on behalf of Seller or any of its licensors or licensees in the possession of Seller (or  to which Seller has access). In addition, Seller has filed all annual and periodic reports, amendments and  safety reports required for any Product, including all investigational versions of the Product, required to be  made to any Regulatory Authority.  (g) Section 3.18(g) of the Seller Disclosure Schedule sets forth a complete and  accurate list and summary of any written information received by, or in the possession of, Seller or any  Affiliate of Seller from, or submitted by Seller or any Affiliate of Seller to, any Regulatory Authority or  other Governmental Entity which could reasonably be expected to (i) lead to the denial of any application  for Regulatory Authorization currently pending before or proposed to be submitted to any Regulatory  Authority or other Governmental Entity relating to the Product or the Business, (ii) result in a penalty under  or the material limitation, material adverse modification, revocation, cancellation or suspension of any  Regulatory Authorization for the Product or (iii) give rise to any Action to determine whether any of the  foregoing is appropriate. Seller has made available to Purchaser complete and correct copies of all such  written information.  Section 3.19. Taxes.  (a) (i) All income and other material Tax Returns required to be filed with respect to  the Business, the Acquired Assets and Assumed Liabilities have been timely filed with the appropriate  Taxing Authority in all jurisdictions in which such Tax Returns are required to be filed (after giving effect  to any valid extensions of time in which to make such filings), and all such Tax Returns are true, complete  and correct in all material respects; and (ii) all amounts of Taxes payable with respect to the Business, the  Acquired Assets and Assumed Liabilities, whether or not shown on any Tax Return, have been timely paid.  

 

  30  (b) No audit or other proceeding with respect to any Taxes or Tax Returns with respect  to the Business, the Acquired Assets or Assumed Liabilities is currently in progress, or has been proposed  or threatened in writing, or, to the Knowledge of Seller, otherwise.  (c) Seller has not received written notice, or, to the Knowledge of Seller, any other  notice, of any Tax deficiency outstanding, proposed or assessed, nor has Seller executed any waiver of any  statute of limitations in respect of Taxes nor agreed to any extension of time with respect to a Tax  assessment, collection or deficiency, in each case, with respect to the Business, the Acquired Assets or  Assumed Liabilities.  (d) There are no liens for Taxes other than Permitted Pre-Closing Encumbrances upon  any of the Acquired Assets.  (e) None of the Acquired Assets constitutes stock, partnership interests or any other  equity interest in any Person for U.S. federal income Tax purposes.  (f) Seller has complied in all material respects with all applicable Laws relating to the  withholding, collection and payment of Taxes and have timely withheld, collected and paid over to the  appropriate Taxing Authority all amounts required to be so withheld, collected and paid under all applicable  Laws.  Section 3.20. Suppliers. Section 3.20 of the Seller Disclosure Schedule sets forth with respect to  the Business a list of the suppliers and vendors of Seller with whom Seller has spent at least $75,000 during  the fiscal year ended December 31, 2021 and for the nine (9) months ended September 30, 2022 (each, a  “Material Supplier”). No Material Supplier has cancelled, terminated or adversely modified, or, to the  Knowledge of Seller, threatened to cancel, terminate or adversely modify, its relationship with Seller.  Section 3.21. Inventory.   (a) Section 3.21(a) of the Seller Disclosure Schedule sets forth a detailed list of all  Inventory as of the date of this Agreement, including the quantity, batch, expiry dating, book value,  location (including whether the item is being held on a consignment basis), original shelf-life and  remaining shelf-life. The Inventory is merchantable, fit for the purposes for which it was procured or  manufactured, usable or saleable in the Business and free of defects and damage, conforms in all material  respects to the specifications established therefor and to the Regulatory Authorizations, and has been  manufactured in all material respects in accordance with the Regulatory Authorizations and all  applicable Laws. Subject to Purchaser (or one or more of its designated Affiliates) storing the Inventory  in a manner consistent in all material respects with Seller’s current methods of storage, at all times prior  to the two-year anniversary of the Closing Date the Inventory will conform in all material respects to  the specifications established therefor and to the applicable Regulatory Authorizations.   (b) The Inventory constitutes sufficient quantities for the normal operation of the  Business for at least the eighteen (18) months following the Closing Date and does not include any items  that are expired or obsolete.   (c) Except for the Inventory so identified in Section 3.21(a) of the Seller Disclosure  Schedule, none of the Inventory is held on a consignment basis. Each item included in the Inventory is  owned by Seller, free and clear of any Encumbrances other than Permitted Post-Closing Encumbrances  and has not been pledged as collateral.   

 

  31  Section 3.22. Insurance. Section 3.22 of the Seller Disclosure Schedule sets forth with respect to  the Business a complete and accurate list of the insurance policies and insurance Contracts of Seller as of  the date hereof, and Seller has made available to Purchaser true and correct copies of all of such policies  and Contracts prior to the date hereof. Except as would not, individually or in the aggregate, reasonably be  expected to be material to Seller, the Acquired Assets or the Business, (a) all insurance policies and  insurance Contracts set forth on Section 3.22 of the Seller Disclosure Schedule are in full force and effect  and are valid and enforceable and cover against the risks as are customary for companies of similar size in  the same lines of business, (b) Seller is not in material breach of or default under any such insurance policies  and insurance Contracts, (c) Seller has not taken any action or failed to take any action that (with or without  notice or lapse of time, or both), would constitute such a breach or default or permit termination or  modification of any of the insurance policies or insurance Contracts, and (d) all premiums due thereunder  have been paid. There are no material claims under any of the insurance policies or insurance Contracts set  forth on Section 3.22 of the Seller Disclosure Schedule for which coverage has been denied or disputed by  the applicable insurance carrier (other than a customary reservation of rights notice). Seller has not received  notice of cancellation or termination with respect to any third-party insurance policies or insurance  Contracts set forth on Section 3.22 of the Seller Disclosure Schedule (other than in connection with normal  renewals of any such insurance policies or Contracts).  Section 3.23. CFIUS. Seller does not engage in (a) the design, fabrication, development, testing,  production or manufacture of one or more “critical technologies” within the meaning of the Defense  Production Act of 1950, as amended, including all implementing regulations thereof (the “DPA”); (b) the  ownership, operation, maintenance, supply, manufacture, or servicing of “covered investment critical  infrastructure” within the meaning of the DPA (where such activities are covered by column 2 of Appendix  A to 31 C.F.R. Part 800); or (c) the maintenance or collection, directly or indirectly, of “sensitive personal  data” of U.S. citizens within the meaning of the DPA, and the Acquired Assets do not include and will not  provide Purchaser with access to any such “critical technologies,” “covered investment critical  infrastructure” or “sensitive personal data.”  Section 3.24. Disclaimer. Seller hereby acknowledges and agrees that, except as provided in this  Agreement and in any certificate or other instrument delivered by or on behalf of Purchaser in connection  with this Agreement, Purchaser makes no representations or warranties whatsoever, express or implied,  with respect to Purchaser, its Affiliates, this Agreement, the Transactions or the manner in which Purchaser  intends to operate the Business or Exploit the Product following the Closing. Seller further acknowledges  that Seller has conducted an independent inspection and investigation of Purchaser and all such other  matters relating to or affecting the Transactions as Seller deemed necessary or appropriate and that in  proceeding with its sale of the Acquired Assets, except for the representations and warranties set forth in  ARTICLE IV or in any certificate or other instrument delivered by or on behalf of Purchaser in connection  with this Agreement, Seller has not relied on any other representations or warranties by or on behalf of  Purchaser in connection with the Transactions. Notwithstanding anything herein to the contrary, the  foregoing limitations shall not apply to, and nothing herein shall limit, Seller’s remedies in the event of  Fraud or Seller’s rights and remedies under any Ancillary Document.  ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PURCHASER  Purchaser hereby represents and warrants to Seller, as of the date hereof and as of the Closing, as  follows:  Section 4.1. Qualification; Organization. Purchaser is a legal entity duly organized, validly  existing and in good standing (with respect to jurisdictions that recognize such concept) under the Laws of  its jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease  

 

  32  and operate its properties and assets and to carry on its business as presently conducted, except where the  failure to be so existing and in good standing or to have such power and authority would not, individually  or in the aggregate, materially impair or materially delay its ability to perform its obligations under this  Agreement. Purchaser is qualified to do business and is in good standing (with respect to jurisdictions that  recognize such concept) as a foreign corporation or other entity in each jurisdiction where the ownership,  leasing or operation of its assets or properties or conduct of its business requires such qualification, except  where the failure to be so qualified or, where relevant, in good standing, would not, individually or in the  aggregate, materially impair or materially delay its ability to perform its obligations under this Agreement.   Section 4.2. Authority of Purchaser. Purchaser has all requisite corporate power and authority  to execute and deliver and perform its obligations under this Agreement and each of the Ancillary  Documents to which it is a party (subject to entry of the Bidding Procedures Order and Sale Order). The  execution, delivery and performance of this Agreement and such Ancillary Documents by Purchaser and  the consummation of the Transactions have been duly and validly authorized and approved by all requisite  corporate action of Purchaser, as applicable, and no other corporate proceedings (pursuant to any of  Purchaser’s organizational documents or otherwise) on the part of Purchaser is necessary to authorize the  consummation of, and to consummate the Transactions. This Agreement and each such Ancillary Document  have been, or at or prior to Closing (as the case may be) will be, duly and validly executed and delivered  by Purchaser to the extent a party thereto, and, assuming the due authorization, execution and delivery of  this Agreement and each such Ancillary Document by Seller, constitute a valid and binding agreement of  Purchaser, as applicable, enforceable against Purchaser in accordance with its terms.  Section 4.3. Consents and Approvals. No consent, approval, permit or authorization of, or  declaration, filing or registration with, any Governmental Entity is necessary or required to be made or  obtained by Purchaser or their Affiliates in connection with the execution, delivery and performance of this  Agreement and the Ancillary Documents and the consummation of the Transactions, except for such  consents, approvals, permits, authorizations, declarations, filings or registrations that would not,  individually or in the aggregate, materially impair or materially delay Purchaser’s ability to perform its  obligations under this Agreement.  Section 4.4. No Violations. Except as described in Section 3.3 and Section 4.3, neither the  execution, delivery or performance of this Agreement and the Ancillary Documents by Purchaser to the  extent a party thereto nor the consummation by Purchaser of the Transactions will (a) conflict with or result  in any violation or breach of any provisions of the certificate of incorporation, bylaws or other  organizational documents of Purchaser, (b) with or without notice or lapse of time or both, conflict with or  result in any breach or violation of or constitute a default or change of control under, or give rise to a right  of, or result in, termination, modification, cancellation, first offer, first refusal or acceleration of any  obligation or to the loss of a benefit under any Contract to which Purchaser is a party or by or to which any  of its properties, rights or assets are bound or subject or (c) conflict with or violate any Order or Law  applicable to Purchaser or its properties, rights or assets, except in the case of the preceding clauses (b) and  (c), for breaches, violations, defaults or terminations that would not reasonably be expected to, individually  or in the aggregate, materially impair or materially delay Purchaser’s ability to perform its obligations under  this Agreement.  Section 4.5. Brokers or Finders. Purchaser has not employed any investment banker, broker or  finder in connection with the Transactions who might be entitled to any fee or any commission from Seller  in connection with this Agreement or upon consummation of the Acquisition or any of the other  Transactions based upon arrangements made by Purchaser.  

 

  33  Section 4.6. Financing. Purchaser has, or will at the time any payment is required, sufficient  funds available to deliver the Purchase Price to Seller and consummate the Transactions, including the  timely satisfaction of the Assumed Liabilities.  Section 4.7. Adequate Assurances Regarding Assigned Contracts. As of the Closing, Purchaser  will be capable of satisfying the adequate assurance of future performance conditions contained in Sections  365(b)(1)(C) and 365(f) of the Bankruptcy Code with respect to the Assigned Contracts.  Section 4.8. Disclaimer. Purchaser hereby acknowledges and agrees that, except as provided in  ARTICLE III or in any certificate or other instrument delivered by or on behalf of Seller in connection with  this Agreement, Seller makes no representations or warranties whatsoever, express or implied, with respect  to any matter relating to the Acquired Assets, Business, Product and Assumed Liabilities with respect to  the Acquired Assets, Business, Product and Assumed Liabilities. Purchaser further acknowledges that  Purchaser has conducted an independent inspection and investigation of the physical condition of the  Acquired Assets and all such other matters relating to or affecting the Acquired Assets as Purchaser deemed  necessary or appropriate and that in proceeding with the Acquisition, except for the representations and  warranties set forth in ARTICLE III or in any certificate or other instrument delivered by or on behalf of  Seller in connection with this Agreement, Purchaser has not relied on any other representations or  warranties by or on behalf of Seller in connection with the Transactions. Notwithstanding anything herein  to the contrary, the foregoing limitations shall not apply to, and nothing herein shall limit, Purchaser’s  remedies in the event of Fraud or Purchaser’s rights and remedies under any Ancillary Document.  ARTICLE V  COVENANTS  Section 5.1. Conduct of Business Pending the Closing.  (a) Seller agrees that between the date hereof and the earlier of the Closing or the date,  if any, on which this Agreement is validly terminated pursuant to ARTICLE VIII, except as set forth in  Schedule 5.1(a), and except (1) as expressly provided in this Agreement, (2) as consented to in writing by  Purchaser, and (3) for the consequences arising from the filing of the Chapter 11 Case, Seller shall use  commercially reasonable efforts to conduct the Business in all material respects in the Ordinary Course of  Business, and use commercially reasonable efforts to (i) maintain and preserve intact its present business  organization, the Acquired Assets and the Business, (ii) maintain, preserve, and keep available the services  of its present officers and Business Employees (other than where such employee voluntarily resigns or  where termination of such services is for cause), (iii) maintain and preserve in all material respects its  present relationships with customers, suppliers, vendors, service providers, licensors, licensees,  Governmental Entities, and other Persons with whom they have material business relations, in each case,  in connection with the operation of the Business, (iv) maintain and preserve in effect in all material respects  the Permits, (v) preserve and maintain all Regulatory Authorizations, (vi) perform in all material respects  all of its post-petition obligations under the Assigned Contracts as and when such obligations become due  (except as Seller may negotiate for and receive applicable extended payment arrangements), and (vii)  comply in all material respects with the budget and other obligations set forth in the DIP Facility (except  as Seller may negotiate for and receive payment extensions under or other modifications thereto).   (b) Seller agrees that between the date hereof and the earlier of the Closing or the date,  if any, on which this Agreement is validly terminated pursuant to ARTICLE VIII, except as set forth in  Schedule 5.1(b), and except (1) as expressly provided in this Agreement, (2) as consented to in writing  by Purchaser or (3) for the consequences arising from the filing of the Chapter 11 Case, Seller shall not,  with respect to the Business, the Acquired Assets or the Assumed Liabilities, directly or indirectly:  

 

  34  (i) acquire (including by merger, consolidation or acquisition of stock or  assets or any other means) or authorize or announce an intention to so acquire, or enter into any  agreements providing for any acquisitions of, any equity interests in or assets of any Person or any  business or division thereof, or otherwise engage in any mergers, consolidations or business  combinations, except for supplies, inventory or equipment in the Ordinary Course of Business;  (ii) make any loans, advances or capital contributions to, or investments in,  any other Person, except for advances for reimbursable employee expenses made in the Ordinary Course  of Business;  (iii) other than sales of Inventory in the Ordinary Course of Business, sell,  lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or  subject to any Encumbrance (other than Permitted Pre-Closing Encumbrances) any of the Acquired  Assets;  (iv) fail to maintain, or allow to lapse, or abandon any Seller Registered  Intellectual Property;  (v) enter into or become bound by, terminate or materially amend or modify  any Contract relating to the acquisition or disposition or granting of any license with respect to any  Seller Intellectual Property, or otherwise subject to an Encumbrance (other than Permitted Pre-Closing  Encumbrances) any Seller Intellectual Property (including by the granting of any covenant-not-to-sue  or covenant-not-to-assert), other than immaterial license grants in the Ordinary Course of Business;  (vi) (A) enter into any Contract that would, if entered into prior to the date  hereof, be a Material Contract or (B) modify, amend, extend or terminate any Assigned Contract or  waive, release or assign any rights, obligations, or claims thereunder;  (vii) (A) except in accordance with the DIP Budget provided to Purchaser prior  to the date hereof, make any capital expenditure or expenditures, enter into agreements or arrangements  providing for capital expenditure or expenditures or otherwise commit to do so, or (B) fail to make any  capital expenditure or expenditures in accordance with such DIP Budget;  (viii) other than with respect to SFJ Pharmaceuticals X, Ltd. or its Affiliates,  commence, waive, release, assign, compromise or settle any claim, litigation, investigation or Action  (for the avoidance of doubt, including with respect to matters in which a Seller is a plaintiff, or in which  any of their officers or directors in their capacities as such are parties) affecting the Business, the  Acquired Assets or the Assumed Liabilities, other than the compromise or settlement of any claim,  litigation or Action not brought by a Governmental Entity and that: (A) is for an amount not to exceed,  for any such compromise or settlement individually or in the aggregate, $100,000, (B) does not impose  any injunctive or nonmonetary relief on Seller and does not involve the admission of wrongdoing by  Seller or any of its officers or directors or otherwise establish a materially adverse precedent for similar  settlements by Purchaser and (C) does not provide for the license of any Intellectual Property or the  termination, modification or amendment of any license of Seller Intellectual Property;  (ix) make any change in financial accounting policies, practices, principles or  procedures or any of its methods of reporting income, deductions or other material items for financial  accounting purposes, except as required by GAAP or applicable Law;  (x) make, change or revoke any Tax election, adopt or change any method of  Tax accounting, file any amended Tax Return, enter into any “closing agreement” within the meaning  

 

