Document:

ex101executedthirdamendm

             THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER        THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this “Agreement”)  dated  as  of  June  17,  2019  (the  “Third  Amendment  Effective  Date”)  is  entered  into  among  ESTABLISHMENT  LABS  HOLDINGS  INC.,  a  BVI  business  company,  limited  by  shares  and  incorporated under the laws of the British Virgin Islands (the “Borrower”), the Guarantors party hereto, the  Lenders  party  hereto  and  MADRYN  HEALTH  PARTNERS,  LP,  a  Delaware  limited  partnership,  as  Administrative Agent.  All capitalized terms used herein and not otherwise defined herein shall have the  meanings given to such terms in the Existing Credit Agreement (as defined below) or the Amended Credit  Agreement (as defined below).                                     RECITALS         WHEREAS,  the  Borrower,  the  Guarantors  party  thereto,  the  Lenders  party  thereto  and  the  Administrative Agent have entered into that certain Credit Agreement dated as of August 24, 2017 (as  amended by that certain First Amendment to Credit Agreement dated as of October 31, 2017, that certain  Second Amendment to Credit Agreement and Waiver dated as of June 15, 2018 and as further amended,  restated,  supplemented  or  modified  from  time  to  time  prior  to  the  date  hereof,  the  “Existing  Credit  Agreement”);          WHEREAS, the Borrower has requested that the Lenders waive the Events of Default set forth in  Exhibit A to this Agreement (such Events of Default, the “Existing Events of Default”);          WHEREAS, the Borrower has requested that the Existing Credit Agreement be amended to provide  for  certain  modifications  of  the  terms  of  the  Existing  Credit  Agreement,  and  that,  as so  amended,  the  Existing Credit Agreement for ease of reference be restated (after giving effect to this Agreement) in the  form of Schedule 1 hereto; and         WHEREAS,  the  Lenders  are  willing  to  waive  the  Existing  Events  of  Default  and  amend  the  Existing Credit Agreement, in each case, subject to the terms and conditions hereof;         NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,  and  for  other  good  and  valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby  acknowledged, the parties hereto agree as follows:         1.   Amendments.  Effective as of the Third Amendment Effective Date:               (a)   The Existing Credit Agreement is hereby amended by this Agreement and for ease        of reference restated (after giving effect to this Agreement) in the form of Schedule 1 hereto (the        Existing Credit Agreement, as so amended by this Agreement, being referred to as the “Amended        Credit Agreement”).               (b)  (i) Exhibit A to the Existing Credit Agreement is hereby amended and restated to        read,  in  its  entirety,  as  set  forth  on  Schedule  2  hereto;  (ii)  Exhibit  B-5  to  the  Existing  Credit        Agreement shall be referred to as Exhibit B-6 in the Amended Credit Agreement and a new Exhibit        B-5 shall be included as an exhibit to the Amended Credit Agreement to read, in its entirety, as set        forth on Schedule 3 hereto; and (iii) Exhibit E to the Existing Credit Agreement is hereby amended        and restated to read, in its entirety, as set forth on Schedule 4 hereto.               (c)  Schedule 2.01 to the Existing Credit Agreement is hereby amended and restated to        read, in its entirety, as set forth on Schedule 5 hereto.                                          1  

 

      Except as expressly set forth above, all Exhibits and Schedules to the Existing Credit Agreement  will  continue  in  their  present  forms  as  Exhibits  or  Schedules,  as  applicable,  to  the  Amended  Credit  Agreement.         2.    Waiver of Existing Events of Default.  Subject to the other terms and conditions of this   Agreement, the Lenders hereby waive the Existing Events of Default.  The above shall not modify or affect   the Loan Parties’ obligations to comply fully with the terms of the Amended Credit Agreement or any other   duty, term, condition or covenant contained in the Amended Credit Agreement or any other Investment   Document  in  the  future.   This  waiver  is  limited  solely  to  the  Existing  Events  of  Default,  and  nothing   contained in this Agreement shall be deemed to constitute a waiver of any other rights or remedies the   Administrative  Agent  or  any  Lender  may  have  under  the  Amended  Credit  Agreement  or  any  other   Investment Documents or under applicable Law.           3.   Conditions Precedent.  This Agreement shall be effective upon satisfaction of the following   conditions precedent:                (a)  Executed Documents. Receipt by the Administrative Agent of counterparts of (i)         this Agreement duly executed by the Loan Parties, the Lenders and the Administrative Agent; (ii)         Term B-4 Notes duly executed by the Borrower in favor of each Lender; and (iii) an amended and         restated Fee Letter in form and substance acceptable to the Administrative Agent;                (b)  Amendment to Costa Rican IP Security Agreement and Costa Rican Security Trust         Agreement. Receipt by the Administrative Agent of counterparts of amendments to (i) the Costa         Rican IP Security Agreement; and (ii) the Costa Rican Security Trust Agreement, in each case,         duly executed by the parties thereto and in form and substance satisfactory to the Administrative         Agent;                (c)  Amendment  to  Brazilian  Share  Pledge  Agreement  and  Brazilian  Receivables         Pledge Agreement. Receipt by the Administrative Agent of counterparts of amendments to (i) the         Brazilian Share Pledge Agreement; and (ii) the Brazilian Receivables Pledge Agreement, in each         case,  duly  executed  by  the  parties  thereto  and  in  form  and  substance  satisfactory  to  the         Administrative Agent;                (d)  Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions         of legal counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, dated         as of the Third Amendment Effective Date, and in form and substance reasonably satisfactory to         the Administrative Agent;                (e)  Organization Documents, Resolutions, Etc.  Receipt by the Administrative Agent         of the following, each of which shall be originals or facsimiles (followed promptly by originals),         in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:                      (i)   copies of the Organization Documents of each Loan Party certified to be               true and complete as of a recent date by (A) the appropriate Governmental Authority of the               state or other jurisdiction of its incorporation or organization, where applicable, or (B) in               the case of each Costa Rican Loan Party, a notarial certification, and in each case certified               by a director, secretary or assistant secretary of such Loan Party to be true and correct as               of the Third Amendment Effective Date;                                           2   CHAR1\1659955v4 

 

                   (ii) such  certificates  of  resolutions  or  other  action,  incumbency  certificates               and/or other certificates of Responsible Officers of each Loan Party as the Administrative               Agent  may  require evidencing  the identity,  authority  and capacity  of  each  Responsible               Officer  thereof  authorized  to  act  as  a  Responsible  Officer  in  connection  with  this               Agreement and the other Investment Documents to which such Loan Party is a party;                       (iii) such  documents  and  certifications  as  the  Administrative  Agent  may               require to evidence that each Loan Party is duly incorporated, organized or formed, and is               validly existing, in good standing and qualified to engage in business in its state or other               jurisdiction  of  incorporation,  organization  or  formation  (such  certifications  to  include,               without limitation, a certificate of good standing of the Borrower issued by the Registrar               of Corporate Affairs in the British Virgin Islands);                       (iv)  a registered agent’s certificate issued by the Borrower’s registered agent               in the British Virgin Islands and dated within one month of the Third Amendment Effective               Date, attaching certified copy registers of directors and charges;                       (v)  a copy of a resolution of the Board of Directors of each Belgian Loan Party               setting forth the reasons it is considered that the entry into this Agreement, and in particular               the assumption of its guaranty obligations in accordance with Article IV of the Amended               Credit Agreement, is of benefit to such Belgian Loan Party;                       (vi)  in relation to each Belgian Loan Party, a solvency certificate (attest niet-              faillissement/certificat  de  non-faillite)  and  an uittreksel  van  de  Kruispuntbank  voor               Ondernemingen/extrait de la Banque Carrefour des Entreprises, each dated not more than               three (3) Business Days prior to the Third Amendment Effective Date; and                      (vii)  a certificate of the Articles of Incorporation and organizational documents,               and a recent certificación de personería jurídica, of each Costa Rican Loan Party;                (f)  Perfection  and  Priority  of  Liens.   Receipt  by  the  Administrative  Agent  of  the         following:                      (i)   searches of Uniform Commercial Code filings (or the equivalent) in the               jurisdiction of formation of each Loan Party or where a filing would need to be made in               order to perfect the Administrative Agent’s security interest in the Collateral, copies of the               financing statements (or the equivalent) on file in such jurisdictions and evidence that no               Liens exist other than Permitted Liens;                      (ii) Uniform Commercial Code (or the equivalent) financing statements for               each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion,               to perfect the Administrative Agent’s security interest in the Collateral, including, without               limitation, filings of variations to the particulars of the relevant charges registered with the               Registrar of Corporate Affairs in the British Virgin Islands in accordance with Section 164               of the BVI Business Companies Act, 2004;                      (iii) searches of ownership of, and Liens on, the Business IP Rights of the Loan               Parties in the appropriate governmental offices; and                      (iv)  duly executed notices of grant of security interest in the form required by               the applicable Security Agreement as are necessary, in the Administrative Agent’s sole                                          3   CHAR1\1659955v4 

 

             discretion, to perfect the Administrative Agent’s security interest in the Business IP Rights               of the Loan Parties;                (g)  Attorney Costs. The Borrower shall have paid all reasonable and documented fees,         charges  and  disbursements  of  counsel  to  the  Administrative  Agent  incurred  to  the  Third         Amendment Effective Date.          4.   Reaffirmation.  Each of the Loan Parties acknowledges and reaffirms (a) that it is bound   by all of the terms of the Investment Documents to which it is a party and (b) that it is responsible for the   observance  and  full performance  of  all Obligations,  including  without limitation,  the repayment  of the   Loans.  Furthermore, the Loan Parties acknowledge and confirm (i) that the Administrative Agent and the   Lenders have performed fully all of their obligations under the Existing Credit Agreement and the other   Investment Documents and (ii) that by entering into this Agreement, the Administrative Agent and the   Lenders do not, except as expressly set forth herein, waive or release any term or condition of the Amended   Credit Agreement or any of the other Investment Documents or any of their rights or remedies under such   Investment Documents or any applicable Law or any of the obligations of the Loan Parties thereunder.    The Loan Parties confirm for the benefit of the Administrative Agent and the Lenders that it is not the   intention of the parties hereto that the amendments to the Existing Credit Agreement set forth herein result   in a Belgian law novation (novatie) (within the meaning of Articles 1271 et seq. of the Belgian Civil Code)   (a “Novation”) of the Existing Credit Agreement, it being specified that in the event this Agreement would   be  deemed  to  constitute  a  Novation,  the  Administrative  Agent  and  the  Lenders  expressly  preserve  the   benefit of the Liens created under any Loan Documents in accordance with Article 1278 of the Belgian   Civil Code and each Loan Party acknowledges and agrees to such preservation.          5.   Release.  As a material part of the consideration for Administrative Agent and the Lenders   entering into this Agreement, the Loan Parties agree as follows (the “Release Provision”):                (a)  By  their  respective  signatures  below,  the  Loan  Parties  hereby  agree  that  the         Administrative Agent, the Lenders, each of their respective Affiliates and the foregoing Persons’         respective  officers,  managers,  members,  directors,  advisors,  sub-advisors,  partners,  agents  and         employees, and their respective successors and assigns (hereinafter all of the above collectively         referred to as the “Lender Group”), are irrevocably and unconditionally released, discharged and         acquitted from any and all actions, causes of action, claims, demands, damages and liabilities of         whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to         the extent that any of the foregoing arises from any action or failure to act under or otherwise arising         in connection with the Investment Documents on or prior to the Third Amendment Effective Date.                (b)  Each  Loan  Party  hereby  acknowledges,  represents  and  warrants  to  the  Lender         Group that:                      (i)   it has read and understands the effect of the Release Provision. Each Loan               Party  has  had  the  assistance  of  independent  counsel  of  its  own  choice,  or  has  had  the               opportunity to retain such independent counsel, in reviewing, discussing, and considering               all the terms of the Release Provision; and if counsel was retained, counsel for such Loan               Party has read and considered the Release Provision and advised such Loan Party with               respect to the same.  Before execution of this Agreement, such Loan Party has had adequate               opportunity to make whatever investigation or inquiry it may deem necessary or desirable               in connection with the subject matter of the Release Provision.                                           4   CHAR1\1659955v4 

 

                  (ii)  no Loan Party is acting in reliance on any representation, understanding,              or agreement not expressly set forth herein.  Each Loan Party acknowledges that the Lender              Group has not made any representation with respect to the Release Provision except as              expressly set forth herein.                     (iii)  each Loan Party has executed this Agreement and the Release Provision              thereof  as  its  free  and  voluntary  act,  without  any  duress,  coercion,  or  undue  influence              exerted by or on behalf of any person.                     (iv)  the Loan Parties are the sole owners of the claims released by the Release              Provision, and no Loan Party has heretofore conveyed or assigned any interest in any such              claim to any other Person.               (c)   Each  Loan  Party  understands  that  the  Release  Provision  was  a  material        consideration  in  the  agreement  of  the  Administrative  Agent  and  the  Lenders  to  enter  into  this        Agreement.  The Release Provision shall be in addition to any rights, privileges and immunities        granted to the Administrative Agent and the Lenders under the Investment Documents.         6.    Miscellaneous.                (a)  The Existing Credit Agreement and the obligations of the Loan Parties thereunder         and under the other Investment Documents, except as expressly modified by this Agreement, are         hereby ratified and confirmed and shall remain in full force and effect according to their terms.          This Agreement is a Loan Document.                (b)  Each Guarantor (i) acknowledges and consents to all of the terms and conditions         of this Agreement, (ii) affirms all of its obligations under the Loan Documents and (iii) agrees that         this Agreement and all documents executed in connection herewith do not operate to reduce or         discharge its obligations under the Existing Credit Agreement or the Loan Documents.                (c)  The Loan Parties hereby represent and warrant as follows:                      (i)   each Loan Party has taken all necessary corporate or other organizational               action to authorize the execution, delivery and performance of this Agreement.                      (ii)  this Agreement has been duly executed and delivered by each Loan Party               party hereto and constitutes a legal, valid and binding obligation of each such Loan Party,               enforceable  against  each  such  Loan  Party  in  accordance  with  its  terms,  subject  to               bankruptcy,  insolvency,  reorganization,  moratorium  and  similar  laws  affecting               enforceability of creditors’ rights generally and to general principles of equity (regardless               of whether such enforceability is considered in a proceeding in equity or at law).                      (iii)  no  approval,  consent,  exemption,  authorization  or  other  action  by,  or               notice to, or filing with, any Governmental Authority or any other Person is necessary or               required in connection with the execution, delivery or performance by, or enforcement               against, any Loan Party of this Agreement.                      (iv)  (A)  the  representations  and  warranties  of  the  Borrower  and  each  other               Loan  Party  contained  in  Article  VI  of  the  Amended  Credit  Agreement  or  any  other               Investment Document, or which are contained in any document furnished at any time under               or in connection therewith, are true and correct in all material respects (and in all respects                                          5   CHAR1\1659955v4 

 

            if any such representation and warranty is already qualified by materiality or reference to              Material  Adverse  Effect)  on  and  as  of  the  date  hereof,  except  to  the  extent  that  such              representations and warranties specifically refer to an earlier date, in which case they are              true and correct in all material respects (and in all respects if any such representation and              warranty is already qualified by materiality or reference to Material Adverse Effect) as of              such  earlier  date  and  (B)  no  event  has  occurred  and  is  continuing  which  constitutes  a              Default or an Event of Default.               (d)   Each of the Loan Parties hereby affirms the Liens created and granted in the Loan        Documents in favor of the Administrative Agent, for the benefit of the Secured Parties, and agrees        that this Agreement does not adversely affect or impair such liens and security interests in any        manner.               (e)   This Agreement may be executed in counterparts (and by different parties hereto        in different counterparts), each of which shall constitute an original, but all of which when taken        together shall constitute a single contract.  Delivery of an executed counterpart of a signature page        of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be        effective as delivery of a manually executed counterpart of this Agreement.               (f)   If any provision of this Agreement is held to be illegal, invalid or unenforceable,        (i) the legality, validity and enforceability of the remaining provisions of this Agreement shall not        be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to        replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect        of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The        invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such        provision in any other jurisdiction.               (g)   THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR        CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED        UPON,  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  AND  THE        TRANSACTIONS  CONTEMPLATED  HEREBY,  SHALL  BE  GOVERNED  BY,  AND        CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.                              [SIGNATURE PAGES FOLLOW]                                          6   CHAR1\1659955v4 

 

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as  of the date first above written.   BORROWER:                     ESTABLISHMENT LABS HOLDINGS INC.,                                a BVI business company incorporated under the laws of the                                British Virgin Islands                                 By:/s/ Juan José Chacón Quirós                                Name:  Juan José Chacón Quirós                                Title:    Director   GUARANTORS:                   ESTABLISHMENT LABS SOCIEDAD ANONIMA,                                a Costa Rica corporation                                 By: :/s/ Juan José Chacón Quirós                                Name: Juan José Chacón Quirós                                Title:   Secretary                                 EUROPEAN DISTRIBUTION CENTER MOTIVA BVBA,                                a Belgium besloten vennootschap met beperkte                                aansprakelijkheid                                 By: :/s/ Juan José Chacón Quirós                                Name:  Juan José Chacón Quirós                                Title:    Manager                                 ESTABLISHMENT LABS BRASIL PRODUTOS PARA                                SAUDE LTDA.,                                a Brazil limited liability company                                 By:/s/ Eddie de Oliveira                                Name:   Eddie de Oliveira                                Title:     Manager                                 JAMM TECHNOLOGIES, INC.,                                a Delaware corporation                                 By:/s/ Juan José Chacón Quirós                                Name:  Juan José Chacón Quirós                                Title:    President                                                         ESTABLISHMENT LABS HOLDINGS INC.                                          THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER  

 

MOTIVA USA LLC,  a Delaware limited liability company   By:   ESTABLISHMENT LABS HOLDINGS INC.        its Sole Member          By:/s/ Juan José Chacón Quirós         Name:  Juan José Chacón Quirós        Title:     Director                           ESTABLISHMENT LABS HOLDINGS INC.            THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER  

 

ADMINISTRATIVE  AGENT:                        MADRYN HEALTH PARTNERS, LP                                 By:  MADRYN HEALTH ADVISORS, LP,                                      its General Partner                                       By:   MADRYN HEALTH ADVISORS GP, LLC,                                            its General Partner                                             By: /s/ Avinash  Amin                                             Name:  Avinash Amin                                             Title:  Member                                                         ESTABLISHMENT LABS HOLDINGS INC.                                          THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER  

 

LENDERS:                      MADRYN HEALTH PARTNERS, LP                                 By:  MADRYN HEALTH ADVISORS, LP,                                      its General Partner                                       By:   MADRYN HEALTH ADVISORS GP, LLC,                                            its General Partner                                             By: /s/ Avinash  Amin                                             Name:  Avinash Amin                                             Title:  Member                                  MADRYN HEALTH PARTNERS (CAYMAN MASTER), LP                                 By:  MADRYN HEALTH ADVISORS, LP,                                      its General Partner                                       By:   MADRYN HEALTH ADVISORS GP, LLC,                                            its General Partner                                             By: /s/ Avinash  Amin                                             Name:  Avinash Amin                                             Title:  Member                                                         ESTABLISHMENT LABS HOLDINGS INC.                                          THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER  

 

                                  EXHIBIT A                           EXISTING EVENTS OF DEFAULT   1.   Failure to notify Administrative Agent of information relating to the formation of the following  Immaterial Subsidiaries within thirty (30) days of formation of such Subsidiary, as required under Section  7.12 of the Existing Credit Agreement:         (a)  Motiva Implants UK Limited;         (b)  Motiva Italy S.R.L.;         (c)  Motiva Implants Spain S.L.; and         (d)  Motive Austria GmbH.   CHAR1\1659955v4 

 

                                 SCHEDULE 1                           AMENDED CREDIT AGREEMENT                                    See Attached.   CHAR1\1659955v4 

 

                                                                  SCHEDULE 1                                 CREDIT AGREEMENT                               Dated as of August 24, 2017                                       among                        ESTABLISHMENT LABS HOLDINGS INC.,                                  as the Borrower,                      CERTAIN SUBSIDIARIES OF THE BORROWER,                                  as the Guarantors,                           MADRYN HEALTH PARTNERS, LP,                              as the Administrative Agent                                        and                   THE LENDERS FROM TIME TO TIME PARTY HERETO    CHAR1\1659840v4  

 

                             TABLE OF CONTENTS                                                                             Page   ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS ..................................................................... 1       1.01 Defined Terms. ................................................................................................................... 1       1.02 Other Interpretive Provisions. ........................................................................................... 39       1.03 Accounting Terms. ............................................................................................................ 39       1.04 Times of Day. ................................................................................................................... 41       1.05 Belgian Terms. .................................................................................................................. 41 ARTICLE II. THE COMMITMENTS ....................................................................................................... 42       2.01 Commitments. ................................................................................................................... 42       2.02 Borrowings........................................................................................................................ 43       2.03 Prepayments. ..................................................................................................................... 44       2.04 Termination or Reduction of Commitments. .................................................................... 46       2.05 Repayment of Loans. ........................................................................................................ 47       2.06 Interest. ............................................................................................................................. 47       2.07 Fees. .................................................................................................................................. 47       2.08 Computation of Interest. ................................................................................................... 47       2.09 Evidence of Debt. ............................................................................................................. 47       2.10 Payments Generally. ......................................................................................................... 48       2.11 Sharing of Payments by Lenders. ..................................................................................... 48       2.12 Defaulting Lenders. .......................................................................................................... 49       2.13 Right of First Offer. .......................................................................................................... 50       2.14 Term C Facility. ................................................................................................................ 50 ARTICLE III. TAXES ................................................................................................................................ 51       3.01 Taxes. ................................................................................................................................ 51       3.02 Increased Costs. ................................................................................................................ 53       3.03 Mitigation Obligations; Replacement of Lenders. ............................................................ 55       3.04 Illegality. ........................................................................................................................... 55       3.05 Three-Month LIBOR Unavailability Period. .................................................................... 55       3.06 Survival. ............................................................................................................................ 56 ARTICLE IV. GUARANTY ...................................................................................................................... 56       4.01 The Guaranty. ................................................................................................................... 56       4.02 Obligations Unconditional. ............................................................................................... 57       4.03 Reinstatement. ................................................................................................................... 57       4.04 Certain Additional Waivers. ............................................................................................. 58       4.05 Remedies. .......................................................................................................................... 58       4.06 Rights of Contribution. ..................................................................................................... 58       4.07 Guarantee of Payment; Continuing Guarantee. ................................................................ 58       4.08 Limitations Applicable to Belgian Loan Parties. .............................................................. 58 ARTICLE V. CONDITIONS PRECEDENT TO BORROWINGS ........................................................... 59       5.01 Condition to Effectiveness. ............................................................................................... 59       5.02 Conditions to Initial Extensions of Credit. ....................................................................... 59       5.03 Conditions to all Borrowings. ........................................................................................... 64       5.04 Additional Conditions to Term C Borrowing. .................................................................. 64   CHAR1\1659840v4  

 

ARTICLE VI. REPRESENTATIONS AND WARRANTIES ................................................................... 65       6.01  Existence, Qualification and Power. ................................................................................. 65       6.02  Authorization; No Contravention. .................................................................................... 65       6.03  Governmental Authorization; Other Consents. ................................................................. 65       6.04  Binding Effect. .................................................................................................................. 66       6.05  Financial Statements; No Material Adverse Effect........................................................... 66       6.06  Litigation. .......................................................................................................................... 66       6.07  No Default......................................................................................................................... 67       6.08  Ownership of Property; Liens. .......................................................................................... 67       6.09  Environmental Compliance. ............................................................................................. 67       6.10  Insurance. .......................................................................................................................... 68       6.11  Taxes. ................................................................................................................................ 68       6.12  ERISA Compliance. .......................................................................................................... 68       6.13  Subsidiaries and Capitalization. ........................................................................................ 70       6.14  Margin Regulations; Investment Company Act................................................................ 70       6.15  Disclosure. ........................................................................................................................ 70       6.16  Compliance with Laws. .................................................................................................... 71       6.17  Intellectual Property; Licenses, Etc. ................................................................................. 72       6.18  Solvency............................................................................................................................ 74       6.19  Perfection of Security Interests in the Collateral. ............................................................. 74       6.20  Business Locations. .......................................................................................................... 74       6.21  Sanctions Concerns; Anti-Corruption Laws; PATRIOT Act; Anti-Money              Laundering Laws. ............................................................................................................. 75       6.22  Material Contracts. ............................................................................................................ 76       6.23  Regulatory Approvals. ...................................................................................................... 76       6.24  Labor Matters. ................................................................................................................... 78       6.25  EEA Financial Institutions. ............................................................................................... 78       6.26  Representations as to Foreign Loan Parties. ..................................................................... 78       6.27  Royalty and Other Payments. ........................................................................................... 79       6.28  Non-Competes. ................................................................................................................. 79       6.29  Internal Controls. .............................................................................................................. 79 ARTICLE VII. AFFIRMATIVE COVENANTS ....................................................................................... 79       7.01  Financial Statements. ........................................................................................................ 80       7.02  Certificates; Other Information. ........................................................................................ 80       7.03  Notices. ............................................................................................................................. 83       7.04  Payment of Obligations. ................................................................................................... 84       7.05  Preservation of Existence, Etc. ......................................................................................... 84       7.06  Maintenance of Properties. ............................................................................................... 85       7.07  Maintenance of Insurance. ................................................................................................ 85       7.08  Compliance with Laws. .................................................................................................... 85       7.09  Books and Records. .......................................................................................................... 85       7.10  Inspection Rights. ............................................................................................................. 86       7.11  Use of Proceeds. ............................................................................................................... 86       7.12  Additional Subsidiaries. .................................................................................................... 86       7.13  ERISA Compliance. .......................................................................................................... 87       7.14  Pledged Assets. ................................................................................................................. 87       7.15  Compliance with Material Contracts. ............................................................................... 88       7.16  Maintenance of Regulatory Approvals, Contracts, IP Rights, Etc. ................................... 88       7.17  Anti-Corruption Laws. ...................................................................................................... 89                                        iii  CHAR1\1659840v4  

 