  35  of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), or surrender any  right to claim a refund of Taxes, in each case, except to the extent such action would not be binding on  Purchaser or any of its Affiliates and would not reasonably be expected to increase the Taxes of  Purchaser or any of its Affiliates;  (xi) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or  otherwise become liable for or modify in any material respects the terms of any Indebtedness or any  derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward  contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other  rights to acquire any debt securities (directly, contingently or otherwise);  (xii) cancel or fail to use commercially reasonable efforts to maintain in the  Ordinary Course of Business Seller’s insurance policies included in, or covering any, Acquired Assets  or to renew or replace existing insurance policies included in, or covering any, Acquired Assets  following their termination;  (xiii) (A) enter into any lease or sublease of real property as lessee or sublessee,  or (B) materially modify or amend any Lease or other lease or sublease of real property, except for  rejection of leases immediately on locations approved by prior written consent of Purchaser, in each  case other than in the Ordinary Course of Business (it being agreed that, with respect to this subsection  (xiii), Purchaser’s consent may not be unreasonably withheld, conditioned or delayed);  (xiv) fail to use best efforts to maintain its Books and Records;  (xv) terminate or modify or waive in any material respect any right under any  Permit or otherwise fail to use best efforts to maintain all Permits used in the operation of the Business  or included in the Acquired Assets;  (xvi) file a motion, fail to timely contest a pleading seeking, or otherwise  consent to (A) a conversion of the Chapter 11 Case into a liquidation proceeding under Chapter 7 of the  Bankruptcy Code, (B) the dismissal of the Chapter 11 Case, (C) the appointment of a Chapter 11 trustee  or examiner or (D) the termination or reduction of the exclusivity period described in 11 U.S.C. §  1121(b);  (xvii) participate in any scheduled meetings or teleconferences with, or  correspond in writing, communicate or consult with the FDA or any similar Governmental Entity  without providing Purchaser (whenever feasible and to the extent permitted under applicable Law) with  prior written notice and a reasonable opportunity to consult with Seller with respect to such  correspondence, communication or consultation, in each case to the extent permitted by applicable Law;  (xviii) except as contemplated by and in accordance with this Agreement and the  Bidding Procedures, take or cause to be taken any action that would reasonably be expected to materially  delay, materially impede or prevent the consummation of the Acquisition;  (xix) make any material change in billing, inventory management or cash  management practices (including with respect to the timing and frequency of paying of payables) or in  working capital practices, or encourage any distributor or customer directly or indirectly to accelerate  purchases of the Products or modify discounting, rebate and similar practices;  (xx) voluntarily terminate, enter into or amend any Benefit Plan, except as  would not reasonably be expected to result in Liability to Purchaser;  

 

  36  (xxi) with respect to all Business Employees, except as required by any Benefit  Plan or other existing employment agreement or offer letter as in effect on the date hereof, (A) increase  any compensation or benefits of any Business Employees; or (B) grant any incentive, bonus, severance,  retention or termination pay or benefits;  (xxii) hire any Business Employees or terminate any Business Employees (other  than for cause);  (xxiii) enter into a collective bargaining agreement or other labor union Contract  with respect to any Business Employees; or  (xxiv) agree or authorize, in writing or otherwise, to take any of the foregoing  actions.  Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand  and agree that (i) nothing contained in this Agreement shall give Purchaser, directly or indirectly, the right  to control or direct the operations of Seller, or the Business prior to the Closing and (ii) prior to the Closing,  Seller shall exercise, consistent with, and subject to, the terms and conditions of this Agreement, complete  control and supervision over the Business and their operations.  Section 5.2. Access and Information.  (a) From the date hereof and through the Closing Date or the date on which this  Agreement is terminated, (x) Seller shall afford Purchaser and its Representatives reasonable access during  normal business hours upon reasonable advance notice to all of Seller’s properties, offices, Assigned  Contracts, employees and Books and Records to the extent related to the Business, the Acquired Assets and  the Assumed Liabilities, (y) Seller shall afford to Purchaser and its Representatives, acting in good faith,  reasonable access upon reasonable advance written notice (and notwithstanding any other restriction in the  Confidential Disclosure Agreement) to all of Seller’s licensors, licensees, suppliers and manufacturers, and,  with the consent of Seller (not to be unreasonably withheld, conditioned or delayed), to Seller’s Regulatory  Authorities, and, (z) during such period, Seller shall furnish as promptly as practicable to Purchaser all  information (financial or otherwise) Purchaser may reasonably request, in each case, related to the Business,  the Acquired Assets or the Assumed Liabilities, for any purpose related to the Transactions. For the  avoidance of doubt, information obtained pursuant to this Section 5.2(a) shall be subject to the Confidential  Disclosure Agreement. For purposes of this Section 5.2(a), Purchaser shall, and shall use its commercially  reasonable efforts to cause its Representatives to, cooperate reasonably with Seller and its respective  Representatives, and shall use its commercially reasonable efforts to minimize any disruption to the  Business.  (b) From and after the Closing for a period of three (3) years following the Closing  Date (or, if later, the confirmation of the Chapter 11 plan) (the “Preservation Period”), Purchaser will  provide Seller and its advisors with reasonable access, during normal business hours upon reasonable  advance notice, to the books and records, including work papers, schedules, memoranda, Tax Returns, Tax  schedules, Tax rulings, and other documents (for the purpose of examining and copying) relating to the  Acquired Assets or the Assumed Liabilities with respect to periods or occurrences prior to the Closing and  reasonable access, during normal business hours and upon reasonable advance notice, to employees,  officers, advisors and accountants of Purchaser (solely for the purpose of better understanding such books  and records), in each case, for purposes relating to the Chapter 11 Case, the wind-down of the operations  of Seller and its estate, actions to which Seller is a party (other than in connection with any litigation or  dispute with Purchaser), insurance claims, Tax payments, returns or audits, the functions of any trusts  established under a Chapter 11 plan of Seller or any other successors of Seller. For purposes of this Section  

 

  37  5.2(b), references to “Seller” shall be construed, where applicable, to include any liquidating trust, plan  administrator, or comparable Person or body bearing responsibility for the administration and wind-down  of Seller’s operations, estates and Chapter 11 Case. In the event Purchaser wishes to destroy such books  and records during the Preservation Period, Purchaser shall first provide ten (10) Business Days’ prior  written notice to Seller, and Seller shall have the right, at its option and expense, to take possession of such  records within ten (10) Business Days after notice thereof.  Section 5.3. Approvals and Consents; Cooperation; Notification.  (a) Subject to the terms and conditions of this Agreement (including Section 5.14),  each party shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause  to be done, all things necessary, proper or advisable under applicable Law to consummate the Transactions  as soon as practicable after the date hereof, including (i) preparing and filing or otherwise providing, in  consultation with the other party and as promptly as practicable and advisable after the date hereof, all  documentation to effect all necessary applications, notices, petitions, filings, and other documents and to  obtain as promptly as practicable all waiting period expirations or terminations, consents, clearances,  waivers, licenses, orders, registrations, approvals, permits, and authorizations necessary or advisable to be  obtained from any third party or any Governmental Entity in order to consummate the Transactions, and  (ii) taking all steps as may be necessary, subject to the limitations in this Section 5.3, to obtain all such  waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits,  authorizations, orders and approvals from any third party or any Governmental Entity. In furtherance and  not in limitation of the foregoing, each party agrees to make all necessary filings, if any, as promptly as  practicable after the date hereof, and to supply as promptly as practicable and advisable any additional  information and documentary materials that may be requested under any Antitrust Laws. Notwithstanding  anything to the contrary in this Agreement, none of the parties shall be required to, and Seller may not,  without the prior written consent of Purchaser, become subject to, consent to or offer or agree to, or  otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement  or order to (A) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets,  business or portion of business of Seller, Purchaser or any Subsidiary of any of the foregoing, (B) conduct,  restrict, operate, invest or otherwise change the assets, the business or portion of the business of Seller,  Purchaser or any Subsidiary of any of the foregoing in any manner or (C) impose any restriction,  requirement or limitation on the operation of the business or portion of the business of Seller, Purchaser or  any Subsidiary of any of the foregoing; provided that if requested by Purchaser, Seller will become subject  to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement,  condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation,  understanding, agreement or order is only binding on such entity in the event the Closing occurs.  (b) Purchaser shall have the principal responsibility for devising and implementing the  strategy with respect to obtaining any necessary antitrust or competition clearances, shall take the lead in  all meetings and communications with any Governmental Entity relating to Antitrust Laws and shall have  the right to direct all matters with any Governmental Authority relating to Antitrust Laws consistent with  its obligations hereunder. In furtherance and not in limitation of the foregoing, each of the parties shall, in  connection with and without limiting the efforts referenced in Section 5.3(a), (i) cooperate in all respects  and consult with the other party in connection with any filing or submission and in connection with any  investigation or other inquiry, including any proceeding initiated by a private party, including by allowing  the other party to have a reasonable opportunity to review in advance and comment on drafts of filings and  submissions and reasonably considering in good faith comments of the other party and providing the other  party with copies of filings and submissions, (ii) promptly inform the other party of any communication  received by such party from, or given by such party to, the Antitrust Division of the Department of Justice  (the “DOJ”), the Federal Trade Commission (the “FTC”) or any other Governmental Entity, by promptly  providing copies to the other party of any such written communications, and of any material communication  

 

  38  received or given in connection with any proceeding by a private party, in each case regarding any of the  Transactions and (iii) permit the other party to review in advance any communication that it gives to, and  consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ,  the FTC or any other Governmental Entity, or, in connection with any proceeding by a private party, with  any other Person, and to the extent permitted by the DOJ, the FTC or other applicable Governmental Entity  or other Person, give the other party the opportunity to attend and participate in any in-person meetings,  substantive telephone calls or conferences with the DOJ, the FTC or other Governmental Entity or other  Person; provided, however, that materials required to be provided pursuant to the foregoing clauses (i)-(iii)  may be redacted (A) to remove references concerning the valuation of any of the parties or any of their  respective Subsidiaries, (B) as necessary to comply with contractual arrangements and (C) as necessary to  address reasonable privilege or confidentiality concerns; provided, further, that any of the parties may, as  each deems advisable and necessary, reasonably designate any competitively sensitive material provided to  the other under this Section 5.3(b) as “Outside Counsel Only Material” and materials so designated shall  only be provided to each party’s outside counsel.   (c) In connection with and without limiting the foregoing, Seller shall give any notices  to third parties required under the Assigned Contracts, and Seller shall use reasonable best efforts to obtain  third-party consents to any Assigned Contracts that are set forth on Schedule 1.1(c) or are otherwise  required in connection with the Acquisition, which consents shall not, in any event, include any consent the  need for which is obviated by the Sale Order or otherwise by the provisions of the Bankruptcy Code.  (d) Each party shall give prompt notice to the other party (i) of any notice or other  communication from any Governmental Entity in connection with this Agreement or the Acquisition, or  from any Person alleging that the consent of such Person is or may be required in connection with the  Acquisition, (ii) of any legal proceeding commenced or, to the knowledge of such party, threatened against  it or any of its Affiliates or otherwise relating to, involving or affecting such party or any of its Affiliates,  in each case in connection with, arising from or otherwise relating to the Acquisition, (iii) in the case of  Seller, of any material written correspondence to or from the FDA or any other Regulatory Authority with  respect to (A) the receipt of any FDA 483 observations or substantially equivalent notices involving any  facility of Seller or any third party engaged by Seller in the manufacture of the Product, (B) the recall,  correction, removal, market withdrawal or replacement of the Product, (C) a change in the marketing  classification or a change in the labelling of the Product, the effect of which would reasonably be expected  to be material to Seller or the conduct of the Business, (D) a non-substantial equivalence determination or  denial of market approval by any Governmental Entity of the Product, (E) the mandatory or voluntary  termination, enjoinment or suspension of the testing, manufacturing, marketing, export, import, or  distribution of the Product or (F) a non-coverage determination by the Centers for Medicare and Medicaid  Services or any other third-party payor with respect to the Product, the effect of which would reasonably  be expected to be material to Seller or the conduct of the Business, and (iv) upon becoming aware of the  occurrence or impending occurrence of any event or circumstance that would reasonably be expected to  have, individually or in the aggregate, a Material Adverse Effect or which would reasonably be expected  to prevent or materially delay or impede the consummation of the Acquisition; provided, however, that the  delivery of any notice pursuant to this Section 5.3(d) shall not cure any breach of any representation or  warranty requiring disclosure of such matter prior to the date hereof or otherwise limit or affect the remedies  available hereunder to any party.  (e) Notwithstanding the foregoing, the obligations of the parties to obtain any consent,  approval or waiver from the Bankruptcy Court shall be governed exclusively by Section 5.6, Section 5.7,  Section 5.8 and Section 5.9.  Section 5.4. Further Assurances. In addition to the provisions of this Agreement, from time to  time after the Closing Date, Seller and Purchaser shall use reasonable best efforts to execute and deliver  

 

  39  such other instruments of conveyance, transfer or assumption, as the case may be, and take such other  actions as may be reasonably requested to implement more effectively the conveyance and transfer of the  Acquired Assets to Purchaser and the assumption of the Assumed Liabilities by Purchaser and otherwise  to effect the purposes of this Agreement and the Transactions. In furtherance and not in limitation of the  foregoing if, following the Closing, Seller (x) receives or becomes aware that it holds any asset, property  or right which constitutes an Acquired Asset, then Seller shall transfer such asset, property or right to  Purchaser or, as applicable, one or more designees of Purchaser as promptly as practicable after the Closing  for no additional consideration, and pending such conveyance the parties shall reasonably cooperate with  each other to provide Purchaser with all of the benefits of use of such asset, property or right and (y) receives  any payment on accounts receivable included in the Acquired Assets, Seller shall hold such payment in  trust and promptly (and in any event within two (2) Business Days) pay the amount thereof to Purchaser.  If, following the Closing, Purchaser receives or becomes aware that it holds any asset, property or right  which constitutes an Excluded Asset, then Purchaser shall transfer such asset, property or right to Seller as  promptly as practicable for no additional consideration, and pending such conveyance the parties shall  reasonably cooperate with each other to provide Seller with all of the benefits of use of such asset, property  or right.  Section 5.5. Assets Held by Other Persons. In furtherance and not in limitation of Seller’s  obligations and Purchaser’s rights under Section 1.1, to the extent that any Person other than Seller owns,  controls, possesses or otherwise has any rights to any assets or rights that are Primarily Related to the  Product or the Business (including any material Regulatory Documentation) (collectively, “Business  Assets”), Seller shall, no later than immediately prior to the Closing, obtain the full and exclusive rights to  any Business Assets that constitute Regulatory Documentation (other than immaterial correspondence by  or to Seller and not to or from any Regulatory Authority) and shall usually commercially reasonable efforts  to obtain the full and exclusive rights to any other Business Assets, and at the Closing Seller shall (or with  respect to Business Assets other than Regulatory Documentation, use commercially reasonable efforts to)  sell, assign, transfer, convey and deliver, or cause (or with respect to Business Assets other than Regulatory  Documentation, use commercially reasonable efforts to cause) to be sold, assigned, transferred, conveyed  and delivered, the Business Assets to Purchaser free and clear of all Encumbrances of any and every kind,  nature and description, other than Permitted Post-Closing Encumbrances.  Section 5.6. The Sale Motion. Seller shall file a motion or motions with the Bankruptcy Court  within three (3) days of the execution and delivery of this Agreement, or as otherwise agreed upon by the  parties, seeking the following relief: (a) approval of the sale of the Acquired Assets; (b) approval of  Purchaser as the “stalking horse” bidder for the Acquired Assets pursuant to the terms of this Agreement;  (c) approval of the Bidding Procedures, Break-Up Fee, Expense Reimbursement Amount and bid and other  related protections (the “Sale Motion”) in form and substance acceptable to Purchaser in its sole discretion.  Seller shall use its best efforts to cause the Bankruptcy Court to enter the Bidding Procedures Order in the  form of Exhibit C, not later than November 21, 2022. Seller shall use its best efforts to obtain entry of the  Sale Order (provided Purchaser is the Successful Bidder) in form and substance acceptable to Purchaser in  its sole discretion as more fully set forth in Exhibit D within two (2) Business Days after Purchaser is  determined to be the Successful Bidder.  Section 5.7. Cooperation with Respect to Bankruptcy Court Approvals. Purchaser shall take  such actions as are reasonably requested by Seller to assist in obtaining entry by the Bankruptcy Court of  the Bidding Procedures Order and the Sale Order.  Section 5.8. Non-Solicitation of Stalking Horse Bidders. Seller shall not, and shall cause its  Representatives, Affiliates, and its Affiliates’ Representatives not to solicit, negotiate or discuss with any  Person (and Seller shall, and shall cause its Representatives, Affiliates and its Affiliates’ Representatives,  to cease immediately any such ongoing activity), or enter into any agreement or understanding with respect  

 

  40  to, or approve or recommend, or knowingly facilitate, any sale, transfer or disposition, directly or indirectly,  whether by means of an asset sale or otherwise, of the Acquired Assets as a replacement or alternative  stalking horse bidder to Purchaser (an “Alternative Stalking Horse Transaction”).  Section 5.9. Bankruptcy Court Filings. Seller shall consult with Purchaser with respect to, and  Purchaser shall have the right to approve in its sole and absolute discretion, the proposed Bidding  Procedures Order and the Sale Order prior to the presentation of such Orders to the Bankruptcy Court.  Seller shall consult with Purchaser with respect to any other pleadings or proposed Orders to be presented  to the Bankruptcy Court relating to the Transactions, and the bankruptcy proceedings in connection  therewith, and provide Purchaser with copies of applications, pleadings, notices, proposed Orders and other  documents to be filed by Seller in the Chapter 11 Case that relate in any way to this Agreement, the  Acquisition, the Bidding Procedures, the Bidding Procedures Order or the Sale Order prior to the making  of any such filing with or submission to the Bankruptcy Court.  Section 5.10. Not a Back Up Bidder. The Bidding Procedures shall exclude Purchaser from any  obligation to act as a Backup Bidder following the Auction (if any) in the event that Purchaser is not selected  as the Successful Bidder. Notwithstanding the foregoing, Purchaser has the unilateral right to elect to serve  as the Backup Bidder in its sole discretion.  Section 5.11. Employee Matters. Neither Purchaser nor any Affiliate of Purchaser is obligated  to hire any Business Employee or any other employee of Seller, but shall have the right to offer employment  or a consulting or independent contractor engagement to any Business Employee. Seller shall provide  Purchaser and its Affiliates reasonable access to the personnel records and personnel files of the Business  Employees and shall provide such other information regarding the Business Employees as Purchaser may  reasonably request prior to the Closing Date. Purchaser and its Affiliates may, in their sole discretion,  provide an offer of employment or engagement as a consultant or independent contractor to any of the  Business Employees (the employees identified to Seller by Purchaser to receive such offers, the “Offer  Employees”), such offer to be made no more than three (3) Business Days following the Auction. Each  offer of employment or engagement shall provide that employment or engagement with Purchaser or its  Affiliate shall commence effective as of the Closing, subject to the Offer Employee’s continued  employment with Seller through the Closing and conditioned upon the Closing and including such other  terms and conditions as determined by Purchaser or its applicable Affiliate. Each Offer Employee who  accepts the offer of employment or engagement delivered pursuant to this Section 5.11 shall be deemed a  “Transferred Employee” as of the Closing. Seller shall cooperate with (including taking all actions  reasonably requested by) Purchaser and its Affiliates with respect to the offer process described in this  Section 5.11 within the time periods reasonably requested by Purchaser, including facilitating Purchaser’s  interaction and offer of employment or engagement with Offer Employees no later than three (3) Business  Days following the date hereof. Seller agrees not to interfere with Purchaser’s or its Affiliates’ offers of  employment or engagement in this Section 5.11 and agrees not make any statement (orally or in writing),  or engage in any conduct, that has the purpose or effect to discourage any Offer Employee from considering  or accepting such offer of employment or engagement by Purchaser or any of its Affiliates. Immediately as  of the Closing, the Transferred Employees (unless such employees accept an offer of engagement as a  consultant or independent contractor and remains an employee of Seller) shall cease to actively participate  in or accrue further benefits under any Benefit Plan. Seller shall be responsible for complying with Worker  Adjustment and Retraining Notification Act of 1988 and any similar Laws in connection with this  Agreement and the Transactions. Notwithstanding anything to the contrary in this Section 5.11, and without  limiting the generality of Section 9.13, no Person (including any Business Employee) other than Purchaser  or Seller shall have any right to enforce the provisions of this Section 5.11.  