      7.18  Cash Management. ............................................................................................................ 89       7.19  Post-Closing Obligations. ................................................................................................. 89       7.20  Compliance with Securities Laws. .................................................................................... 90 ARTICLE VIII. NEGATIVE COVENANTS ............................................................................................ 90       8.01  Liens. ................................................................................................................................ 90       8.02  Investments. ...................................................................................................................... 92       8.03  Indebtedness...................................................................................................................... 93       8.04  Fundamental Changes. ...................................................................................................... 95       8.05  Dispositions. ..................................................................................................................... 96       8.06  Restricted Payments. ......................................................................................................... 96       8.07  Change in Nature of Business. .......................................................................................... 97       8.08  Transactions with Affiliates and Insiders.......................................................................... 97       8.09  Burdensome Agreements. ................................................................................................. 97       8.10  Use of Proceeds. ............................................................................................................... 98       8.11  Payment of Other Indebtedness. ....................................................................................... 98       8.12  Organization Documents; Fiscal Year; Legal Name, State of Formation and              Form of Entity; Certain Amendments. .............................................................................. 98       8.13  Ownership of Subsidiaries. ............................................................................................... 99       8.14  Sale Leasebacks. ............................................................................................................... 99       8.15  Sanctions; Anti-Corruption Laws. .................................................................................... 99       8.16  Minimum Product Revenues............................................................................................. 99       8.17  Liquidity.......................................................................................................................... 100       8.18  Modifications and Terminations of Material Contracts. ................................................. 101       8.19  Inbound and Outbound Licenses. ................................................................................... 101 ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES ................................................................... 101       9.01  Events of Default. ........................................................................................................... 101       9.02  Remedies Upon Event of Default. .................................................................................. 104       9.03  Application of Funds. ..................................................................................................... 105 ARTICLE X. ADMINISTRATIVE AGENT ........................................................................................... 106       10.01 Appointment and Authority. ........................................................................................... 106       10.02 Rights as a Lender. .......................................................................................................... 106       10.03 Exculpatory Provisions. .................................................................................................. 107       10.04 Reliance by Administrative Agent. ................................................................................. 107       10.05 Delegation of Duties. ...................................................................................................... 108       10.06 Resignation of Administrative Agent. ............................................................................ 108       10.07 Non-Reliance on Administrative Agent and Other Lenders. .......................................... 108       10.08 Administrative Agent May File Proofs of Claim. ........................................................... 109       10.09 Collateral and Guaranty Matters. .................................................................................... 109 ARTICLE XI. MISCELLANEOUS ......................................................................................................... 110       11.01 Amendments, Etc. ........................................................................................................... 110       11.02 Notices and Other Communications; Facsimile Copies. ................................................ 111       11.03 No Waiver; Cumulative Remedies; Enforcement. .......................................................... 113       11.04 Expenses; Indemnity; and Damage Waiver. ................................................................... 113       11.05 Payments Set Aside. ....................................................................................................... 115       11.06 Successors and Assigns. ................................................................................................. 116       11.07 Treatment of Certain Information; Confidentiality. ........................................................ 119       11.08 Set-off. ............................................................................................................................ 120                                         iv  CHAR1\1659840v4  

 

      11.09 Interest Rate Limitation. ................................................................................................. 120       11.10 Counterparts; Integration; Effectiveness. ........................................................................ 120       11.11 Survival of Representations and Warranties. .................................................................. 121       11.12 Severability. .................................................................................................................... 121       11.13 Replacement of Lenders. ................................................................................................ 121       11.14 Governing Law; Jurisdiction; Etc. .................................................................................. 122       11.15 Waiver of Right to Trial by Jury. .................................................................................... 123       11.16 Electronic Execution of Assignments and Certain Other Documents. ........................... 123       11.17 USA PATRIOT Act. ....................................................................................................... 124       11.18 No Advisory or Fiduciary Relationship. ......................................................................... 124       11.19 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. .................... 124       11.20 Funding Date................................................................................................................... 125                                         v  CHAR1\1659840v4  

 

SCHEDULES   2.01   Commitments and Applicable Percentages  7.19   Post-Closing Obligations  11.02  Certain Addresses for Notices   EXHIBITS   A      Form of Loan Notice  B-1    Form of Term A Note  B-2    Form of Term B-1 Note  B-3    Form of Term B-2 Note  B-4    Form of Term B-3 Note  B-5    Form of Term B-4 Note  B-6    Form of Term C Note  C      Form of Joinder Agreement  D      Form of Assignment and Assumption  E      Form of Compliance Certificate                                           vi  CHAR1\1659840v4  

 

                             CREDIT AGREEMENT         This CREDIT AGREEMENT is entered into as of August 24, 2017 among ESTABLISHMENT  LABS HOLDINGS INC., a BVI business company, limited by shares and incorporated under the laws of  the British Virgin Islands (the “Borrower”), the Guarantors (defined herein), the Lenders (defined herein)  and MADRYN HEALTH PARTNERS, LP, a Delaware limited partnership, as the Administrative Agent.         The Borrower has requested that the Lenders make term loan facilities available to the Borrower  and certain equity investments in the Borrower, and the Lenders are willing to do so on the terms and  conditions set forth herein.         In  consideration  of  the  mutual  covenants  and  agreements  herein  contained,  the  parties  hereto  covenant and agree as follows:                                     ARTICLE I.                        DEFINITIONS AND ACCOUNTING TERMS         1.01 Defined Terms.         As used in this Agreement, the following terms shall have the meanings set forth below:         “510(k)”  means (a)  any  premarket  notification and  corresponding  FDA  clearance  for  a  Device  pursuant  to  FDA  regulations  and  all  substantially  equivalent  or  similar  notifications,  applications  and  clearances  with  respect  to  any  other  non-U.S.  Regulatory  Authority,  including  the  EMA,  and  (b)  all  amendments,  supplements  and  other  additions  and  modifications  thereto,  and  all  documents,  data  and  information which are necessary for, filed with, incorporated by reference in or otherwise support any of  the foregoing.         “Acquisition” means the acquisition, whether through a single transaction or a series of related  transactions,  of  (a)  a  majority  of  the  Voting  Stock  or  other  controlling  ownership  interest  in  another  Person (including  the  purchase  of  an  option, warrant or  convertible  or similar type  security  to  acquire  such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase  of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion  of securities into, such equity or other ownership interest, (b) assets of another Person which constitute all  or substantially all of the assets of such Person or of a division, line of business or other business unit of  such Person or (c) any Product.         “Act” has the meaning set forth in Section 11.17.         “Administrative  Agent”  means  Madryn  Health  Partners,  LP,  in  its  capacity  as  administrative  agent under any of the Loan Documents, or any successor administrative agent.         “Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate,  account as set forth on Schedule 11.02 or such other address or account as the Administrative Agent may  from time to time notify the Loan Parties and the Lenders.         “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly  through one or more intermediaries, Controls or is Controlled by or is under common Control with the  Person specified.    CHAR1\1659840v4 

 

      “Agreement” means this Credit Agreement.         “All-In-Yield” means, with respect to any Indebtedness, the all-in-yield thereof, and taking into  account  the  interest  rate  (but  without  duplication  of  any  applicable  interest  rate  floor),  interest  rate  margin,  interest  rate  floors,  original  issue  discount  and  upfront  fees  paid  generally  to  all  Persons  providing such Indebtedness (with original issue discount and upfront fees being equated to interest (as  reasonably  determined  by  the  Administrative  Agent  in  a  manner  consistent  with  customary  financial  practice)  based  on  a  four  year  life  to  maturity),  but  exclusive  of  any  arrangement,  structuring,  underwriting or similar fee paid to any Person in connection therewith that is not shared generally with all  Persons providing such Indebtedness.         “Anti-Money Laundering Laws” has the meaning set forth in Section 6.21(d).         “Applicable Foreign Loan Party Documents” has the meaning set forth in Section 6.26(a).         “Applicable Margin” means eight percent (8.00%) per annum.         “Applicable Percentage” means, with respect to any Lender at any time, (a) in respect of the Term  A  Facility,  with  respect  to  any  Term  A  Lender  at  any  time,  the  percentage  (carried  out  to  the  ninth  decimal place) of the Term A Facility represented by (i) on or prior to the Funding Date, such Term A  Lender’s Term A Commitment at such time and (ii) thereafter, the outstanding principal amount of such  Term A Lender’s Term A Loans at such time, (b) in respect of the Term B-1 Facility, with respect to any  Term B-1 Lender at any time, the percentage (carried out to the ninth decimal place) of the Term B-1  Facility represented by (i) at any time during the Term B-1 Availability Period, such Term B-1 Lender’s  Term B-1 Commitments at such time and (ii) thereafter, the outstanding principal amount of such Term  B-1 Lender’s Term B-1 Loans at such time, (c) in respect of the Term B-2 Facility, with respect to any  Term B-2 Lender at any time, the percentage (carried out to the ninth decimal place) of the Term B-2  Facility represented by (i) at any time during the Term B-2 Availability Period, such Term B-2 Lender’s  Term B-2 Commitments at such time and (ii) thereafter, the outstanding principal amount of such Term  B-2 Lender’s Term B-2 Loans at such time, (d) in respect of the Term B-3 Facility, with respect to any  Term B-3 Lender at any time, the percentage (carried out to the ninth decimal place) of the Term B-3  Facility represented by (i) at any time during the Term B-3 Availability Period, such Term B-3 Lender’s  Term B-3 Commitments at such time and (ii) thereafter, the outstanding principal amount of such Term  B-3 Lender’s Term B-3 Loans at such time, (e) in respect of the Term B-4 Facility, with respect to any  Term B-4 Lender at any time, the percentage (carried out to the ninth decimal place) of the Term B-4  Facility represented by (i) at any time during the Term B-4 Availability Period, such Term B-4 Lender’s  Term B-4 Commitments at such time and (ii) thereafter, the outstanding principal amount of such Term  B-4 Lender’s Term B-4 Loans at such time and (f) in respect of the Term C Facility, with respect to any  Term C Lender at any time, the percentage (carried out to the ninth decimal place) of the Term C Facility  represented by (i) at any time after the Term C Commitments have been established pursuant to Section  2.14, such Term C Lender’s unfunded Term C Commitment at such time plus the outstanding principal  amount of such Term C Lender’s Term C Loans at such time and (ii) thereafter, the outstanding principal  amount of such Term C Lender’s Term C Loans at such time.  If the Commitments of all of the Lenders  to make Loans have been terminated pursuant to Section 9.02, or if the Commitments have expired, then  the Applicable Percentage of each Lender in respect of the applicable Facility shall be determined based  on the Applicable Percentage of such Lender in respect of such Facility most recently in effect, giving  effect  to  any  subsequent  assignments.   The  Applicable  Percentage  of  each  Lender  in  respect  of  each  Facility  is  set  forth  opposite  the  name  of  such  Lender  on  Schedule  2.01  or  in  the  Assignment  and  Assumption pursuant to which such Lender becomes a party hereto, as applicable.         “Applicable Quarter” has the meaning set forth in Section 8.16(b)(i)(A).                                         2  CHAR1\1659840v4 

 

      “Appropriate  Lender”  means,  at  any  time,  with  respect  to  any  Facility,  a  Lender  that  has  a  Commitment with respect to such Facility or holds a Loan under such Facility at such time.         “Approved  Fund”  means  any  Fund  that  is  administered  or  managed  by  (a)  a  Lender,  (b)  an  Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.         “Approved  Strategic  Investment”  means  an  Acquisition  or  Investment  designated  by  the  Borrower  as  an  “Approved  Strategic  Investment,”  which  designation  must  be  approved  by  the  Administrative Agent  in  its  sole and  absolute  discretion;  provided, that,  if the Borrower  would  like  to  designate  an  Acquisition  or  Investment  as  an  “Approved  Strategic  Investment,”  the  Borrower  shall  provide  written  notice to  the  Administrative  Agent  to  that  effect  (including  such  other  documents  and  certificates  as  the  Administrative  Agent  shall  require  in  connection  therewith)  and  within  ten  (10)  Business Days after receipt thereof, the Administrative Agent shall inform the Borrower by written notice  whether it approves such Acquisition or Investment as an “Approved Strategic Investment.”         “Assignment and  Assumption”  means an  assignment  and  assumption  entered  into  by  a  Lender  and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)),  and  accepted  by  the  Administrative  Agent,  in  substantially  the  form  of  Exhibit  D  or  any  other  form  (including electronic documentation generated by MarkitClear or other electronic platform) approved by  the Administrative Agent.         “Attributable  Indebtedness”  means,  on  any  date,  (a)  in  respect  of  any  Capital  Lease  of  any  Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of  such date in accordance with GAAP, (b) in respect of any Synthetic Lease of any Person, the capitalized  amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of  such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a  Capital Lease and (c) in respect of any Securitization Transaction of any Person, the outstanding principal  amount of such financing, after taking into account reserve accounts and making appropriate adjustments,  determined by the Administrative Agent in its reasonable judgment.         “Audited  Financial  Statements”  means  the  audited  consolidated  balance  sheet of  the  Borrower  and its Subsidiaries for the fiscal year ended December 31, 2016, and the related consolidated statements  of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its  Subsidiaries,  including  the  notes  thereto,  audited  by  independent  public  accountants  of  recognized  national standing and prepared in conformity with GAAP.         “Bail-In  Action”  means  the  exercise  of  any  Write-Down  and  Conversion  Powers  by  the  applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.         “Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55  of  Directive  2014/59/EU  of  the  European  Parliament  and  of  the  Council  of  the  European  Union,  the  implementing law for such EEA Member Country from time to time which is described in the EU Bail-In  Legislation Schedule.         “Banco Davivienda” means Banco Davivienda (Costa Rica) S.A.         “Banco Davivienda Documents” means, collectively, (a) that certain letter agreement dated as of  May 26, 2017 between Establishment Labs Sociedad Anonima and Banco Davivienda, (b) that certain  Mobile  Guarantee  on  Inventories  dated  as  of  May  26,  2017  between  Establishment  Labs  Sociedad  Anonima and Banco Davivienda, (c) that certain Bill of Exchange dated as of May 26, 2017 executed by                                          3  CHAR1\1659840v4 

 

Establishment  Labs  Sociedad  Anonima  in  favor  of  Banco  Davivienda  and  (d)  all  other  certificates,  agreements, documents and instruments related to the foregoing.         “Belgian Companies Code” means the Belgian Wetboek van Vennootschappen/Code des Sociétés,  as amended from time to time.          “Belgian Loan Party” means any Loan Party that is organized under the laws of the Kingdom of  Belgium.         “Belgian  Share  Pledge  Agreement”  means  that  certain  share  pledge  agreement  dated  as  of  the  Funding Date executed by the Administrative Agent, for the benefit of the Secured Parties, Establishment  Labs Sociedad Anonima and the Borrower.         “Belgian Receivables Pledge Agreement” means that certain receivables pledge agreement dated  as of the Funding Date executed by the Administrative Agent, for the benefit of the Secured Parties, and  each of the Belgian Loan Parties.         “Board  of  Directors”  means  (a)  with  respect  to  a  corporation,  the  board  of  directors  of  the  corporation or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a  partnership, the Board of Directors of the general partner of the partnership, (c) with respect to a limited  liability company, the managing member or members or any controlling committee of managing members  thereof  or  if  not  member-managed,  the  managers  thereof  or  any  committee  of  managing  members  or  managers  thereof  duly  authorized  to  act  on  behalf  of  such  Persons,  and  (d)  with  respect  to  any  other  Person, the board or committee of such Person serving a similar function.         “Borrower” has the meaning set forth in the introductory paragraph hereto.         “Borrowing”  means  a  Term  A  Borrowing,  a  Term  B-1  Borrowing,  a  Term  B-2  Borrowing,  a  Term B-3 Borrowing, a Term B-4 Borrowing or a Term C Borrowing, as the context may require, in each  case, pursuant to Section 2.01.         “Brazilian  Guarantor”  means any  Guarantor  that  is  organized  under  the laws of  the  Federative  Republic of Brazil.         “Brazilian Loan Party” means any Loan Party that is organized under the laws of the Federative  Republic of Brazil.         “Brazilian Share Pledge Agreement” means that certain quota pledge agreement dated as of the  Funding Date, as amended as of the Third Amendment Effective Date, executed by the Administrative  Agent, for the benefit of the Secured Parties, each of the Brazilian Loan Parties and each Loan Party that  owns Equity Interests in any Brazilian Loan Party.         “Brazilian  Receivables  Pledge  Agreement”  means  that  certain  receivables  pledge  agreement  dated as of the Funding Date, as amended as of the Third Amendment Effective Date, executed by the  Administrative Agent, for the benefit of the Secured Parties, and each of the Brazilian Loan Parties.         “Business Day” means any day other than a Saturday, Sunday or other day on which commercial  banks  are  authorized  to  close  under  the  Laws  of,  or  are  in  fact  closed  in,  the  state  where  the  Administrative Agent’s Office is located and, if such day relates to any Loan, means any such day that is  also  a  day  on  which  dealings  in  Dollar  deposits  are  conducted  by  and  between  banks  in  the  London  interbank eurodollar market.                                         4  CHAR1\1659840v4 

 

      “Business IP Rights” means, at any time of determination, IP Rights owned by, licensed to, or  otherwise  authorized  for  use  by  any  of  the  Loan  Parties  or  any  of  their  Subsidiaries  at  such  time  including, without limitation, the IP Rights listed on Schedule 6.17(b) to the Disclosure Letter.         “Businesses”  means,  at  any  time,  a  collective  reference  to  the  businesses  operated  by  the  Borrower and its Subsidiaries at such time.         “Business Facilities” means, at any time, a collective reference to the facilities and real properties  owned, leased or operated by any Loan Party or any Subsidiary.         “BVI Loan Party” means any Loan Party that is organized under the laws of the British Virgin  Islands.         “Capital  Lease”  means,  as  applied  to  any  Person,  any  lease  of  any  property  by  that  Person  as  lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance  sheet of that Person.         “Cash Equivalents” means any of the following types of Investments, to the extent owned by the  Borrower or any of its Subsidiaries free and clear of all Liens (other than Permitted Liens):               (a)  readily marketable obligations issued or directly and fully guaranteed or insured        by the United States or any agency or instrumentality thereof having maturities of not more than        three hundred sixty days (360) days from the date of acquisition thereof; provided, that, the full        faith and credit of the United States is pledged in support thereof;               (b)  time deposits with, or insured certificates of deposit or bankers’ acceptances of,        any commercial bank that (i) is organized under the laws of the United States, any state thereof or        the  District  of  Columbia  or  is  the  principal  banking  subsidiary  of  a  bank  holding  company        organized under the laws of the United States, any state thereof or the District of Columbia, and is        a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial        paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus        of at least $1,000,000,000, in each case with maturities of not more than one hundred eighty (180)        days from the date of acquisition thereof;               (c)  commercial paper issued by any Person organized under the laws of any state of        the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at        least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than        one hundred eighty (180) days from the date of acquisition thereof;               (d)  Investments,  classified  in  accordance  with  GAAP  as  current  assets  of  the        Borrower or any of its Subsidiaries, in money market investment programs registered under the        Investment Company Act of 1940, which are administered by financial institutions that have the        highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited        solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of        this definition;               (e)  other short-term investments utilized by Foreign Subsidiaries in accordance with        normal  investment  practices  for  cash  management  in  investments  of  a  type  analogous  to  the        foregoing; and                                           5  CHAR1\1659840v4 

 

            (f)  solely  with  respect  to  any  Foreign  Subsidiary,  non-Dollar  denominated  (i)        certificates  of  deposit  of,  bankers  acceptances  of,  or  time  deposits  with,  any  commercial  bank        which is organized and existing under the laws of the country in which such Foreign Subsidiary        maintains its chief executive office and principal place of business, provided such country is (x) a        member  of  the  Organization  for  Economic  Cooperation  and  Development  or  (y)  the  British        Virgin Islands, the Republic of Costa  Rica, or the Federative Republic of Brazil, and, in each        case,  whose  short-term  commercial  paper  rating  is  at  least  “Prime-1”  (or  the  then  equivalent        grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P (any such bank being        an “Approved Foreign Bank”) and maturing within one hundred eighty (180) days of the date of        acquisition  and  (ii)  equivalents  of  demand  deposit  accounts  which  are  maintained  with  an        Approved Foreign Bank.         “Change in Law” means the occurrence, after the Effective Date, of any of the following: (a) the  adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation  or  treaty  or  in  the  administration,  interpretation,  implementation  or  application  thereof  by  any  Governmental  Authority  or  (c)  the  making  or  issuance  of  any  request,  rule,  guideline  or  directive  (whether or not having the force of law) by any Governmental Authority; provided, that, notwithstanding  anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and  all  requests,  rules,  guidelines  or  directives  thereunder  or  issued  in  connection  therewith  and  (y)  all  requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel  Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign  regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in  Law”, regardless of the date enacted, adopted or issued.         “Change of Control” means the occurrence of any of the following events:               (a)  any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of        the  Securities  Exchange  Act  of  1934),  other  than  the  Holders,  is  or  becomes  the  “beneficial        owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except        that a person or group shall be deemed to have “beneficial ownership” of all securities that such        person or group has the right to acquire, whether such right is exercisable immediately or only        after the passage of time (such right, an “option right”)), directly or indirectly, of Equity Interests        representing 35% or more of the aggregate ordinary voting power in the election of the Board of        Directors  of  the  Borrower  represented  by  the  issued  and  outstanding  Equity  Interests  of  the        Borrower on a fully diluted basis (and taking into account all such securities that such person or        group has the right to acquire pursuant to any option right); or               (b)  during any period of twelve (12) consecutive months, a majority of the members        of  the  Board  of  Directors  of  the  Borrower  cease  to  be  composed  of  individuals  (i)  who  were        members  of  that  Board  of  Directors  on  the  first  day  of  such  period,  (ii)  whose  election,        appointment or nomination to that Board of Directors was approved by individuals referred to in        clause (i) above constituting at the time of such election, appointment or nomination at least a        majority  of  that  Board  of  Directors  or  (iii)  whose  election,  appointment  or  nomination  to  that        Board  of  Directors  was  approved  by  individuals  referred  to  in  clauses  (i)  and  (ii)  above        constituting at the time of  such election, appointment or nomination at least a majority of that        Board of Directors; or               (c)  any  “Change  of  Control”  (or  any  comparable  term)  shall  occur  under  any        Permitted  Senior  Revolving  Credit  Document  or  any  document  or  other  agreement  evidencing        any Indebtedness with an aggregate principal amount in excess of the Threshold Amount; or                                          6  CHAR1\1659840v4 

 

            (d)  except as otherwise permitted under this Agreement, the Borrower shall cease to        own and control, directly or indirectly, beneficially and of record, one hundred percent (100%) of        the  issued  and  outstanding  Equity  Interests  (other  than  directors’  qualifying  shares  or  Equity        Interests that are required to be held by another person in order to satisfy a foreign requirement of        Law prescribing an equity owner resident in the local jurisdiction) of each of its Subsidiaries, free        and clear of all Liens except Liens created by the Collateral Documents.        “Collateral”  means  a  collective  reference  to  all  real  and  personal  property  (other  than,  for  the  avoidance of doubt, Excluded Property) with respect to which Liens in favor of the Administrative Agent,  for the benefit of the Secured Parties, are purported to be granted pursuant to and in accordance with the  terms of the Collateral Documents.         “Collateral  Access  Agreement”  means  an  agreement  in  form  and  substance  reasonably  satisfactory to the Administrative Agent pursuant to which a lessor of real property on which Collateral is  stored or otherwise located, or a warehouseman, processor or other bailee of inventory or other property  owned  by  any  Loan  Party,  acknowledges  the  Liens  of  the  Administrative  Agent  and  waives  (or,  if  approved by the Administrative Agent, subordinates) any Liens held by such Person on such property,  and permits the Administrative Agent access to any Collateral stored or otherwise located thereon.         “Collateral  Documents”  means  a  collective  reference  to  the  Security  Agreements,  the  Pledge  Agreements, the Qualifying Control Agreements, the Collateral Access Agreements, the Mortgages, the  Real Property Security Documents and other security documents as may be executed and delivered by the  Loan Parties pursuant to the terms of Section 7.14.         “Commitment”  means  a  Term  A  Commitment,  a  Term  B-1  Commitment,  a  Term  B-2  Commitment,  a  Term  B-3  Commitment,  a  Term  B-4  Commitment  or  a  Term  C  Commitment,  as  the  context may require.         “Compliance Certificate” means a certificate substantially in the form of Exhibit E.         “Contract”  means  any  contract,  license,  lease,  agreement,  obligation,  promise,  undertaking,  understanding, arrangement,  document, commitment,  entitlement or  engagement  under  which a  Person  has, or will have, any liability or contingent liability (in each case, whether written or oral, express or  implied,  and  whether  in  respect  of  monetary  or  payment  obligations,  performance  obligations  or  otherwise).         “Control”  means  the  possession,  directly  or  indirectly,  of  the  power  to  direct  or  cause  the  direction of the management or policies of a Person, whether through the ability to exercise voting power,  by  contract  or  otherwise.  “Controlling” and “Controlled”  have  meanings  correlative  thereto.   Without  limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if  such  other  Person  possesses,  directly  or  indirectly,  power  to  vote  ten  percent  (10%)  or  more  of  the  securities having  ordinary  voting  power for the  election  of directors,  managing  general partners or the  equivalent.         “Controlled Account” has the meaning set forth in Section 7.18(a).         “Controlled  Investment Affiliate” means, as  to  any Person,  any  other  Person  which directly  or  indirectly is in control of, is controlled by, or is under common control with such Person and is organized  by  such  first  Person  (or  any  other  Person  controlling  such  first  Person)  primarily  for  making  equity  investments in the Borrower or any other portfolio companies in the ordinary course of business.                                          7  CHAR1\1659840v4 

 

      “Convertible Indebtedness” means Indebtedness having a feature which entitles the holder thereof  to convert or exchange all or a portion of such Indebtedness into or by reference to Equity Interests of the  Borrower.         “Copyrights”  means,  collectively,  all  copyrights  (whether  statutory  or  common  law,  whether  established or registered in the United States or any other country or any political subdivision thereof,  whether registered or unregistered and whether published or unpublished), all tangible embodiments of  the  foregoing  and  all  copyright  registrations  and  applications, together  with  any  and  all  (a)  rights  and  privileges arising under applicable Law and international treaties and conventions with respect to the use  of such copyrights, (b) reissues, renewals, continuations and extensions thereof and amendments thereto,  (c)  income,  fees,  royalties,  damages,  claims  and  payments  now  or  hereafter  due  and/or  payable  with  respect  thereto,  including  damages  and  payments  for  past,  present  or  future  infringements  thereof,  (d)  rights  corresponding  thereto  throughout  the  world  and  (e)  rights  to  sue  for  past,  present  or  future  infringements thereof.         “Costa Rican Loan Party” means any Loan Party that is organized under the laws of the Republic  of Costa Rica.         “Costa  Rican  IP  Security  Agreement”  means  the  Costa  Rican  intellectual  property  pledge  agreement/mobile  guaranty  dated  as  of  the  Funding  Date,  as  amended  as  of  the  Third  Amendment  Effective Date, executed in favor of the Administrative Agent, for the benefit of the Secured Parties, by  Establishment  Labs  Sociedad  Anonima,  a  Costa  Rica  corporation,  with  respect  to  its  Costa  Rican  intellectual property.         “Costa Rican Security Trust Agreement” means that certain security trust agreement (which, for  the avoidance of doubt, shall include a pledge of the Equity Interests of each Subsidiary that is organized  under the laws of the Republic of Costa Rica) dated as of the Funding Date, as amended as of the Third  Amendment Effective Date, by and among the Borrower, the Administrative Agent, each of the Costa  Rican Loan Parties and the Trustee, for the benefit of the Secured Parties.         “Crown Predator” means CPH TU, LP, a Delaware limited partnership.         “Crown Predator Convertible Indebtedness” means the Indebtedness owing by the Borrower to  Crown Predator pursuant to that certain Note and Warrant Purchase Agreement dated as of August 28,  2015 between the Borrower and Crown Predator, as amended, modified, extended, restated, replaced or  supplemented from time to time, and as evidenced by (a) that certain Amended and Restated Convertible  Secured Promissory Note dated as of September 14, 2016 executed by the Borrower in favor of Crown  Predator  in  the  original  principal  amount  of  $10,000,000,  (b)  that  certain  Amended  and  Restated  Convertible Secured Promissory Note dated as of September 14, 2016 executed by the Borrower in favor  of Crown Predator in the original principal amount of $3,000,000, (c) that certain Amended and Restated  Convertible Secured Promissory Note dated as of September 14, 2016 executed by the Borrower in favor  of Crown Predator in the original principal amount of $5,000,000, (d) that certain Amended and Restated  Convertible Secured Promissory Note dated as of September 14, 2016 executed by the Borrower in favor  of Crown Predator in the original principal amount of $1,840,000 and (e) that certain Convertible Secured  Promissory Note dated as of September 14, 2016 executed by the Borrower in favor of Crown Predator in  the original principal amount of $4,408,076.71.         “Cure Period” has the meaning set forth in Section 8.16(b)(i).         “Cure Right” has the meaning set forth in Section 8.16(b)(i).                                          8  CHAR1\1659840v4 

 

      “Debt Issuance” means the issuance by any Loan Party or any Subsidiary of any  Indebtedness  other than Indebtedness permitted under Section 8.03.         “Debt Issuance Notice” has the meaning set forth in Section 2.13(a).         “Debtor Relief Laws” means (a) the Bankruptcy Code of the United States, (b) the Insolvency  Act, 2003 of the British Virgin Islands, (c) the Commercial Code, Civil Code and Civil Procedure Code,  in  each  case, of  the  Republic  of  Costa Rica  and  (d)  all  other liquidation,  conservatorship,  bankruptcy,  assignment  for  the  benefit  of  creditors,  moratorium,  rearrangement,  receivership,  insolvency,  reorganization, or similar debtor relief Laws of the United States, the British Virgin Islands, the Republic  of  Costa  Rica,  the  Kingdom  of  Belgium,  the  Federative  Republic  of  Brazil  or  other  applicable  jurisdictions from time to time in effect.         “Default”  means  any  event  or  condition  that  constitutes  an  Event  of  Default  or  that,  with  the  giving of any notice, the passage of time, or both, would be an Event of Default.         “Default Rate” has the meaning set forth in Section 2.06(b).         “Defaulting  Lender”  means,  subject  to  Section  2.12(b),  any  Lender,  as  determined  by  the  Administrative Agent, that (a) has failed to perform any of its funding obligations hereunder, including  with respect to any Term B-1 Commitment, Term B-2 Commitment, Term B-3 Commitment, Term B-4  Commitment or Term C Commitment, within three (3) Business Days of the date required to be funded  by  it  hereunder,  (b)  has  notified  the  Borrower  or  the  Administrative  Agent  that  it  does  not  intend  to  comply with its funding obligations hereunder or (c) has, or has a direct or indirect parent company that  has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator,  trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization  or liquidation of its business or a custodian appointed for it or (iii) taken any action in furtherance of, or  indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided,  that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any  Equity  Interests  in  that  Lender  or  any  direct  or  indirect  parent  company  thereof  by  a  Governmental  Authority.         “Designated  Jurisdiction”  means  any  country  or  territory  to  the  extent  that  such  country  or  territory is the subject of any Sanction.         “Device” means any medical instrument, apparatus, implement, machine, contrivance, implant, in  vitro  reagent  or  other  similar  or  related  item,  including  any  component,  part  or  accessory,  that  (a)  is  intended  for  use  in  the  diagnosis  of  disease,  malady  or  other  conditions  or  in  the  cure,  mitigation,  treatment  or  prevention  of  disease  or  malady,  in  man  or  other  animals,  or  is  intended  to  affect  the  structure or any function of the body of man or other animals, (b) does not achieve its primary intended  purpose or purposes through chemical action within or on the body of man or other animals and (c) is not  dependent upon being metabolized for the achievement of its primary intended purpose or purposes.         “Device  Clearance  Application”  means  any  premarket  approval  application  submitted  under  Section 515 of the FDCA (21 U.S.C. § 360e) (a “PMA”), any de novo request submitted under Section  513(f) of the FDCA (21 U.S.C. § 360c(f)), or any 510(k) submitted under Section 510(k) of the FDCA  (21 U.S.C. § 360(k)) seeking clearance from the FDA for a Device that is substantially equivalent to a  legally marketed predicate Device, as defined in the FDCA, or any corresponding non-U.S. application in  any other non-U.S. jurisdiction, including, with respect to the European Union, any equivalent submission  to  a  Standard  Body  pursuant  to  an  applicable  directive  of  the  European  Council  with  respect  to  CE                                          9  CHAR1\1659840v4 

 

marking (or, if applicable, a self-certification of conformity with respect to any such directive through a  “declaration of conformity”).         “Disclosure Letter” means that certain disclosure letter dated as of the Effective Date containing   certain  schedules  delivered  by  the  Loan  Parties  to  the  Administrative  Agent  (for  the  benefit  of  the   Lenders) (as such schedules are supplemented from time to time in accordance with Section 7.02(a)).          “Disposition” or “Dispose” means the sale, transfer, license, lease, issuance or other disposition   (including (x) any Sale and Leaseback Transaction and (y) any issuance by any Subsidiary of its Equity   Interests, but excluding any issuance by the Borrower of its Equity Interests) of any property by any Loan   Party  or  any  Subsidiary,  including  any  sale,  assignment,  transfer  or  other  disposal,  with  or  without   recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding   the following: (a) the sale, lease, license, transfer or other disposition of inventory in the ordinary course   of business, including pursuant to exclusive distribution arrangements consistent with past practice, (b)   the sale, lease, license, transfer or other disposition in the ordinary course of business of surplus, obsolete   or  worn  out  property  no  longer  used  or  useful  in  the  conduct  of  business  of  any  Loan  Party  and  its   Subsidiaries, (c) any sale, lease, license, transfer or other disposition of property to any Loan Party or any   Subsidiary;  provided,  that,  (i)  if  the  transferor  of  such  property  is  a  Qualified  Loan  Party,  (A)  the   transferee  thereof  must  be  a  Qualified  Loan  Party  or  (B)  to  the  extent  such  transaction  constitutes  an   Investment, such transaction is permitted under Section 8.02, and (ii) if the transferor of such property is a   Loan Party that is not a Qualified Loan Party, (A) the transferee thereof must be a Loan Party or (B) to the   extent such transaction constitutes an Investment, such transaction is permitted under Section 8.02, (d)   granting licenses of intellectual property permitted by Section 8.19(b), (e) any Involuntary Disposition, (f)   the sale, transfer, issuance or other disposition of a de minimis number of shares of the Equity Interests of   a Foreign Subsidiary in order to qualify members of the governing body of such Subsidiary if required by   applicable Law, (g) the abandonment or other disposition of IP Rights that are not material and are no   longer  used  or  useful  in  any  material  respect  in  the business  of  the Borrower and  its  Subsidiaries,  (h)   licenses, sublicenses, leases or subleases (in each case, other than with respect to IP Rights or intellectual   property) granted to third parties in the ordinary course of business and not interfering with the business   of  the  Borrower  and  its  Subsidiaries,  (i)  dispositions  of  cash  and  Cash  Equivalents,  (j)  to  the  extent   constituting Dispositions, transactions permitted by Sections 8.02, 8.04 and 8.06 and Liens permitted by   Section 8.01, (k) discounts of or forgiveness of accounts receivable or in connection with the collection or   compromise thereof, in each case, in the ordinary course of business and (l) Permitted Sale and Leaseback   Transactions.          “Disqualified Capital Stock” means any Equity Interest which, by its terms (or by the terms of   any security into which it is convertible or for which it is exchangeable), or upon the happening of any   event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or   is  mandatorily  redeemable,  pursuant to  a  sinking  fund  obligation  or  otherwise, or is redeemable at the   option of the holder thereof, in whole or in part, prior to the one hundred eighty-first (181st) day after the   Maturity  Date,  (b)  requires  the  payment  of  any  cash  dividends  at  any  time  prior  to  the  one  hundred   eighty-first (181st) day after the Maturity Date, (c) contains any repurchase obligation which may come   into effect prior to the Facility Termination Date, or (d) is convertible into or exchangeable (unless at the   sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interests referred to in clause (a),   (b)  or  (c)  above,  at  any  time  prior  to  the  one  hundred  eighty-first  (181st)  day  after  the  Maturity  Date;   provided,  that,  (x)  any  Equity  Interests  that  would  not  constitute  Disqualified  Capital  Stock  but  for   provisions thereof giving holders thereof (or the holders of any security into or for which such Equity   Interests are convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem or   repurchase such Equity Interests upon the occurrence of a change in control or an asset sale occurring   prior to the one hundred eighty-first (181st) day after the Maturity Date shall not constitute Disqualified   Capital Stock to the extent that such Equity Interests provide that the issuer thereof will not redeem or                                          10  CHAR1\1659840v4 

 

 repurchase any such Equity Interests pursuant to such provisions prior to the Facility Termination Date   and  (y)  only  the  portion  of  Equity  Interests  which  so  matures  or  is  mandatorily  redeemable,  is  so   redeemable at the option of the holder thereof, has such cash dividend, has such repurchase obligation or   is so convertible or exchangeable, in each case, prior to the one hundred eighty-first (181st) day after the   Maturity Date will be deemed to be Disqualified Capital Stock; provided, further, however, that if such   Equity Interest is issued to any current or former employee, director or consultant or to any plan for the   benefit of current or former employees, directors or consultants of the Borrower or any Subsidiary or by   any such plan to such current or former employees, directors or consultants such Equity Interest will not   constitute Disqualified Capital Stock solely because it may be required to be repurchased by the Borrower   or  any  Subsidiary  in  order  to  satisfy  applicable  statutory  or  regulatory  obligations,  including  tax   withholding, or as a result of such current or former employee’s, director’s or consultant’s termination,   death or disability.          “Dollar” and “$” mean lawful money of the United States.          “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any state of the   United States or the District of Columbia.          “Earn Out Obligations” means, with respect to an Acquisition, all obligations of the applicable   Loan Party or any Subsidiary to make earn out or other contingency payments (including purchase price   adjustments, non-competition and consulting agreements, or other indemnity obligations) pursuant to the   documentation  relating  to  such  Acquisition.   For  purposes  of  determining  the  aggregate  consideration   paid for an Acquisition at the time of such Acquisition, the amount of any Earn Out Obligations shall be   deemed  to  be  the  maximum  amount  of  the  earn-out  payments  in  respect  thereof  as  specified  in  the   documents  relating  to  such  Acquisition.   For  purposes  of  determining  the  amount  of  any  Earn  Out   Obligations to be included in the definition of Funded Indebtedness, the amount of Earn Out Obligations   shall be deemed to be the aggregate liability in respect thereof, as determined in accordance with GAAP.          “EEA Financial Institution” means (a) any credit institution or investment firm established in any   EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity   established in an EEA Member Country which is a parent of an institution described in clause (a) of this   definition or (c) any financial institution established in an EEA Member Country which is a Subsidiary of   an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision   with its parent.          “EEA  Member  Country”  means  any  of  the  member  states  of  the  European  Union,  Iceland,   Liechtenstein and Norway.          “EEA Resolution Authority” means any public administrative authority or any Person entrusted   with  public  administrative  authority  of  any  EEA  Member  Country  (including  any  delegee)  having   responsibility for the resolution of any EEA Financial Institution.          “Effective Date” means August 24, 2017.          “Eligible Assets” means fixed or capital assets that are used or useful in the same or a similar line   of business as the Borrower and its Subsidiaries were engaged in on the Effective Date (or any reasonable   extension or expansions thereof).          “Eligible  Assignee”  means  any  Person  that  meets  the  requirements  to  be  an  assignee  under   Section  11.06(b)(iii)  and  (v)  (subject  to  such  consents,  if  any,  as  may  be  required  under  Section   11.06(b)(iii)).                                          11  CHAR1\1659840v4 

 

      “EMA” means the European Medicines Agency or any successor entity.          “Employee  Benefit  Non-U.S.  Plan”  means  any  plan,  fund  (including,  without  limitation,  any   superannuation fund) or other similar program established, contributed to (regardless of whether through   direct contributions or through employee withholdings) or maintained outside the United States by the   Borrower or any of its Subsidiaries primarily for the benefit of employees of the Borrower or any of its   Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or   results in, retirement income, a deferral of income in contemplation of retirement, or payments to be made   upon termination of employment, and which plan is not subject to ERISA.           “Employee  Benefit  Non-US  Plan  Event”  means  (a)  a  failure  to  meet  any  minimum  funding   standards, pay any required installment or make any required contribution under any Employee Benefit   Non-U.S. Plan, (b) the withdrawal or termination of any Employee Benefit Non-U.S. Plan resulting in   material  liability  to  the  Borrower  or  any  of  its  Subsidiaries,  (c)  the  institution  by  any  Governmental   Authority  of  proceedings  to  terminate  any  Employee  Benefit  Non-U.S.  Plan,  (d)  the  imposition  of   material  liability  on  the  Borrower  or  any  of  its  Subsidiaries  due  to  the  failure  to  comply  with  any   applicable Law relating to any Employee Benefit Non-U.S. Plan, (e) the withdrawal by the Borrower or   any  of  its  Subsidiaries from  any  Employee  Benefit Non-U.S.  Plan  resulting  in  material liability  to  the   Borrower or any of its Subsidiaries, (f) any imposition by any Governmental Authority of any material   tax, fine or penalty against the Borrower or any of its Subsidiaries due to the failure to comply with laws   and regulations applicable to any Employee Benefit Non-U.S. Plan, (g) the assertion of any material claim   against the Borrower or any of its Subsidiaries with respect to any Employee Benefit Non-U.S. Plan or (h)   the imposition of any Lien on the assets of the Borrower or any of its Subsidiaries to secure obligations   under any Employee Benefit Non-U.S. Plan.            “Environmental Laws” means any and all federal, state, provincial, territorial, local, foreign and   other  applicable  statutes,  laws,  regulations,  ordinances,  rules,  judgments,  orders,  decrees,  permits,   concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and   the protection of the environment or the release of any materials into the environment, including those   related to hazardous substances or wastes, air emissions and discharges to waste or public systems.          “Environmental Liability” means any liability, contingent or otherwise (including any liability for   damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other   Loan  Party  or  any  of  their  respective  Subsidiaries  directly  or  indirectly  resulting  from  or  based  upon   (a) violation  of  any  Environmental  Law,  (b)  the  generation,  use,  handling,  transportation,  storage,   treatment  or  disposal  of  any  Hazardous  Materials,  (c)  exposure  to  any  Hazardous  Materials,  (d)  the   release  or  threatened  release  of  any  Hazardous  Materials  into  the  environment  or  (e)  any  contract,   agreement  or  other  consensual  arrangement  pursuant  to  which  liability  is  assumed  or  imposed  with   respect to any of the foregoing.          “Equity Interests”  means, with respect to any Person, all of the shares of capital stock of (or other   ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase   or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in)   such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other   ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition   from such Person of such shares (or such other interests), and all of the other ownership or profit interests   in such Person (including partnership, member, membership or trust interests therein), whether voting or   nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on   any  date  of  determination;  provided,  however,  that  Equity  Interests  shall  not  include  Convertible   Indebtedness.                                           12  CHAR1\1659840v4 

 

       “ERISA”  means  the  United  States  Employee  Retirement  Income  Security  Act  of  1974,  as   amended, and the regulations promulgated thereunder from time to time.          “ERISA  Affiliate”  means  any  trade  or  business  (whether  or  not  incorporated)  under  common   control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and   Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412   of the Internal Revenue Code).          “ERISA  Event”  means  (a)  a  Reportable  Event  with  respect  to  any  Pension  Plan,  (b)  the   withdrawal of the Borrower or any ERISA Affiliate from any Pension Plan subject to Section 4063 of   ERISA  during  a  plan  year  in  which  such  entity  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) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a   Multiemployer  Plan  (within  the  meaning  of  Sections  4203  and  4205  of  ERISA,  respectively)  or   notification that a Multiemployer Plan is insolvent (within the meaning of Section 4245 of ERISA), (d)   the filing of a notice of intent to terminate or the treatment of a Pension Plan amendment as a termination   under Sections 4041 or 4041A of ERISA, (e) the institution by the PBGC of proceedings to terminate a   Pension Plan, (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the   termination of, or the appointment of a trustee to administer, any Pension Plan, (g) the determination that   any  Pension  Plan  is  considered  an  at-risk  plan  or  a  plan  in  endangered  or  critical  status  within  the   meaning of Sections 430, 431 and 432 of the Internal Revenue Code or Sections 303, 304 and 305 of   ERISA,  or  (h)  the  imposition  of  any  liability  under  Title  IV  of  ERISA,  other  than  for  any  PBGC   premiums  due  but  not  delinquent  under  Section  4007  of  ERISA,  upon  the  Borrower  or  any  ERISA   Affiliate with respect to any Pension Plan.          “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the   Loan Market Association (or any successor person), as in effect from time to time.          “Event of Default” has the meaning set forth in Section 9.01.          “Exchange Act” means the Securities Exchange Act of 1934.          “Excluded Property” means, with respect to any Loan Party, including any Person that becomes a   Loan  Party  after  the  Effective  Date  as  contemplated  by  Section  7.12,  (a)  any  real  property  which  is   located  outside  of  the  United  States  unless  requested  by  the  Administrative  Agent  or  the  Required   Lenders,  (b)  (i)  any  leasehold  interest  of  any  Loan  Party  in  real  property  and  (ii)  any  fee  owned  real   property which is subject to a Lien of the type described in Section 8.01(n), (c) solely with respect to any   U.S. Loan Party, any personal property (including, without limitation, motor vehicles) of such U.S. Loan   Party in respect of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code   or  (ii)  effected  by  appropriate  evidence  of  the  Lien  being  filed  in  either  the  United  States  Copyright   Office or the United States Patent and Trademark Office, unless requested by the Administrative Agent or   the Required Lenders, (d) any property which, subject to the terms of Section 8.09, is subject to a Lien of   the type described in Section 8.01(i) pursuant to documents which prohibit such Loan Party from granting   any  other  Liens  in  such  property,  (e)  any  United  States  intent-to-use  trademark  or  service  mark   application 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 or service mark application   under federal law, (f) any Equity Interests in any Person that is not a Wholly Owned Subsidiary of a Loan   Party,  to  the  extent  that  the  granting  of  a  Lien  thereon,  or  a  security  interest  therein,  is  prohibited  or   requires the consent of another Person (that is not the Borrower or any Affiliate thereof), in each case,   pursuant to the Organization Documents of such Person that is not a Wholly Owned Subsidiary; provided,   that, in the event of the termination or elimination of any such prohibition or requirement for consent, to the                                          13  CHAR1\1659840v4 

 

extent sufficient to permit any such Equity Interests to become Collateral, or upon the granting of any such  consent,  or  waiving  or  terminating  any  requirement  for  such  consent,  a  security  interest  in  such  Equity  Interests shall be automatically and simultaneously granted under the applicable Collateral Document and  such Equity Interests shall be included as Collateral, (g) solely with respect to any U.S. Loan Party, any  General Intangible (as defined in the Uniform Commercial Code), permit, lease, license, contract or other  Instrument (as defined in the Uniform Commercial Code) of such U.S. Loan Party to the extent the grant of  a security interest in such General Intangible (as defined in the Uniform Commercial Code), permit, lease,  license,  contract  or  other  Instrument  (as  defined  in  the  Uniform  Commercial  Code)  in  the  manner  contemplated by the Collateral Documents, under the terms thereof or under applicable Law, is prohibited  and would result in the termination thereof or give the other parties thereto the right to terminate, accelerate  or otherwise alter such U.S. Loan Party’s rights, titles and interests thereunder (including upon the giving of  notice or the lapse of time or both); provided, that, (i) any such limitation described in this clause (g) on the   security  interests  granted  under  the  Collateral  Documents  shall  only  apply  to  the  extent  that  any  such   prohibition  or  right  to  terminate  or  accelerate  or  alter  a  U.S.  Loan  Party’s  rights  could  not  be  rendered   ineffective pursuant to the Uniform Commercial Code or any other applicable Law or principles of equity and   (ii) in the event of the termination or elimination of any such prohibition or right or the requirement for any   consent contained in any applicable Law, General Intangible (as defined in the Uniform Commercial Code),   permit, lease, license, contract or other Instrument (as defined in the Uniform Commercial Code), to the   extent sufficient to permit any such item to become Collateral, or upon the granting of any such consent, or   waiving or terminating any requirement for such consent, a security interest in such General Intangible (as   defined in the Uniform Commercial Code), permit, lease, license, contract or other Instrument (as defined   in the Uniform Commercial Code) shall be automatically and simultaneously granted under the applicable   Collateral Documents and such items shall be included as Collateral, (h) assets to the extent that pledges   thereof,  and  security  interests  therein,  are  prohibited  by  applicable  Law;  provided,  that,  (i) any  such   limitation described in  this  clause (h)  on the security  interests  granted under  the  Collateral  Documents   shall only apply to the extent that any such prohibition could not be rendered ineffective pursuant to the   Uniform Commercial Code or any other applicable Law or principles of equity and (ii) in the event of the   termination or elimination of any such prohibition contained in any applicable Law, a security interest in   such assets shall be automatically and simultaneously granted under the applicable Collateral Documents   and such assets shall be included as Collateral and (i) any real or personal property as to which (i) the   Administrative Agent and the Borrower agree in writing that the costs or other consequences of obtaining   a security interest or perfection thereof are excessive in view of the benefits to be obtained by the Secured   Parties  therefrom  or  (ii)  the  Administrative  Agent  and  the  Borrower  agree  in  writing  that  obtaining  a   security interest or perfection thereof would result in material adverse tax consequences to the Borrower   or its Subsidiaries.          “Excluded  Subsidiary”  means  (a)  any  Foreign  Subsidiary,  the  perfected  grant  of  a  security   interest in the assets of such Subsidiary in support of, and the guaranteeing of, the Obligations (i) would   be prohibited by applicable Law in the jurisdiction of formation or incorporation of such Subsidiary (as   reasonably determined by the Borrower with the consent of the Administrative Agent) or (ii) would result   in material adverse tax consequences to the Borrower or its Subsidiaries (as reasonably determined by the   Borrower with the consent of the Administrative Agent), (b) any other Foreign Subsidiary with respect to   which (in the reasonable judgment of the Administrative Agent), the cost or other consequences of such   Foreign Subsidiary guaranteeing the Obligations are excessive in view of the benefits to be obtained by   the Secured Parties therefrom or (c) any Immaterial Subsidiary.          “Exclusivity Period” has the meaning set forth in Section 2.13(b).          “Existing  Credit  Agreement”  means  that  certain  Credit  Agreement  and  Guaranty  dated  as  of   September 19, 2016 by and among the Borrower, certain of the Borrower’s subsidiaries from time to time   party thereto and the lenders from time to time party thereto, as amended or modified from time to time.                                          14  CHAR1\1659840v4 

 

      “Extraordinary Receipts” means any cash received by or paid to or for the account of any Person   not  in  the  ordinary  course  of  business,  including  tax  refunds,  pension  plan  reversions,  proceeds  of   insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute   compensation  for  lost  earnings),  condemnation  awards  (and  payments  in  lieu  thereof),  indemnity   payments and any purchase price adjustments; provided, that, “Extraordinary Receipts” shall not include   (x) cash payments received by or paid to or for the account of any Loan Party pursuant to a judgment,   claim (including an insurance claim), settlement, cause of action or indemnification claim, to the extent   such payments are in respect of any obligations owed by such Loan Party to a third party that is not an   Affiliate of a Loan Party with respect to the underlying claim for which such judgment, claim, settlement,   cause of action or indemnification claim arose and are applied to pay (or reimburse such Loan Party for   payment  on  account  of)  such  obligations  and  (y) any  purchase  price  adjustment  (other  than  working   capital purchase price adjustments) pursuant to any acquisition agreement entered into after the Effective   Date in connection with a Permitted Acquisition to the extent that the purchase price of such Permitted   Acquisition  was  paid  solely  with  Qualified  Capital  Stock  or  with  the  proceeds  from  the  issuance  of   Qualified Capital Stock by the Borrower or a capital contribution to the Borrower.          “Facility” means the Term A Facility, the Term B-1 Facility, the Term B-2 Facility, the Term B-3   Facility, the Term B-4 Facility or the Term C Facility, as the context may require.          “Facility Termination Date” means the date as of which all of the following shall have occurred:   (a) all of the Commitments have terminated and (b) all Obligations have been paid in full in cash (other   than contingent indemnification obligations for which no claim has been asserted).          “FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as of the Effective   Date  (or  any  amended  or  successor  version  that  is  substantively  comparable  and  not  materially  more   onerous to comply with) and any current or future regulations thereunder, official interpretations thereof,   any  agreement  entered  into  pursuant  to  Section  1471(b)(1)  of  the  Internal  Revenue  Code  and  any   intergovernmental agreements entered into thereunder.          “FDA” means the U.S. Food and Drug Administration and any successor entity.          “FDCA”  means  the  U.S. Food,  Drug  and  Cosmetic Act  of  1938  (or any successor thereto),  as   amended from time to time, and the rules, regulations, guidelines, guidance documents and compliance   policy guides issued or promulgated thereunder.          “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the   rates on overnight federal funds transactions with members of the Federal Reserve System arranged by   federal  funds  brokers  on  such  day,  as  published  by  the  Federal  Reserve  Bank  of  New  York  on  the   Business Day next succeeding such day; provided, that, if such day is not a Business Day, the Federal   Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so   published  on  the  next  succeeding  Business  Day.   Notwithstanding  the foregoing,  if  the  Federal  Funds   Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement          “Fee  Letter”  means  that  certain  Amended  and  Restated  Fee  Letter  dated  as  of  the  Third   Amendment Effective Date, by and among the Borrower and the Administrative Agent.          “Flood Hazard Property” has the meaning set forth in the definition of “Real Property Security   Documents”.          “Foreign Lender” has the meaning set forth in Section 3.01(c)(ii).                                           15  CHAR1\1659840v4 

 