 

  41  Section 5.12. Seller Confidentiality Agreements; Post-Closing Confidentiality.  (a) Seller and Purchaser hereby agree that the Confidential Disclosure Agreement  shall terminate, and no party shall have any further obligations thereunder, effective concurrently with the  Closing, other than Purchaser’s obligations with respect to the confidentiality and non-use of confidential  information exclusively related to the Excluded Assets and the Excluded Liabilities.  (b) Effective at the Closing, Seller hereby assigns to Purchaser the assignable rights  under Seller Confidentiality Agreements to enforce the non-use, non-disclosure and return or destruction  of “Confidential Information” (as such term is defined in Seller Confidentiality Agreements) to the extent  related to the Business, the Acquired Assets and the Assumed Liabilities and the non-solicitation provisions  with respect to the Transferred Employees. To the extent that such rights are not assignable, Seller shall  enforce, on Purchaser’s behalf and at Purchaser’s direction and sole expense, all such rights.  (c) Seller shall not, and shall cause its controlled Affiliates and its directors and  officers not to, disclose to any Person other than the directors, officers, employees and authorized  representatives of Purchaser and its Affiliates, or use or otherwise exploit for their benefit, any Confidential  Information, except (i) pursuant to any Order, as required in any Action or as otherwise required by  applicable Law, (ii) to enforce Seller’s rights and remedies under this Agreement or (iii) as reasonably  required in connection with the Chapter 11 Case; provided, however, that in the event disclosure is required  by applicable Law or in connection with the Chapter 11 Case, Seller shall, to the extent reasonably possible,  provide Purchaser with prompt notice of such requirement prior to making any disclosure so that Purchaser  may seek at its own cost and expense an appropriate protective order. “Confidential Information” shall  mean any proprietary or confidential information to the extent related to the Business, the Acquired Assets,  the Assumed Liabilities or Purchaser or any of its Affiliates, excluding any information that (x) is (as of the  Closing Date) or becomes generally available to the public other than as a result of a breach of this Section  5.12(c) or (y) becomes available to Seller, its Affiliates or its directors and officers after the Closing Date  on a non-confidential basis from a source other than Purchaser or its Affiliates, provided that such source  is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of  confidentiality to Purchaser or their Affiliates or any other Person with respect to such information.  Section 5.13. Use of Names and Marks. Purchaser and its Affiliates acknowledge and agree that,  notwithstanding the transfer of the Seller Intellectual Property included in the Acquired Assets, (a) Seller  will continue using its current corporate names, and (b) Seller shall be entitled to refer to names and marks  included in the Acquired Assets in filings with Governmental Entities and for factual or historical reference.  Section 5.14. Permits . As promptly as practicable after the Closing, Seller and Purchaser shall  file with each applicable Governmental Entity the notices and information required pursuant to any  applicable Law to transfer the Permits included in the Acquired Assets from Seller to Purchaser. The parties  also agree to use all commercially reasonable efforts to take any and all other actions required by any  Governmental Entity to effect the transfer of the Permits included in the Acquired Assets from Seller to  Purchaser.  Section 5.15. Reporting. Seller shall: (a) deliver to Purchaser, substantially contemporaneously  with its delivery to the administrative agent under the DIP Facility, all disclosures, including, but not limited  to all weekly cash-flow, variance and similar financial reporting required under the DIP Facility and (b)  deliver to Purchaser such additional financial and other information with respect to the Business and the  Seller, and on such periodic basis, as may reasonably be requested by Purchaser.  Section 5.16. Additional Actions. Neither Seller nor Purchaser will file any pleading or take any  other action in the Bankruptcy Court with respect to this Agreement or the consummation of the  

 

  42  Transactions that is inconsistent with performing and carrying out the provisions of this Agreement in  accordance with the terms and subject to the conditions herein; provided, however, that nothing contained  in the foregoing will be construed to limit in any way Purchaser’s rights under this Agreement, or to limit  Purchaser’s or Seller’s rights to advocate for the approval of this Agreement and against any Alternative  Stalking Horse Transaction; notwithstanding the foregoing, Purchaser hereby agrees and acknowledges that  this Agreement and the Transactions are subject to Seller’s right and ability to solicit, negotiate, discuss,  and consider higher or otherwise better competing bids with respect to the Business, in each case in  accordance with the Bidding Procedures Order following its entry by the Bankruptcy Court.  Section 5.17. Restrictive Covenants.  (a) From and after the Closing through the last day of the Non-Competition Period,  Seller shall not, and shall cause its Affiliates not to, either alone or in conjunction with others, directly or  indirectly, (i) engage in or assist other Persons in engaging in any Competing Business anywhere in the  world, (ii) have an interest in any Person that engages directly or indirectly in any Competing Business in  any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant  or (iii) make any negative, derogatory or disparaging statements or communications regarding Purchaser,  the Business, or the Affiliates or Representatives of Purchaser. For purposes of this Section 5.17(a), (1)  “Competing Business” means the development, manufacture, commercialization, sale, or other Exploitation  of any compound, product candidate or product that treats or is intended to neutralize, abrogate or reverse  the antiplatelet activity of ticagrelor, including any anti-ticagrelor antibody or antibody fragment, or  otherwise competes, directly or indirectly, or is reasonably likely to compete, directly or indirectly, with  the Product or the grant to any third party of any right to do any of the foregoing and (2) “Non-Competition  Period” means the period commencing as of the Closing and ending on the date that is the fifth (5th)  anniversary of the Closing Date. Notwithstanding anything in this Section 5.17(a) to the contrary, (x) the  restrictive covenants in this Section 5.17(a) shall in no way prevent Seller from acquiring not more than  1% of the outstanding equity securities of any company listed on a national securities exchange engaged in  a Competing Business solely as a passive investment and (y) in the event of an acquisition of Seller  (including by merger, consolidation or sale of stock) by, or the sale or transfer of all or substantially all of  the assets of Seller to, a third party that is not an Affiliate of Seller, nothing in this Agreement or any  Ancillary Document shall restrict the acquiring party or its Affiliates, other than Seller and Seller’s  controlled Affiliates, from pursuing or engaging in the Competing Business if such acquiring party or its  Affiliates engaged in the Competing Business prior to the completion of such transaction; provided,  however, that (A) all such acquiring party’s or its Affiliates’ activities related to the Competing Business  shall be kept separate from the activities of Seller and Seller’s controlled Affiliates and (B) such acquiring  party or its Affiliates shall implement procedures customary in the industry to ensure that employees of  Seller or any of its controlled Affiliates who had access to or knowledge of the Acquired Assets are not  utilized by such acquiring party or its Affiliates in such Competing Business.  (b) During the period commencing on the Closing Date and ending on the third (3rd)  anniversary of the Closing Date (the “Non-Solicitation Period”), Seller shall not, and shall cause its  controlled Affiliates to not, directly or indirectly, either individually or acting in concert with another Person  or Persons,   (i) request, induce or attempt to influence any distributor, supplier, vendor,  licensor, licensee, sales representative or customer of goods or services of the Business to curtail, cancel  or refrain from maintaining or increasing the amount or type of business such Person is currently  transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its  pricing or other terms with the Business, or otherwise make any negative, derogatory or disparaging  statements or communications regarding Purchaser, the Business, or the Affiliates or Representatives of  Purchaser.   

 

  43  (ii) solicit or induce any individual who is or was a Business Employee to  terminate his or her employment with Purchaser or any of its Affiliates or offer employment to or hire  or otherwise engage any such individual, whether as an independent contractor, consultant or otherwise  (provided that this Section 5.17(b)(ii) shall not restrict Seller from soliciting, hiring or otherwise  recruiting any Business Employee who at the time of such solicitation, hiring or recruitment (A) is not  an employee of Purchaser or its Affiliates and (B) either voluntarily terminated his or her employment  with Purchaser or its Affiliates or was terminated involuntarily by Purchaser or its Affiliates at least six  (6) months prior to such solicitation, hiring and recruitment); or  (iii) influence or attempt to influence any person who is an employee of the  Business during the Non-Solicitation Period to terminate his or her employment or engagement with  Purchaser.  (c) Seller acknowledges and agrees that the provisions of this Section 5.17 are  necessary and reasonable to protect Purchaser in the conduct of its business and are a material inducement  to Purchaser’s execution and delivery of this Agreement and its willingness to enter into the Transactions.  The parties recognize that the Laws and public policies of various jurisdictions may differ as to the validity  and enforceability of covenants similar to those set forth in this Section 5.17. The parties agree that any  court or arbitral authority is expressly authorized to modify any unenforceable provision of this Section  5.17 instead of severing the unenforceable provision from this Section 5.17 in its entirety, whether by  rewriting the offending provision, adding additional language to this Section 5.17, or by making any other  modifications it deems warranted to carry out the intent and agreement of the parties as embodied in this  Section 5.17. It is the intention of the parties that the provisions of this Section 5.17 be enforced to the  fullest extent permissible under the Laws and policies of each jurisdiction in which enforcement may be  sought and that the unenforceability (or the modification to conform to such Laws or policies) of any  provision of this Section 5.17 shall not render unenforceable, or impair, the remainder of the provisions of  Section 5.17 or any other provision in this Agreement. Accordingly, if any provision of this Section 5.17  shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall be deemed to  apply only with respect to the operation of such provision in the particular jurisdiction in which such  determination is made and not with respect to any other provision or jurisdiction.  (d) Seller acknowledges and agrees that a breach or threatened breach of this Section  5.17 will cause irreparable damage and substantial loss to Purchaser and its Affiliates, the exact amount of  which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate.  Accordingly, Seller acknowledges and agrees that in the event of a breach or threatened breach of this  Section 5.17, Purchaser shall be entitled to equitable relief, including injunctive relief, in addition to any  and all other rights and remedies that may be available to it in respect of such breach under any applicable  Law or under this Agreement, without posting bond or other security and without a showing of the  inadequacy of monetary damages as a remedy.  (e) The Non-Competition Period and the Non-Solicitation Period shall automatically  be extended for any period of time during which the Seller is not in compliance with the covenants and  agreements set forth in this Section 5.17.  Section 5.18. Transitional Support; Phase 3 Trial Sponsorship. In furtherance and not in  limitation of Seller’s obligations under the Transition Services Agreement and otherwise under this  Agreement, from and after the date hereof until the later of the “Term” (as defined in the Transition Services  Agreement) or the first anniversary of the Closing Date, to the extent permitted by Law and subject in all  cases to the last sentence of Section 5.1(b) Seller shall use commercially reasonable efforts to cause (or,  with respect to the period prior to the Closing, to prepare for), and shall reasonably cooperate with Purchaser  with respect to, the transition of the Acquired Assets and the Business from Seller to Purchaser as  

 

  44  contemplated herein, including (a) coordinating with Purchaser to ensure continuity of the development  program with respect to the Product, including with respect to the Business Employees and Seller’s  laboratory services and operations, (b) facilitating a prompt transition to Purchaser or its designated  Affiliates of the Phase 3 Trial sponsorship, study sites and investigator and clinical development  relationships on such date or dates on or after the Closing Date as specified by Purchaser in writing, (c) if  and to the extent requested by Purchaser (and without duplication of any amounts payable under the  Transition Services Agreement), entering into a sublease or other arrangement to be effective upon the  Closing whereby Purchaser would be entitled to use a portion of Seller’s facilities located in Malvern, PA  (or any replacement facilities, including Seller’s laboratory and related facilities used in the Business) and  would reimburse Seller for Purchaser’s pro rata share of costs associated with such use by Purchaser and  otherwise, (d) communicating with licensors, licensees, suppliers, vendors, contractors, employees and  other third parties as reasonably requested by Purchaser and (e) assisting Purchaser as reasonably requested  in connection with all of the foregoing.   ARTICLE VI  CONDITIONS PRECEDENT  Section 6.1. Conditions Precedent to Obligation of Seller and Purchaser. The respective  obligations of each party to effect the Transactions shall be subject to the satisfaction at or prior to the  Closing of the following conditions:  (a) Approvals. Any waiting period (and extensions thereof) applicable to the  Acquisition under any Antitrust Law shall have expired or been terminated and any other required  approvals, consents or clearances under any Antitrust Laws shall have been obtained; and  (b) No Orders. No Governmental Entity of competent jurisdiction shall have notified  either Party that any investigation or review of the Transactions is ongoing or enacted, enforced or entered  any Law and no Order (whether temporary, preliminary or permanent) shall be in effect on the Closing  Date that has the effect of making the Transactions illegal or otherwise prohibiting the Closing.  Section 6.2. Conditions Precedent to Obligation of Seller. The obligations of Seller to effect the  Transactions shall be subject to the satisfaction or waiver (to the extent permitted by applicable Law) by  Seller at or prior to the Closing of the following conditions:  (a) Representations and Warranties. The representations and warranties of Purchaser  contained in this Agreement shall be true and correct (disregarding any exception or qualification in such  representations and warranties relating to “material” or “materiality”) as of the date hereof and as of the  Closing Date (except to the extent such representations and warranties speak as of another date (other than  the date of this Agreement), in which case such representations and warranties shall be true and correct as  of such other date), except where the failure of such representations and warranties to be so true and correct  (disregarding any exception or qualification in such representations and warranties relating to “material” or  “materiality”) has not and would not reasonably be expected to, individually or in the aggregate, materially  impair or materially delay Purchaser’s ability to perform its obligations under this Agreement or to  consummate the Transactions;  (b) Covenants. The covenants and obligations of Purchaser to be performed or  complied with at or prior to the Closing pursuant to this Agreement shall have been duly performed and  complied with in all material respects;  (c) Sale Order. The Bankruptcy Court shall have entered the Sale Order and such  Order shall not have been stayed as of the Closing Date, stayed pending appeal, reversed or vacated; and  

 

  45  (d) Officer’s Certificates. Purchaser shall have delivered to Seller a certificate duly  executed by an authorized officer of Purchaser certifying to the effect that the conditions set forth in Section  6.2(a) and Section 6.2(b) have been satisfied.  The foregoing conditions are for the benefit of Seller only and accordingly Seller will be entitled to waive  compliance with any such conditions if they see fit to do so, without prejudice to rights and remedies at  Law and in equity and also without prejudice to any rights of termination or otherwise in the event of the  failure to fulfill any other conditions in whole or in part.  Section 6.3. Conditions Precedent to Obligation of Purchaser. The obligations of Purchaser to  effect the Transactions shall be subject to the satisfaction or waiver (to the extent permitted by applicable  Law) by Purchaser at or prior to the Closing of the following conditions:  (a) Representations and Warranties. (i) The representations and warranties of Seller  shall be true and correct in all material respects (disregarding any exception or qualification in such  representations and warranties relating to “material,” “materiality” or “Material Adverse Effect”) as of the  date hereof and as of the Closing Date (except to the extent such representations and warranties speak as of  another date (other than the date of this Agreement), in which case such representations and warranties  shall be true and correct as of such other date);  (b) Covenants. The covenants and obligations of Seller to be performed or complied  with at or prior to the Closing pursuant to this Agreement shall have been duly performed and complied  with in all material respects;  (c) Assigned Contracts. Except as provided in Section 1.5(e), Seller shall have (i)  obtained the consents and waivers set forth on Schedule 6.3(c), which consents shall not, in any event,  include any consent the need for which is obviated by the Sale Order or otherwise by the provisions of the  Bankruptcy Code, and (ii) assigned to Purchaser the Assigned Contracts set forth on Schedule 1.1(c),  subject to Purchaser’s provisions of adequate assurance of future performance as required under Section  365 of the Bankruptcy Code and, except for the express contractual rights of the counterparties to the  Assigned Contracts, no Person (other than Purchaser) will have any ownership or other interest in any  Acquired Asset or otherwise with respect to the Business;  (d) Actions. No Action shall have been commenced against Purchaser or Seller that  would prevent the Closing or that would otherwise materially and adversely affect Purchaser’s ability to  operate the Business following the Closing. No injunction or restraining order shall have been issued by  any Governmental Authority, and be in effect, which restrains or prohibits any Transaction;  (e) Sale Order. The Bankruptcy Court shall have entered the Sale Order, and such  Order (i) shall not have been stayed as of the Closing Date, stayed pending appeal, reversed or vacated and  (ii) shall not have been amended, supplemented or otherwise modified in any manner materially adverse to  Purchaser;  (f) Officer’s Certificates. Seller shall have delivered to Purchaser a certificate duly  executed by an executive officer of Seller certifying to the effect that the conditions set forth in Section  6.3(a), Section 6.3(b), and Section 6.3(g) have been satisfied;  (g) Material Adverse Effect. From the date of this Agreement, there shall not have  occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in  the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse  Effect;   

 