      “Foreign Loan Party” means each Loan Party that is not a U.S. Loan Party.          “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.          “FRB” means the Board of Governors of the Federal Reserve System of the United States.          “Fund” means any Person (other than a natural Person) that is (or will be) engaged in making,   purchasing,  holding  or  otherwise investing  in  commercial loans  and  similar extensions  of  credit  in the   ordinary course of its activities.          “Funded Indebtedness” means, as to any Person at a particular time, without duplication, all of   the following, whether or not included as indebtedness or liabilities in accordance with GAAP:                (a)  all obligations, whether current or long-term, for borrowed money (including the         Obligations)  and  all  obligations  of  such  Person  evidenced  by  bonds,  debentures,  notes,  loan         agreements or other similar instruments;                (b)  all purchase money Indebtedness;                (c)  the  principal  portion  of  all  obligations  under  conditional  sale  or  other  title         retention  agreements  relating  to  property  purchased  by  such  Person  or  any  Subsidiary  thereof         (other than customary reservations or retentions of title under agreements with suppliers entered         into in the ordinary course of business);                (d)  all obligations arising under letters of credit (including standby and commercial),         bankers’ acceptances, bank guaranties, surety bonds and similar instruments;                (e)  all obligations in respect of the deferred purchase price of property or services         (other than (x) trade accounts payable in the ordinary course of business and (y) obligations under         deferred compensation plans), including, without limitation, any Earn Out Obligations;                (f)  the Attributable Indebtedness of Capital Leases, Securitization Transactions and         Synthetic Leases;                (g)  all obligations of such Person to purchase, redeem, retire, defease or otherwise         make  any  payment  in  respect  of  any  Disqualified  Capital  Stock  in  such  Person  or  any  other         Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or         involuntary liquidation preference plus accrued and unpaid dividends;                (h)  all Funded  Indebtedness  of  others secured  by  (or for which the holder  of  such         Funded Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien         on,  or  payable  out  of  the  proceeds  of  production  from,  property  owned  or  acquired  by  such         Person, whether or not the obligations secured thereby have been assumed;                (i)   all  Guarantees  with  respect  to  Funded  Indebtedness  of  the  types  specified  in         clauses (a) through (h) above of another Person; and                (j)   all Funded Indebtedness of the types referred to in clauses (a) through (i) above         of any partnership or joint venture (other than a joint venture that is itself a corporation or limited         liability company) in which such Person is a general partner or joint venturer, except to the extent         that Funded Indebtedness is expressly made non-recourse to such Person.                                          16  CHAR1\1659840v4 

 

For purposes hereof, the amount of any direct obligation arising under letters of credit (including standby  and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments shall be the  maximum amount available to be drawn thereunder.         “Funding  Date”  means  the  date  on  which  the  conditions  set  forth  in  Section  5.02  have  been   satisfied.          “GAAP”  means  generally  accepted  accounting  principles  in  the  United  States  set  forth  in  the   opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified   Public  Accountants  and statements and  pronouncements of the  Financial  Accounting  Standards  Board,   consistently applied and as in effect from time to time.          “Governmental Approval” means any consent, authorization, approval, order, license, franchise,   permit,  certification,  accreditation,  registration,  clearance,  exemption,  filing  or  notice  that  is  issued  or   granted by or from (or pursuant to any act of) or required by any Governmental Authority, including any   application or submission related to any of the foregoing.          “Governmental Authority” means the government of the United States, the British Virgin Islands,   the  Kingdom  of  Belgium,  the  Republic  of  Costa  Rica,  the  Federative  Republic  of  Brazil  or  any  other   nation,  or  of  any  political  subdivision  thereof,  whether  state,  provincial,  territorial  or  local,  and  any   agency,  authority,  instrumentality,  regulatory  body,  court,  central  bank  or  other  entity  exercising   executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to   government (including any supra-national bodies such as the European Union or the European Central   Bank).          “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person   guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable   or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly,   and  including  any  obligation  of  such  Person,  direct  or  indirect,  (i)  to  purchase  or  pay  (or  advance  or   supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or   lease  property,  securities  or  services  for  the  purpose  of  assuring  the  obligee  in  respect  of  such   Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation,   (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or   level  of  income  or  cash  flow  of  the  primary  obligor  so  as  to  enable  the  primary  obligor  to  pay  such   Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the   obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to   protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of   such  Person  securing  any  Indebtedness  or  other  obligation  of  any  other  Person,  whether  or  not  such   Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any   holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to   be  an  amount  equal  to the  stated  or determinable  amount  of the related  primary  obligation,  or  portion   thereof,  in  respect  of  which  such  Guarantee  is  made  or,  if  not  stated  or  determinable,  the  maximum   reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.    The term “Guarantee” as a verb has a corresponding meaning.          “Guarantors” means (a) each Subsidiary identified as a “Guarantor” on the signature pages hereto   and  (b)  each  other  Person  that  joins  as  a  Guarantor  pursuant  to  Section  7.12,  together  with  their   successors  and  permitted  assigns;  provided,  that,  in  no  event  shall  any  Excluded  Subsidiary  be  a   Guarantor.                                           17  CHAR1\1659840v4 

 

      “Guaranty” means the Guaranty made by the Guarantors in favor of the Secured Parties pursuant   to Article IV.          “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous   or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or   asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all   other substances or wastes of any nature regulated pursuant to any Environmental Law.          “Healthcare  Laws”  means,  collectively,  all  Laws applicable  to  the  business  of any  Loan  Party   regulating the manufacturing, labeling, promotion and provision of and payment for healthcare products,   items and services, including the Health Insurance Portability and Accountability Act of 1996, Section   1128B(b) of the Social Security Act, as amended; 42 U.S.C. § 1320a-7b (Criminal Penalties Involving   Medicare or State Health Care Programs), commonly referred to as the “Federal Anti-Kickback Statute;”   Section  1877  of  the  Social  Security  Act,  as  amended  and  similar  state  laws;  42  U.S.C.  §  1395nn   (Limitation on Certain Physician Referrals), commonly referred to as “Stark Statute;” U.S. Federal Food,   Drug, and Cosmetic Act, as amended from time to time (21 U.S.C. § 301 et seq.); all applicable Good   Manufacturing Practice requirements addressed in the FDA’s Quality System Regulation (21 C.F.R. Part   820);  the  Medical  Devices  Regulations,  21  C.F.R.  Part  812,  and  Parts  50,  54,  and  56;  all  applicable   labeling  requirements  addressed  in  the  FDA’s  Device  Labeling  Regulation  (21  C.F.R.  Part  801);  all   regulations  with  respect  to  the  provision  of  Medicare  and  Medicaid  programs  and  services  (42  C.F.R.   Chapter IV et seq.); and all regulations promulgated under or pursuant to any of the foregoing.          “HMT” has the meaning set forth in the definition of “Sanctions”.          “Holders” means, collectively, (a) the Persons set forth on Schedule 1.01(b) to  the Disclosure   Letter, (b) each natural relative who is a rightful heir of any of the foregoing holders described in clause   (a) of this definition, (c) any trust maintained by or for the benefit of any of the foregoing holders and   rightful  heirs  described  in  clauses  (a)  or  (b)  of  this  definition  and  (d)  each  Controlled  Investment   Affiliate of any holder specified in clause (a) of this definition.           “IDE”  means  an  application,  including  an  application  filed  with any  Regulatory  Authority,  for   authorization  to  commence  human  clinical  studies  with  respect  to  any  Device,  including  (a)  an   Investigational Device Exemption as defined in the FDCA or any successor application or procedure filed   with the FDA, (b) an abbreviated Investigational Device Exemption as specified in FDA regulations in 21   C.F.R. § 812.2(b), (c) any equivalent of any of the foregoing pursuant to or under any non-U.S. country or   regulatory jurisdiction, (d) all amendments, variations, extensions and renewals of any of the foregoing   that may be filed with respect thereto and (e) all documents and correspondence with Institutional Review   Boards, whether U.S. or non-U.S., or equivalent.          “Immaterial Subsidiary” means any Subsidiary that, as of any date of determination (a) for the   four  consecutive  fiscal  quarter  period  most  recently  ended  prior  to  such  date  for  which  financial   statements have been delivered to the Administrative Agent pursuant to Sections 7.01(a) or (b)(i), did not   (together with its Subsidiaries) (i) generate Product Revenues in excess of five percent (5%) of Product   Revenues (for the avoidance of doubt, for the Borrower and its Subsidiaries on a consolidated basis) for   such four consecutive fiscal quarter period or (ii) together with all other Immaterial Subsidiaries at such   time, generate Product Revenues in excess of ten percent (10%) of Product Revenues (for the avoidance   of doubt, for the Borrower and its Subsidiaries on a consolidated basis) for such four consecutive fiscal   quarter period and (b) did not have (together with its Subsidiaries) (i) total assets in excess of five percent   (5%) of the consolidated total assets of the Borrower and its Subsidiaries at such date or (ii) together with   all other Immaterial Subsidiaries at such time, total assets in excess of ten percent (10%) of consolidated   total  assets  of the  Borrower and its Subsidiaries at  such  date; provided, that,  notwithstanding  anything                                          18  CHAR1\1659840v4 

 

herein  to  the  contrary,  (x)  in  no  event  shall  any  Subsidiary  that  owns  material  Business  IP  Rights  be  deemed  to  be  an  Immaterial  Subsidiary  and  (y)  in  no  event  shall  any  Subsidiary  that  has  become  a  Guarantor in accordance with the terms of this Agreement be deemed to be an Immaterial Subsidiary.         “Indebtedness”  means,  as  to  any  Person  at  a  particular  time,  without  duplication,  all  of  the   following, whether or not included as indebtedness or liabilities in accordance with GAAP:                (a)  all Funded Indebtedness;                (b)  the Swap Termination Value of any Swap Contract;                (c)  all Guarantees with respect to outstanding Indebtedness of the types specified in         clauses (a) and (b) above of any other Person; and                (d)  all Indebtedness of the types referred to in clauses (a) through (c) above of any         partnership  or  joint  venture  (other  than  a  joint  venture  that  is  itself  a  corporation  or  limited         liability  company)  in  which  such  Person  or  a  Subsidiary  thereof  is  a  general  partner  or  joint         venturer,  unless  such  Indebtedness  is  expressly  made  non-recourse  to  such  Person  or  such         Subsidiary.          “Indemnitee” has the meaning set forth in Section 11.04(b).          “Information” has the meaning set forth in Section 11.07.          “Interest Payment Date” means, (a) the last day of each March, June, September and December;   provided, that, if any such last day is not a Business Day, the applicable “Interest Payment Date” shall be   the first Business Day immediately preceding such last day of such month; and (b) the Maturity Date.          “Interest Period” means, with respect to any Loan, (a) the period commencing on (and including)   the applicable borrowing date of such Loan and ending on (and including) the last day of the calendar   quarter in which such borrowing date occurs; provided, that, if any such last day is not a Business Day,   the applicable Interest Period shall end on the first Business Day immediately preceding such last day of   such quarter, and (b) thereafter, the period beginning on (and including) the first day following the end of   the preceding Interest Period and ending on the earlier of (and including) (x) the last day of the calendar   quarter following the calendar quarter in which the preceding Interest Period ended; provided, that, if any   such last day is not a Business Day, the applicable Interest Period shall end on the first Business Day   immediately  preceding  such  last  day  of  such  quarter,  and  (y)  the  Maturity  Date.   Notwithstanding  the   foregoing, each Interest Period in effect as of the Second Amendment Effective Date shall end on (and   include)  the  last  day  of  the  calendar  quarter  in  which  the  Second  Amendment  Effective  Date  occurs;   provided, that, if such last day is not a Business Day, each applicable Interest Period shall end on the first   Business Day immediately preceding such last day of such quarter.          “Interest  Rate”  means,  for  any  Interest  Period,  the  sum  of  (a)  the  Applicable  Margin  plus  (b)   Three-Month LIBOR for such Interest Period; provided, that, at all times when a LIBOR Unavailability   Period  shall  exist  and  be  continuing,  the  “Interest  Rate”  shall  equal  the  sum  of  (i)  the  total  of  (x)  the   Applicable Margin minus (y) one percent (1.00%) plus (ii) the Prime Rate.          “Interim  Financial  Statements”  means  the  unaudited  consolidated  financial  statements  of  the   Borrower and its Subsidiaries for the fiscal quarter ended March 31, 2017, including balance sheets and   statements of income or operations, shareholders’ equity and cash flows.                                           19  CHAR1\1659840v4 

 

      “Internal Revenue Code” means the United States Internal Revenue Code of 1986.          “Internal Revenue Service” means the United States Internal Revenue Service.          “Invention”  means  any  novel,  inventive  or  useful  art,  apparatus,  method,  process,  machine   (including  any  article  or  Device),  manufacture  or  composition  of  matter,  or  any  novel,  inventive  and   useful improvement in any art, method, process, machine (including article or Device), manufacture or   composition of matter.          “Investment” means, as to any Person, any direct or indirect acquisition or investment by such   Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person,   (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other   acquisition  of  any  other  debt  or  equity  participation  or  interest  in,  another  Person,  including  any   partnership  or  joint  venture  interest  in  such  other  Person  and  any  arrangement  pursuant  to  which  the   investor Guarantees Indebtedness of such other Person or (c) an Acquisition.  For purposes of covenant   compliance, the amount of any Investment shall be the amount actually invested, without adjustment for   subsequent increases or decreases in the value of such Investment.          “Investment  Documents”  means,  collectively,  the  Loan  Documents,  the  Share  Purchase   Agreement and the ROFR Side Letter.          “Involuntary Disposition” means any loss of, damage to or destruction of, or any condemnation   or other taking for public use of, any property of any Loan Party or any of its Subsidiaries.          “IP  Rights”  means  all  Patents,  Trademarks,  Copyrights  and  Technical  Information,  whether   registered  or  not,  U.S.  or  non-U.S.,  Device  Clearance  Applications,  Product  Agreements,  Product   Authorizations or Regulatory Approvals, including (without limitation) all of the following:                (a)   applications or registrations relating to such IP Rights;                (b)  rights and privileges arising under any applicable Law with respect to such IP         Rights;                (c)   rights to sue for past, present or future infringements of such IP Rights; and                (d)  rights of the same or similar effect or nature in any jurisdiction corresponding         to such IP Rights throughout the world.          “Joinder Agreement” means a joinder agreement substantially in the form of Exhibit C executed   and delivered by a Subsidiary in accordance with the provisions of Section 7.12.          “JW  Opportunities  Warrant”  means  that  certain  Warrant  Certificate  dated  as  of  September  30,   2016 issued by the Borrower in favor of JW Opportunities Master Fund, Ltd.          “JW Partners Warrant” means that certain Warrant Certificate dated as of September 30, 2016   issued by the Borrower in favor of JW Partners, LP.          “Laws”  means,  collectively,  all  international,  foreign,  federal,  state,  provincial,  territorial  and   local  statutes,  treaties,  rules,  guidelines,  regulations,  ordinances,  codes  and  administrative  or  judicial   precedents  or  authorities,  including  the  interpretation  or  administration  thereof  or  determinations   thereunder by any Governmental Authority charged with the enforcement, interpretation or administration                                          20  CHAR1\1659840v4 

 

thereof,  and  all  applicable  administrative  orders,  directed  duties,  requests,  licenses,  authorizations  and  permits of, and agreements with, any Governmental Authority, in each case having the force of law.         “Lenders” means each of the Persons identified as a “Lender” on the signature pages hereto and   their respective successors and assigns.          “Lending Office” means, as to any Lender, the office address of such Lender and, as appropriate,   account of such Lender set forth on Schedule 11.02 or such other address or account as such Lender may   from time to time notify the Borrower and the Administrative Agent.          “LIBOR Screen Rate” has the meaning set forth in the definition of “Three-Month LIBOR”.          “LIBOR Successor Rate” has the meaning set forth in Section 3.05.            “LIBOR  Successor  Rate  Conforming  Changes”  means,  with  respect  to  any  proposed  LIBOR   Successor Rate, any conforming changes to the definition of Interest Period, Interest Rate or Three-Month   LIBOR,  the  timing  and  frequency  of  determining  rates  and  making  payments  of  interest  and  other   administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the   adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative   Agent  in  a  manner  substantially  consistent  with  market  practice  (or,  if  the  Administrative  Agent   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 the Administrative Agent determines in consultation with the Borrower).          “LIBOR Unavailability Period” means a period, commencing on the date on which any of the   events set forth in clauses (a), (b), (c) or (d) below occur and continuing through the earlier to occur of (x)   the date on which no such conditions continue to exist and (y) the date on which a LIBOR Successor Rate   is established:                 (a)  adequate and reasonable means do not exist for ascertaining the LIBOR Screen         Rate, including, without limitation, because the LIBOR Screen Rate is not available or published         on a current basis and such circumstances are unlikely to be temporary, or                (b)  the administrator of the LIBOR Screen Rate or a Governmental Authority having         jurisdiction over the Administrative Agent has made a public statement identifying a specific date         after which the LIBOR Screen Rate shall no longer be made available, or used for determining         the interest rate of loans, or                (c)  loans currently being executed, or that include language similar to that contained         in this definition and Section 3.05, are being executed or amended (as applicable) to incorporate         or adopt a new benchmark interest rate to replace the LIBOR Screen Rate, or                (d)  for  any  reason  the  LIBOR  Screen  Rate  with  respect  to  any  Loan  does  not         adequately and fairly reflect the cost to the Lenders of funding such Loan.          “Lien”  means  any  mortgage,  pledge,  hypothecation,  assignment,  deposit  arrangement,   encumbrance,  lien  (statutory  or  other),  charge  or  preference,  priority  or  other  security  interest  or   preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including   any conditional sale or other title retention agreement, any easement, right of way or other encumbrance   on title to real property, and any financing lease having substantially the same economic effect as any of   the foregoing).                                          21  CHAR1\1659840v4 

 

      “Liquidity” means, as of any date, an amount equal to Unrestricted Cash as of such date.          “Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a   Term A Loan, a Term B-1 Loan, a Term B-2 Loan, a Term B-3 Loan, a Term B-4 Loan or a Term C   Loan.          “Loan  Documents”  means  this  Agreement,  each  Note,  each  Joinder  Agreement  (or  such  other   documents  as  the  Administrative  Agent  shall  reasonably  request  pursuant  to  Section  7.12  for  such   purpose),  each  Collateral Document,  the  Disclosure  Letter,  the  Fee  Letter, any  intercreditor  agreement   entered into in connection with Permitted Senior Revolving Credit Indebtedness, each agreement entered   into  in  accordance  with  the  terms  of  Section  2.14  and  any  other  agreement,  instrument  or  document   designated  by  its  terms  as  a  “Loan  Document”;  provided,  that,  for  the  avoidance  of  doubt,  the  Share   Purchase Agreement, the ROFR Side Letter and any document related to the Share Purchase Agreement   or  the  ROFR  Side  Letter  (for  the  avoidance  of  doubt,  other  than  any  document  described  in  the  text   preceding this proviso), in each case, shall not be “Loan Documents”.          “Loan Notice” means a notice of a Borrowing of Loans pursuant to Section 2.02(a), which shall   be substantially in the form of Exhibit A.          “Loan Parties” means, collectively, the Borrower and each Guarantor.          “Master Agreement” has the meaning set forth in the definition of “Swap Contract”.          “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect   upon, the business, financial performance or condition, operations (including the financial results thereof),   assets or properties of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the   rights and remedies of the Administrative Agent or any Lender under any Loan Document to which it is a   party or a material impairment in the perfection, value or priority of the Administrative Agent’s security   interests  in  the  Collateral,  (c)  an  impairment  of  the  ability  of  any  Loan  Party  to  perform  its  material   obligations  under  any  Loan  Document  to  which  it is  a  party  or  (d)  a  material adverse  effect  upon the   legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which   it is a party.          “Material  Contracts”  means  all  (a)  employment  agreements  covering  the  management  of  any   Loan Party or any Subsidiary, (b) collective bargaining agreements or other labor agreements covering   any employees of any Loan Party or any Subsidiary, (c) agreements for managerial, consulting or similar   services to which any Loan Party or any Subsidiary is a party or by which it is bound, (d) agreements   regarding any Loan Party or any Subsidiary, its assets or operations or any investment therein to which   any of its equityholders is a party or by which it is bound, (e) real estate leases, licenses of IP Rights or   other lease or license agreements to which any Loan Party or any Subsidiary is a party, either as lessor or   lessee,  or  as  licensor  or  licensee  (other  than  licenses  arising  from  the  purchase  of  “off  the  shelf”   products),  (f)  customer,  sales,  distribution  or  supply  agreements  to  which  any  Loan  Party  or  any   Subsidiary  is  a  party,  in  each  case  with  respect  to  the  preceding  clauses  (a),  (c),  (d)  and  (e)  requiring   payment  of  more  than  $500,000  in  any  year,  and  with  respect  to  the  preceding  clause  (f),  requiring   payment  of  more  than  $750,000  in  any  year,  (g)  any  other  Contract  to  which  any  Loan  Party  or  any   Subsidiary is a party that (i) relates to any Product or any Product Commercialization and Development   Activity and (ii) is reasonably expected to (A) result in payments or receipts (including royalty, licensing   or similar payments) made to any Loan Party or any of its Subsidiaries in an aggregate amount in excess   of $750,000 in any period of twelve (12) consecutive months or (B) require payments or expenditures   (including royalty, licensing or similar payments) made by any Loan Party or any of its Subsidiaries in an   aggregate amount in excess of $750,000 in any period of twelve (12) consecutive months or (h) any other                                          22  CHAR1\1659840v4 

 

agreements  or  instruments  to  which  any  Loan  Party  or  any  Subsidiary  is  a  party,  and  the  breach,  nonperformance, termination or cancellation of which, or the failure of which to renew, could reasonably  be expected, either individually or in the aggregate, to have a Material Adverse Effect.         “Material IP Rights” means all Business IP Rights, whether owned or licensed as of the Effective   Date, or acquired, developed or otherwise licensed or obtained by a Loan Party or any of their respective   Subsidiaries  after  the  Effective  Date  (x)  the  loss  of  which  could  reasonably  be  expected,  either   individually or in the aggregate, to have a Material Adverse Effect or (y) that has a fair market value in   excess of $750,000.         “Maturity Date” means September 30, 2025; provided, that, if such date is not a Business Day,   the Maturity Date shall be the first Business Day immediately preceding such date.          “Maximum Rate” has the meaning set forth in Section 11.09.          “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.          “Mortgages” means the mortgages, deeds of trust or deeds to secure debt that purport to grant to   the Administrative Agent, for the benefit of the Secured Parties, a security interest in the fee interest of   any Loan Party in real property (other than Excluded Property).          “Multiemployer  Plan”  means  any  employee  benefit  plan  of  the  type  described  in  Section   4001(a)(3)  of  ERISA,  to  which  the  Borrower  or  any  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”  means  any  Plan  which  has  two  or  more  contributing  sponsors   (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as   such a plan is described in Section 4064 of ERISA.          “Net  Cash  Proceeds”  means the  aggregate  cash  or Cash  Equivalents  proceeds  received  by  any   Loan  Party  or any  Subsidiary in  respect of  any  Disposition,  Debt  Issuance,  Involuntary  Disposition  or   Extraordinary  Receipts,  net  of  (a)  reasonable  direct  costs  incurred  in  connection  therewith  (including,   without limitation, legal, accounting and investment banking fees, and sales commissions), (b) taxes paid   or  payable  as  a  result  thereof,  (c)  in  the  case  of  any  Disposition,  the  amount  necessary  to  retire  any   Indebtedness secured by a Permitted Lien (ranking senior to any Lien of the Administrative Agent) on the   related  property  and  (d)  in  the  case  of  any  Extraordinary  Receipt  consisting  of  insurance  and   condemnation proceeds, such proceeds to the extent applied to the repair or replacement of the applicable   property  within  one  (1)  year  after  receipt  thereof;  it  being  understood  that  “Net  Cash  Proceeds”  shall   include, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of   any  non-cash  consideration  received  by  any  Loan  Party  or  any  Subsidiary  in  any  Disposition,  Debt   Issuance, Involuntary Disposition or Extraordinary Receipt.          “Non-Consenting  Lender”  means  any  Lender  that  does  not  approve  any  consent,  waiver  or   amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the   terms of Section 11.01 and (b) has been approved by the Required Lenders.          “Note” or “Notes” means the Term A Notes, the Term B-1 Notes, the Term B-2 Notes, the Term   B-3 Notes, the Term B-4 Notes or the Term C Notes, individually or collectively, as appropriate.          “Obligations”  means  (a)  all  advances  to,  and  all  debts,  liabilities,  obligations,  covenants  and   duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan and (b)                                          23  CHAR1\1659840v4 

 

all costs and expenses incurred in connection with enforcement and collection of the foregoing, including  the fees, charges and disbursements of counsel, in each case whether direct or indirect (including those  acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising  and including interest and fees that accrue after the commencement by or against any Loan Party or any  Affiliate thereof pursuant to any proceeding under any Debtor Relief Laws naming such Person as the  debtor  in  such  proceeding,  regardless  of  whether  such  interest  and  fees  are  allowed  claims  in  such  proceeding.         “OFAC”  means  the  Office  of  Foreign  Assets  Control  of  the  United  States  Department  of  the   Treasury.          “Organization Documents” means, (a) with respect to any corporation, the certificate or articles   of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any   non-U.S. jurisdiction), (b) with respect to any BVI business company, the certificate of incorporation and   the  memorandum  and  articles of  association  of  such company,  (c)  with  respect to  any  limited liability   company,  the  certificate  or  articles  of  formation  or  organization  and  operating  agreement  or  limited   liability  company  agreement  (or  equivalent  or  comparable  documents  with  respect  to  any  non-U.S.   jurisdiction), and (d) with respect to any partnership, joint venture, trust or other form of business entity,   the  partnership,  joint  venture  or  other  applicable  agreement  of  formation  or  organization  and  any   agreement,  instrument,  filing  or  notice  with  respect  thereto  filed  in  connection  with  its  formation  or   organization  with  the  applicable  Governmental  Authority  in  the  jurisdiction  of  its  formation  or   organization and, if applicable, any certificate or articles of formation or organization of such entity.          “Outstanding Amount” means with respect to any Loans on any date, the aggregate outstanding   principal  amount  thereof  after  giving  effect  to  any  borrowings  and  prepayments  or  repayments  of  any   Loans occurring on such date.          “Participant” has the meaning set forth in Section 11.06(d).          “Patents”  means,  collectively,  all  patents  and  all  patent applications  and  registrations  (whether   issued, established  or  registered  or  recorded  in  the  United  States  or  any  other  country  or  any  political   subdivision thereof) and all tangible embodiments of the foregoing, together with any and all (a) rights   and privileges arising under applicable Law and international treaties and conventions with respect to the   use  of  any  patents,  (b)  Inventions  and  improvements  described  and  claimed  therein,  (c)  reissues,   divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto,   (d) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder   and  with  respect  thereto  including  damages  and  payments  for  past,  present  or  future  infringements   thereof,  (e) rights  corresponding thereto throughout the  world and (f)  rights to sue for  past,  present  or   future infringements thereof.          “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.          “Pension  Funding Rules” means the  rules of the  Internal  Revenue  Code  and ERISA  regarding   minimum  required  contributions  (including  any  installment  payment  thereof)  to  Pension  Plans  and  set   forth in Sections 412, 430, 431, 432 and 436 of the Internal Revenue Code and Sections 302, 303, 304   and 305 of ERISA.          “Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or   a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate   and is either covered by Title IV of ERISA or is subject to minimum funding standards under Section 412   of the Internal Revenue Code.                                          24  CHAR1\1659840v4 

 

      “Perceptive  Warrant”  means  that  certain  Warrant  Certificate  dated  as  of  September  30,  2016   issued by the Borrower in favor of Perceptive Credit Holdings, LP.          “Permitted  Acquisition”  means  an  Investment  consisting  of  an  Acquisition  by  a  Loan  Party   whether by purchase, merger or otherwise (whether in one or a series of related transactions); provided,   that:                (a)  immediately  prior  to,  and  after  giving  effect  thereto,  no  Default  or  Event  of         Default  shall  have  occurred  and  be  continuing  or  would  reasonably  be  expected  to  result         therefrom;                (b)  all  transactions  in  connection  therewith  shall  be  consummated,  in  all  material         respects,  in  accordance  with  all  applicable  Law  and  in  conformity  with  all  applicable         governmental, shareholder and third party consents and approvals;                (c)  in  the  case  of  an  acquisition  of  Equity  Interests  of  another  Person,  all  of  such         Equity  Interests  shall be owned  one  hundred  percent  (100%)  by  such  Loan  Party  or  a  Wholly         Owned Subsidiary of such Loan Party, and such Loan Party shall take, or cause to be taken, each         of the actions set forth in Section 7.12 and Section 7.14, if applicable, within the applicable time         periods set forth therein;                (d)  in  the  case  of  the  Acquisition  of assets,  all  assets  acquired  shall  be owned by  a         Loan Party and such Loan Party shall take, or cause to be taken, within the time periods set forth in         Section  7.14  and/or  in  the  Collateral  Documents,  all  necessary  actions  to  comply  with  Section         7.14(b);                (e)  such acquired Person (in the case of an Acquisition of Equity Interests) or assets (in         the case of an Acquisition of assets, a Product or a line of business or division) (i) shall be engaged         or used, as the case may be, in (A) a similar or reasonably related business or line of business or (B)         a  business  or  line  of  business  that  is  reasonably  related  or  similar  to  those  in  which  the  Loan         Parties and their respective Subsidiaries are engaged as of the Effective Date or (ii) shall have a         reasonably related or similar customer base as the Loan Parties and their respective Subsidiaries;                (f)   on  a Pro  Forma  Basis  after  giving  effect to such  Acquisition, the Loan  Parties         and their respective Subsidiaries shall be in compliance with the financial covenants set forth in         Sections 8.16 and 8.17 as of the last day of the four fiscal quarter period most recently ended for         which financial statements have been delivered to the Administrative Agent pursuant to Section         7.01(a) or (b)(i);                (g)   in the case of an Acquisition of the Equity Interests of another Person, the Board         of Directors of such other Person shall have duly approved such Acquisition;                (h)   the  purchase  price  (or  equivalent  consideration)  for  such  Acquisition  shall  be         paid only in cash or Qualified Capital Stock of the Borrower and (i) to the extent such purchase         price is paid in cash, when taken together with all other Acquisitions consummated or effected for         cash consideration since the Effective Date, does not exceed $5,000,000 in the aggregate, or (ii)         to the extent such purchase price is paid in Qualified Capital Stock of the Borrower, when taken         together  with  all  other  Acquisitions  consummated  or  effected  for  Qualified  Capital  Stock         consideration  since  the  Effective  Date,  does  not  exceed  the  fair  market  value  of  $10,000,000         (with fair market value being determined in good faith by the Borrower’s Board of Directors at         the time of the applicable Acquisition) in the aggregate; and                                          25  CHAR1\1659840v4 

 

            (i)   the Loan Parties shall have provided the Administrative Agent with at least ten        (10)  Business  Days’  prior  written  notice  of  any  such  Acquisition,  together  with  summaries,        prepared in reasonable detail, of all due diligence conducted by or on behalf of the Loan Parties        or their respective Subsidiaries, as applicable, prior to such Acquisition, and the Administrative        Agent  shall  have  received  a  certificate  of  a  Responsible  Officer  of  the  Borrower  (prepared  in        reasonable  detail)  disclosing  the  Borrower’s reasonable,  good  faith  belief  as  to  any  contingent        liabilities  and  prospective  research and  development costs  associated  with the Person  or assets        being acquired.        “Permitted Liens” means, at any time, Liens in respect of property of any Loan Party or any of its   Subsidiaries permitted to exist at such time pursuant to the terms of Section 8.01.          “Permitted Refinancing” means, with respect to any Indebtedness, any extensions, renewals and   replacements of such Indebtedness; provided, that, such extension, renewal or replacement (a) shall not   increase the outstanding principal amount of such Indebtedness (other than by the aggregate amount of   any fees and expenses incurred in connection with such refinancing and any reasonable premium paid in   connection  with  such  refinancing),  (b)  contains  terms  relating  to  outstanding  principal  amount,   amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a   whole no less favorable in any material respect to the Loan Parties and their respective Subsidiaries or the   Secured Parties than the terms of any agreement or instrument governing such existing Indebtedness, (c)   shall  have  an  applicable  interest  rate  or  equivalent  yield  which  does  not  exceed  the  interest  rate  or   equivalent yield of the Indebtedness being extended, renewed or replaced, (d) shall not contain any new   requirement  to  grant  any  Lien  or  to  give  any  Guarantee  that  was  not  an  existing  requirement  of  the   Indebtedness being extended, renewed or replaced and (e) after giving effect to such extension, renewal   or replacement, no Default or Event of Default shall have occurred (or would reasonably be expected to   occur) as a result thereof.          “Permitted  Sale  and  Leaseback  Transaction”  means,  with  respect  to  any  Loan  Party  or  any   Subsidiary, any Sale and Leaseback Transaction whereby such Loan Party or such Subsidiary shall sell   fixed assets to any Person and thereafter rent or lease such fixed assets for the same or a similar purpose,   in  each  case,  entered  into  in  connection  with  the  incurrence  by  such  Loan  Party  or  Subsidiary  of   Indebtedness permitted by Section 8.03(e); provided, that, (a) such Sale and Leaseback Transaction shall   be consummated within six (6) months of the purchase of the applicable fixed asset(s) (or, in the case of   any such fixed assets owned by such Loan Party or such Subsidiary as of the Effective Date, within six   (6) months of the Effective Date) and (b) the fixed assets that are the subject of such Sale and Leaseback   Transaction shall be financed with Indebtedness incurred in reliance on Section 8.03(e).          “Permitted  Senior  Revolving  Credit  Documents”  means  each  agreement,  instrument  and   document  entered  into  by  Establishment  Labs  Sociedad  Anonima  in  connection  with  any  Permitted   Senior  Revolving  Credit  Indebtedness,  in  each  case  in  form  and  substance  satisfactory  to  the   Administrative  Agent,  as  the  same  may  be  amended,  modified,  extended,  restated,  replaced  or   supplemented from time to time subject to the terms and provisions of the intercreditor agreement entered   into by the Administrative Agent in connection therewith.          “Permitted  Senior  Revolving  Credit  Indebtedness”  means  senior  secured  Indebtedness  of   Establishment Labs Sociedad Anonima which satisfies the following requirements: (a) the Loan Parties   shall  have  delivered  to  the  Administrative  Agent  and  the  Lenders  the  applicable  Permitted  Senior   Revolving Credit Documents prior to incurrence of the Permitted Senior Revolving Credit Indebtedness   thereunder, in each case certified by a Responsible Officer of Establishment Labs Sociedad Anonima, (b)   the Administrative Agent shall have approved the financial institution providing such Permitted Senior   Revolving  Credit  Indebtedness  (each  such  financial  institution,  a  “Permitted  Senior  Revolving  Credit                                          26  CHAR1\1659840v4 

 

Lender”)  and  (c)  no  Loan  Party  nor  any  Subsidiary  of  a  Loan  Party  (in  each  case,  other  than   Establishment  Labs  Sociedad  Anonima)  shall  Guarantee,  or  provide  a  Lien  with  respect  to,  such   Indebtedness.          “Permitted  Senior  Revolving  Credit  Lender”  has  the  meaning  set  forth  in  the  definition  of   “Permitted Senior Revolving Credit Indebtedness.”          “Permitted  Senior  Revolving  Credit  Priority  Collateral”  has  the  meaning  set  forth  in  Section   8.03(g).          “Person”  means any  natural  person, corporation, limited liability  company,  trust, joint  venture,   association, company, partnership, Governmental Authority or other entity.          “Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including   a Pension Plan), and public or private, statutory or in addition to statutory requirements, maintained for   employees of the Borrower or any of its Subsidiaries or any of their respective Affiliates, or any ERISA   Affiliate  or  any  such  Plan  to  which  the  Borrower  or  any  of  its  Subsidiaries  or  any  of  their  respective   Affiliates or any ERISA Affiliate is required to contribute, sponsor, maintain, or contribute on behalf of   any of its employees.          “Pledge  Agreements”  means,  collectively,  the  U.S.  Pledge  Agreements,  the  Brazilian  Share   Pledge Agreement and the Belgian Share Pledge Agreement.          “PMA” has the meaning set forth in the definition of “Device Clearance Application”.          “Prime Rate” means, with respect to any Interest Period, the fluctuating rate per annum equal to   the highest rate published in the “Money Rates” section of The Wall Street Journal as the “prime rate”   then in effect (or, if such source is not available for any reason, such alternative source as determined by   the Administrative Agent) on the first Business Day of such Interest Period; provided, that, the “Prime   Rate” initially shall be set on the first Business Day of the applicable LIBOR Unavailability Period for the   Interest Period in which such LIBOR Unavailability Period commences.          “Pro  Forma  Basis”,  “Pro  Forma  Compliance”  and  “Pro  Forma  Effect”  means,  in  respect  of  a   Specified  Transaction,  that  such  Specified  Transaction  and  the  following  transactions  in  connection   therewith (to the extent applicable) shall be deemed to have occurred as of the first day of the applicable   period  for  the  applicable  covenant  or  requirement:  (a)(i)  with  respect  to  any  Disposition,  Involuntary   Disposition or sale, transfer or other disposition that results in a Person ceasing to be a Subsidiary, income   statement  and  cash  flow  statement  items  (whether  positive  or  negative)  attributable  to  the  Person  or   property disposed  of shall be  excluded and  (ii)  with respect to  any  Acquisition  or Investment,  income   statement  and  cash  flow  statement  items  (whether  positive  or  negative)  attributable  to  the  Person  or   property acquired shall be included to the extent relating to any period applicable in such calculations to   the extent (A) such items are not otherwise included in such income statement items for the Borrower and   is Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section   1.01 and (B) such items are supported by financial statements or other information reasonably satisfactory   to the Administrative Agent, (b) any retirement of Indebtedness and (c) any incurrence or assumption of   Indebtedness by any Loan Party or any Subsidiary (and if such Indebtedness has a floating or formula   rate, such Indebtedness shall have an implied rate of interest for the applicable period for purposes of this   definition  determined  by  utilizing  the  rate  which  is  or  would  be  in  effect  with  respect  to  such   Indebtedness  as  at  the  relevant  date  of  determination);  provided,  that,  Pro  Forma  Basis,  Pro  Forma   Compliance  and  Pro  Forma  Effect  in  respect  of  any  Specified  Transaction  shall  be  calculated  in  a   reasonable and factually supportable manner and certified by a Responsible Officer of the Borrower.                                          27  CHAR1\1659840v4 

 

      “Product”  means  (a)  those  Devices  set  forth  (and  described  in  reasonable  detail)  on  Schedule   1.01(a) to the Disclosure Letter and (b) any current or future Device developed, manufactured, licensed,   marketed, sold or  otherwise  commercialized  by  any  Loan  Party  or  any Subsidiary, including  any such   Device currently in development.          “Product  Agreement”  means,  with  respect  to  any  Product,  any  contract,  license,  document,   instrument, interest (equity or otherwise) or the like under which one or more Persons grants or receives   (a) any right, title or interest with respect to any Product Commercialization and Development Activities   in respect of such Product or (b) any right to exclude any other Person from engaging in, or otherwise   restricting any right, title or interest as to, any Product Commercialization and Development Activities   with respect to such Product, including any contract with suppliers, manufacturers, distributors, clinical   research organizations, hospitals, group purchasing organizations, wholesalers, pharmacies or any other   Person related to such entity.          “Product Assets” means, with respect to any Product, (a) any and all rights, title and interest of   any  Loan  Party  or  any  Subsidiary  in  any  assets  relating  to  such  Product  or  any  Product   Commercialization  and  Development  Activities  with  respect  to  such  Product,  (b)  all  Product  Related   Information  with  respect  to  such  Product  or  any  related  Product  Commercialization  and  Development   Activities, (c) any Product Agreement related to such Product or any such Product Commercialization and   Development Activities, (d) any IP Rights, Regulatory Approvals and similar assets with respect to such   Product or any such Product Commercialization and Development Activities and (e) all rights, title and   interests in any other property, tangible or intangible, manifesting or otherwise in respect of such Product   or  any  such  Product  Commercialization  and  Development  Activities,  including,  without  limitation,   inventory, accounts receivable or similar rights to receive money or payment pertaining thereto and all   proceeds of the foregoing.          “Product Authorizations” means any and all Regulatory Approvals (including all applicable IDEs,   PMAs, 510(k)s, Device Clearance Applications, Product Standards, supplements, amendments, pre- and   post-  approvals,  governmental  price  and  reimbursement  approvals  and  approvals  of  applications  for   regulatory exclusivity), clearances, licenses, notifications, registrations or authorizations of or required by   any applicable Regulatory Authority in each case necessary for the ownership, use or commercialization   of any Product or for any Product Commercialization and Development Activities with respect thereto in   any country or jurisdiction, whether U.S. or non-U.S.          “Product  Commercialization  and  Development  Activities”  means,  with  respect  to  any  Product,   any combination of research, development, manufacture, import, use, sale, licensing, importation, storage,   labeling,  marketing,  promotion,  supply,  distribution,  testing,  packaging,  purchasing  or  other   commercialization  activities, receipt  of  payment  in  respect  of  any of  the foregoing (including, without   limitation,  in  respect  of  licensing,  royalty  or  similar  payments),  or  any  similar  or  other  activities  the   purpose of which is to commercially exploit such Product.          “Product Related Information” means, with respect to any Product, all materials and information   owned  or  possessed  by  the  Loan  Parties  or  any  of  their  respective  Subsidiaries  that  is  necessary  or   required  for  any  Product  Commercialization  and  Development  Activities  relating  to  such  Product,   including (a) brand materials, packaging and other trade dress, customer targeting and other marketing,   promotion  and  sales  materials  and  information,  referral,  customer,  supplier  and  other  contact  lists  and   information,  product,  business,  marketing  and  sales  plans,  research,  studies  and  reports,  sales,   maintenance  and  production  records,  training  materials  and  other  marketing,  sales  and  promotional   information,  (b)  clinical  data,  information  included  or  supporting  any  Product  Authorization  or  other   Regulatory  Approval,  any  regulatory  filings,  updates,  notices  and  correspondence  (including  adverse   event  and  other  pharmacovigilance  and  other  post-marketing  reports  and  information,  etc.),  technical                                          28  CHAR1\1659840v4 

 

information,  product  development  and  operational  data  and  records,  and  all  other  documents,  records,  files, data and other information relating to product development, manufacture and use, (c) litigation and  dispute  records,  and  accounting  records,  (d)  all  documents,  records  and  files  relating  to  IP  Rights,  including all correspondence from and to third parties (including IP Rights counsel and patent, trademark  and other intellectual property registries, including the United States Patent and Trademark Office) and  (e) all other information, techniques and know-how necessary or required in connection with the Product  Commercialization and Development Activities for any Product.         “Product  Revenues”  means,  for  any  period,  for  the  Borrower  and  its  Subsidiaries  on  a   consolidated basis, all amounts paid to and received by the Borrower and its Subsidiaries in the ordinary   course of business that, in accordance with GAAP, would be classified as net revenue, excluding upfront   payments, milestones, royalties  and  other similar  one-time payments  received  by  the Borrower  and  its   Subsidiaries that are not related to the sale of products or services; provided, that, “Product Revenues”   shall exclude the revenues generated by any Subsidiary to the extent that the declaration or payment of   dividends or similar distributions by that Subsidiary of the income resulting from such revenues is not at   the time permitted by operation of the terms of its Organization Documents or any agreement, instrument,   judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary.          “Product Standards” means all safety, quality and other specifications and standards applicable to   any Product, including all medical device and other standards promulgated by Standards Bodies.          “Proposed Term Sheet” has the meaning set forth in Section 2.13(b).          “Proposed Terms” has the meaning set forth in Section 2.13(b).          “Qualified Capital Stock” of any Person means any Equity Interests of such Person that are not   Disqualified Capital Stock.          “Qualified Loan Party” means (a) any BVI Loan Party, (b) any Costa Rican Loan Party, (c) any   U.S. Loan Party or (d) any Loan Party (other than any BVI Loan Party, Costa Rican Loan Party or U.S.   Loan  Party),  that  is  organized  in  a  jurisdiction  (as  designated  by  the  Administrative  Agent  to  the   Borrower in writing): (i) that permits such Loan Party to grant to the Administrative Agent, for the benefit   of the Secured Parties, Liens that are first priority and perfected in substantially all of the assets of such   Loan Party (other than Excluded Property), pursuant to Section 7.14 and the Collateral Documents and   (ii)  the  Laws  of  which,  in  the  reasonable  determination  of  the  Administrative  Agent,  provide  the   Administrative Agent with the ability to enforce such Liens in a manner that is substantially equivalent to   the ability to enforce Liens against a U.S. Loan Party.          “Qualifying  Control  Agreement”  means  an  agreement  among  a  Loan  Party,  a  depository   institution or securities intermediary and the Administrative Agent (or the Trustee), for the benefit of the   Secured Parties, which agreement is in form and substance reasonably satisfactory to the Administrative   Agent  and  which  provides  the  Administrative  Agent  (or  the  Trustee,  as  applicable)  with  “control”  (as   such term is used in Article 9 of the Uniform Commercial Code) or dominion over the deposit account(s)   or securities account(s) described therein.           “Real Property Security Documents” means with respect to the fee interest of any Loan Party in   any real property (other than Excluded Property):                (a)  a  fully  executed  and  notarized  Mortgage  encumbering  the  fee  interest  of  such         Loan Party in such real property;                                           29  CHAR1\1659840v4 

 

            (b)   if requested by the Administrative Agent in its sole discretion, maps or plats of        an as-built survey of the sites of such real property certified to the Administrative Agent and the        title insurance company issuing the policies referred to in clause (c) of this definition in a manner         satisfactory to each of the Administrative Agent and such title insurance company, dated a date         satisfactory  to  each  of  the  Administrative  Agent  and  such  title  insurance  company  by  an         independent professional licensed land surveyor, which maps or plats and the surveys on which         they are based shall be sufficient to delete any standard printed survey exception contained in the         applicable  title  policy  and  be  made  in  accordance  with  the  Minimum  Standard  Detail         Requirements for Land Title Surveys jointly established and adopted by the American Land Title         Association and the American Congress on Surveying and Mapping in 2011 with items 2, 3, 4,         6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 14, 16,17, 18 and 19 on Table A thereof completed;                (c)  ALTA  mortgagee  title  insurance  policies  issued  by  a  title  insurance  company         acceptable  to  the  Administrative  Agent  with  respect  to  such  real  property,  assuring  the         Administrative  Agent  that  the  Mortgage  covering  such  real  property  creates  a  valid  and         enforceable  first priority  mortgage  lien  on  such real property,  free and clear  of  all  defects  and         encumbrances except Permitted Liens, which title insurance policies shall otherwise be in form         and substance satisfactory to the Administrative Agent and shall include such endorsements as         are requested by the Administrative Agent;                (d)  evidence  as  to  (i)  whether  such  real  property  is  in  an  area  designated  by  the         Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood         Hazard  Property”)  and  (ii)  if  such  real  property  is  a  Flood  Hazard  Property,  (A)  whether  the         community in which such real property is located is participating in the National Flood Insurance         Program,  (B)  the  applicable  Loan  Party’s  written  acknowledgment  of  receipt  of  written         notification from the Administrative Agent (1) as to the fact that such real property is a Flood         Hazard Property and (2) as to whether the community in which each such Flood Hazard Property         is located is participating in the National Flood Insurance Program and (C) copies of insurance         policies  or  certificates  of  insurance  of  the  Borrower  and  its  Subsidiaries  evidencing  flood         insurance satisfactory to the Administrative Agent and naming the Administrative Agent and its         successors and/or assigns as sole loss payee on behalf of the Secured Parties;                (e)  if requested by the Administrative Agent in its sole discretion, an environmental         assessment report, as to such real property, in form and substance and from professional firms         acceptable to the Administrative Agent;                (f)  if  requested  by  the  Administrative  Agent  in  its  sole  discretion,  evidence         reasonably satisfactory to the Administrative Agent that such real property, and the uses of such         real  property,  are  in  compliance  in  all  material  respects  with  all  applicable  zoning  laws  (the         evidence  submitted  as  to  which  should  include  the  zoning  designation  made  for  such  real         property, the permitted uses of such real property under such zoning designation and, if available,         zoning requirements as to parking, lot size, ingress, egress and building setbacks); and                (g)  if requested by the Administrative Agent in its sole discretion, an opinion of legal         counsel  to  the  Loan  Party  granting  the  Mortgage  on  such  real  property,  addressed  to  the         Administrative  Agent  and  each  Lender,  in  form  and  substance  reasonably  acceptable  to  the         Administrative Agent.          “Recipient” means the Administrative Agent, any Lender, and any other recipient of any payment   by or on account of any obligation of any Loan Party under any Loan Document.                                           30  CHAR1\1659840v4 

 

      “Referral Source” has the meaning set forth in Section 6.16(b).          “Register” has the meaning set forth in Section 11.06(c).          “Regulatory  Approval”  means  any  Governmental  Approval  relating  to  any  Product  or  any   Product  Commercialization  and  Development  Activities,  including  any  Product  Authorizations  with   respect thereto.          “Regulatory  Authority”  means  any  Governmental  Authority,  whether  U.S.  or  non-U.S.,  that  is   concerned  with  or  has  regulatory  or  supervisory  oversight  with  respect  to  any Product  or  any  Product   Commercialization  and  Development  Activities,  including  the  FDA  and  all  equivalent  Governmental   Authorities, whether U.S. or non-U.S.          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners,   directors,  officers,  employees,  agents,  trustees,  administrators,  managers,  advisors,  sub-advisors  and   representatives of such Person and of such Person’s Affiliates.          “Relativity  Warrant”  means  that  certain  Warrant  Certificate  dated  as  of  September  30,  2016   issued by the Borrower in favor of Relativity Healthcare Fund, LLC.          “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than   events for which the thirty-day notice period has been waived.          “Required  Lenders”  means,  at  any  time,  Lenders  having  Total  Credit  Exposures  representing   more than fifty percent (50%) of the Total Credit Exposures of all Lenders.  The Total Credit Exposure of   any Defaulting Lender shall be disregarded in determining Required Lenders at any time.          “Responsible Officer” means a director, the chief executive officer, president, chief legal officer,   chief financial officer, treasurer, assistant treasurer or controller of a Loan Party and, solely for purposes   of the delivery of certificates pursuant to Sections 5.02 or 7.12, the secretary or any assistant secretary of   a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party   shall  be  conclusively  presumed  to  have  been  authorized  by  all  necessary  corporate,  partnership  and/or   other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed   to have acted on behalf of such Loan Party.          “Restricted” means, when referring  to  cash  or  Cash Equivalents  of  the  Loan  Parties, that  such   cash or Cash Equivalents (a) appear (or would be required to appear) as “restricted” on a consolidated   balance sheet of the Borrower and its Subsidiaries as determined in accordance with GAAP, or (b) are   subject to any Lien in favor of any Person (other than bankers’ liens and rights of setoff) other than the   Administrative Agent for the benefit of the Secured Parties.          “Restricted Payment” means (a) any dividend or other distribution, direct or indirect, on account   of any shares (or equivalent) of any class of Equity Interests of any Loan Party or any of its Subsidiaries,   now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase   or  other  acquisition  for  value,  direct  or  indirect,  of  any  shares  (or  equivalent)  of  any  class  of  Equity   Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made   to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares   of any class of Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding   and  (d)  any  payment  made  in  cash  to  holders  of  Convertible  Indebtedness  in  excess  of  the  original   principal  (or  notional)  amount  thereof  and  interest  thereon  (and,  to  the  extent  not  permissible  to  be                                           31  CHAR1\1659840v4 

 

satisfied  with  shares  of  common  stock,  customary  redemption,  mandatory  conversion  or  similar  premiums, if any).         “ROFR  Side  Letter”  means  that  certain  letter  agreement  dated  as  of  the  Funding  Date  by  and   between the Borrower and the Lenders from time to time party thereto with respect to the purchase of   certain Equity Interests of the Borrower in connection with a sale of the Equity Interests of the Borrower.          “S&P”  means  Standard  &  Poor’s  Financial  Services  LLC,  a  subsidiary  of  The  McGraw-Hill   Companies, Inc., and any successor thereto.          “Sale and Leaseback Transaction” means, with respect to any Loan Party or any Subsidiary, any   arrangement, directly or indirectly, with any Person whereby such Loan Party or such Subsidiary shall   sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and   thereafter rent or lease such property or other property that it intends to use for substantially the same   purpose or purposes as the property being sold or transferred.          “Sanction(s)”  means  any  sanction  administered  or  enforced  by  the  United  States  government   (including,  without  limitation,  OFAC),  the United Nations  Security  Council,  the  European  Union, Her   Majesty’s Treasury (“HMT”), the Costa Rican Institute of Drugs or other relevant sanctions authority.          “SEC”  means  the  Securities  and  Exchange  Commission,  or  any  Governmental  Authority   succeeding to any of its principal functions.          “Second Amendment Effective Date” means June 15, 2018.          “Secured  Parties”  means,  collectively,  the  Administrative  Agent,  the  Lenders  and  the   Indemnitees.          “Securities Act” means the Securities Act of 1933.          “Securitization  Transaction”  means,  with  respect  to  any  Person,  any  financing  transaction  or   series of financing transactions (including factoring arrangements) pursuant to which such Person or any   Subsidiary of such Person may sell, convey or otherwise transfer, or grant a security interest in, accounts,   payments,  receivables,  rights  to  future  lease  payments  or  residuals  or  similar  rights  to  payment  to  a   special purpose subsidiary or affiliate of such Person.          “Security  Agreements”  means,  collectively,  the  U.S.  Security  Agreement, the  U.S.  IP  Security   Agreement, the U.S. Deposit Account Security Agreement, the Belgian Receivables Pledge Agreement,   Brazilian Receivables Pledge Agreement, the Costa Rican IP Security Agreement and the Costa Rican   Security Trust Agreement.          “Share Purchase Agreement” means that certain Series F Share Purchase Agreement dated as of   the Funding Date by and between the Borrower and the Lenders.          “Solvent” or “Solvency” means, with respect to (a) any BVI Loan Party as of a particular date,   that on such date such BVI Loan Party is “solvent” as such term is determined under Section 8 of the   Insolvency Act, 2003 of the British Virgin Islands and (b) any Person (including, for the avoidance of   doubt, any BVI Loan Party) as of a particular date, that on such date (i) such Person is able to pay its   debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary   course of business, (ii) such Person does not intend to, and does not believe that it will, incur debts or   liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course,                                          32  CHAR1\1659840v4 