  46  (h) Key Employees. The Required Key Employees shall have accepted and not  rescinded offers of employment or engagement as a consultant or independent contractor and shall  constitute Transferred Employees as of the Closing; and   (i) Contract Amendment. A binding term sheet with respect to, or an amendment of,  the Contract set forth on Schedule 6.3(i), with such terms and conditions that are acceptable to Purchaser  in its sole and absolute discretion, shall have been duly executed by the counterparty thereto, which, upon  countersignature by Purchaser, shall be effective at or prior to Closing.  The foregoing conditions are for the benefit of Purchaser only and accordingly Purchaser will be entitled  to waive compliance with any such conditions if they see fit to do so, without prejudice to any rights and  remedies at Law and in equity and also without prejudice to any of rights of termination or otherwise in the  event of the failure to fulfill any other conditions in whole or in part.  ARTICLE VII  INDEMNIFICATION  Section 7.1. Indemnification.  (a) Survival. All representations and warranties contained in this Agreement, any  Ancillary Document or in any certificate or instrument delivered by or on behalf of Seller, any Affiliate of  Seller or Purchaser pursuant to this Agreement, including the certificates delivered at Closing pursuant to  Section 6.2(d) and Section 6.3(f), shall survive the Closing and shall continue until 11:59 p.m. Eastern Time  on the date that is eighteen (18) months following the Closing Date, at which time they shall expire.  Notwithstanding the foregoing, each of the representations and warranties in Section 3.1 (Qualification,  Organization, Subsidiaries), Section 3.2 (Authority of Seller), Section 3.6 (Title to Property; Sufficiency of  Assets), Section 3.8 (Brokers or Finders), Section 3.10 (Intellectual Property), Section 3.19 (Taxes), Section  4.1 (Qualification; Organization), Section 4.2 (Authority of Purchaser) and Section 4.5 (Brokers or Finders)  (collectively, the “Fundamental Reps”) shall survive the Closing until 11:59 p.m. Eastern Time on the date  that is the later of (i) the seventh anniversary of the Closing Date or (ii) 60 days after the expiration of all  applicable statutes or periods of limitations (giving effect to any waiver, mitigation or extension thereof)  (which, for the avoidance of doubt, does not mean the statute of limitations applicable to a claim for breach  of contract). All covenants, agreements or obligations contained in this Agreement, any Ancillary  Document or in any certificate or instrument delivered by or on behalf of Seller, any Affiliate of Seller or  Purchaser pursuant to this Agreement shall survive the Closing indefinitely or for the period explicitly  specified therein. Notwithstanding anything to the contrary set forth in this Agreement, any claim for  indemnity asserted in good faith and in writing by notice from the non-breaching party to the breaching  party prior to the termination of the applicable survival period set forth above and, for the avoidance of  doubt, regardless of whether any Actions related to such claim has then been filed, shall not thereafter be  barred by the expiration of the relevant representation, warranty or covenant and shall survive until finally  resolved by Actions or otherwise in accordance with this Agreement or until the maximum time allowed  by Law.  (b) Indemnification by Seller. Following the Closing, Seller shall indemnify, defend  and hold harmless Purchaser and its Affiliates, and their respective Representatives, equity holders,  successors and permitted assigns (collectively, “Purchaser Indemnitees”) from and against, and compensate  and reimburse Purchaser Indemnitees for, any and all Losses actually incurred or suffered by any Purchaser  Indemnitee arising out of or related to:  (i) any inaccuracy in or any breach by Seller or any Affiliate of Seller of any  of the representations or warranties made by Seller or any Affiliate of Seller in ARTICLE III or in any  

 

  47  certificate or instrument delivered by or on behalf of Seller or any Affiliate of Seller pursuant to this  Agreement;  (ii) any failure of Seller or any Affiliate of Seller to perform or any breach by  Seller or any Affiliate of Seller of any of its covenants, agreements or obligations contained in this  Agreement, or in any certificate or instrument delivered by or on behalf of Seller or any Affiliate of  Seller pursuant to this Agreement;  (iii) any Excluded Liability;   (iv) any failure of Seller to pay Periodic Taxes or Transfer Taxes allocated to  Seller under Section 9.1; or  (v) any Taxes required by applicable Law to be withheld from any payment  to Seller made hereunder that are not withheld by Purchaser, but not including penalties, interest or  additions to Tax resulting from Purchaser’s or the applicable withholding agent’s failure to timely  withhold and pay such Taxes.  (c) Indemnification by Purchaser. Following the Closing, Purchaser shall indemnify,  defend and hold harmless Seller and its Affiliates, and their respective Representatives, equity holders,  successors and permitted assigns (collectively, “Seller Indemnitees”) from and against, and compensate  and reimburse Seller Indemnitees for, any and all Losses incurred or suffered by any Seller Indemnitee  arising out of or related to:  (i) any inaccuracy in or any breach by Purchaser or any Affiliate of Purchaser  of any of the representations or warranties made by Purchaser or any Affiliate of Purchaser in ARTICLE  IV or in any certificate or instrument delivered by or on behalf of Purchaser or any Affiliate of Purchaser  pursuant to this Agreement;  (ii) any failure of Purchaser or any Affiliate of Purchaser to perform or any  breach by Purchaser or any Affiliate of Purchaser of any of its covenants, agreements or obligations  contained in this Agreement or in any certificate or instrument delivered by or on behalf of Purchaser  or any Affiliate of Purchaser pursuant to this Agreement;  (iii) any Assumed Liability; or  (iv) any failure of Purchaser to pay Periodic Taxes or Transfer Taxes allocated  to Purchaser under Section 9.1.  Section 7.2. Claim Procedure.  (a) Except as provided in Section 7.2(b) with respect to Third Party Claims, in the  event of a claim made by a Purchaser Indemnitee or a Seller Indemnitee (the “Indemnified Party”), the  Indemnified Party shall give reasonably prompt written notice to the other party (the “Indemnifying Party”),  which notice (an “Indemnification Certificate”) shall describe such Indemnified Party’s claim for  indemnification and the estimated amount, if reasonably practicable, of the claimed Losses; provided,  however, that the failure to give reasonably prompt notice shall not relieve the applicable Indemnifying  Party of its indemnification obligations under this Agreement except to the extent that the Indemnifying  Party is materially and adversely prejudiced by reason of such failure. The Indemnified Party shall be  entitled to payment for the Losses set forth in the Indemnification Certificate pursuant to Section 7.2(c)  unless the Indemnifying Party objects in a written statement to the claim made in the Indemnification  

 

  48  Certificate and delivers such statement to the Indemnified Party prior to the expiration of thirty (30) days  from the Indemnifying Party’s receipt of such Indemnification Certificate. An Indemnifying Party’s failure  to object within such thirty (30) day period to any claim set forth in an Indemnification Certificate shall be  deemed to be the Indemnifying Party’s acceptance of, and waiver of any objections to, such claim. If an  Indemnifying Party shall so object in writing to any claim or claims made in any Indemnification  Certificate, the Indemnifying Party and the Indemnified Party shall attempt in good faith for a period of  twenty (20) days following the Indemnified Party’s receipt of such objection notice to agree upon the  respective rights of the parties with respect to each of such claims. If no such agreement can be reached  after such twenty (20) day period of good faith negotiation, either the Indemnifying Party or the Indemnified  Party may initiate Actions for purposes of having the matter settled in accordance with the terms of this  Agreement.  (b) In the event an Indemnified Party becomes aware of a claim made by a third party  (including any Action commenced or threatened to be commenced by any third party) (each, a “Third Party  Claim”) that such Indemnified Party reasonably believes may result in an indemnification claim pursuant  to Section 7.1, such Indemnified Party shall promptly (and in any event within thirty (30) days after  becoming aware of such Third Party Claim) notify the Indemnifying Party in writing of such Third Party  Claim (such notice, the “Claim Notice”). The Claim Notice shall describe (to the extent known by the  Indemnified Party) the Third Party Claim and provide the estimated amount, if reasonably practicable, of  the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Party in  delivering a Claim Notice shall relieve the Indemnifying Party from any Liability hereunder except to the  extent that the Indemnifying Party is materially and adversely prejudiced by reason of such failure.  Purchaser may, upon written notice thereof to Seller, assume control of the defense of any Third Party  Claim referred to therein (at Seller’s sole cost and expense (which shall be subject to Section 7.3) if Seller  is the Indemnifying Party). If Purchaser does not so assume control of the defense of such Third Party  Claim, Seller shall control the defense of such Third Party Claim, and for the avoidance of doubt all costs  and expenses associated therewith shall constitute Losses subject to indemnification and reimbursement  pursuant and subject to this ARTICLE VII. The Party not controlling the defense of such Third Party Claim  (the “Non-Controlling Party”) may participate therein at its own expense; provided, however, that if the  Indemnifying Party assumes control of the defense of such Third Party Claim and the Indemnifying Party  and the Indemnified Party have materially conflicting interests or different defenses available with respect  to such Third Party Claim that cause the Indemnified Party to hire its own separate counsel with respect to  such Third Party Claim, the reasonable fees and expenses of a counsel to the Indemnified Party shall be  considered “Losses” for purposes of this Agreement. The party controlling the defense of a Third Party  Claim (the “Controlling Party”) shall keep the Non-Controlling Party reasonably advised of the status of  such claim and the defense thereof and shall consider in good faith recommendations made by the Non- Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with  such information as it may have with respect to such Third Party Claim (including copies of any summons,  complaint or other pleading that may have been served on such party and any written claim, demand,  invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and  assist the Controlling Party in the defense of such Third Party Claim; provided that neither the Controlling  Party nor the Non-Controlling Party will be required to furnish any such information that would (in the  reasonable judgment of such party upon advice of counsel) be reasonably likely to (a) waive any privileges,  including the attorney-client privilege, held by such party or any of its Affiliates or (b) breach any duty of  confidentiality owed to any Person (whether such duty arises contractually, by Law or otherwise) or any  Contract with any other Person or violate any applicable Law (provided, that such party shall use  commercially reasonable efforts to obtain any required consents and take such other reasonable action (such  as the entry into a joint defense agreement or other arrangement to avoid loss of attorney-client privilege)  to permit such access). Neither the Indemnified Party nor the Indemnifying Party shall agree to any  settlement of, or the entry of any judgment arising from, any such Third Party Claim without the prior  written consent of the other such party, which consent shall not be unreasonably withheld, conditioned or  

 

  49  delayed; provided, however, that the consent of the Indemnified Party shall not be required with respect to  any such settlement or judgment if the Indemnifying Party agrees in writing to pay or cause to be paid any  amounts payable pursuant to such settlement or judgment and such settlement or judgment includes no  admission of liability by or other obligation on the part of the Indemnified Party and includes a complete  release of the Indemnified Party from further Liability.  (c) Once a Loss is agreed to by the Indemnifying Party or is finally adjudicated or  otherwise finally determined to be payable pursuant to this ARTICLE VII (the “Determination Date”),  subject to Section 7.2(d), the Indemnifying Party shall satisfy its obligations within ten (10) Business Days  of the Determination Date by wire transfer of immediately available funds to an account designated by the  Indemnified Party.  (d) The Purchaser Indemnitees may set off any amount to which they may be entitled  under this Agreement (including this ARTICLE VII) against any amount otherwise payable by Purchaser  or any other Purchaser Indemnitee to Seller or any Affiliate of Seller (including any Milestone Payments).  For the avoidance of doubt, Purchaser may exercise such right of setoff prior to the Determination Date  with respect to any claim under this ARTICLE VII. The exercise of such setoff right in good faith, whether  or not ultimately determined to be justified, will not constitute a breach or event of default under this  Agreement or any other Contract relating to any amount against which the setoff is applied. Neither the  exercise of, nor the failure to exercise, the Purchaser Indemnitees’ rights under this Section 7.2 shall  constitute an election of remedies or limit any Purchaser Indemnitee in any manner in the enforcement of  any other remedies that may be available to it; provided, however, that Purchaser’s exclusive means of  recovery with respect to any claims pursuant to Section 7.1(b)(i) shall be pursuant to the setoff rights set  forth in this Section 7.2(d).  Section 7.3. Limitations on Indemnification.  (a) No Indemnifying Party shall be liable to an Indemnified Party under Section  7.1(b)(i) or Section 7.1(c)(i), as applicable (other than with respect to any inaccuracies in or breaches of a  Fundamental Rep), until the aggregate amount of all Losses sought from the Indemnifying Party under this  ARTICLE VII exceeds $250,000 (the “Deductible”), in which case the Indemnified Party shall be entitled  to indemnification of the Indemnified Party’s Losses in excess of such amount. In no event shall any  Indemnifying Party have Liability for indemnification under Section 7.1(b)(i) or Section 7.1(c)(i), as  applicable (other than with respect to any inaccuracies in or breaches of a Fundamental Rep), for any  amount exceeding, in the aggregate, $10,000,000. In no event shall any Indemnifying Party have Liability  for indemnification under this ARTICLE VII for any amount exceeding, in the aggregate, the Purchase  Price received by or payable to Seller; provided, however, that the limitations on indemnification under this  Section 7.3 shall not apply to Fraud.  (b) For purposes of this ARTICLE VII, all “material,” “Material Adverse Effect” and  similar materiality type qualifications contained in the representations and warranties shall be ignored and  not given any effect, including for purposes of determining (a) the amount of any Losses incurred, (b)  whether or not a breach of a representation or warranty has occurred and (c) whether the Basket has been  surpassed.  (c) The amount of Losses recovered by an Indemnified Party under Section 7.1(b) or  Section 7.1(c), as applicable, shall be reduced by (i) any amounts actually recovered by the Indemnified  Party from a third party in connection with such Third Party Claim and (ii) the amount of any insurance  proceeds paid to the Indemnified Party relating to such claim, in each case ((i) and (ii)), net of the  Indemnified Party’s costs of recovery (including any related premium increases). If any amounts referenced  in the preceding sentence are received after payment by the Indemnifying Party of the full amount otherwise  

 

  50  required to be paid to an Indemnified Party pursuant to this ARTICLE VII, the Indemnified Party shall  repay to the Indemnifying Party, promptly after such receipt, any amount that the Indemnifying Party would  not have had to pay pursuant to this ARTICLE VII had such amounts been received prior to such payment.  Section 7.4. Tax Treatment of Indemnification Payments. All payments made pursuant to this  ARTICLE VII shall be treated as adjustments to the Purchase Price for all Tax purposes, unless otherwise  required by applicable Law.  Section 7.5. Exclusive Remedy. Subject to Section 1.6(a)(ii)(E) and Section 9.14, each party  acknowledges and agrees that, following the Closing, the remedies provided for in this ARTICLE VII shall  be the sole and exclusive remedies for claims and damages available to the Indemnified Parties for breaches  of the representations and warranties in ARTICLE III and ARTICLE IV and any certificate delivered in  connection with this Agreement, except that nothing herein shall limit the Liability of either party for claims  arising from Fraud. This Section 7.5 shall not affect either party’s (or their respective Affiliates’) ability to  exercise any rights or remedies available to such party (or their respective Affiliates) under Section 9.14 or  under any Ancillary Document with respect to claims arising under such Ancillary Document.  Section 7.6. Effect of Investigation. The representations, warranties and covenants of the  Indemnifying Party, and any Indemnified Party’s right to indemnification with respect thereto, shall not be  affected or deemed waived by reason of any investigation made by or on behalf of any Indemnified Party  (including by any of its Representatives) or by reason of the fact that any Indemnified Party or any of its  Representatives knew or should have known that any such representation or warranty is, was or might be  inaccurate or by reason of any Indemnified Party’s waiver of any condition set forth in Section 6.2 or  Section 6.3, as the case may be.  ARTICLE VIII  TERMINATION  Section 8.1. Termination.  (a) This Agreement may be terminated by either Purchaser or Seller in the event that  the Closing has not occurred on or before January 31, 2023, or such later date as may be mutually agreed  in writing by the parties (the “Outside Date”); provided, however, that the right to terminate this Agreement  pursuant to this Section 8.1(a) shall not be available to any party whose failure to materially perform any  of its obligations under this Agreement required to be performed by it at or prior to the Closing results in  the failure of the Closing to occur prior to such date.  (b) This Agreement may also be terminated prior to the Closing:  (i) at any time by the mutual written agreement of Purchaser and Seller;  (ii) by Purchaser, if (x) there shall have been a breach of any of the covenants  or agreements or any of the representations or warranties set forth in this Agreement on the part of Seller  which breach, either individually or in the aggregate with other breaches by Seller, would result in, if  occurring or continuing on the Closing Date, the failure of the conditions set forth in Section 6.3(a) or  Section 6.3(b), as the case may be, or (y) Seller has breached the Bidding Procedures Order or the Sale  Order, which such breach, in each case which is not cured within ten Business Days following written  notice to Seller thereof (and in any event prior to the Outside Date) or which by its nature or timing  cannot be cured within such time period (provided, that Purchaser is not then in material breach of any  of the covenants, agreements, representations or warranties set forth in this Agreement on the part of  Purchaser);  

 

  51  (iii) by Seller, if (x) there shall have been a breach of any of the covenants or  agreements or any of the representations or warranties set forth in this Agreement on the part of  Purchaser which breach, either individually or in the aggregate with other breaches by Purchaser, would  result in, if occurring or continuing on the Closing Date, the failure of the conditions set forth in Section  6.2(a) or Section 6.2(b), as the case may be, or (y) there has been any material breach by Purchaser of  the Bidding Procedures Order or the Sale Order, in each case which is not cured within ten (10) Business  Days following written notice to Purchaser thereof (and in any event prior to the Outside Date) or which  by its nature or timing cannot be cured within such time period (provided, that Seller is not then in  material breach of any of the covenants, agreements, representations or warranties set forth in this  Agreement on the part of Seller);  (iv) by Purchaser, if Seller shall fail to file the Sale Motion with the  Bankruptcy Court within three (3) Business Days following the execution of this Agreement;  (v) by Purchaser, if Seller files a motion requesting, consents to, fails to timely  contest a pleading seeking, or the Bankruptcy Court, sua sponte, orders (A) a conversion of the Chapter  11 Case into a liquidation proceeding under Chapter 7 of the Bankruptcy Code, (B) the dismissal of the  Chapter 11 Case, (C) the appointment of a Chapter 11 trustee or examiner or (D) the termination or  reduction of the exclusivity period described in 11 U.S.C. § 1121(b);  (vi) by Purchaser, if the Bankruptcy Court enters any Order materially  inconsistent with the Bidding Procedures Order, the Sale Order, this Agreement or the Acquisition, each  as determined by Purchaser in its reasonable discretion;  (vii) by either Seller or Purchaser, if a Governmental Entity issues a final, non- appealable ruling or Order permanently prohibiting the Transactions; provided, however, that the right  to terminate this Agreement pursuant to this Section 8.1(b)(vii) shall not be available to any party whose  breach of any of its representations, warranties, covenants or agreements contained herein results in such  ruling or Order;  (viii) by Purchaser, if any creditor of Seller obtains a final and unstayed Order  of the Bankruptcy Court granting relief from the stay to foreclose on any portion of the Acquired Assets;  (ix) by either Seller or Purchaser, if the Auction has occurred and Purchaser is  not the Successful Bidder;  (x) by Purchaser, if the DIP Facility shall have been terminated, the DIP  Lenders shall have refused to advance funds on account of the failure of any condition precedent thereto  or the principal amount of the loans thereunder shall be (or shall be asserted by the lenders thereunder  to be) due and payable at any time on or prior to the Closing; and   (xi) by Purchaser, if the Bankruptcy Court has not entered the Bidding  Procedures Order by November 21, 2022.  For the avoidance of doubt, the parties acknowledge and agree, that in the event that Seller determines that  the last Overbid submitted by Purchaser is higher or otherwise better than all other Qualified Bids as such  Qualified Bids may be amended by an Overbid submitted at the Auction, then within two (2) Business Days  following the conclusion of the Auction, Seller and Purchaser shall enter into an amendment to this  Agreement to reflect Purchaser’s last Overbid.  Section 8.2. Effect of Termination.  