 

(iii) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a  transaction, for which such Person’s property would constitute unreasonably small capital after giving due  consideration to the prevailing practice in the industry in which such Person is engaged or is to engage,  (iv) the fair value of the property of such Person is greater than the total amount of liabilities, including,  without limitation, contingent liabilities, of such Person and (v) the present fair salable value of the assets  of  such  Person  is  not  less  than  the  amount  that  will  be  required  to  pay  the  probable  liability  of  such  Person  on  its  debts  as  they  become  absolute  and  matured.   In  computing  the  amount  of  contingent  liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of  all  the  facts  and  circumstances  existing  at  such  time,  represents  the  amount  that  can  reasonably  be  expected to become an actual or matured liability.         “Specified Cure Contribution” has the meaning set forth in Section 8.16(b)(i).          “Specified  Deposit  Account”  has  the  meaning  set  forth  in  the  U.S.  Deposit  Account  Security   Agreement.          “Specified Transaction” means (a) any Acquisition, any Disposition, any sale, transfer or other   disposition  that  results  in  a  Person  ceasing  to  be  a  Subsidiary,  any  Involuntary  Disposition,  or  any   Investment  that  results  in  a  Person  becoming  a  Subsidiary,  in  each  case,  whether  by  merger,   amalgamation,  consolidation  or  otherwise  or  any  incurrence  or  repayment  of  Indebtedness  or  (b)  any   other  event  that  by  the  terms  of  the  Loan  Documents  requires  Pro  Forma  Compliance  with  a  test  or   covenant, calculation as to Pro Forma Effect with respect to a test or covenant or requires such test or   covenant to be calculated on a Pro Forma Basis.          “Standard Bodies” means applicable organizations that create, sponsor or maintain safety, quality   or other standards, including ISO, ANSI, CEN and SCC.          “Subsidiary”  of  a  Person  means  a  corporation,  partnership,  joint  venture,  limited  liability   company  or  other  business  entity  of  which  a  majority  of  the  shares  of  Voting  Stock  is  at  the  time   beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through   one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a   “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.          “Swap  Contract”  means  (a)  any  and  all  rate  swap  transactions,  basis  swaps,  credit  derivative   transactions,  forward  rate  transactions,  commodity  swaps,  commodity  options,  forward  commodity   contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or   forward  bond  or forward bond  price  or forward  bond  index  transactions, interest rate  options, forward   foreign  exchange  transactions,  cap  transactions,  floor  transactions,  collar  transactions,  currency  swap   transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar   transactions or any combination of any of the foregoing (including any options to enter into any of the   foregoing), whether or not any such transaction is governed by or subject to any master agreement, and   (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and   conditions of, or governed by, any form of master agreement published by the International Swaps and   Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master   agreement  (any  such  master  agreement,  together  with  any  related  schedules,  a  “Master  Agreement”),   including any such obligations or liabilities under any Master Agreement; provided, that, the term “Swap   Contract” shall not include (i) phantom stock, stock option plans or similar plans providing for payments   only on account of services provided by current or former directors, officers, employees or consultants of   the  Borrower  or  its  Subsidiaries  or  (ii)  any  option  or  warrant  agreement  for  the  purchase  of  Equity   Interests of the Borrower.                                           33  CHAR1\1659840v4 

 

      “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking   into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a)   for  any  date  on  or  after  the  date  such  Swap  Contracts  have  been  closed  out  and  termination  value(s)   determined  in  accordance  therewith,  such  termination  value(s)  and  (b)  for  any  date  prior  to  the  date   referenced  in  clause  (a),  the  amount(s)  determined  as  the  mark-to-market  value(s)  for  such  Swap   Contracts,  as  determined  based  upon  one  or  more  mid-market  or  other  readily  available  quotations   provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate   of a Lender).          “Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan   or  similar  off-balance  sheet  financing  arrangement  whereby  the  arrangement  is  considered  borrowed   money indebtedness for tax purposes but is classified as an operating lease or does not otherwise appear   on a balance sheet under GAAP.          “Taxes” has the meaning set forth in Section 3.01(a).          “Technical Information” means all trade secrets and other proprietary or confidential information,   public  information,  non-proprietary  know-how,  any  information  of  a  scientific,  technical  or  business   nature in any form or medium, standards and specifications, conceptions, ideas, innovations, discoveries,   Inventions, invention disclosures, all documented research, developmental, demonstration or engineering   work  and  all  other  information,  data,  plans,  specifications,  reports,  summaries,  experimental  data,   manuals,  models,  samples,  know-how,  technical  information,  systems,  methodologies,  computer   programs, information technology and any other information.          “Term A Borrowing” means a borrowing consisting of simultaneous Term A Loans made by each   of the Term A Lenders pursuant to Section 2.01(a).          “Term A Commitment” means, as to each Term A Lender, its obligation to make a Term A Loan   to  the  Borrower  pursuant  to  Section  2.01(a),  in  the  principal  amount  set  forth  opposite  such  Lender’s   name on Schedule 2.01. The aggregate principal amount of the Term A Commitments of all of the Term   A Lenders as in effect on the Effective Date is THIRTY MILLION DOLLARS ($30,000,000).          “Term A Facility” means, at any time, (a) on or prior to the Funding Date, the aggregate amount   of the Term A Commitments at such time and (b) thereafter, the aggregate Outstanding Amount of the   Term A Loans of all Term A Lenders outstanding at such time.          “Term A Lender” means (a) at any time on or prior to the Funding Date, any Lender that has a   Term A Commitment at such time and (b) at any time after the Funding Date, any Lender that holds one   or more Term A Loans at such time.          “Term A Loan” means an advance made by any Term A Lender under the Term A Facility.          “Term A Note” has the meaning set forth in Section 2.09.          “Term B-1 Availability Period” means the period from and after October 31, 2017 (or such earlier   date as may be agreed to by the Administrative Agent in its sole discretion) to the earliest of (a) June 30,   2019, (b) the date of termination of the Term B-1 Commitments pursuant to Section 2.04 and (c) the date   of termination of the Term B-1 Commitments pursuant to Section 9.02.          “Term B-1 Borrowing” means a borrowing consisting of simultaneous Term B-1 Loans made by   each of the Term B-1 Lenders pursuant to Section 2.01(b)(i).                                          34  CHAR1\1659840v4 

 

      “Term B-1 Commitment” means, as to each Term B-1 Lender, its obligation to make a Term B-1   Loan  to  the  Borrower  pursuant  to  Section  2.01(b)(i),  in  the  principal  amount  set  forth  opposite  such   Lender’s name on Schedule 2.01. The aggregate principal amount of the Term B-1 Commitments of all of   the Term B-1 Lenders as in effect on the Effective Date is FIVE MILLION DOLLARS ($5,000,000).          “Term B-1 Facility” means, at any time, (a) on or prior to the funding of the Term B-1 Loans, the   aggregate  amount  of  the  Term  B-1  Commitments  at  such  time  and  (b) thereafter,  the  aggregate   Outstanding Amount of the Term B-1 Loans of all Term B-1 Lenders outstanding at such time.          “Term B-1 Lender” means (a) at any time on or prior to the funding of the Term B-1 Loans, any   Lender that has a Term B-1 Commitment at such time and (b) at any time after the funding of the Term   B-1 Loans, any Lender that holds one or more Term B-1 Loans at such time.          “Term B-1 Loan” means an advance made by any Term B-1 Lender under the Term B-1 Facility.          “Term B-1 Note” has the meaning set forth in Section 2.09.          “Term B-2 Availability Period” means the period from and after the Funding Date to the earliest   of (a) June 30, 2019, (b) the date of termination of the Term B-2 Commitments pursuant to Section 2.04   and (c) the date of termination of the Term B-2 Commitments pursuant to Section 9.02.          “Term B-2 Borrowing” means a borrowing consisting of simultaneous Term B-2 Loans made by   each of the Term B-2 Lenders pursuant to Section 2.01(b)(ii).          “Term B-2 Commitment” means, as to each Term B-2 Lender, its obligation to make a Term B-2   Loan  to  the  Borrower  pursuant  to  Section  2.01(b)(ii),  in  the  principal  amount  set  forth  opposite  such   Lender’s name on Schedule 2.01. The aggregate principal amount of the Term B-2 Commitments of all of   the Term B-2 Lenders as in effect on the Effective Date is FIVE MILLION DOLLARS ($5,000,000).          “Term B-2 Facility” means, at any time, (a) on or prior to the funding of the Term B-2 Loans, the   aggregate  amount  of  the  Term  B-2  Commitments  at  such  time  and  (b) thereafter,  the  aggregate   Outstanding Amount of the Term B-2 Loans of all Term B-2 Lenders outstanding at such time.          “Term B-2 Lender” means (a) at any time on or prior to the funding of the Term B-2 Loans, any   Lender that has a Term B-2 Commitment at such time and (b) at any time after the funding of the Term   B-2 Loans, any Lender that holds one or more Term B-2 Loans at such time.          “Term B-2 Loan” means an advance made by any Term B-2 Lender under the Term B-2 Facility.          “Term B-2 Note” has the meaning set forth in Section 2.09.          “Term B-3 Availability Period” means the period from and after the Funding Date to the earliest   of (a) September 30, 2019, (b) the date of termination of the Term B-3 Commitments pursuant to Section   2.04 and (c) the date of termination of the Term B-3 Commitments pursuant to Section 9.02.          “Term B-3 Borrowing” means a borrowing consisting of simultaneous Term B-3 Loans made by   each of the Term B-3 Lenders pursuant to Section 2.01(b)(iii).          “Term B-3 Commitment” means, as to each Term B-3 Lender, its obligation to make a Term B-3   Loan  to  the  Borrower  pursuant  to  Section  2.01(b)(iii),  in  the  principal  amount set  forth  opposite  such   Lender’s name on Schedule 2.01. The aggregate principal amount of the Term B-3 Commitments of all of                                          35  CHAR1\1659840v4 

 

the Term B-3 Lenders as in effect on the Third Amendment Effective Date is TEN MILLION DOLLARS  ($10,000,000).         “Term B-3 Facility” means, at any time, (a) on or prior to the funding of the Term B-3 Loans, the   aggregate  amount  of  the  Term  B-3  Commitments  at  such  time  and  (b) thereafter,  the  aggregate   Outstanding Amount of the Term B-3 Loans of all Term B-3 Lenders outstanding at such time.          “Term B-3 Lender” means (a) at any time on or prior to the funding of the Term B-3 Loans, any   Lender that has a Term B-3 Commitment at such time and (b) at any time after the funding of the Term   B-3 Loans, any Lender that holds one or more Term B-3 Loans at such time.          “Term B-3 Loan” means an advance made by any Term B-3 Lender under the Term B-3 Facility.          “Term B-3 Note” has the meaning set forth in Section 2.09.          “Term B-4 Availability Period” means the period from and after the Third Amendment Effective   Date to the earliest of (a) December 31, 2019, (b) the date of termination of the Term B-4 Commitments   pursuant  to  Section  2.04  and  (c) the  date  of  termination  of  the  Term  B-4  Commitments  pursuant  to   Section 9.02.          “Term B-4 Borrowing” means a borrowing consisting of simultaneous Term B-4 Loans made by   each of the Term B-4 Lenders pursuant to Section 2.01(b)(iv).          “Term B-4 Commitment” means, as to each Term B-4 Lender, its obligation to make a Term B-4   Loan  to  the  Borrower  pursuant  to  Section  2.01(b)(iv),  in  the  principal  amount  set  forth  opposite  such   Lender’s name on Schedule 2.01. The aggregate principal amount of the Term B-4 Commitments of all of   the  Term  B-4  Lenders  as  in  effect  on  the  Third  Amendment  Effective  Date  is  FIFTEEN  MILLION  DOLLARS ($15,000,000).          “Term B-4 Facility” means, at any time, (a) on or prior to the funding of the Term B-4 Loans, the   aggregate  amount  of  the  Term  B-4  Commitments  at  such  time  and  (b) thereafter,  the  aggregate   Outstanding Amount of the Term B-4 Loans of all Term B-4 Lenders outstanding at such time.          “Term B-4 Lender” means (a) at any time on or prior to the funding of the Term B-4 Loans, any   Lender that has a Term B-4 Commitment at such time and (b) at any time after the funding of the Term   B-4 Loans, any Lender that holds one or more Term B-4 Loans at such time.          “Term B-4 Loan” means an advance made by any Term B-4 Lender under the Term B-4 Facility.          “Term B-4 Note” has the meaning set forth in Section 2.09.          “Term  C  Availability  Period”  means  the  period  from  and  after  the  institution  of  the  Term  C   Commitments  pursuant  to  Section  2.14  to  the  earliest  of  (a) December  31,  2020,  (b)  the  date  of   termination of the Term C Commitments pursuant to Section 2.04 and (c) the date of termination of the   Term C Commitments pursuant to Section 9.02.          “Term C Borrowing” means a borrowing consisting of simultaneous Term C Loans made by each   of the Term C Lenders pursuant to Section 2.01(c).          “Term C Commitment” means, as to each Term C Lender, its obligation to make Term C Loans   to  the  Borrower  pursuant  to  Section  2.01(c).   The  aggregate  principal  amount  of  the  Term  C                                          36  CHAR1\1659840v4 

 

Commitments  of  all  of  the  Term  C  Lenders  shall  not  exceed  TEN  MILLION  DOLLARS  ($10,000,000.00).         “Term C Facility” means, at any time, (a) on or prior to the funding of the Term C Loans, the   aggregate amount of the Term C Commitments at such time and (b) thereafter, the aggregate Outstanding   Amount of the Term C Loans of all Term C Lenders outstanding at such time.          “Term  C  Lender”  means  (a) at  any  time  at  or  prior  to  the  funding  of  the  Term  C  Loans,  any   Lender that has a Term C Commitment at such time and (b) at any time after the funding of the Term C   Loans, any Lender that holds one or more Term C Loans at such time.          “Term C Loan” means an advance made by any Term C Lender under the Term C Facility.          “Term C Note” has the meaning set forth in Section 2.09.          “Third Amendment Effective Date” means June 17, 2019.          “Three-Month LIBOR” means, with respect to any Interest Period, a rate per annum equal to the   greater of (x) two and one-half percent (2.50%) per annum and (y) the three-month London Interbank   Offered Rate for deposits in Dollars at approximately 11:00 a.m. (London, England time), as determined   by  the  Administrative  Agent  from  the  appropriate  Bloomberg  or  Telerate  page  selected  by  the   Administrative Agent (the “LIBOR Screen Rate”) (or any successor thereto or similar source reasonably   determined  by  the  Administrative  Agent  from  time  to  time),  two  (2)  Business  Days  prior  to  the  first   Business  Day  of such  Interest  Period  and rounded up  to the nearest  1/16  of one  percent (1.00%). The   Administrative Agent’s determination of interest rates shall be determinative in the absence of manifest   error.          “Threshold Amount” means $750,000.          “Total Credit Exposure” means, as to any Lender at any time, the unused Commitments of such   Lender at such time and the Outstanding Amount of all Loans of such Lender at such time.          “Trademarks”  means,  collectively,  all  trademarks  (including  service  marks),  slogans,  logos,   symbols,  certification  marks,  collective  marks,  trade  dress,  uniform  resource  locators  (URL's),  domain   names,  corporate  names  and  trade  names,  whether  statutory  or  common  law,  whether  registered  or   unregistered  and  whether  established  or  registered  in  the  United  States  or  any  other  country  or  any   political  subdivision  thereof,  all  registrations  and  applications  for  the  foregoing  and  all  tangible   embodiments of the foregoing, together with, in each case, the goodwill symbolized thereby and any and   all (a) rights and privileges arising under applicable Law and international treaties and conventions with   respect  to  the  use  of  any  trademarks,  (b)  reissues,  continuations,  extensions  and  renewals  thereof  and   amendments  thereto, (c)  income,  fees,  royalties,  damages  and  payments  now  and  hereafter  due  and/or   payable thereunder and with respect thereto, including damages, claims and payments for past, present or   future infringements thereof, (d) rights corresponding thereto throughout the world and (e) rights to sue   for past, present and future infringements thereof.          “Trustee”  means  Intermanagement  Costa  Rica,  Ltda.,  acting  as  fiduciary  in  the  Costa  Rican   Security Trust Agreement.          “United States” and “U.S.” mean the United States of America.                                           37  CHAR1\1659840v4 

 

      “Unrestricted  Cash”  means,  at  any  time,  the aggregate  cash and  Cash  Equivalents of the  Loan   Parties (without duplication) that are not Restricted at such time.          “U.S. Deposit Account Security Agreement” means the U.S. deposit account security agreement   dated as of the Funding Date executed in favor of the Administrative Agent, for the benefit of the Secured   Parties, by Establishment Labs Sociedad Anonima, a Costa Rica corporation, with respect to the Specified   Deposit Account.          “U.S. IP Security Agreement” means the U.S. intellectual property security agreement dated as of   the Funding Date executed in favor of the Administrative Agent, for the benefit of the Secured Parties, by   Establishment  Labs  Sociedad  Anonima,  a  Costa  Rica  corporation,  with  respect  to  its  U.S.  intellectual   property.          “U.S.  Loan  Party”  means  any  Loan  Party  that  is  organized  under the  laws  of any  state  of  the   United States or the District of Columbia.          “U.S.  Pledge  Agreements”  means,  collectively,  (a)  the  U.S.  pledge  agreement  dated  as  of  the   Funding Date executed in favor of the Administrative Agent, for the benefit of the Secured Parties, by   each of the U.S. Loan Parties and each of the BVI Loan Parties other than the Borrower and (b) the U.S.   pledge agreement dated as of the Funding Date executed in favor of the Administrative Agent, for the   benefit of the Secured Parties, by the Borrower.          “U.S.  Security  Agreement”  means  the  U.S.  security  agreement  dated  as  of  the  Funding  Date   executed in favor of the Administrative Agent, for the benefit of the Secured Parties, by the U.S. Loan   Parties and the BVI Loan Parties.          “VAT”  mean  a  consumption  or  value-added  tax,  including  any  similar  Tax  which  may  be   imposed in place thereof from time to time.          “Voting  Stock”  means,  with  respect  to  any  Person,  Equity Interests issued  by  such  Person  the   holders  of  which  are  ordinarily,  in  the  absence  of  contingencies,  entitled  to  vote  for  the  election  of   directors (or persons performing similar functions) of such Person, even though the right so to vote has   been suspended by the happening of such a contingency.          “Wholly Owned Subsidiary” means, as to any Person, (a) any corporation one hundred percent   (100%) of whose Equity Interests is at the time owned by such Person and/or one or more Wholly Owned   Subsidiaries of such Person and (b) any partnership, association, joint venture or other entity in which   such Person and/or one or more Wholly Owned Subsidiaries of such Person owns one hundred percent   (100%) of the Equity Interests at such time (other than, in the case of a Foreign Subsidiary with respect to   the  preceding  clauses  (a)  or  (b),  director’s  qualifying  shares  and/or  other  nominal  amounts  of  shares   required to be held by Persons other than the Borrower and its Subsidiaries under applicable law).  Unless   otherwise  specified,  all  references  herein  to  a  “Wholly  Owned  Subsidiary”  or  to  “Wholly  Owned   Subsidiaries” shall refer to a Wholly Owned Subsidiary or Wholly Owned Subsidiaries of the Borrower.          “Withholding  Agent”  means  any  Loan  Party,  the  Administrative  Agent  and  any  other  Person   required by applicable Law to withhold or deduct amounts from a payment made by or on account of any   obligation of any Loan Party under any Loan Document.          “Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the   write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In                                           38  CHAR1\1659840v4 

 

Legislation  for  the  applicable  EEA  Member  Country,  which  write-down  and  conversion  powers  are  described in the EU Bail-In Legislation Schedule.          1.02 Other Interpretive Provisions.          With  reference  to  this  Agreement  and  each  other  Investment  Document,  unless  otherwise   specified herein or in such other Investment Document:                (a)  The  definitions  of  terms  herein  shall  apply  equally  to  the  singular  and  plural         forms of the terms defined.  Whenever the context may require, any pronoun shall include the         corresponding  masculine,  feminine  and  neuter  forms.   The  words  “include,”  “includes”  and         “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will”         shall be construed to have the same meaning and effect as the word “shall.”  Unless the context         requires  otherwise,  (i)  any  definition  of  or  reference  to  any  agreement,  instrument  or  other         document (including the Loan Documents and any Organization Document) shall be construed as         referring  to  such  agreement,  instrument  or  other  document  as  from  time  to  time  amended,         modified,  extended,  restated,  replaced  or  supplemented  from  time  to  time  (subject  to  any         restrictions set forth herein or in any other Investment Document), (ii) any reference herein to any         Person  shall  be  construed  to  include  such  Person’s  successors  and  assigns,  (iii)  the  words         “hereto”,  “herein,”  “hereof”  and  “hereunder,”  and  words  of  similar  import  when  used  in  any         Investment Document, shall be construed to refer to such Investment Document in its entirety and         not to any particular provision thereof, (iv) all references in any Investment Document to Articles,         Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles         and  Sections  of,  and  Preliminary  Statements,  Exhibits  and  Schedules  to,  the  Investment         Document  in  which  such  references  appear,  (v)  any  reference  to  any  law  shall  include  all         statutory  and  regulatory  provisions  or  determinations  consolidating,  amending,  replacing  or         interpreting such law and any reference to any law or regulation shall, unless otherwise specified,         refer  to  such  law  or  regulation  as  amended,  modified,  extended,  restated,  replaced  or         supplemented from time to time, (vi) the words “asset” and “property” shall be construed to have         the same meaning and effect and to refer to any and all real and personal property and tangible         and intangible assets and properties, including cash, securities, accounts and contract rights and         (vii) the parties hereto have participated jointly in the negotiation and drafting of this Agreement         and  in the  event  an  ambiguity  or question  of intent  or  interpretation  arises,  no  presumption  or         burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of         the provisions of this Agreement.                (b)  In the computation of periods of time from a specified date to a later specified         date, the word “from” means “from and including;” the words “to” and “until” each mean “to but         excluding;” and the word “through” means “to and including.”                (c)  Section headings herein and in the other Investment Documents are included for         convenience  of  reference  only  and  shall  not  affect  the  interpretation  of  this  Agreement  or  any         other Investment Document.          1.03 Accounting Terms.                (a)  Generally.   Except  as  otherwise  specifically  prescribed  herein,  all  accounting         terms not specifically or completely defined herein shall be construed in conformity with, and all         financial data (including financial ratios and other financial calculations) required to be submitted         pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent         basis, as in effect from time to time, applied in a manner consistent with that used in preparing the                                          39  CHAR1\1659840v4 

 

       Audited  Financial  Statements,  except  as  otherwise  specifically  prescribed  herein;  provided,         however, that, calculations of Attributable Indebtedness under any Synthetic Lease or the implied         interest component of any Synthetic Lease shall be made by the Loan Parties in accordance with         accepted financial practice in the United States and consistent with the terms of such Synthetic         Lease.   Notwithstanding  the  foregoing,  for  purposes  of  determining  compliance  with  any         covenant contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to         be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825         and  FASB  ASC  470-20  on  financial  liabilities  shall  be  disregarded.   The  parties  hereto         acknowledge and agree that for purposes of all calculations hereunder, the principal amount of         Convertible Indebtedness shall be the outstanding principal (or notional) amount thereof, valued         at par.                (b)  Changes in GAAP.  The Loan Parties will provide a written summary of material         changes  in  GAAP  and  in  the  consistent  application  thereof  with  each  annual  and  quarterly         financial  statement  delivered  in  accordance  with  Section  7.01.   If  at  any  time  any  change  in         GAAP  would  affect  the  computation  of  any  financial  requirement  set  forth  in  any  Loan         Document, and either the Borrower or the Required Lenders shall so request, the Administrative         Agent, the Lenders and the Borrower shall negotiate in good faith to amend such requirement to         preserve the original intent thereof in light of such change in GAAP (subject to the approval of         the Required Lenders); provided, that, until so amended, (i) such requirement shall continue to be         computed in accordance with GAAP prior to such change therein and (ii) the Loan Parties shall         provide to the Administrative Agent and the Lenders financial statements and other documents         required under this Agreement or as requested hereunder setting forth a reconciliation between         calculations of such requirement made before and after giving effect to such change in GAAP.          Notwithstanding any other provision contained herein, other than for purposes of the delivery of         financial statements prepared in accordance with GAAP, all terms of an accounting or financial         nature  used  herein  shall  be  construed,  all  calculations  herein  shall  be  made,  and  all  covenants         shall be interpreted without giving effect to any change (whether occurring prior to or after the         date  hereof)  in  accounting  for  leases  pursuant  to  GAAP  resulting  from  the  implementation  of         Financial  Accounting  Standards  Board  ASU  No.  2016-02,  Leases  (Topic  842)  (and,  for  the         avoidance of doubt, (x) the terms “operating lease,” “capital lease” and “Capital Lease” shall be         interpreted  without  giving  effect  to  any  change  in  accounting  for  leases  pursuant  to  GAAP         resulting from the implementation of Financial Accounting Standards Board ASU No. 2016-02,         Leases (Topic 842) and (y) the amount of total assets (or any similar term or calculation) at any         time shall be determined without giving effect to any change in accounting for leases pursuant to         GAAP  resulting  from  the  implementation  of  Financial  Accounting  Standards  Board  ASU  No.         2016-02, Leases (Topic 842), in each case whether or not such lease obligations were in effect         prior to or after such implementation); provided, that, for purposes of this sentence, in connection         with the computation of any amount or ratios referred to herein, the Borrower shall provide to the         Administrative Agent financial statements and other customary documentation as may reasonably         be requested in writing by the Administrative Agent or any Lender to reconcile calculations of         such  amount  or  ratio  with  the  financial  statements  delivered  by  the  Loan  Parties  pursuant  to         Section 7.01(a) or Section 7.01(b)(i).                (c)  Consolidation  of  Variable  Interest  Rate  Entities.   All  references  herein  to         consolidated financial statements of the Borrower and its Subsidiaries or to the determination of         any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference         shall,  in  each  case,  be  deemed  to  include  each  variable  interest  entity  that  the  Borrower  is         required  to  consolidate  pursuant  to  FASB  ASC  810  as  if  such  variable  interest  entity  was  a         Subsidiary as defined herein.                                           40  CHAR1\1659840v4 