 

  52  (a) Except as otherwise provided in this Section 8.2, in the event of termination of this  Agreement by either party in accordance with Section 8.1, all rights and obligations of the parties under  this Agreement shall terminate without any Liability of any party to the other party, except for Liability for  Fraud or intentional breach of this Agreement prior to such termination. The provisions of Section 1.6(b)(ii),  Section 1.6(b)(iii), Section 5.10, this Section 8.2 and ARTICLE IX (other than Section 9.1 and Section 9.2)  shall expressly survive the termination of this Agreement.  (b) In consideration of Purchaser and its Affiliates having expended considerable time  and expense in connection with this Agreement and the negotiation thereof, and the identification and  quantification of assets to be included in the Acquired Assets, and to compensate Purchaser as a stalking- horse bidder, and regardless of whether or not Purchaser makes any matching or competing bids at the  Auction, in the event that this Agreement is terminated pursuant to Section 8.1 (other than (x) by Purchaser  and Seller pursuant to Section 8.1(b)(i) or (y) by Seller pursuant to Section 8.1(a) or Section 8.1(b)(iii)  (unless at the time of any such termination Purchaser would have been entitled to terminate this  Agreement)), Purchaser shall be entitled to payment by Seller of a break-up fee in an amount equal to  $2,000,000 (the “Break-Up Fee”), which such amount Seller shall pay (or cause to be paid) to Purchaser  upon the consummation of an Alternative Transaction. The Break-Up Fee shall be treated as a superpriority  claim to be paid prior to all unsecured claims and all administrative expense claims in the Chapter 11 Case  under Section 503(b)(1)(A) and Section 507(a)(2) of the Bankruptcy Code, subject only to the superpriority  claims granted in favor of the DIP Lender in an amount not to exceed the amount of the DIP Loan  Commitment (as defined in the interim order authorizing Seller to obtain postpetition financing and related  relief [Chapter 11 Case Docket No. 57] and in any final order thereon). Seller acknowledges and agrees  that (i) the approval of the Break-Up Fee is an integral part of the Transactions; (ii) in the absence of Seller’s  obligation to pay the Break-Up Fee, Purchaser would not have entered into this Agreement; (iii) the entry  of Purchaser into this Agreement is necessary for preservation of the estate of Seller and is beneficial to  Seller because, in Seller’s business judgment, it will enhance Seller’s ability to maximize the value of its  assets for the benefit of its creditors and other stakeholders; (iv) the Break-Up Fee is reasonable in relation  to Purchaser’s costs and efforts and to the magnitude of the Transactions and Purchaser’s lost opportunities  resulting from the time spent pursuing the Transactions; and (v) time is of the essence with respect to the  entry of the Bidding Procedures Order by the Bankruptcy Court, approving, among other things, the process  by which bids may be solicited, including the Bidding Procedures. For the avoidance of doubt, the Break- Up Fee, if payable pursuant to this Section 8.2(b), shall be in addition to the return of the Deposit Funds  and payment of the Expense Reimbursement Amount, in each case, to the extent payable to Purchaser  pursuant to Section 1.6(b)(iii) and Section 8.2(c), respectively.  (c) In consideration of Purchaser and its Affiliates having expended considerable time  and expense in connection with this Agreement and the negotiation thereof, and the identification and  quantification of assets to be included in the Acquired Assets, and to compensate Purchaser as a stalking- horse bidder, and regardless of whether or not Purchaser makes any matching or competing bids at the  Auction, in the event that this Agreement is terminated pursuant to Section 8.1 (other than (x) by Purchaser  and Seller pursuant to Section 8.1(b)(i) or (y) by Seller pursuant to Section 8.1(a) or Section 8.1(b)(iii)  (unless at the time of any such termination Purchaser would have been entitled to terminate this  Agreement)), Purchaser shall be entitled to payment by Seller of the Expense Reimbursement Amount,  which such amount Seller shall pay (or cause to be paid) to Purchaser upon the consummation of an  Alternative Transaction. Seller acknowledges and agrees that (A) the payment of the Expense  Reimbursement Amount is an integral part of the Transactions, (B) in the absence of Seller’s obligation to  make this payment, Purchaser would not have entered into this Agreement, (C) the damages resulting from  termination of this Agreement under circumstances where Purchaser is entitled to the Expense  Reimbursement Amount are uncertain and incapable of accurate calculation and that the delivery of the  Expense Reimbursement Amount to Purchaser is not a penalty, but rather shall constitute a reasonable  amount that will compensate Purchaser in the circumstances where Purchaser is entitled to the reimbursable  

 

  53  expenses for the efforts and resources expended and opportunities forgone while negotiating this Agreement  and in reliance on this Agreement and on the expectation of the consummating of the Transactions, and  that, without these agreements, Purchaser would not enter into this Agreement; (D) time is of the essence  with respect to the payment of the Expense Reimbursement Amount and (E) the Expense Reimbursement  Amount shall, subject to Bankruptcy Court approval, constitute a superpriority claim to be paid prior to all  unsecured claims and all administrative expense claims of Seller’s estate under Sections 503(b)(1)(A) and  507(a)(2) of the Bankruptcy Code, subject only to the superpriority claims granted in favor of the DIP  Lender in an amount not to exceed the amount of the DIP Loan Commitment (as defined in the interim  order authorizing Seller to obtain postpetition financing and related relief [Chapter 11 Case Docket No. 57]  and in any final order thereon). For the avoidance of doubt, the Expense Reimbursement Amount, if payable  pursuant to this Section 8.2(c), shall be in addition to the Deposit Funds and the Break-Up Fee, in each  case, to the extent payable to Purchaser pursuant to Section 1.6(b)(iii) and Section 8.2(b), respectively.  (d) Notwithstanding Section 8.2(a), Purchaser shall maintain the right to receive the  payment of the Break-Up Fee and the Expense Reimbursement Amount (as the case may be) from Seller  as provided in Section 8.2(b) and Section 8.2(c). If this Agreement is terminated by Seller as contemplated  by Section 1.6(b)(ii), (i) Purchaser shall forfeit the Deposit Funds and any interest thereon; (ii) other than  in connection with Fraud on the part of, or an intentional breach of this Agreement by, Purchaser, the receipt  of the Deposit Funds shall be the sole and exclusive remedy available to Seller against Purchaser or any of  its former, current or future equityholders, directors, officers, Affiliates, agents or Representatives with  respect to this Agreement and the Transactions; and (iii) upon receipt by Seller of the Deposit Funds, neither  Purchaser nor any of its former, current or future equityholders, directors, officers, Affiliates, agents or  Representatives shall have any further Liability or obligation relating to or arising out of this Agreement or  the Transactions.  (e) If Seller fails to take any action necessary to cause the delivery of the Break-Up  Fee or the Expense Reimbursement Amount under circumstances where Purchaser is entitled to the Break- Up Fee or the Expense Reimbursement Amount and, in order to obtain such Break-Up Fee or Expense  Reimbursement Amount, Purchaser commences a suit which results in a judgment in favor of Purchaser,  Seller shall pay to Purchaser, in addition to the Break-Up Fee and the Expense Reimbursement Amount, an  amount in cash equal to the costs and expenses (including attorney’s fees) incurred by Purchaser in  connection with such suit, which such amounts shall constitute a superpriority administrative expense  priority claim under Section 503(b)(1)(A) and Section 507(a)(2) of the Bankruptcy Code, subject only to  the superpriority claims granted in favor of the DIP Lender in an amount not to exceed the amount of the  DIP Loan Commitment (as defined in the interim order authorizing Seller to obtain postpetition financing  and related relief [Chapter 11 Case Docket No. 57] and in any final order thereon), and shall be payable as  set forth in Section 8.2(c).  (f) The parties acknowledge that the agreements contained in this Section 8.2 are an  integral part of the Transactions, that the damages resulting from termination of this Agreement under  circumstances where Seller is entitled to the Deposit Funds are uncertain and incapable of accurate  calculation and that the delivery of the Deposit Funds is not a penalty but rather shall constitute liquidated  damages in a reasonable amount that will compensate Seller in the circumstances where Seller is entitled  to the Deposit Funds for the efforts and resources expended and opportunities forgone while negotiating  this Agreement and in reliance on this Agreement and on the expectation of the consummation of the  Transactions, and that, without these agreements, Seller would not enter into this Agreement. If Purchaser  fails to take any action necessary to cause the delivery of the Deposit Funds pursuant to the Escrow  Agreement under circumstances where Seller is entitled to the Deposit Funds and, in order to obtain such  Deposit Funds Seller commences a suit which results in a judgment in favor of Seller, Purchaser shall pay  to Seller an amount in cash equal to the costs and expenses (including attorney’s fees) incurred by Seller in  connection with such suit.  

 

  54  ARTICLE IX  GENERAL PROVISIONS  Section 9.1. Tax Matters.  (a) All sales, use, excise, transfer, documentary, stamp, value added, recordation,  license, conveyance and other similar Taxes (“Transfer Taxes”), if any, imposed on or with respect to the  Acquisition shall be borne 50% by Seller and 50% by Purchaser shall be paid to the appropriate Taxing  Authority promptly when due by the Person having the obligation to pay such Transfer Tax under applicable  Law. The party responsible under applicable Law for filing a Tax Return with respect to any such Transfer  Taxes shall prepare and timely file such Tax Return and promptly provide a copy of such Tax Return to the  other party. Purchaser shall use reasonable efforts and cooperate in good faith to reduce or eliminate any  Transfer Taxes to the extent permitted by applicable Law, including the transfer by remote electronic  transmission of all Acquired Assets capable of being so transmitted (and the delivery of certificates  evidencing such electronic transmission) and in the filing of any Tax Returns required with respect to any  applicable Transfer Taxes. Without limiting the generality of the foregoing, Seller and Purchaser and their  respective Affiliates shall use commercially reasonable efforts to obtain available exemptions from Transfer  Taxes and will cooperate with each other in providing any information and documentation that may be  necessary to obtain any such exemptions, including any applicable resale or exemption certificate.  (b) For purposes of this Agreement, with respect to any Acquired Asset, Seller and  Purchaser shall apportion the Liability for personal property Taxes, ad valorem Taxes, and similar Taxes  (“Periodic Taxes”) for Straddle Periods applicable to such Acquired Asset in accordance with this Section  9.1(b). The Periodic Taxes described in this Section 9.1(b) shall be apportioned between Seller and  Purchaser as of the Closing Date, with Purchaser liable for that portion of the Periodic Taxes for a Straddle  Period (which portion of such Taxes shall for purposes of this Agreement be deemed attributable to the  Post-Closing Tax Period) equal to the Periodic Taxes for such Straddle Period multiplied by a fraction, the  numerator of which is the number of days remaining in such Straddle Period after the Closing Date, and  the denominator of which is the total number of days in such entire Straddle Period. Seller shall be liable  for that portion of the Periodic Taxes for a Straddle Period for which Purchaser is not liable under the  preceding sentence (which portion of such Taxes shall for purposes of this Agreement be deemed  attributable to the Pre-Closing Tax Period). The party responsible under applicable Law for paying a Tax  described in this Section 9.1(b) shall be responsible for administering the payment of such Tax. All  apportionments hereunder shall be final as of the Closing Date, and except where the apportionment is  inaccurate as a result of the gross negligence of a party, there will be no re-apportionments of any Periodic  Taxes regardless of whether information becomes available after the Closing Date that alters the amount of  Taxes that would have been due with respect to the Straddle Period. To the extent the Liability for Periodic  Taxes for a certain Straddle Period is not determinable at the time of Closing or such Periodic Taxes are  charged in arrears, such Periodic Taxes shall be prorated for such Straddle Period, based on the most recent  ascertainable full Tax year without adjustment. For purposes of this Section 9.1(b), the Straddle Period for  ad valorem Taxes and personal property Taxes shall be the fiscal period for which such Taxes were assessed  by the applicable Tax jurisdiction.  (c) Seller, on the one hand, or Purchaser, on the other hand, as the case may be (the  “Reimbursing Party”), shall provide reimbursement for any Tax paid by the other (the “Paying Party”), all  or a portion of which is the responsibility of the Reimbursing Party in accordance with the terms of this  Agreement (including this Section 9.1). Within a reasonable time prior to the payment of any such Tax, the  Paying Party shall give notice to the Reimbursing Party of the Tax payable and the Paying Party’s and  Reimbursing Party’s respective Liability therefor, although failure to do so shall not relieve the  Reimbursing Party from its Liability hereunder except to the extent the Reimbursing Party is actually  prejudiced thereby.  

 

  55  (d) The parties shall provide each other with such assistance as reasonably may be  requested by any of them in connection with (i) the preparation of any Tax Return, (ii) the determination of  any Liability in respect of Taxes or the right to any refund, credit or prepayment in respect of Taxes  (including pursuant to this Agreement) or (iii) any audit or other examination by any Taxing Authority, or  any judicial or administrative proceeding with respect to any Taxes.  Section 9.2. Bulk Sales. Purchaser and Seller hereby waive compliance with the requirements  and provisions of any “bulk-transfer” or similar Laws of any jurisdiction that may otherwise be applicable  with respect to the sale, conveyance, assignment or transfer of any or all of the Acquired Assets to  Purchaser. In furtherance and not in limitation of the foregoing, Seller shall ensure that the Sale Order shall  provide either that (a) Seller has complied with any applicable bulk sale or bulk transfer Laws of any  jurisdiction in connection with the Transactions or (b) compliance with such Laws described in clause (a)  is not necessary or appropriate under the circumstances.   Section 9.3. Public Announcements. Unless otherwise required by applicable Law or by  obligations of Seller or Purchaser or their respective Affiliates pursuant to any listing agreement with or  rules of any securities exchange or in order to enforce a party’s rights or remedies under this Agreement,  and subject to the provisions of the Bankruptcy Code and Seller’s obligations in connection with the  Chapter 11 Case, Seller and Purchaser shall consult with each other before issuing any press release or  otherwise making any public statement with respect to this Agreement, the Transactions or the activities  and operations of the other and shall not issue any such release or make any such statement without the  prior written consent of the other (such consent not to be unreasonably withheld, conditioned or delayed).  Section 9.4. Notices. Any notice pursuant to this Agreement must be in writing and will be  deemed effectively given by the applicable party on the earliest of the date (a) three (3) Business Days after  such notice is sent by registered U.S. mail, return receipt requested, (b) on which such notice is sent by  email, (c) one Business Day after such notice is deposited with an overnight courier service for next day  delivery, or (d) on which such notice is delivered by hand; in each case to the appropriate address set forth  below (or by such other address as the party may designate by notice to the other party, with such change  of address effective five days following delivery of such notice of change):  to Seller:  PhaseBio Pharmaceuticals, Inc.  1 Great Valley Parkway, Suite 30  Malvern, PA 19355  Attention: Jonathan Mow, CEO and Kris Hanson, SVP & General Counsel  Email: jonathan.mow@phasebio.com; kris.hanson@phasebio.com  with a courtesy copy (which shall not constitute notice) to:  Cooley LLP  11951 Freedom Drive, 14th Floor  Reston, VA 20190  Attention: Christian E. Plaza   Email: cplaza@cooley.com  to Purchaser:  Chiesi Farmaceutici S.p.A.  Via Palermo 26/A  

 

  56  43122 Parma  Italy  Attention: Marco Vecchia, Group General Counsel, and Mike Gordon, SVP and General  Counsel of Chiesi USA  Email: m.vecchia@chiesi.com; mike.gordon@chiesi.com  with courtesy copies (which shall not constitute notice) to:  Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.  150 Fayetteville Street, Suite 2300  Raleigh, North Carolina 27601  Attention: Heyward D. Armstrong and Justin G. Truesdale  E-Mail: harmstrong@smithlaw.com and jtruesdale@smithlaw.com  and  K&L Gates LLP  4350 Lassiter at North Hills Av, Suite 300  P.O. Box 17047  Raleigh, North Carolina 27619  Attention: A. Lee Hogewood III and John R. Gardner  Email: a.lee.hogewoodiii@klgates.com; john.gardner@klgates.com    Section 9.5. Descriptive Headings; Interpretative Provisions. The headings contained in this  Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of  this Agreement. The words “hereof,” “herein” and “hereunder” and words of like import used in this  Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules  of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to  herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any  capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning  as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural,  and any plural term the singular. Where a word or phrase is defined herein, each of its other grammatical  forms shall have a corresponding meaning. Whenever the words “include,” “includes” or “including” are  used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or  not they are in fact followed by those words or words of like import. Except where the context otherwise  requires, the word “or” is used in the inclusive sense (and/or). Whenever the last day for the exercise of any  right or the discharge of any duty under this Agreement falls on other than a Business Day, the party having  such right or duty shall have until the next Business Day to exercise such right or discharge such duty.  Unless otherwise indicated, the word “day” shall be interpreted as a calendar day. References to “dollars”  or “$” mean United States dollars, unless otherwise clearly indicated to the contrary. The word “notice”  shall mean notice in writing (whether or not specifically stated) and shall include notices, consents,  approvals and other written communications contemplated under this Agreement. The phrases “made  available to Purchaser,” “delivered to Purchaser” or “provided to Purchaser” and similar phrases as used  herein with respect to any documents or information means that (a) such information or documents were  contained and accessible in the virtual data room hosted by Seller in connection with the Transactions as of  11:59 p.m. Eastern Time on November 3, 2022 and (b) Purchaser and its designated Representatives have  had unrestricted access to such documents in the virtual data room since such time. No summary of this  Agreement prepared by or on behalf of any party shall affect the meaning or interpretation of this  Agreement. Time periods based on a number of days within or following which any payment is to be made  or act is to be done shall be calculated by excluding the day on which the period commences and including  

 

  57  the day on which the period ends and, if applicable, by extending the period to the next Business Day  following if the last day of the period is not a Business Day.  Section 9.6. No Strict Construction. Seller, on the one hand, and Purchaser, on the other hand,  participated jointly in the negotiation and drafting of this Agreement, and, in the event an ambiguity or  question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by Seller and  Purchaser, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of  the authorship of any provision of this Agreement. Without limitation as to the foregoing, no rule of strict  construction construing ambiguities against the draftsperson shall be applied against any Person with  respect to this Agreement.  Section 9.7. Entire Agreement; Assignment. This Agreement, the Ancillary Documents and the  Confidential Disclosure Agreement constitute the entire agreement and supersede all other prior agreements  and understandings, both written and oral, between the parties with respect to the subject matter hereof and  thereof. Neither Party to this Agreement may assign any of its rights or delegate any of its obligations under  this Agreement without the prior written consent of the other Party; provided, however, that Purchaser may  assign its rights or delegate its obligations, in whole or in part, without such consent to (a) any Person that  succeeds to all or substantially all of its assets or business related to this Agreement (whether by sale,  merger, operation of law or otherwise), (b) an Affiliate of Purchaser or (c) any purchaser, transferee, or  assignee of any of the Acquired Assets, in each case, subject to the binding agreement of such transferee to  be subject to Purchaser’s obligations under this Agreement. Any purported assignment in violation of this  Section 9.7 shall be null and void.  Section 9.8. Governing Law; Submission of Jurisdiction; Waiver of Jury Trial. This Agreement  shall be governed by and construed in accordance with the Laws of the State of Delaware. Any and all  claims, controversies and causes of action arising out of or relating to this Agreement, whether sounding in  contract, tort or statute, shall be governed by the Laws of the State of Delaware, including its statutes of  limitations, without giving effect to any conflict-of-laws or other rule that would result in the application  of the Laws of a different jurisdiction. The parties agree that the exclusive jurisdiction and venue for any  litigation arising out of this Agreement shall be in the Bankruptcy Court; provided, however, that if at the  time of commencement of any such litigation, there is no longer a pending Chapter 11 Case or the  Bankruptcy Court does not have jurisdiction or declines to exercise jurisdiction, the exclusive jurisdiction  and venue for any litigation arising out of or relating to this Agreement, provided jurisdiction may be  obtained under applicable Law, shall be in the state or federal courts in the State of Delaware, and each  party hereby waives any objections they may have with respect thereto (including any objections based  upon forum non conveniens). Each party hereby consents to service of process in the manner and at the  address set forth in Section 9.4. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES  ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING  OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED  HEREBY.  Section 9.9. Expenses. Except as otherwise provided herein, whether or not the Transactions  are consummated, all costs and expenses incurred in connection with this Agreement and the Transactions  shall be paid by the party incurring such expenses.  Section 9.10. Amendment. This Agreement may not be amended except by an instrument in  writing signed on behalf of each party.  Section 9.11. Waiver. At any time prior to the Closing, the parties may (a) extend the time for  the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the  representations and warranties contained herein or in any document delivered pursuant hereto and (c) waive  

 

  58  compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party  to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf  of such party.  Section 9.12. Counterparts; Effectiveness. This Agreement may be executed in multiple  counterparts, each of which shall be deemed an original, but all of which together shall constitute one and  the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic  signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other  transmission method and any counterpart so delivered shall be deemed to have been duly and validly  delivered and be valid and effective for all purposes.   Section 9.13. Severability; Validity; Parties in Interest. If any provision of this Agreement or the  application thereof to any Person or circumstance is held invalid or unenforceable, the remainder of this  Agreement, and the application of such provision to other Persons or circumstances, shall not be affected  thereby, and to such end, the provisions of this Agreement are agreed to be severable. Except as expressly  provided in this Agreement and without limiting the rights of the Indemnified Parties hereunder, nothing in  this Agreement, express or implied, is intended to confer upon any Person not a party to this Agreement  any rights or remedies of any nature whatsoever under or by reason of this Agreement.  Section 9.14. Specific Performance. The parties agree that irreparable injury will occur in the  event that any of the provisions of this Agreement is not performed in accordance with its specific terms or  is otherwise breached. Each party shall be entitled to seek an injunction or injunctions to prevent or remedy  any breaches or threatened breaches of this Agreement by any other party, to a decree or order of specific  performance specifically enforcing the terms and provisions of this Agreement and to any further equitable  relief.  Section 9.15. Time of the Essence. Time shall be of the essence of this Agreement.  Section 9.16. Remedies Cumulative. Except as herein expressly set forth, no remedy conferred  upon a party by this Agreement is intended to be exclusive of any other remedy herein or by Law provided  or permitted, but each shall be cumulative and shall be in addition to every other remedy given herein or  now or hereafter existing at Law, in equity or by statute.  Section 9.17. Conflicts; Deal Communications.   (a) It is acknowledged by each of the parties that Seller has retained Cooley LLP  (“Cooley”) to act as its counsel in connection with the negotiation, documentation and consummation of  this Agreement and the Transactions (the “Current Representation”), and that Purchaser does not have the  status of a client of Cooley for conflict of interest or any other purposes as a result thereof. Purchaser hereby  agrees that after the Closing, Cooley may represent Seller or any of its Affiliates or any of their respective  Representatives (any such Person, a “Permitted Seller Person”) in any matter involving or arising from the  Current Representation, including any interpretation or application of this Agreement or any Ancillary  Document, and including for the avoidance of doubt any Proceeding between or among Purchaser or any  of its Affiliates, and any Permitted Seller Person, even though the interests of such Permitted Seller Person  may be directly adverse to Purchaser or any of its Affiliates, and even though Cooley may have represented  Purchaser in a substantially related matter, or may be representing Purchaser in ongoing matters. Purchaser  hereby waives and agrees not to assert (i) any claim that Cooley has a conflict of interest in any  representation described in this Section 9.17(a) or (ii) any confidentiality obligation with respect to any  communication between Cooley and any Permitted Seller Person occurring during the Current  Representation.  

 

  59  (b) Purchaser hereby agrees that all communications (whether before, at or after the  Closing) between Cooley, any Permitted Seller Person, or any current or former director, officer or  employee of Seller to the extent related to the Current Representation or any dispute arising under this  Agreement (the “Deal Communications”), whether or not attorney-client privileged, and all rights to any  other evidentiary privilege to the extent related thereto, and the protections afforded to information relating  to representation of a client under applicable rules of professional conduct that may apply to such Deal  Communications, shall be retained, owned, and controlled collectively by the Permitted Seller Persons and  shall not pass to or be claimed by Purchaser or any of its Affiliates or their respective Representatives. To  the extent that files or other materials maintained by Cooley constitute Deal Communications, only the  Permitted Seller Persons shall hold property rights in such communications and Cooley shall have no duty  to reveal or disclose any such files or other materials or any Deal Communications by reason of any  attorney-client relationship between Cooley and any Permitted Seller Persons.  (c) Notwithstanding the foregoing, in the event that a dispute arises between  Purchaser, on the one hand, and a third party other than Seller, on the other hand, Purchaser may assert the  attorney-client privilege to prevent the disclosure of the Deal Communications to such third party; provided,  however, that Purchaser may not waive such privilege without the prior written consent of Seller (which  such consent shall not be unreasonably withheld, conditioned or delayed). In the event that Purchaser or  any of its respective directors, officers, employees or other representatives is legally required by an Order  or otherwise to access or obtain a copy of all or a portion of the Deal Communications, Purchaser shall, to  the extent legally permissible, (x) reasonably promptly notify Seller in writing, (y) agree that the Seller may  seek a protective order and (z) use, at the Seller’s sole cost and expense, commercially reasonable efforts  to assist therewith.  ARTICLE X  DEFINITIONS  As used herein, the terms below shall have the following meanings:  “AAR Cost Calculation” is defined in Section 1.6(a)(ii)(F).  “AAR Costs” is defined in Section 1.6(a)(ii)(E).  “Acquired Assets” is defined in Section 1.1.  “Acquisition” is defined in the Recitals.  “Action” means any claim, hearing, charge, action, suit, arbitration, litigation, mediation,  grievance, audit, examination, inquiry, proceeding or investigation by or before any Governmental Entity  or arbitrator.  “Actual Costs” is defined in Section 1.6(a)(ii)(G).  “Additional Approval Requirements” means any and all clinical trials (including extensions, sub- analyses or cohorts thereof), non-clinical studies, comparability studies or activities performed in  satisfaction of post-marketing approval requirements, including all testing, activities (including CMC),  conditions and commitments in connection therewith but excluding the Observational Study and the P3  Study.   “Additional Assigned Contracts” is defined in Section 1.5(e).  

 

  60  “Affiliate” of a specified Person means a Person who, directly or indirectly through one or more  intermediaries, controls, is controlled by, or is under common control with, such specified Person. For  avoidance of doubt, Purchaser and Seller will not be deemed Affiliates of one another notwithstanding the  possession by Purchaser (whether or not exercised) of any rights with respect to Seller or otherwise as a  result of the Transactions.  “Agreement” has the meaning set forth in the Preamble and shall include the Exhibits and  Schedules annexed hereto or referred to herein.  “Allocation” is defined in Section 1.8.  “Alternative Stalking Horse Transaction” is defined in Section 5.8.  “Alternative Transaction” means (a) a Restructuring Transaction or (b) any sale, assignment, lease,  transfer, license, relinquishment of rights to or other disposition of or settlement of claims with respect to  all or any material portion of the Acquired Assets to or with any Person (or group of Persons), whether in  one transaction or a series of transactions, in each case other than to Purchaser.  “Ancillary Documents” means the Bill of Sale & Assignment and Assumption Agreement,  Intellectual Property Assignment Agreements, Escrow Agreement, Transition Services Agreement and  each other agreement, document or instrument (other than this Agreement) executed and delivered by the  parties in connection with the consummation of the Transactions.  “Anti-Corruption Law” means any Law related to combating bribery and corruption, including the  OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions, the  UN Convention Against Corruption and any implementing legislation promulgated pursuant to such  Conventions, the Foreign Corrupt Practices Act of 1977 and the U.K. Bribery Act 2010.  “Antitrust Laws” means any applicable supranational, national, federal, state, county, local or  foreign antitrust, competition or trade regulation Laws that are designed or intended to prohibit, restrict or  regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition  through merger or acquisition, including the HSR Act, the Sherman Act, the Clayton Act and the Federal  Trade Commission Act, in each case, as amended, and other similar antitrust, competition or trade  regulation Laws of any jurisdiction other than the United States.  “Assigned Contract Cure Costs Cap” means, with respect to each Assigned Contract, the amount  under the column “Cure Costs” set forth opposite such Assigned Contract on Schedule 1.5(a).  “Assigned Contracts” is defined in Section 1.1(c).  “Assumed Liabilities” is defined in Section 1.3.  “Auction” is defined in the Bidding Procedures.  “Avoidance Actions” is defined in Section 1.1(m).  “Backup Bidder” is defined in the Bidding Procedures.  “Bankruptcy Code” is defined in the Recitals.  “Bankruptcy Court” is defined in the Recitals.  

 

  61  “Benefit Plan” means a plan, program, agreement or other arrangement providing for employment,  compensation, retirement, deferred compensation, severance, separation, relocation, repatriation,  expatriation, termination pay, performance awards, bonus, incentive, stock option, stock purchase, stock  bonus, phantom stock, stock appreciation right, supplemental retirement or other pension or welfare  benefits, whether written or unwritten, including each “employee benefit plan” within the meaning of  Section 3(3) of ERISA, (a) which is or has been sponsored, maintained, contributed to, or required to be  contributed to by Seller or any of its ERISA Affiliates for the benefit of any employee or former employee  of Seller or (b) with respect to which Seller or any of its ERISA Affiliates would reasonably be expected  to have any Liability.  “Bidding Procedures” means the bidding procedures in the form attached to the Bidding Procedures  Order in Exhibit C, with any changes that Purchaser may approve in advance in its sole and absolute  discretion, to be approved by the Bankruptcy Court pursuant to the Bidding Procedures Order.  “Bidding Procedures Order” means the Order of the Bankruptcy Court, pursuant to Sections 105(a),  363 and 365 of the Bankruptcy Code, that has not been stayed, vacated or stayed pending appeal: (a)  authorizing and scheduling the Auction, (b) approving procedures for the submission of Qualified Bids, (c)  in the case of any subsequent Qualified Bids, approving the initial Overbid of at least $1,000,000 and further  incremental Overbids of at least $500,000, (d) approving the Break-Up Fee and the Expense  Reimbursement Amount, (e) scheduling a hearing to consider approval of such sale, and (f) approving the  form and manner of notice of the Auction procedures and Sale Hearing, which Order shall be in the form  attached hereto as Exhibit C, with any changes that Purchaser may approve in advance in its sole and  absolute discretion.  “Bill of Sale & Assignment and Assumption Agreement” is defined in Section 2.2(a)(i).  “BIS” is defined in Section 3.14(e).  “BLA” means a Biologics License Application submitted to the FDA pursuant to 21 C.F.R. Part  601.2 (as amended from time to time), or the equivalent application or filing submitted to any equivalent  agency or Governmental Entity outside the United States (including any supra-national agency such as the  EMA), and all amendments, supplements, variations and extensions which may be submitted thereto,  including all documents, data and other information concerning the applicable biologic which are necessary  for FDA approval to market such product in the United States or such country or jurisdiction outside of the  United States.  “Bleeding Indication” means the indication for the Product for the reversal of the antiplatelet effects  of ticagrelor in patients with uncontrolled major or life-threatening bleeding.  “Books and Records” means all documents of, or otherwise in the possession, custody or control  of, or used by, Seller that are Primarily Related to the Business, the Acquired Assets or the Assumed  Liabilities, including all files, instruments, papers, books, microfilms, photographs, letters, budgets,  forecasts, ledgers, journals, title policies, lists of past, present or prospective customers, supplier lists,  regulatory filings, technical documentation, documentation containing Know-How, user documentation  (installation guides, user manuals, training materials, release notes, working papers, etc.), data, reports  (including environmental reports and assessments), plans, mailing lists, price lists, marketing information  and procedures, advertising and promotional materials, equipment records, warranty information, architects  agreements, construction contracts, drawings, plans and specifications, records of operations, standard  forms of documents, copies of Tax Returns and copies of related books, records and workpapers related to  Taxes, manuals of operations or business procedures and other similar procedures (including all discs, tapes  and other media-storage data containing such information), in each case whether or not in electronic form.   

 

  62  “Break-Up Fee” is defined in Section 8.2(b).    “Business” is defined in the Recitals.  “Business Assets” is defined in Section 5.5.  “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New  York City, New York, or Parma, Italy, are authorized or obligated by Law to close.   “Business Employee” is defined in Section 3.16(a).  “Cash” means all cash and cash equivalents, including checks, commercial paper, treasury bills,  certificates of deposit and marketable securities, and any bank accounts and lockbox arrangements of Seller  as of the Closing.  “Chapter 11 Case” is defined in the Recitals.  “Claim Notice” is defined in Section 7.2(b).  “Closing” is defined in Section 2.1.  “Closing Consideration” is defined in Section 1.6(a)(i).  “Closing Date” is defined in Section 2.1.  “Closing Inventory Schedule” means a schedule setting forth a detailed list of all Inventory as of  the Closing Date, including the quantity, batch, expiry dating, book value, location (including whether the  item is being held on a consignment basis), original shelf-life and remaining shelf-life.  “Code” means the Internal Revenue Code of 1986, as amended.  “Competing Business” is defined in Section 5.17(a).  “Compound” means the anti-ticagrelor antibody fragment product known as bentracimab (also  known as PB2452 or MEDI2452).  “Confidential Disclosure Agreement” means the Confidential Disclosure Agreement, between  Seller and Chiesi USA, Inc., a Delaware corporation and wholly owned Subsidiary of Purchaser, dated  August 3, 2020, as amended.  “Confidential Information” is defined in Section 5.12(c).  “Contract” means any agreement, contract, subcontract, lease, sublease, instrument, permit,  concession, franchise, arrangement, understanding, note, option, bond, mortgage, indenture, trust  document, loan or credit agreement, license, sublicense, insurance policy or other legally binding  commitment or instrument.  “Controlling Party” is defined in Section 7.2(b).  “Cooley” is defined in Section 9.17(a).  

 

  63  “Copyrights” means all rights associated with works of authorship, including protectable subject  matter under U.S. copyright Law (or foreign equivalent), copyrights and any other rights in works of  authorship (including Software) and, exclusive exploitation rights, moral rights, any related rights of  authors and any other rights in copyrightable works (including Software), copyright registrations, or any  application therefor and all extensions, restorations, reversions and renewals of any of the foregoing.  “Cost Concern Notice” is defined in Section 1.6(a)(ii)(G).  “Cure Costs” is defined in Section 1.5(a).  “Cure Costs Cap” means an aggregate amount equal to the sum of the Assigned Contract Cure  Costs Cap for each Assigned Contract.   “Cure Costs Deduction” means the aggregate amount of all Cure Costs in excess of the Cure Costs  Cap; provided, however, that in determining the Cure Costs Deduction in no event will the Cure Costs Cap  with respect to the Assigned Contracts set forth on Schedule 6.3(i) be deemed to apply to any other Assigned  Contract.  “Current Representation” is defined in Section 9.17(a).  “Deductible” is defined in Section 7.3(a).  “Deposit Funds” is defined in Section 1.6(b).  “Designated Parties” is defined in Section 1.1(m).  “Designation Deadline” is defined in Section 1.5(e).  “Determination Date” is defined in Section 7.2(c).  “Diligent Efforts” means using such efforts and resources, in the aggregate, that a pharmaceutical  company similarly situated to Purchaser would reasonably devote to a product at a similar stage of  development and with similar market or commercial potential and taking into consideration the individual  characteristics of Purchaser and the commercialization practices for pharmaceutical products at a similar  stage in product lifecycle by such similarly situated pharmaceutical companies. Such efforts may take into  account, without limitation, the safety and efficacy of the product, the risks inherent in the  commercialization of the product, its competitiveness compared to alternative third-party products, the  proprietary position of the product (including scope and duration of relevant patents and length of marketing  exclusivity), the scope of marketing approval, the regulatory status of the product, whether the product is  subject to a clinical hold, recall or market withdrawal, intellectual property rights with respect to the  product, then-prevailing economic and market conditions, the strategic value of the product to such  company, the anticipated profitability of the product and the therapeutic use of the product.   “DIP Budget” means the budget for the DIP Facility in the form set forth in Exhibit E.  “DIP Facility” means the Seller’s debtor-in-possession financing facility, entered into connection  with the Chapter 11 Case, as the same may be amended, restated, supplemented or refinanced from time to  time in accordance with the terms of this Agreement, including any orders approving or authorizing Seller’s  entry into and performance under such facility.  “DIP Lender” means the lender under the DIP Loan Documents.  