 

             (d)  Pro  Forma  Calculations.   Notwithstanding  anything  to  the  contrary  contained         herein, all calculations of the financial covenant set forth in Section 8.16(a) shall be made on a         Pro Forma Basis with respect to all Specified Transactions occurring during the applicable period         to which such calculation relates.          1.04 Times of Day.          Unless otherwise specified, all references herein to times of day shall be references to Eastern   time (daylight or standard, as applicable).          1.05 Belgian Terms.          All references herein in the context of Belgian law or a Belgian Loan Party to:                (a)  a  receiver,  trustee,  custodian,  conservator,  liquidator,  rehabilitator  or  similar         officer  includes  any    curator/curateur, vereffenaar/liquidateur, voorlopig        bewindvoerder/administrateur judiciaire, ondernemingsbemiddelaar/médiateur  d'entreprise,  as         applicable;                (b)  a  security  interest  includes  any  mortgage  (hypotheek/hypothèque),  mortgage         mandate  (hypothecair  mandaat/mandat  hypothécair),  pledge  (pand/nantissement),  privilege         (voorrecht/privilège), retention right (eigendomsvoorbehoud/droit de  retention), any real  surety         (zakelijke zekerheid/sûreté réelle) and any transfer by way of security (overdracht ten titel van         zekerheid/transfert à titre de garantie);                (c)  a person being unable to pay its debts is that person being in a state of cessation         of payments (staking van betaling/cessation de paiements);                (d)  a receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,         adjustment,  composition  or  other  judicial  proceeding  includes  any gerechtelijke        reorganisatie/réorganisation  judiciaire, vereffening/liquidation, ontbinding/dissolution,         faillissement/faillite, sluiting  van  een  onderneming/fermeture  d'enterprise  and  any  other         concurrence between creditors (samenloop van schuldeisers/concours des créanciers);                 (e)  a  writ  or  warrant  of  attachment  or  execution  or  similar  process  includes  any         uitvoerend beslag/saisie exécutoire and bewarend beslag/saisie conservatoire;                (f)  a guaranty refers, only for the purpose of the Guaranty granted by the Belgian         Loan  Parties  pursuant  to  Article  IV,  to  the  Belgian  legal  concept  of  a  guarantee  (“garantie  /         vrijwaring”) and not a surety (“borg / cautionnement”);                (g)  organized under the laws of the Kingdom of Belgium means that such Loan Party         has its  principal place of business (voornaamste  vestiging/établissement  principal) in  Belgium;         and                (h)  Organization  Documents  means  the oprichtingsakte/acte constitutif,         statuten/statuts  and uittreksel van de Kruispuntbank voor Ondernemingen/extrait de la Banque        Carrefour des Entreprises.                                           41  CHAR1\1659840v4 

 

                                   ARTICLE II.                                  THE COMMITMENTS          2.01 Commitments.                (a)  Term A Borrowing.  Subject to the terms and conditions set forth herein, each         Term A Lender severally agrees to make a single loan to the Borrower, in Dollars, on the Funding         Date in an aggregate amount not to exceed such Term A Lender’s Term A Commitment.  The         Term A Borrowing shall consist of Term A Loans made simultaneously by the Term A Lenders         in accordance with their respective Term A Commitments.  Term A Borrowings repaid or prepaid         may not be reborrowed.                (b)  Term B-1 Borrowing, Term B-2 Borrowing, Term B-3 Borrowing and Term B-4         Borrowing.                      (i)   Term  B-1  Borrowing.   Subject  to  the  terms  and  conditions  set  forth               herein, each Term B-1 Lender severally agrees to make a single loan to the Borrower, in               Dollars,  at  the  request  of  the  Borrower  on  any  Business  Day  during  the  Term  B-1               Availability Period, in an aggregate amount not to exceed such Term B-1 Lender’s Term               B-1  Commitment;  provided,  that,  the  Administrative  Agent  shall  have  received  (A)  a               Compliance Certificate pursuant to Section 7.02(a) certifying that Product Revenues were               at least $25,000,000 (without giving effect to any Cure Right) for the four consecutive               fiscal quarter period most recently ended prior to the date of the Term B-1 Borrowing for               which financial statements have been delivered to the Administrative Agent pursuant to               Sections 7.01(a) or (b)(i) or (B) on or before the earlier of (1) November 29, 2017 and (2)               the  date  on  which  the  Loan  Parties  deliver  to  the  Administrative  Agent  a  Compliance               Certificate pursuant to Section 7.02(a) for the fiscal quarter ending September 30, 2017, a               certificate of a Responsible Officer of the Borrower certifying that Product Revenues are               projected to have been at least $25,000,000 (without giving effect to any Cure Right) for               the four consecutive fiscal quarter period ending September 30, 2017 based on financial               statements  and  projections  reasonably  satisfactory  to  the  Administrative  Agent.   The               Term B-1 Borrowing shall consist of Term B-1 Loans made simultaneously by the Term               B-1  Lenders  in  accordance  with  their  respective  Term  B-1  Commitments.   Term  B-1               Borrowings repaid or prepaid may not be reborrowed.                      (ii) Term  B-2  Borrowing.   Subject  to  the  terms  and  conditions  set  forth               herein, each Term B-2 Lender severally agrees to make a single loan to the Borrower, in               Dollars,  at  the  request  of  the  Borrower  on  any  Business  Day  during  the  Term  B-2               Availability Period, in an aggregate amount not to exceed such Term B-2 Lender’s Term               B-2  Commitment;  provided,  that,  (A)  the  Administrative  Agent  shall  have  received  a               Compliance Certificate pursuant to Section 7.02(a) certifying that Product Revenues were               at least $30,000,000 (without giving effect to any Cure Right) for the four consecutive               fiscal quarter period most recently ended prior to the date of the Term B-2 Borrowing for               which financial statements have been delivered to the Administrative Agent pursuant to               Sections 7.01(a) or (b)(i) and (B) the Borrower shall have drawn the full amount of the               Term  B-1  Facility  pursuant  to  Section  2.01(b)(i)  prior  to  the  date  of  the  Term  B-2               Borrowing.   The  Term  B-2  Borrowing  shall  consist  of  Term  B-2  Loans  made               simultaneously by the Term B-2 Lenders in accordance with their respective Term B-2               Commitments.  Term B-2 Borrowings repaid or prepaid may not be reborrowed.                                           42  CHAR1\1659840v4 

 

                   (iii) Term  B-3  Borrowing.   Subject  to  the  terms  and  conditions  set  forth               herein, each Term B-3 Lender severally agrees to make a single loan to the Borrower, in               Dollars,  at  the  request  of  the  Borrower  on  any  Business  Day  during  the  Term  B-3               Availability Period, in an aggregate amount not to exceed such Term B-3 Lender’s Term               B-3 Commitment; provided, that, the Borrower shall have drawn the full amount of the               Term  B-1  Facility  and  Term  B-2  Facility  pursuant  to  Sections  2.01(b)(i)  and  (ii),               respectively,  prior  to  the  date  of the  Term  B-3  Borrowing.   The Term  B-3  Borrowing               shall  consist  of  Term  B-3  Loans  made  simultaneously  by  the  Term  B-3  Lenders  in               accordance with their respective Term B-3 Commitments.  Term B-3 Borrowings repaid               or prepaid may not be reborrowed.                      (iv)  Term  B-4  Borrowing.   Subject  to  the  terms  and  conditions  set  forth               herein, each Term B-4 Lender severally agrees to make a single loan to the Borrower, in               Dollars,  at  the  request  of  the  Borrower  on  any  Business  Day  during  the  Term  B-4               Availability Period, in an aggregate amount not to exceed such Term B-4 Lender’s Term               B-4 Commitment; provided, that, the Borrower shall have drawn the full amount of the               Term  B-1  Facility,  Term  B-2  Facility  and  Term  B-3  Facility  pursuant  to  Sections               2.01(b)(i), (ii) and (iii), respectively, prior to the date of the Term B-4 Borrowing.  The               Term B-4 Borrowing shall consist of Term B-4 Loans made simultaneously by the Term               B-4  Lenders  in  accordance  with  their  respective  Term  B-4  Commitments.   Term  B-4               Borrowings repaid or prepaid may not be reborrowed.                (c)  Term C Borrowings.  Subject to Section 2.14 and the other terms and conditions         set forth herein, each Term C Lender severally agrees to make a single loan to the Borrower, in         Dollars, during the Term C Availability Period, in an aggregate amount not to exceed such Term         C Lender’s Term C Commitment.  The Term C Borrowing shall consist of Term C Loans made         simultaneously by the Term C Lenders in accordance with their respective Term C Commitments.          Term C Borrowings repaid or prepaid may not be reborrowed.          2.02 Borrowings.                (a)  Each  Borrowing  shall  be made  upon  the  Borrower’s  irrevocable  notice  (in  the         form of a written Loan Notice, appropriately completed and signed by a Responsible Officer of         the Borrower) to the Administrative Agent, which must be given not later than 11:00 a.m. (x) on         the Effective Date in the case of the Term A Borrowing, (y) at least ten (10) Business Days (or         such  shorter  period  as  may  be  agreed  to  by  the  Administrative Agent  in  its  sole discretion)  in         advance of the requested date of such Borrowing in the case of the Term B-1 Borrowing or (z) at         least fifteen (15) Business Days (or such shorter period as may be agreed to by the Administrative         Agent in its sole discretion) in advance of the requested date of such Borrowing (other than the         Term  A  Borrowing  and  the  Term  B-1  Borrowing).   Each  Loan  Notice  shall  specify  (i)  the         requested  date  of such  Borrowing  (which  shall  be a Business  Day), (ii) the  applicable Facility         under which the Borrower is requesting such Borrowing and (iii) the principal amount of Loans         to be borrowed.  The Borrowing of Term A Loans shall be in an aggregate principal amount of         $30,000,000.  The Borrowing of Term B-1 Loans shall be in an aggregate principal amount of         $5,000,000.  The  Borrowing  of  Term  B-2  Loans  shall  be  in  an  aggregate  principal  amount  of         $5,000,000.  The  Borrowing  of  Term  B-3  Loans  shall  be  in  an  aggregate  principal  amount  of         $10,000,000.  The Borrowing of Term B-4 Loans shall be in an aggregate principal amount of         $15,000,000.  The  Borrowing  of  Term  C  Loans  shall  be  in  an  aggregate  principal  amount  of         $10,000,000.                                           43  CHAR1\1659840v4 

 

             (b)  Following receipt of a Loan Notice for a Facility, the Administrative Agent shall         promptly notify each Appropriate Lender of the amount of its Applicable Percentage under such         Facility of the applicable Loans.  Each Appropriate Lender shall make the amount of its Loan         available  to  the  Administrative  Agent  in  immediately  available  funds  at  the  Administrative         Agent’s  Office  not  later  than  1:00  p.m.  on  the  Business  Day  specified  in  the  applicable  Loan         Notice.  Upon satisfaction of the applicable conditions set forth in Section 5.03 and Section 5.04         (and,  if  such  Borrowing  is  the  initial  Borrowing,  Section  5.01  and  Section  5.02),  the         Administrative Agent shall make all funds so received available to the Borrower in like funds as         received  by  the  Administrative  Agent  by  wire  transfer  of  such  funds  in  accordance  with         instructions provided to (and acceptable to) the Administrative Agent by the Borrower.          2.03 Prepayments.                (a)  Voluntary Prepayments.  Subject to the payment of any prepayment premium as         required under Section 2.03(d) and any other fees or amounts payable hereunder at such time, the         Borrower may, upon notice from the Borrower to the Administrative Agent, voluntarily prepay         the Loans, in whole or in part; provided, that, (i) such notice must be received not later than 11:00         a.m. three (3) Business Days prior to the date of prepayment, (ii) any such prepayment shall only         be made on an Interest Payment Date (it being understood that the requirement set forth in this         sub-clause  (ii)  shall  not  be  applicable  to  any  voluntary  prepayment  in  full  of  the  aggregate         Outstanding Amount of the Loans in connection with a Facility Termination Date) and (iii) any         such prepayment shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000         in excess thereof (or, if less, the entire principal amount thereof then outstanding).  Each such         notice  shall  specify  the  date  and  amount  of  such  prepayment.   If  such  notice  is  given  by  the         Borrower, the Borrower shall make such prepayment and the payment amount specified in such         notice shall be due and payable on the date specified therein; provided, that, any such notice of         prepayment  may  indicate  that  such  prepayment  is  conditioned  upon  the  consummation  of  a         refinancing of this Agreement, capital raising or a particular Disposition or the occurrence of a         Change of Control and may be revoked by the Borrower in the event such refinancing or other         transaction is not consummated, and if so revoked, such prepayment shall not be due and payable.          Any prepayment pursuant to this Section 2.03(a) shall be accompanied by (x) all accrued interest         on  the  principal  amount  of  the  Loans  prepaid,  (y)  the  prepayment  premium  required  under         Section 2.03(d) and (z) all fees, costs, expenses, indemnities and other amounts due and payable         hereunder at the time of prepayment.  Each such prepayment shall be applied ratably to the Term         A Facility, the Term B-1 Facility, the Term B-2 Facility, the Term B-3 Facility, the Term B-4         Facility  and  the  Term  C  Facility.  Each  such  prepayment  shall  be  applied  to  the  Loans  of  the         Lenders  in  accordance  with  their  respective  Applicable  Percentages  in  respect  of  each  of  the         relevant Facilities.                (b)  Mandatory Prepayments.                      (i)   Dispositions and Involuntary Dispositions.  The Borrower shall promptly               (and in any event, within five (5) Business Days) prepay the Obligations in an aggregate               amount  equal  to  100%  of  the  Net  Cash  Proceeds  of  all  Dispositions  and  Involuntary               Dispositions received by any Loan Party or any Subsidiary; provided, that, such Net Cash               Proceeds  shall  not be  required to  be  so  applied  (A) until the  aggregate  amount  of  Net               Cash  Proceeds  derived  from  all  such  Dispositions  or  Involuntary  Dispositions  in  any               fiscal year is equal to or greater than $500,000 (and then only in excess of such amount)               and (B) if, at the election of the Borrower, such Loan Party or such Subsidiary reinvests               all or any portion of such Net Cash Proceeds in Eligible Assets within three hundred sixty               five  (365)  days  of  the  date  of  such  Disposition  or  Involuntary  Disposition;  provided,                                          44  CHAR1\1659840v4 

 

             further, that, for purposes of the foregoing clause (B), if such Net Cash Proceeds shall               have not been so reinvested by the end of such period, such Net Cash Proceeds shall be               immediately  applied  to  prepay  the  Loans.   Any  prepayment  pursuant  to  this  clause  (i)               shall be applied as set forth in clause (iv) below.                      (ii) Extraordinary Receipts.   The  Borrower  shall  promptly  (and,  in  any               event,  within  five  (5)  Business  Days)  upon  the  receipt  by  any  Loan  Party  or  any               Subsidiary  of  the  Net  Cash  Proceeds  of  any  Extraordinary  Receipt,  prepay  the               Obligations in an aggregate amount equal to 100% of such Net Cash Proceeds; provided,               that, such Net Cash Proceeds shall not be required to be so applied (A) until the aggregate               amount of Net Cash Proceeds derived from all such Extraordinary Receipts in any fiscal               year is equal to or greater than $500,000 (and then only in excess of such amount) and               (B) if, at the election of the Borrower, such Loan Party or such Subsidiary reinvests all or               any portion of such Net Cash Proceeds in Eligible Assets within three hundred sixty five               (365)  days  of  the  date  of  receipt  thereof;  provided,  further,  that,  for  purposes  of  the               foregoing clause (B), if such Net Cash Proceeds shall have not been so reinvested by the               end of such period, such Net Cash Proceeds shall be immediately applied to prepay the               Loans.  Any prepayment pursuant to this clause (ii) shall be applied as set forth in clause               (iv) below.                      (iii) Debt Issuance.  The Borrower shall immediately upon the receipt by any               Loan Party or any Subsidiary of the Net Cash Proceeds of any Debt Issuance, prepay the               Obligations  in  an  aggregate  amount  equal  to  100%  of  such  Net  Cash  Proceeds.   Any               prepayment pursuant to this clause (iii) shall be applied as set forth in clause (iv) below.                     (iv)  Application of Mandatory Prepayments.  All payments under this Section               2.03(b) shall be applied first to all fees, costs, expenses, indemnities and other amounts               due and payable hereunder, then proportionately (based on the relation of such amounts               to the total amount of the relevant payment under this Section 2.03(b)) to the payment or               prepayment (as applicable) of the following amounts of the Obligations: default interest,               if any, prepayment premium required by Section 2.03(d), accrued interest and principal.                Each  such  prepayment  shall  be  applied  ratably  to  the  Term  A  Facility,  the  Term  B-1               Facility,  the  Term  B-2  Facility,  the  Term  B-3  Facility,  the  Term  B-4  Facility  and  the               Term C Facility.  Each such prepayment shall be applied to the Loans of the Lenders in               accordance with their respective Applicable Percentages in respect of each of the relevant               Facilities.               (c)  Change of Control.  Upon the occurrence of a Change of Control, the Borrower         shall, at the  direction of the  Required  Lenders, and may,  at  its option  upon three (3)  Business         Days’  prior  written  notice  from  the  Borrower  to  the  Administrative  Agent,  prepay  the         Outstanding Amount of the Loans together with all accrued and unpaid interest thereon plus the         prepayment premium required by Section 2.03(d) plus all other Obligations.  Each such direction         or notice shall specify the date and amount of such prepayment.  If such notice is given by the         Borrower, the Borrower shall make such prepayment and the payment amount specified in such         notice shall be due and payable on the date specified therein; provided, that, any such notice of         prepayment  may  indicate  that  such  prepayment  is  conditioned  upon  the  occurrence  of  such         Change  of  Control  and  may  be  revoked  by  Borrower  in  the  event  such  transaction  is  not         consummated,  and  if  so  revoked,  such  prepayment  shall  not  be  due  and  payable.   Each         prepayment under this Section 2.03(c) shall be applied to the Loans of the Lenders in accordance         with their respective Applicable Percentages in respect of each of the relevant Facilities.                                           45  CHAR1\1659840v4 

 

             (d)  Prepayment Premiums.  If all or any portion of the Loans are prepaid, or required         to be prepaid, pursuant to this Section 2.03, Article IX (whether by acceleration or otherwise) or         otherwise, then, in all cases, the Borrower shall pay to the Lenders, for their respective ratable         accounts, on the date on which such prepayment is paid or required to be paid, in addition to the         other Obligations so prepaid or required to be prepaid, a prepayment premium equal to: (i) with         respect to any prepayment paid or required to be paid on or prior to December 31, 2021, fifteen         percent (15.00%) of the principal amount of the Loans prepaid or required to be prepaid, (ii) with         respect to any prepayment paid or required to be paid after December 31, 2021 but on or prior to         December  31,  2022,  ten  percent  (10.00%)  of  the  principal  amount  of  the  Loans  prepaid  or         required  to  be  prepaid,  (iii)  with  respect  to  any  prepayment  paid  or  required  to  be  paid  after         December 31, 2022 but on or prior to December 31, 2023, five percent (5.00%) of the principal         amount of the Loans prepaid or required to be prepaid, (iv) with respect to any prepayment paid         or required to be paid after December 31, 2023 but on or prior to December 31, 2024, two and         one-half percent (2.50%) of the principal amount of the Loans prepaid or required to be prepaid,         and  (v)  with  respect  to  any  prepayment  paid  or  required  to  be  paid  thereafter,  zero  percent         (0.00%) of the principal amount of the Loans prepaid or required to be prepaid.          2.04 Termination or Reduction of Commitments.                (a)  Voluntary.  The Borrower may, upon notice to the Administrative Agent during         the  Term  B-1  Availability  Period  with  respect  to  the  Term  B-1  Facility,  during  the  Term  B-2         Availability  Period  with  respect  to  the  Term  B-2  Facility,  during  the  Term  B-3  Availability         Period  with  respect  to  the  Term  B-3  Facility,  during  the  Term  B-4  Availability  Period  with         respect to the Term B-4 Facility and during the Term C Availability Period with respect to the         Term  C  Facility,  terminate  in  full  the  Commitments  under  any  Facility,  or  from  time  to  time         permanently reduce the Commitments under any Facility; provided, that: (i) any such notice shall         be received by the Administrative Agent not later than 11:00 a.m. five (5) Business Days prior to         the date of termination or reduction and (ii) any such partial reduction shall be in an aggregate         amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof; provided, further,         that, any such notice of termination or reduction may indicate that such termination or reduction         is  conditioned upon the  consummation  of  a refinancing  of this Agreement, capital raising  or a         particular  Disposition  or  the  occurrence  of  a  Change  of  Control  and  may  be  revoked  by  the         Borrower  in  the  event  such  refinancing  or  other  transaction  is  not  consummated,  and  if  so         revoked, such termination or reduction shall not be due and payable.  Upon any termination or         reduction  of the Commitments  under a  Facility, the Commitments  of  each  Appropriate  Lender         shall be reduced by such Lender’s Applicable Percentage of such reduction amount.                (b)  Mandatory.  The Commitments under the Term A Facility shall be automatically         and permanently reduced to zero on the date of the Borrowing under such Facility pursuant to         Section 2.01.  The Commitments under the Term B-1 Facility, the Term B-2 Facility, the Term B-        3 Facility and the Term B-4 Facility shall be automatically and permanently reduced to zero on         the  earlier  of  (x) the  date of  the  Borrowing  under  such  Term B-1  Facility,  Term  B-2 Facility,         Term B-3 Facility or Term B-4 Facility, as applicable, pursuant to Section 2.01 and (y) the date         that  the  Term  B-1  Availability  Period,  Term  B-2  Availability  Period,  Term  B-3  Availability         Period or Term B-4 Availability Period, as applicable, shall end.  The Term C Commitments shall         be automatically and permanently reduced to zero on the earlier to occur of (x) the date of the         Borrowing under the Term C Facility pursuant to Section 2.01 and (y) the date that the Term C         Availability  Period  shall  end.   Upon  any  reduction  of  the  Commitments  under  a  Facility,  the         Commitments  of  each  Appropriate  Lender  shall  be  reduced  by  such  Lender’s  Applicable         Percentage of such reduction amount.                                           46  CHAR1\1659840v4 

 

       2.05 Repayment of Loans.          The Borrower shall repay the outstanding principal amount of all Loans, together with all accrued   and unpaid interest thereon and all other outstanding Obligations, on the Maturity Date. If any principal   repayment to be made by the Borrower shall come due on a day other than a Business Day, such principal   repayment shall be due on the first immediately preceding Business Day.          2.06 Interest.                (a)  Pre-Default Rate.  Subject to the provisions of subsection (b) below, each Loan         shall bear interest on the outstanding principal amount thereof for each Interest Period from the         applicable borrowing date at a rate per annum equal to the Interest Rate for such Interest Period.                (b)  Default Rate.  (i) Upon the occurrence and during the existence of any Event of         Default, all outstanding Obligations shall thereafter bear interest at an interest rate per annum at         all times equal to the Interest Rate for the applicable Interest Period plus four percent (4.00%) per         annum (the “Default Rate”), to the fullest extent permitted by applicable Laws and (ii) accrued         and unpaid interest on past due amounts (including interest on past due interest) shall be due and         payable in cash on demand.                (c)  Interest Generally.  Interest on each Loan shall be due and payable in arrears on         each  Interest  Payment  Date  and  at  such  other  times  as  may  be  specified  herein.   Interest         hereunder  shall  be  due  and  payable  in  accordance  with  the  terms  hereof  before  and  after         judgment, and before and after the commencement of any proceeding under any Debtor Relief         Law.          2.07 Fees.          The Borrower shall pay to the Administrative Agent and the Lenders, for their own respective   accounts, fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned   when paid and shall not be refundable for any reason whatsoever.          2.08 Computation of Interest.          All computations of interest shall be made on the basis of a 360-day year and actual days elapsed.    Interest shall accrue on each Loan for the day on which such Loan is made, and shall not accrue on a   Loan, or any portion thereof, for the day on which such Loan or such portion is paid.          2.09 Evidence of Debt.          The  Loans  made  by  each  Lender  shall  be  evidenced  by  one  or  more  accounts  or  records   maintained by such Lender in the ordinary course of business.  The accounts or records maintained by   each Lender shall be conclusive absent manifest error of the amount of Loans made by the Lenders to the   Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall   not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing   with respect to the Obligations.  Upon the request of any Lender made through the Administrative Agent,   the  Borrower  shall  execute  and  deliver  to  such  Lender  a  promissory  note,  which  shall  evidence  such   Lender’s Loans in addition to such accounts or records.  Each such promissory note shall (i) in the case of   the Term A Loans, be in the form of Exhibit B-1 (a “Term A Note”), (ii) in the case of the Term B-1   Loans, be in the form of Exhibit B-2 (a “Term B-1 Note”), (iii) in the case of the Term B-2 Loans, be in   the form of Exhibit B-3 (a “Term B-2 Note”), (iv) in the case of the Term B-3 Loans, be in the form of                                          47  CHAR1\1659840v4 

 