 

  64  “DIP Loan Documents” means the definitive documentation for the DIP Facility, as the same may  be amended, restated, supplemented or refinanced from time to time in accordance with the terms of this  Agreement, in the form set forth in Exhibit E.  “Documented AAR Costs” is defined in Section 1.6(a)(ii).  “DOJ” is defined in Section 5.3(b).  “DPA” is defined in Section 3.23.  “Effect” means any change, effect, development, circumstance, condition, fact, state of facts, event  or occurrence.  “EMA” means the European Medicines Agency.  “Encumbrance” means any lien, pledge, hypothecation, mortgage, deed of trust, security interest,  encumbrance, covenant, charge, claim, option, right of first refusal, easement, right of way, encroachment,  occupancy right, preemptive right, community property interest or restriction of any nature, whether arising  prior to or subsequent to the commencement of the Chapter 11 Case, and whether voluntarily incurred or  arising by operation of Law.  “Environmental Laws” means any and all applicable Laws which (a) regulate or relate to the  protection or clean-up of the environment, the use, treatment, storage, transportation, handling, disposal or  release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water,  air, wildlife, plants or other natural resources, or the health and safety of Persons or property, including  protection of the health and safety of employees or (b) impose Liability or responsibility with respect to  any of the foregoing, including the Comprehensive Environmental Response, Compensation and Liability  Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the  regulations promulgated and rulings issued thereunder.  “ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or  business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section  4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same  “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.  “Escrow Agent” is defined in Section 1.6(b).  “Escrow Agreement” is defined in Section 1.6(b).  “Estimated Costs” is defined in Section 1.6(a)(ii)(G).  “Excess Setoff Costs” is defined in Section 1.6(a)(ii)(G).  “Excluded Assets” is defined in Section 1.2.  “Excluded Liabilities” is defined in Section 1.4.  “Excluded Taxes” means any (a) Taxes imposed on or payable by Seller or its Affiliates for any  taxable period; (b) Taxes imposed on or with respect to the Acquired Assets, the Assumed Liabilities or the  Business for any Pre-Closing Tax Period; (c) Taxes imposed on or with respect to the Excluded Assets or  

 

  65  the Excluded Liabilities for any taxable period, (d) any Transfer Taxes for which Seller is responsible  pursuant to Section 9.1(a), (e) Liability of Purchaser or any of its Affiliates for any Taxes as a transferee or  successor to Seller or its Affiliates and (f) Periodic Taxes for which Seller is responsible pursuant to Section  9.1(b). For purposes of this Agreement, in the case of any Straddle Period, (i) Periodic Taxes shall be  allocated between the Pre-Closing Tax Period and the Post-Closing Tax Period in the manner set forth in  Section 9.1(b) and (ii) Taxes (other than Periodic Taxes) relating to the Acquired Assets, the Assumed  Liabilities or the Business for the Pre-Closing Tax Period shall be computed as if such taxable period ended  as of the closing of business on the Closing Date.  “Expense Reimbursement Amount” means the dollar amount equal to the lesser of (a) $750,000  and (b) the aggregate amount of all reasonable and documented out of pocket costs, expenses and fees  incurred by Purchaser or its Affiliates, in connection with evaluating, negotiating, documenting and  performing the Transactions and the Ancillary Documents, including fees, costs and expenses of any  professionals (including financial advisors, outside legal counsel, accountants, experts and consultants)  retained by Purchaser or its Affiliates in connection with or related to the authorization, preparation,  investigation, negotiation, execution and performance of this Agreement, the Transactions, including the  Chapter 11 Case and other judicial and regulatory proceedings related to such transactions, which amount  shall constitute a superpriority administrative expense priority claim under Section 503(b)(1)(A) and  Section 507(a)(2) of the Bankruptcy Code and shall be payable as set forth in Section 8.2(c), subject only  to the superpriority claims granted in favor of the DIP Lender in an amount not to exceed the amount of the  DIP Loan Commitment (as defined in the interim order authorizing Seller to obtain postpetition financing  and related relief [Chapter 11 Case Docket No. 57] and in any final order thereon).  “Exploit” and “Exploitation” means to make, manufacture, import, export, use, sell, offer for sale,  research, develop, conduct regulatory activities, commercialize, register, hold or keep (whether for disposal  or otherwise), transport, distribute, promote, market, or otherwise dispose of, or have done any or all of the  foregoing.   “Export Controls” means all applicable export and reexport control Laws and regulations, including  the Export Administration Regulations maintained by the U.S. Department of Commerce, trade and  economic sanctions maintained by OFAC and the International Traffic in Arms Regulations maintained by  the U.S. Department of State and any applicable anti-boycott compliance regulations.  “FDA” means the United States Food and Drug Administration.  “FDA Accelerated Approval” means an accelerated approval granted by the FDA on the basis of  an application made pursuant to forth in 21 C.F.R. § 601 Subpart E or any successor program.   “FDA Accelerated Approval Milestone” is defined in Section 1.6(a)(ii)(A).  “FDA Accelerated Approval Milestone Payment” is defined in Section 1.6(a)(ii)(A)(1).  “FDA Full Approval” means unconditional approval granted by the FDA that is not subject to any  specific obligations under 21 C.F.R. § 601 Subpart E. The Unconditional Regulatory Approval shall  include, for example, a standard marketing authorization from the FDA.  “FDA Full Approval Milestone” is defined in Section 1.6(a)(ii)(A).  “FDA Full Approval Milestone Payment” is defined in Section 1.6(a)(ii)(A)(3) .  “FDCA” means the U.S. Food, Drug and Cosmetic Act of 1938, as amended.  

 

  66  “Final Documented AAR Costs” is defined in Section 1.6(a)(ii)(G).  “Financial Officers” shall mean, with respect to Seller, the Chief Financial Officer of Seller, and  with respect to Purchaser, the Chief Financial Officer of Purchaser, or their respective designees with  equivalent decision-making authority with respect to matters under this Agreement.  “Financial Statements” is defined in Section 3.5(a).  “Fraud” means an actual and intentional fraud committed by any Person in the making of the  representations and warranties set forth in ARTICLE III or ARTICLE IV of this Agreement or in any  certificate or other instrument delivered in connection with this Agreement.  “FTC” is defined in Section 5.3(b).  “Fundamental Reps” is defined in Section 7.1(a).  “GAAP” means United States generally accepted accounting principles.  “Good Clinical Practice” means, with respect to Seller, standards for clinical trials for  pharmaceuticals (including all applicable requirements relating to protection of human subjects), as set  forth in the FDCA and applicable regulations promulgated thereunder (including, for example, 21 C.F.R.  Parts 50, 54, and 56), as amended from time to time, and such standards of good clinical practice (including  all applicable requirements relating to protection of human subjects) as are required by other organizations  and Governmental Entities in any other countries, including applicable regulations or guidelines from the  International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals  for Human Use, in which Products are sold or intended to be sold, to the extent such standards are not less  stringent than in the United States.  “Good Laboratory Practice” means, with respect to Seller, standards for pharmaceutical  laboratories, as set forth in the FDCA and applicable regulations promulgated thereunder, as amended from  time to time, and such standards of good laboratory practice as are required by other organizations and  Governmental Entities in any other countries, including applicable regulations or guidelines from the  International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals  for Human Use in which the Products are sold or intended to be sold, to the extent such standards are not  less stringent than in the United States.  “Good Manufacturing Practice” means, with respect to Seller, standards for the manufacture,  processing, packaging, testing, transportation, handling and holding of drug products, as set forth in the  FDCA and applicable regulations promulgated thereunder, as amended from time to time, and such  standards of good manufacturing practice as are required by other organizations and Governmental Entities  in any other countries, including applicable regulations or guidelines from the International Conference on  Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use in which  the Products are sold or intended to be sold, to the extent such standards are not less stringent than in the  United States.  “Governmental Entity” means (a) any supranational, national, federal, state, county, municipal,  local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or  administrative functions of or pertaining to government, (b) any public international governmental  organization or (c) any agency, division, bureau, department, commission, board, arbitral or other tribunal,  branch or other political subdivision of any government, entity or organization described in the foregoing  clause (a) or (b) of this definition (including patent and trademark offices and self-regulatory organizations).  

 

  67  “Hazardous Substance” means any pollutant, chemical, substance and any toxic, infectious,  carcinogenic, reactive, corrosive, ignitable or flammable chemical, chemical compound, hazardous  substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation  under any Environmental Laws, including any quantity of petroleum product or byproduct, solvent,  flammable or explosive material, radioactive material, asbestos, lead paint, polychlorinated biphenyls (or  PCBs), dioxins, dibenzofurans, heavy metals and radon gas.  “Health Care Submissions” is defined in Section 3.18(a).  “Health Laws” means any Law of any Governmental Entity (including multi-country  organizations) the purpose of which is to ensure the safety, efficacy and quality of medicines, biological  products or pharmaceuticals by regulating the research, development, manufacturing and distribution of  these products, including Laws relating to Good Laboratory Practice, Good Clinical Practice,  investigational use, product marketing authorization, manufacturing facilities compliance, registration and  approval, Good Manufacturing Practice, manufacturer, sponsor or applicant registration or licensing,  labeling, advertising, promotional practices, safety surveillance, record keeping and filing of required  reports and their respective counterparts promulgated by Regulatory Authorities in countries outside the  United States and shall also include, without limitation (a) the FDCA and the regulations promulgated and  guidance issued thereunder, (b) the Public Health Service Act, and the regulations promulgated and  guidance issued thereunder, (c) all federal and state fraud and abuse Laws, including the Federal Anti- Kickback Statute, the civil False Claims Act, the administrative False Claims Law, the Anti-Inducement  Law, the exclusion Laws, and the regulations promulgated pursuant to such statutes, (d) the Health  Insurance Portability and Accountability Act of 1996, the regulations promulgated thereunder and  comparable state Laws, (e) the Controlled Substances Act, (f) Titles XVIII and XIX of the Social Security  Act and the regulations promulgated thereunder, (g) the Clinical Laboratories Improvement Amendments  and (h) all applicable Laws, rules and regulations, ordinances, judgments, decrees, orders, writs and  injunctions administered by Regulatory Authorities, each of clauses (a) through (h) as may be amended  from time to time.  “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended and  supplemented by the Health Information Technology for Clinical Health Act of the American Recovery  and Reinvestment Act of 2009.  “Import Restrictions” means all applicable U.S. and foreign import Laws, including Title 19 of the  U.S. Code and Title 19 of the Code of Federal Regulations.  “IND” means an Investigational New Drug Application submitted to the FDA pursuant to 21 C.F.R.  Part 312 (as amended from time to time) with respect to the Products, or the equivalent application or filing  submitted to any equivalent agency or Governmental Entity outside the United States of America (including  any supra-national agency such as the EMA), and all supplements, amendments, variations, extensions and  renewals thereof that may be submitted with respect to the foregoing.  “Indebtedness” means, with respect to any Person, (a) all obligations for borrowed money, (b) all  obligations evidenced by bonds, debentures, notes or similar instruments, (c) all Indebtedness of others  secured by any Encumbrance on owned or acquired property of the reference Person, whether or not the  Indebtedness secured thereby has been assumed, (d) all guarantees (or any other arrangement having the  economic effect of a guarantee) of Indebtedness of others, (e) all capital lease obligations and all synthetic  lease obligations, (f) all obligations, contingent or otherwise, of such Person as an account party in respect  of financial guaranties, letters of credit, letters of guaranty, surety bonds and other similar instruments, (g)  all securitization transactions, (h) all obligations representing the deferred and unpaid purchase price of  property (other than trade payables incurred in the Ordinary Course of Business), (i) all obligations,  

 

  68  contingent or otherwise, in respect of bankers’ acceptances and (j) net cash payment obligations of such  Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable  upon termination thereof (assuming they were terminated on the date of determination).  “Indemnification Certificate” is defined in Section 7.2(a).  “Indemnified Party” is defined in Section 7.2(a).  “Indemnifying Party” is defined in Section 7.2(a).  “Independent Accountant” means a national or international accounting firm, independent of  Purchaser or Seller, selected by Purchaser and reasonably acceptable to Seller (which may be a different  firm with respect to Sections 1.6 and 1.8).  “Information Privacy and Security Laws” means any applicable Laws issued by a Governmental  Entity and all guidance issued by any Governmental Entity thereunder, relating to: (a) the privacy,  protection, or security of Protected Information, including as relevant to the collection, storage, processing,  transfer, sharing and destruction of Protected Information or (b) requirements for websites and mobile  applications, online behavioral advertising, call or electronic monitoring or recording, or any outbound  communications, including outbound calling and text messaging, telemarketing and email marketing.  Without limiting the foregoing, “Information Privacy and Security Laws” includes the Federal Trade  Commission Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and  Abuse Prevention Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of  2003, the Children’s Online Privacy Protection Act, the Computer Fraud and Abuse Act, the Electronic  Communications Privacy Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Reporting Act,  HIPAA, the Gramm-Leach-Bliley Act, state data security Laws, state social security number protection  Laws, state data breach notification Laws, state consumer protection Laws, Directive 95/46/EC of the  European Parliament and of the Council of 24 October 1995 and Directive 2002/58/EC of the European  Parliament and of the Council of 12 July 2002 as amended (and any European Union member states’ Laws  and regulations implementing them), the European General Data Protection Regulation, the Canadian  Personal Information Protection and Electronic Documents Act, India’s Information Technology Act,  Japan’s Act on the Protection of Personal Information, Hong Kong’s Personal Data (Privacy) Ordinance,  and Australia’s Privacy Amendment (Private Sector) Act 2000 as amended by the Privacy Amendment  (Enhancing Privacy Protection) Act 2012, and other applicable data protection Laws of the jurisdictions in  which Business is operated.  “Intellectual Property” means any and all rights, which may exist or be created under the Law  anywhere in the world, arising under or associated with: (a) Patents; (b) Trademarks; (c) inventions and  designs; (d) Know-How and trade secrets; (e) Copyrights; (f) all industrial designs and any registrations  and applications therefor; (g) Internet Properties; (h) all other similar or equivalent intellectual property or  proprietary rights anywhere in the world, and (i) rights in or relating to applications for, registrations of,  rights of priority in, and divisions, continuations, continuations-in-part, reissuances, renewals, extensions,  restorations and reversions of the any of the foregoing (as applicable) in clauses (a) through (h) above.  “Intellectual Property Assignment Agreements” is defined in Section 2.2(a)(iii).  “Internet Properties” means any and all IP, internet or global computing network addresses, sites  and locations, including domain names, top-level domains and country code top-level domains, sub- domains, uniform resource locators and other similar names and locators and telephone numbers, and all  goodwill associated with, and all rights related to or otherwise associated with the foregoing.  

 

  69  “Inventory” is defined in Section 1.1(d).  “IP Contracts” is defined in Section 3.10(h).  “Key Employee Group” is defined in that separate confidential communication from Purchaser to  Seller, which communication sets forth the Offer Employees that are Key Employees and the composition  of the Key Employee Group that is required by Purchaser in connection with the Transactions (the “Key  Employee Notice”).    “Know-How” means any non-public, proprietary or other information, whether tangible or  intangible and regardless of the form or medium, including trade secrets, knowledge, experience, know- how, technology, information, and data, including formulas and formulations, processes, practices,  techniques, unpatented inventions, discoveries, ideas, developments, test procedures, results, concepts,  methods, methodologies, protocols, designs, improvements, models, specifications, materials,  compositions of matter of any type of kind, assays, screens, Software, algorithms, databases, database  rights, chemistry, manufacturing and control (CMC) information and data, lab notebooks, stability,  technology and test data and results (including pharmacological, biological, chemical, biochemical,  toxicological, pre-clinical and clinical), analytical and quality control information, data, results and  descriptions, studies and procedures, development, manufacturing and commercialization costs,  information contained in submissions to and information from Regulatory Authorities and other reports,  together with all documents and files embodying the foregoing.   “Knowledge of Seller” means (a) the actual and constructive knowledge of Sue Arnold, Glen  Burkhardt, Jeff Erickson and Lauren Richardson after due inquiry into the facts or circumstances supporting  any representation, warranty or statement qualified by such term or similar terms and (b) all such knowledge  as would reasonably be obtained by any executive officer of Seller, for the time period of his tenure, in the  discharge of such officer’s duties.   “Law” means any law (including common law), statute, constitution, requirement, code, rule,  regulation, order, ordinance, treaty, judgment or decree or other pronouncement of any Governmental  Entity.  “Leases” is defined in Section 3.12(b).  “Liability” means any liability, debt, guarantee, claim, demand, commitment or obligation (whether  direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to  become due) of every kind and description, including all costs and expenses related thereto.   “Loss” means any loss, claim, demand, Order, Action, damage, penalty, fine, settlement payment,  Liability, Tax, Encumbrance, fee, cost (including any opportunity or replacement cost) or expense,  including costs and expenses of investigation and reasonable attorneys’ fees and expenses, as well as the  costs and expenses (including reasonable attorneys’ fees and expenses) in connection with asserting,  maintaining or enforcing any claim for indemnification or any Action to enforce an Indemnified Party’s  rights hereunder, in each case whether involving a Third Party Claim or a claim solely between the parties  (or between any party and any Indemnified Party); provided, however, that Losses shall not include punitive  damages unless awarded or otherwise payable to a third party.  “MAA” means an application for the authorization to market a compound or product in any country  or group of countries, as defined in the applicable Law and filed with the Regulatory Authority of such  given country or group of countries, including a BLA, and all additions, amendments, supplements,  extensions and modifications thereto.  

 

  70  “Malvern Lease” means that certain Lease Agreement, by and between Seller and Liberty Property  Limited Partnership, dated January 15, 2010, as amended by that certain First Amendment, dated December  18, 2014, that certain Second Amendment, dated February 9, 2018 and that certain Third Amendment, by  and between Seller and WPT Land 2 LP, dated October 6, 2022.  “Material Adverse Effect” means (a) any Effect that, individually or in the aggregate, would  reasonably be expected to materially impair or materially delay the ability of Seller to timely consummate  the Transactions or to perform its obligations hereunder or (b) any Effect that, individually or in the  aggregate, results in a material adverse effect on the assets, business, condition (financial or otherwise) or  results of operations of the Business or the Acquired Assets or the Assumed Liabilities; provided, however,  that the fact that the Chapter 11 Case has been filed and that, accordingly, Seller has been conducting the  Business in the Ordinary Course of Business as the same is being conducted as of the date of this Agreement  in the Chapter 11 Case, shall not, in and of itself, be deemed to be a Material Adverse Effect for purposes  of clause (b) of this definition; provided, however, that no Effects resulting or arising from the following  shall be deemed to constitute a Material Adverse Effect or shall be taken into account when determining  whether a Material Adverse Effect exists or has occurred: (i) changes after the date hereof in general  economic, financial or securities markets or geopolitical conditions, (ii) general changes or developments  after the date hereof in regulatory or macroeconomic conditions or the industries and markets in which the  Business operates, (iii) the announcement of the Acquisition or the identity of Purchaser, (iv) any action or  omission by Purchaser in breach of this Agreement, (v) any action which is expressly requested in writing  by Purchaser, (vi) changes after the date hereof in any applicable Laws or applicable accounting regulations  or principles or the enforcement or interpretation thereof, (vii) any outbreak or escalation of hostilities or  war or any act of terrorism or natural disaster or act of God and (viii) any action required or prohibited by  the commencement of the Chapter 11 Case; provided, further, that the exceptions set forth in clauses (i),  (ii), (vi) and (vii) above shall only apply to the extent that such Effect is materially and disproportionately  adverse to the Business, taken as a whole, compared to other companies of similar size that operate in the  industries or markets in which Seller operate.  “Material Contracts” is defined in Section 3.13(a).  “Material Supplier” is defined in Section 3.20.  “Milestone Event” is defined in Section 1.6(a)(ii)(A).  “Milestone Payment” and “Milestone Payments” are defined in Section 1.6(a)(ii)(A).  “Non-Competition Period” is defined in Section 5.17(a).  “Non-Controlling Party” is defined in Section 7.2(b).  “Non-Solicitation Period” is defined in Section 5.17(b).  “Observational Study” means the prospective observational study identified by Seller as the  “Bentracimab Prospective Observational Study (REVERSE-IT Registry),” a synopsis of which was made  available to Purchaser and which is further described in the meeting minutes for the April 6, 2022 meeting  between Seller and the FDA.  “OFAC” is defined in Section 3.14(e).  “Offer Employees” is defined in Section 5.11.  

 

  71  “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or award of a  Governmental Entity.  “Ordinary Course Licenses” means shrink wrap or click through licenses to generally available  third party technology or Software on standard terms that have not been customized for Seller for annual  consideration of less than $50,000.  “Ordinary Course of Business” means the ordinary and usual course of normal day-to-day  operations of Seller’s Business, as conducted by Seller consistent with past custom and practice (including  with respect to quantity and frequency), except for the consequences relating to the filing of the Chapter 11  Case; provided, that in no event shall “Ordinary Course of Business” include any breach of Law or Contract,  or violation of any Permit.  “Outside Date” is defined in Section 8.1.  “Overbid” is defined in the Bidding Procedures.  “P3 Study” means the Phase 3 Trial ongoing as of the date hereof, solely to the extent set forth in  Protocol Number PB2452-PT-CL-0004 (Amendment 4 version 5.0 Final dated 06May2022 thereto) (and  without modification, expansion or amendment to such protocol (including the specified endpoints therein)  and solely with respect to the number of patients (a) actually enrolled or (b) planned as of the date hereof  to be enrolled, whichever of (a) or (b) is greater, but in no event to exceed 200 patients in aggregate total,  of which not more than 59 will be bleed patients) as of the date hereof.  “party” and “parties” are defined in the Preamble.  “Patents” means patents and patent applications, including divisionals, continuations,  continuations-in-part, conversions, substitutions, additions, registrations, renewals, extensions,  restorations, supplementary protection certificates, confirmation, reissues, re-examinations, and  revalidations thereof and invention disclosures therefor, and including any equivalents of the foregoing in  any jurisdiction.  “Paying Party” is defined in Section 9.1(c).  “Periodic Taxes” is defined in Section 9.1(b).  “Permits” means all consents, approvals, authorizations, certificates, filings, notices, permits,  concessions, registrations, franchises, licenses or rights of or issued by any Regulatory Authority or other  Governmental Entity, including Regulatory Authorizations.  “Permitted Post-Closing Encumbrances” means any Permitted Pre-Closing Encumbrance that is  not extinguished by the Sale Order under applicable Law, it being understood that the Sale Order shall  extinguish Encumbrances to the maximum extent permissible under applicable Law.  “Permitted Pre-Closing Encumbrances” means (a) liens for Taxes not yet due and payable or being  contested in good faith by appropriate proceedings, (b) statutory liens and rights of setoff of carriers,  shippers, warehousemen, mechanics, repairmen, workmen, suppliers and materialmen, in each case,  incurred in the Ordinary Course of Business (i) for amounts not yet overdue, (ii) for amounts that are  overdue and that (in the case of any such amounts overdue for a period in excess of thirty (30) days) are  being contested in good faith, and (iii) restrictions or requirements set forth in any Permits relating to the  Business.   

 

  72  “Permitted Seller Person” is defined in Section 9.17(a).  “Person” means a natural person, partnership, corporation, limited liability company, business trust,  joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity  or organization.  “Personal Data” means any and all information that can reasonably be associated with an individual  natural person, including information that identifies an individual natural person, including name, physical  address, telephone number, email address, financial account number, passwords or PINs, device identifier  or unique identification number, government-issued identifier (including Social Security number and  driver’s license number), medical, health or insurance information, gender, date of birth, educational or  employment information, religious or political views or affiliations and marital or other status (to the extent  any of these data elements can reasonably be associated with an individual natural person). Personal Data  also includes any information not listed above if such information is defined as “personal data,” “personally  identifiable information,” “individually identifiable health information,” “protected health information” or  “personal information” under any applicable Law and is regulated by such Law.  “Petition Date” is defined in the Recitals.  “Phase 3 Trial” means that certain Phase 3, Multicenter, Open-Label, Single-Arm Study of  Bentracimab (PB2452) in Ticagrelor-Treated Patients With Uncontrolled Major or Life-Threatening  Bleeding or Requiring Urgent Surgery or Invasive Procedure (REVERSE-IT Trial) commenced on or about  March 30, 2020, for which Seller is the sponsor.   “Post-Closing Tax Period” means any taxable period or portion thereof beginning after the Closing  Date and, in the case of any Straddle Period, the portion of such Straddle Period beginning immediately  after the Closing Date.  “Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, in  the case of any Straddle Period, the portion of such Straddle Period ending on the Closing Date.  “Preservation Period” is defined in Section 5.2(b).  “Primarily Related” or “Primarily” means, with respect to the applicable referent term, any or all  of the following: (a) primarily related to, (b) reasonably necessary or useful with respect to or in connection  with the Exploitation of or (c) actually or proposed to be used with respect to or in connection with the  Exploitation of.   “Privacy Statements” means, collectively, all of Seller’s publicly posted privacy policies (including  if posted on Seller’s products and services) in effect as of the date hereof regarding the collection, use,  disclosure, transfer, storage, maintenance, retention, deletion, disposal, modification or processing of  Protected Information.  “Product” means (a) the Compound, (b) any product or product candidate that is comprised of or  contains the Compound and (c) any precursors, intermediates, improvements, modifications, derivatives or  formulations of any of the foregoing, including all forms of such pharmaceutical compositions in existence  or under research or in development. For the avoidance of doubt, references to “the Product” or “the  Products” include each of the foregoing, individually or collectively, as the context may require.  “Protected Information” means (a) Personal Data or (b) any information that is governed or  regulated by one or more Information Privacy and Security Laws that a Seller receives, creates, transmits  

 

  73  or maintains in electronic form through any of Seller’s systems networks or other information technology  systems.  “Purchase Price” is defined in Section 1.6(a).  “Purchaser” is defined in the Recitals.  “Purchaser Indemnitees” is defined in Section 7.1(b).  “Qualified Bids” is defined in the Bidding Procedures.  “Registered Intellectual Property” means all applications, registrations and filings for Intellectual  Property that have been registered, filed, or applied for with or by any Governmental Entity or other public  or quasi-public legal authority anywhere in the world, including the United States Patent and Trademark  Office or United States Copyright Office, including issued Patents and Patent applications, registered  Trademarks and Trademark applications, registered Copyrights and Copyright applications, and Internet  Properties registrations and applications.  “Regulatory Authority” means any national or supranational Governmental Entity, including the  FDA or the EMA, with responsibility for granting any license, registrations or approvals with respect to the  Products.  “Regulatory Authorizations” means any approvals, clearances, authorizations, registrations,  certifications, licenses and permits granted by any Regulatory Authority, including any INDs, BLAs and  MAAs.  “Regulatory Documentation” means all (a) applications, submissions, registrations, or notifications  submitted, or generated or prepared in preparation for, or anticipation of, submission, to a Regulatory  Authority with a view to the filing, obtaining, updating or maintaining of any Regulatory Authorization, in  each case including any investigational medicinal product dossier to the extent relating to the Product  (including, for clarity, INDs), (b) correspondence with or to Regulatory Authorities (including Regulatory  Authorization letters, minutes and official contact reports relating to any communications with any  Regulatory Authorities) with respect to the assets described in clause (a) above, (c) records contained in all  pharmacovigilance and study databases, all adverse drug events, experience or reaction reports and  associated documents, investigations of adverse drug event, experience or reaction reports, and any other  information relevant to the assessment of safety or benefit-risk ratios, including, for the avoidance of doubt,  all legacy data, in each case to the extent relating to the Product, (d) non-clinical, clinical and other files,  writings, drafts, notes, studies, reports, modules and other documents or data contained or referenced in or  supporting any of the foregoing, in each case, that were acquired, developed, compiled, collected or  generated by Seller or by any third party on behalf of Seller, in each case, to the extent used or related to  the Product or the Business, (e) Trial Data, and (f) all regulatory or legal rights in any of (a)-(e).  “Reimbursing Party” is defined in Section 9.1(c).  “Representatives” means, when used with respect to any Person, the directors, officers, employees,  consultants, financial advisors, accountants, legal counsel, investment bankers and other agents, advisors  and representatives of such Person and its Subsidiaries.  “Required Key Employees” means the required number of Key Employees in each category of Key  Employees in the Key Employee Group, as set forth in the Key Employee Notice; provided, however, that  if Purchaser elects, in its sole discretion, not to make an offer of employment or engagement as a consultant  

 

  74  or independent contractor to one or more Key Employees, the required number of Key Employees in the  applicable category shall be reduced by the number of Key Employees in such category that have not  received an offer of employment or engagement as a consultant or independent contractor; provided,  further, that no such reduction shall apply with respect to any Key Employee whose employment with  Seller terminates (voluntarily or involuntarily) prior to Closing.  “Restricted Parties” is defined in Section 3.14(g).  “Restructuring Transaction” means (a) any recapitalization transaction, plan of reorganization,  liquidation, restructuring or sale, including any such transaction by way of a credit bid by or settlement with  any creditor or other contractual counterparty of Seller, involving (directly or indirectly) all or any material  portion of the Acquired Assets, or (ii) any merger, consolidation, share exchange, business combination or  similar transaction (directly or indirectly) involving all or any material portion of the Acquired Assets, in  each case whether in one transaction or a series of transactions; provided that, in each case of (i) and (ii),  such transaction will not be considered to be a Restructuring Transaction if such transaction occurs prior to  the termination of this Agreement and would not prevent the Acquisition from occurring in accordance with  the terms of this Agreement.  “Retained Books and Records” means the company seal, minute books, stock certificates, stock or  equity record books, Tax Returns and other books, records and work papers related to Taxes paid or payable  by Seller or their Affiliates, work papers and such other books and records as pertain to the organization,  qualification to do business, existence or capitalization of Seller or any Affiliate thereof, books and records  that Seller is required to retain under applicable Law, books and records that relate exclusively to an  Excluded Asset or Excluded Liability and all of Seller’s communications, documents, or materials  exclusively related to the Excluded Assets and the Excluded Liabilities that Seller may retain pursuant to  any attorney-client privilege, work product doctrine, common interest, or joint defense privilege, and  electronic and tangible documents reflecting such communications and materials.  “Sale Hearing” means the hearing conducted by the Bankruptcy Court to approve the Transactions.  “Sale Motion” is defined in Section 5.6.  “Sale Order” means an Order of the Bankruptcy Court in the form attached hereto as Exhibit D,  with any changes that Purchaser may approve in advance in its sole and absolute discretion, that has not  been stayed, vacated or stayed pending appeal, authorizing and approving the sale of the Acquired Assets  to Purchaser on the terms and conditions set forth herein.  “SEC” means the Securities and Exchange Commission.  “Seller” is defined in the Recitals.  “Seller Confidentiality Agreements” means those agreements by and between Seller, on the one  hand, and Persons expressing an interest in acquiring an ownership interest in Seller or the Business, on the  other hand, with respect to the use and confidentiality of information about Seller and its Affiliates and the  Business and certain other obligations.  “Seller Disclosure Schedule” means the disclosure schedule delivered by Seller to Purchaser  immediately prior to the execution of this Agreement.  “Seller Indemnitees” is defined in Section 7.1(c).  

 

  75  “Seller Intellectual Property” means all Intellectual Property owned or purported to be owned by,  or licensed to, Seller (other than Intellectual Property that is an Excluded Asset) which (i) claim, cover or  are embodied in, or (ii) are otherwise Primarily Related to, in each case ((i) and (ii)) the Product or the  Business.  “Seller Registered Intellectual Property” means all Registered Intellectual Property that is  registered or recorded in the name of, is or was filed or recorded in the name of, or that has been assigned  to, Seller or Seller’s licensor.  “Seller SEC Documents” means all forms, statements, documents and reports filed or furnished  with the SEC since January 1, 2020.  “Software” means all types of computer and other software programs including operating systems,  application programs, software tools, firmware and software imbedded in equipment, including both object  code and source code versions thereof, and all related documentation.  “Specified Laboratory Equipment” is defined in Section 1.1(q).  “Straddle Period” means a taxable period that includes but does not end on the Closing Date.  “Subsidiary” means with respect to any Person, any corporation, limited liability company,  partnership or other organization, whether incorporated or unincorporated, of which (a) at least a majority  of the outstanding shares of capital stock, or other equity interests, having by their terms ordinary voting  power to elect a majority of the board of directors or others performing similar functions with respect to  such corporation, limited liability company, partnership or other organization is directly or indirectly owned  or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more  of its Subsidiaries, or (b) with respect to a partnership, such Person or any other Subsidiary of such Person  is a general partner of such partnership.  “Successful Bidder” is defined in the Bidding Procedures.  “Surgical Indication” means the indication for the Product for the reversal of the antiplatelet effects  of ticagrelor in patients requiring urgent surgery or an invasive procedure.  “Tax” or “Taxes” means any and all U.S. federal, state, local and non-U.S. taxes, assessments,  levies, duties, tariffs, imposts and other similar charges and fees imposed by any Governmental Entity,  including income, franchise, windfall or other profits, gross receipts, property, sales, use, net worth, capital  stock, payroll, employment, social security, workers’ compensation, unemployment compensation, excise,  withholding, ad valorem, stamp, transfer, value-added, occupation, environmental, disability, real property,  personal property, registration, alternative or add-on minimum, or estimated tax, including any interest,  penalty, additions to tax and any additional amounts imposed with respect thereto.  “Tax Return” means any report, return, certificate, claim for refund, election, estimated Tax filing  or declaration filed or required to be filed with any Governmental Entity with respect to Taxes, including  any schedule or attachment thereto, and including any amendments thereof.  “Taxing Authority” means any federal, state, local or foreign Governmental Entity or authority  responsible for the imposition, collection or administration of any Tax.  “Third Party Claim” is defined in Section 7.2(b).  

 

  76  “Trademarks” means trademarks, trademark rights, service marks, service mark rights, trade dress,  logos, slogans, trade names, trade name rights, assumed names, corporate names and other designations of  origin, together with all translations, adaptations, derivations and combinations thereof and including all  goodwill associated therewith, and all applications, registrations and renewals in connection therewith.  “Transactions” means the transactions contemplated by this Agreement and the Ancillary  Documents.  “Transfer Taxes” is defined in Section 9.1(a).  “Transferred Employee” is defined in Section 5.11.  “Transition Services Agreement” is defined in Section 2.2(a)(vii).  “Trial Data” means all technical or scientific Know-How, trade secrets, methods, processes,  formulae, designs, specifications and data, including biological, chemical, pharmacological, toxicological,  pre-clinical, clinical, safety, manufacturing and quality control data and assays; in each case, whether or  not confidential, proprietary, patented or patentable, in any form, (a) generated or developed by or on  behalf of Seller or any collaborator, co-developer or other Person to which Seller or such collaborator or  co-developer has delegated responsibility or has otherwise engaged to perform clinical trials or CMC  related activities (including supply of the Product for use in clinical trials) or related services, including  any clinical trial databases and other data and reports arising out of the conduct of clinical trials or other  clinical activities, any clinical trial agreements, vendor agreements or contract research organization  agreements related to the conduct of the clinical trials or clinical activities, including any and all research  results, or (b) either owned or controlled by Seller as of the date hereof, or upon passage of time, or  occurrence of a particular event, would become owned or controlled by Seller, in each case Primarily  Related to the Business or Product.     [Signature Page Follows]  

 

    [Signature Page to Asset Purchase Agreement]  IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed on  their behalf by their officers thereunto duly authorized, as of the date first above written.        SELLER:     PHASEBIO PHARMACEUTICALS INC.        By:  /s/ Jonathan Mow    Name: Jonathan Mow   Title: Chief Executive Officer                   

 

    [Signature Page to Asset Purchase Agreement]  IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed on  their behalf by their officers thereunto duly authorized, as of the date first above written.          PURCHASER:      CHIESI FARMACEUTICI S.P.A.          By:  /s/ Alessandro Chiesi     Name: Alessandro Chiesi   Title: Chief Commercial Officer

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