Exhibit B-4 (a “Term B-3 Note”), (v) in the case of the Term B-4 Loans, be in the form of Exhibit B-5 (a   “Term B-4 Note”) and (vi) in the case of the Term C Loans, be in the form of Exhibit B-6 (a “Term C   Note”).   Each  Lender  may  attach  schedules  to  its  Notes  and  endorse  thereon  the  date,  amount  and   maturity of its Loans and payments with respect thereto.          2.10 Payments Generally.                (a)  General.  All payments to be made by the Borrower shall be made free and clear         of  and  without  condition  or  (except  as  expressly  provided  in  Section  3.01)  deduction  for  any         counterclaim, defense, recoupment or setoff.  Subject to Section 9.03, all payments of principal,         interest, prepayment premiums and fees on the Loans and all other Obligations payable by any         Loan Party under the Loan Documents shall be due, without any presentment thereof, directly to         the Lenders, at the respective Lending Offices of the Lenders; provided, that, if at the time of any         such payment a Lender is a Defaulting Lender, such Defaulting Lender’s pro rata share of such         payment shall be made directly to the Administrative Agent.  The Loan Parties will make such         payments  in  Dollars,  in  immediately  available  funds  not  later  than  2:00  p.m.  on  the  date  due,         marked for attention as indicated, or in such other manner or to such other account in any United         States bank as the Lenders may from time to time direct in writing.  All payments received by the         Lenders after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any         applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower         shall come due on a day other than a Business Day, payment shall be made on the next following         Business Day, and such extension of time shall be reflected in computing interest.                (b)  Obligations  of  Lenders  Several.   The  obligations  of  the  Lenders  hereunder  to         make Loans and to make payments pursuant to Section 11.04(c) are several and not joint.  The         failure of any Lender to make any Loan or to make any payment under Section 11.04(c) on any         date required hereunder shall not relieve any other Lender of its corresponding obligation to do so         on such date, and no Lender shall be responsible for the failure of any other Lender to so make its         Loan or to make its payment under Section 11.04(c).                (c)  Funding  Source.   Nothing  herein  shall  be  deemed  to  obligate  any  Lender  to         obtain the funds for any Loan in any particular place or manner or to constitute a representation         by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or         manner.          2.11 Sharing of Payments by Lenders.          If any Lender shall, by exercising any right of setoff or otherwise, obtain payment in respect of   any  principal  of  or  interest  on  its  portion  of  any  of  the  Loans  or  prepayment  premium  in  connection   therewith resulting in such Lender’s receiving payment of a proportion of the aggregate amount of the   Loans and accrued interest thereon and prepayment premium in connection therewith greater than its pro   rata share thereof as provided herein, then the Lender shall (a) notify the Administrative Agent of such   fact  and  (b)  purchase  (for  cash  at  face  value)  participations  in  the  portions  of  the  Loans  of  the  other   Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments   shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of, accrued   interest on and prepayment premium in connection with their respective portions of the Loans and other   amounts owing them; provided, that:                      (i)   if  any  such  participations  are  purchased  and  all  or  any  portion  of  the               payment giving rise thereto is recovered, such participations shall be rescinded and the               purchase price restored to the extent of such recovery, without interest; and                                          48  CHAR1\1659840v4 

 

                   (ii) the provisions of this Section 2.11 shall not be construed to apply to (x)               any payment made by or on behalf of the Borrower pursuant to and in accordance with               the express terms of this Agreement (including the application of funds arising from the               existence  of  a  Defaulting  Lender)  or  (y)  any  payment  obtained  by  a  Lender  as               consideration for the assignment of or sale of a participation in any of its portion of the               Loans to any assignee or participant, other than an assignment to any Loan Party or any               Subsidiary (as to which the provisions of this Section 2.11 shall apply).          Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under   applicable  Law, that  any Lender  acquiring  a participation  pursuant to  the  foregoing arrangements  may   exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as   fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.          2.12 Defaulting Lenders.                (a)  Adjustments.   Notwithstanding  anything  to  the  contrary  contained  in  this         Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no         longer a Defaulting Lender, to the extent permitted by applicable Law:                      (i)   Waivers and Amendment.  The Defaulting Lender’s right to approve or               disapprove  any  amendment,  waiver  or consent  with respect to this  Agreement shall be               restricted as set forth in the definition of “Required Lenders” and Section 11.01.                      (ii) Reallocation  of  Payments.   Any  payment  of  principal,  interest,  fees  or               any other amount received by the Administrative Agent for the account of that Defaulting               Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise,               and  including  any  amounts  made  available  to  the  Administrative  Agent  by  that               Defaulting Lender pursuant to Section 11.08), shall be applied at such time or times as               may be determined by the Administrative Agent as follows: first, to the payment of any               amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second,               as the Borrower may request (so long as no Default or Event of Default exists), to the               funding  of  any  Loan  in  respect  of  which  that  Defaulting  Lender  has  failed  to  fund  its               portion  thereof  as  required  by  this  Agreement,  as  determined  by  the  Administrative               Agent; third, if so determined by the Administrative Agent and the Borrower, to be held               in a non-interest bearing deposit account and released in order to satisfy obligations of               that  Defaulting  Lender  to fund Loans under this  Agreement; fourth, to the  payment  of               any amounts owing to the Lenders as a result of any judgment of a court of competent               jurisdiction  obtained  by  any  Lender  against  that  Defaulting  Lender  as  a  result  of  that               Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no               Default or Event of Default exists, to the payment of any amounts owing to the Borrower               as a result of any judgment of a court of competent jurisdiction obtained by the Borrower               against  that  Defaulting  Lender  as  a  result  of  that  Defaulting  Lender’s  breach  of  its               obligations  under  this  Agreement; and sixth, to that Defaulting Lender  or  as  otherwise               directed  by  a  court  of  competent  jurisdiction;  provided,  that,  if  (x)  such  payment  is  a               payment of the principal amount of any Loans in respect of which that Defaulting Lender               has not fully funded its appropriate share and (y) such Loans were made at a time when               the conditions set forth in Section 5.03 were satisfied or waived, such payment shall be               applied solely to pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to               being applied to the payment of any Loans of that Defaulting Lender.  Any payments,               prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or               held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.12(a)(ii)                                          49  CHAR1\1659840v4 

 

             shall  be  deemed  paid  to  and  redirected  by  that  Defaulting  Lender,  and  each  Lender               irrevocably consents hereto.                (b)  Defaulting Lender Cure.  If the Borrower and the Administrative Agent agree in         writing  in  their  sole  discretion  that  a  Defaulting  Lender  should  no  longer  be  deemed  to  be  a         Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of         the  effective  date  specified  in  such  notice  and  subject  to  any  conditions  set  forth  therein,  that         Lender  will  cease  to  be  a  Defaulting  Lender;  provided,  that,  no  adjustments  will  be  made         retroactively  with  respect  to  fees  accrued  or  payments  made  by  or  on  behalf  of  the  Borrower         while that Lender was a Defaulting Lender; provided, further, that, except to the extent otherwise         expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender         will constitute a waiver or release of any claim of any party hereunder arising from that Lender         having been a Defaulting Lender.          2.13 Right of First Offer.                (a)  If the Borrower or any Subsidiary contemplates undertaking an issuance of any         Indebtedness (other than (x) Indebtedness permitted under Section 8.03(a), (c), (d), (e), (f), (j), (k)         or (m) or (y) Indebtedness in an aggregate principal amount below the Threshold Amount), then,         not less than thirty (30) Business Days prior to the proposed date of such issuance, the Borrower         shall provide written notice (a “Debt Issuance Notice”) thereof to the Lenders, and shall deliver         promptly  to  the  Lenders  such  information  concerning  such  issuance  as  the  Lenders  may         reasonably request.                (b)  For a period of twenty (20) Business Days (the “Exclusivity Period”) after receipt         by the Lenders of a Debt Issuance Notice, the Lenders shall have the exclusive option, but not the         obligation,  to  propose  the  material  terms  and  conditions  (the  “Proposed  Terms”)  under  which         they  would  be  willing  to  provide  such  Indebtedness  by  delivering  written  notice  (a  “Proposed         Term Sheet”) thereof to the Borrower, setting forth such Proposed Terms. Failure by the Lenders         to deliver a Proposed Term Sheet within the applicable Exclusivity Period shall be deemed an         election by the Lenders not to provide such Indebtedness. If the Lenders deliver a Proposed Term         Sheet to the Borrower that purports to provide not less than the aggregate amount of financing         contemplated  by  the  issuance  contemplated  in  the  Debt  Issuance  Notice,  then  neither  the         Borrower nor any Subsidiary may then undertake any such issuance with any other Person unless         such issuance with such other Person (x) includes financial covenants and events of default and         other  terms  including  amortization,  mandatory  prepayments  and  maturity  dates  that  are  more         favorable  (taken  as  a  whole)  to  the  Borrower  and  its  Subsidiaries  than  the  Indebtedness         contemplated by the Proposed Term Sheet (such determination to be made by the Borrower in         good  faith)  and  (y)  has  an  All-In-Yield  that  is  less  than  the  All-In-Yield  of  the  Indebtedness         contemplated by the Proposed Term Sheet; provided, that, prior to undertaking any such issuance         with any other Person, the Borrower or such Subsidiary shall provide the Lenders with at least ten         (10) Business Days’ notice thereof (and such information with respect thereto as the Lenders shall         reasonably  request)  and  afford  the  Lenders  a  period  of  five  (5)  Business  Days  thereafter  to         propose a Proposed Term Sheet containing economic terms at least as favorable to the Borrower         or such Subsidiary as the economic terms of such Indebtedness.          2.14 Term C Facility.          At  any  time  on  or  after  the Funding  Date but prior  to  December  31,  2020,  upon  prior  written   notice by the Borrower to the Administrative Agent, the Borrower may establish the Term C Facility in an   aggregate amount not to exceed TEN MILLION DOLLARS ($10,000,000); provided, that,                                          50  CHAR1\1659840v4 

 

            (a)   the  Borrower  shall  have  drawn  the  full  amount  of  the  Term  B-1  Facility,  the        Term B-2 Facility, the Term B-3 Facility and the Term B-4 Facility pursuant to Section 2.01(b);                (b)  no existing Lender shall be under any obligation to make any Term C Loan and         any such decision whether to make a Term C Loan shall be in such Lender’s sole and absolute         discretion;                (c)  (i) no Default or Event of Default shall exist and be continuing at the time of the         establishment of the Term C Facility and (ii) the conditions precedent set forth in Section 5.04         shall have been satisfied prior to or contemporaneously with funding of any Term C Loans;                (d)  the maturity date for the Term C Facility shall be the Maturity Date;                (e)  the Borrower shall have paid all fees required to be paid in connection therewith,         whether pursuant to the Fee Letter or otherwise;                (f)  the Term C Lenders, the Administrative Agent and the Loan Parties shall have         entered into such technical amendments to this Agreement as are necessary, in the Administrative         Agent’s reasonable discretion, to effect the inclusion of the Term C Facility herein;                 (g)  the Borrower shall have obtained commitments for the aggregate amount of the         Term C Facility from existing Lenders pursuant to joinder documentation reasonably satisfactory         to the Administrative Agent; and                (h)  the  Borrower  shall  have  delivered  to  the  Administrative  Agent  a  certificate  of         each Loan Party dated as of the date of such institution and effectiveness (in sufficient copies for         each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the         resolutions adopted by such Loan Party approving or consenting to the Term C Facility and (ii)         certifying that, before and after giving effect to the Term C Facility, (x) the representations and         warranties contained in Article VI and the other Investments Documents are true and correct in         all respects on and as of the date of such increase, except to the extent that such representations         and warranties specifically refer to an earlier date, in which case they are true and correct in all         respects  as  of  such  earlier  date,  and  except  that  for  purposes  of  this  Section  2.14,  the         representations  and  warranties  contained  in  subsections  (a)  and  (b)  of  Section  6.05  shall  be         deemed  to  refer  to  the  most  recent  statements  furnished  pursuant  to  clauses  (a)  and  (b),         respectively, of Section 7.01 and (y) no Default or Event of Default exists.                                     ARTICLE III.                                        TAXES          3.01 Taxes.                (a)  Except as required by applicable Law, all payments of principal and interest on         the Loans and all other amounts payable hereunder shall be made free and clear of and without         deduction  for  any  present  or  future  income,  excise,  stamp,  documentary,  property  or  franchise         taxes, VAT and other taxes, fees, duties, levies, assessments, withholdings or other charges of any         nature  whatsoever  (including  interest  and  penalties  thereon)  imposed  by  any  taxing  authority,         excluding (x) taxes imposed on or measured by net income imposed by the jurisdiction (or any         political subdivision thereof) under which a Recipient is organized or in which such Recipient has         its  principal  office,  applicable  Lending  Office  or  with  which  such  Recipient  otherwise  has  a                                          51  CHAR1\1659840v4 

 

       present  or  former  connection  (other  than  solely  as  the  result  of  entering  into  any  of  the  Loan         Documents  or  taking  any  action  thereunder),  (y)  U.S.  federal  withholding  taxes  imposed  on         amounts payable to or for the account of a Recipient with respect to an applicable interest in a         Loan or Commitment pursuant to a law in effect on the date on which (i) such Recipient acquires         such interest in the Loan or Commitment (other than pursuant to an assignment request by the         Borrower pursuant to Section 11.13) or (ii) such Recipient changes its Lending Office, except in         each case to the extent that, pursuant to this Section 3.01, amounts with respect to such taxes were         payable either  to  such  Recipient’s assignor  immediately  before  such  Recipient became  a  party         hereto or to such Recipient immediately before it changed its Lending Office and (z) U.S. federal         withholding  tax  imposed  under  FATCA  (all  non-excluded  items  being  called  “Taxes”).  If  any         withholding or deduction of any Taxes from any payment by or on account of any obligation of         any Loan Party hereunder is required in respect of any Taxes pursuant to any applicable Law,         then (i) the applicable Withholding Agent shall be entitled to make such withholding or deduction         and shall pay directly to the relevant Governmental Authority the full amount required to be so         withheld  or  deducted,  (ii)  the  applicable  Withholding  Agent  shall  promptly  forward  to  the         Administrative  Agent  an  official  receipt  or  other  documentation  reasonably  satisfactory  to  the         Administrative Agent evidencing such payment to such Governmental Authority and (iii) the sum         payable by the applicable Loan Party shall be increased by such additional amount or amounts as         is necessary to ensure that the net amount actually received by the applicable Recipient will equal         the full amount such Recipient would have received had no such withholding or deduction for         Taxes been required.                (b)  The Borrower or the Guarantors, as applicable, shall indemnify each Recipient,         within ten  (10) days  after demand  therefor,  for the  full  amount  of any  Taxes (including  Taxes         imposed on or attributable to amounts payable under this Section 3.01) payable or paid by such         Recipient  or  required  to  be  withheld  or  deducted  from  a  payment  by  such  Recipient  and  any         reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were         correctly or legally imposed or asserted by the relevant Governmental Authority.                (c)  (i) Any Lender that is entitled to an exemption from or reduction of withholding         tax, including  under FATCA,  with  respect  to  payments  made  under  any  Loan  Document  shall         deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested         by  the  Borrower  or  the  Administrative  Agent,  such  properly  completed  and  executed         documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i)         of  the  Internal  Revenue  Code)  or  reasonably  requested  by  the  Borrower  or  the  Administrative         Agent  as  will  permit  such  payments  to  be  made  without  withholding  or  at  a  reduced  rate  of         withholding.   In  addition,  any  Lender,  if  reasonably  requested  by  the  Borrower  or  the         Administrative Agent,  shall  deliver  such  other  documentation prescribed  by  applicable Law or         reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or         the  Administrative  Agent  to  determine  whether  or  not  such  Lender  is  subject  to  backup         withholding or information reporting requirements.  Notwithstanding anything to the contrary in         the preceding sentences, the completion, execution and submission of such documentation (other         than  such  documentation  set  forth  in  Section  3.01(c)(ii)  below)  shall  not  be  required  if  in  the         Lender’s  reasonable  judgment  such  completion,  execution  or  submission  would  subject  such         Lender to any material unreimbursed cost or expense or would materially prejudice the legal or         commercial position of such Lender.                (ii)  Each  Lender  that  is  not  a  “United  States  person”  as  defined  in  Section         7701(a)(30)  of  the  Internal  Revenue  Code  that  purports  to  become  an  assignee  of  an  interest         pursuant to Section 11.06 after the Effective Date (each such Lender a “Foreign Lender”) shall, to         the  extent  it  is  legally  entitled  to  do  so,  execute  and  deliver  to  each  of  the  Borrower  and  the                                          52  CHAR1\1659840v4 

 

       Administrative Agent on or prior to the date that such Lender becomes a party hereto (and from         time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent),         one  or  more  (as  the  Borrower  or  the  Administrative  Agent  may  reasonably  request)  duly         completed  and  executed  copies of  United  States  Internal Revenue  Service  Forms W-8ECI,  W-        8BEN, W-8BEN-E, W-8IMY and other certification documents from each beneficial owner (as         applicable).  Each Lender that is a “United States person” as defined in Section 7701(a)(30) of the         Internal Revenue Code shall execute and deliver to the Borrower and the Administrative Agent         on or prior to the date such Lender becomes a party hereto (and from time to time thereafter upon         the  reasonable  request  of  the  Borrower  or  the  Administrative  Agent),  one  or  more  (as  the         Borrower  or  the  Administrative  Agent  may  reasonably  request)  duly  completed  and  executed         copies of United States Internal Revenue Service Form W-9 certifying that such Lender is not         subject to United States backup withholding.                  (iii)  The  Borrower  shall  not  be  required  to  pay  additional  amounts  to  any  Lender         pursuant  to  this  Section  3.01  with  respect  to  taxes  attributable  to  the  failure  of  such  Foreign         Lender to comply with this Section 3.01(c), and such taxes shall be excluded from the definition         of Taxes.                (d)  Each  Lender  agrees  that  if  any  form  or  certification  it  previously  delivered         pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall         promptly update such form or certification or promptly notify the Administrative Agent and the         Borrower of its inability to do so.                (e)  If any party determines, in its sole discretion exercised in good faith, that it has         received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01         (including by the payment of additional amounts pursuant to this Section 3.01), it shall pay to the         indemnifying party an amount equal to such refund (but only to the extent of indemnity payments         made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-        pocket expenses (including Taxes) of such indemnified party and without interest (other than any         interest  paid  by  the  relevant  Governmental  Authority  with  respect  to  such  refund).   Such         indemnifying party, upon the request of such indemnified party, shall repay to such indemnified         party the amount paid over pursuant to this clause (e) (plus any penalties, interest or other charges         imposed  by  the  relevant  Governmental  Authority)  in  the  event  that  such  indemnified  party  is         required to repay such refund to such Governmental Authority.  Notwithstanding anything to the         contrary in this clause (e), in no event will the indemnified party be required to pay any amount to         an  indemnifying  party  pursuant  to  this  clause  (e)  the  payment  of  which  would  place  the         indemnified party in a less favorable net after-Tax position than the indemnified party 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.  This paragraph shall not be construed to require         any indemnified party to make available its Tax returns (or any other information relating to its         Taxes that it deems confidential) to the indemnifying party or any other Person.          3.02 Increased Costs.                (a)  Increased Costs Generally.  If any Change in Law shall:                      (i)   impose,  modify  or  deem  applicable  any  reserve,  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, any Lender (except any               reserve requirement contemplated by Section 3.02(d);                                           53  CHAR1\1659840v4 

 

                   (ii) subject any Recipient to any taxes (other than (A) Taxes that are covered               by Section 3.01(b) and (B) taxes that are excluded from the definition of Taxes in Section               3.01(a)) on its loans, loan principal, commitments, or other obligations, or its deposits,               reserves, other liabilities or capital attributable thereto; or                      (iii) impose  on  any  Lender  or  the  London  interbank  market  any  other               condition, cost or expense (other than taxes) affecting this Agreement;          and the result of any of the foregoing shall be to increase the cost to such Lender of making or         maintaining  any  Loan  (or  of  maintaining  its  obligation  to  make  any  such  Loan),  then,  upon         request of such Lender, the Borrower will pay to such Lender, as the case may be, such additional         amount or amounts as will compensate such Lender, as the case may be, for such additional costs         incurred or reduction suffered.                (b)  Capital  Requirements.   If  any  Lender  determines  that  any  Change  in  Law         affecting such Lender or any Lending Office of such Lender or such Lender’s holding company,         if any, regarding capital or liquidity requirements has or would have the effect of reducing the         rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any,         as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such         Lender to a level below that which such Lender or such Lender’s holding company could have         achieved but for such Change in Law (taking into consideration such Lender’s policies and the         policies of such Lender’s holding company with respect to capital adequacy), then from time to         time  the  Borrower  will  pay  to  such  Lender,  as  the  case  may  be,  such  additional  amount  or         amounts  as  will  compensate  such  Lender  or  such  Lender’s  holding  company  for  any  such         reduction suffered.                (c)  Certificates  for  Reimbursement.   A  certificate  of  a  Lender  setting  forth  the         amount or amounts necessary to compensate such Lender or its holding company, as the case may         be, as  specified in subsection  (a)  or (b)  of  this  Section  and  delivered  to the Borrower  shall be         conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due         on any such certificate within ten (10) days after receipt thereof.                (d)  Reserves on Loans.  The Borrower shall pay to each Lender, (i) as long as such         Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or         including  eurocurrency  funds  or  deposits  (currently  known  as  “Eurocurrency  liabilities”),         additional interest on the unpaid principal amount of each Loan equal to the actual costs of such         reserves  allocated  to  such  Loan  by  such  Lender  (as  determined  by  such  Lender  in  good faith,         which  determination  shall be  conclusive),  and  (ii)  as  long  as  such  Lender  shall  be  required  to         comply with any reserve ratio requirement or analogous requirement of any central banking or         financial regulatory authority imposed in respect of the maintenance of the Commitments or the         funding of the Loans, such additional costs (expressed as a percentage per annum and rounded         upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to         such Commitment or Loan by such Lender (as determined by such Lender in good faith, which         determination shall be conclusive), which in each case shall be due and payable on each date on         which interest is payable on such Loan; provided, that, the Borrower shall have received at least         ten (10) days’ prior notice (with a copy to the Administrative Agent) of such additional interest or         costs from such Lender.  If a Lender fails to give notice ten (10) days prior to the relevant Interest         Payment  Date,  such  additional  interest  shall  be  due  and  payable  ten  (10)  days  from  receipt  of         such notice.                                           54  CHAR1\1659840v4 

 

             (e)  Delay  in  Requests.   Failure  or  delay  on  the  part  of  any  Lender  to  demand         compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of         such  Lender’s  right  to  demand  such  compensation,  provided,  that,  the  Borrower  shall  not  be         required  to  compensate  a  Lender  pursuant  to  the  foregoing  provisions  of  this  Section  for  any         increased costs incurred or reductions suffered more than nine (9) months prior to the date that         such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or         reductions  and  of  such  Lender’s  intention  to  claim  compensation  therefor  (except  that,  if  the         Change  in  Law  giving  rise  to  such  increased  costs  or  reductions  is  retroactive,  then  the  nine-        month  period  referred  to  above  shall  be  extended  to  include  the  period  of  retroactive  effect         thereof).          3.03 Mitigation Obligations; Replacement of Lenders.                (a)  Designation of a Different Lending Office.  If any Lender requests compensation         under  Section  3.02  or  requires  the  Borrower  to  pay  any  Taxes  or  additional  amounts  to  any         Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or         if any Lender gives a notice pursuant to Section 3.02, then at the request of the Borrower such         Lender  shall,  as  applicable,  use  reasonable  efforts  to  designate  a  different  Lending  Office  for         funding  or  booking  its  Loans  hereunder  or  to  assign  its  rights  and  obligations  hereunder  to         another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation         or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.02, as         the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as         applicable,  and  (ii)  in  each  case,  would  not  subject  such  Lender,  as  the  case  may  be,  to  any         unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The         Borrower  hereby  agrees  to  pay  all  reasonable  costs  and  expenses  incurred  by  any  Lender  in         connection with any such designation or assignment.                (b)  Replacement  of  Lenders.   If  any  Lender  requests  compensation  under  Section         3.02, or if the Borrower is required to pay any Taxes or additional amounts to any Lender or any         Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case,         such Lender has declined or is unable to designate a different Lending Office in accordance with         Section 3.03(a), the Borrower may replace such Lender in accordance with Section 11.13.          3.04 Illegality.          If any Lender determines that any Law has made it unlawful, or that any Governmental Authority   has asserted that it is unlawful, for any Lender or its Lending Office to perform any of its obligations   hereunder  or  to  make,  maintain  or  fund  or  charge  interest  with  respect  to  any  Borrowing,  or  any   Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or   sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender   to  the  Borrower  through  the  Administrative  Agent,  any  obligation  of  such  Lender  to  issue,  make,   maintain, fund or charge interest with respect to any such Borrowing or to make Loans shall be suspended   until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise   to  such  determination no  longer  exist.   Upon receipt of such notice,  the  Borrower  shall, upon  demand   from such Lender (with a copy to the Administrative Agent), prepay the Loans immediately.  Upon any   such prepayment, the Borrower shall also pay accrued interest on the amount so prepaid.          3.05 Three-Month LIBOR Unavailability Period.          Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if the   Administrative Agent determines (which determination shall be conclusive absent manifest error) that a                                          55  CHAR1\1659840v4 

 

LIBOR  Unavailability  Period  has  commenced  and  is  continuing,  then,  reasonably  promptly  after  such  determination, the Administrative Agent shall give the Borrower notice thereof and the Administrative  Agent and the Borrower may amend this Agreement to replace Three-Month LIBOR with an alternate  benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated  therein),  giving  due  consideration  to  any  evolving  or  then  existing  convention  for  similar  U.S.  dollar  denominated  credit  facilities  for  such  alternative  benchmarks  (any  such  proposed  rate,  a  “LIBOR   Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes and any such   amendment shall become effective at 5:00 p.m. (New York time) on the fifth (5th) Business Day after the   Administrative  Agent  shall  have  posted  such  proposed  amendment  to  all  Lenders  and  the  Borrower   unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative   Agent written notice that such Required Lenders do not accept such amendment.  It is understood and   agreed that, for all purposes of this Agreement, once commenced, a “LIBOR Unavailability Period” shall   be  deemed  to  exist  and  be  continuing  unless  and  until  such  amendment  has  become  effective  in   accordance with the terms hereof.          During  the  continuance  of  any  LIBOR  Unavailability  Period,  the  obligation  of  the  Lenders  to   make  or  maintain  Loans  with  an  Interest  Rate  calculated  based  on  Three-Month  LIBOR  shall  be   suspended and the Borrower may revoke any pending request for a Borrowing of Loans with an Interest   Rate calculated based on Three-Month LIBOR or, failing that, will be deemed to have converted such   request into a request for a Borrowing of Loans with an Interest Rate calculated based on the Prime Rate.          Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that   in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.          3.06 Survival.          All  of  the  Borrower’s  obligations  under  this  Article  III  shall  survive  termination  of  the   Commitments, repayment of all Obligations and resignation of the Administrative Agent.                                     ARTICLE IV.                                     GUARANTY          4.01 The Guaranty.          Each  of  the  Guarantors  hereby  jointly  and  severally  guarantees  to  each  Secured  Party  as   hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full   when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly   in accordance with the terms thereof.  The Guarantors hereby further agree that if any of the Obligations   are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or   otherwise),  the  Guarantors  will,  jointly  and  severally,  promptly  pay  the  same,  without  any  demand  or   notice whatsoever,  and  that  in  the  case  of any  extension  of  time  of payment  or  renewal  of any  of the   Obligations,  the  same  will  be  promptly  paid  in  full  when  due  (whether  at  extended  maturity,  as  a   mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or   renewal.          Notwithstanding  any  provision  to  the  contrary  contained  herein  or  in  any  other  of  the  Loan   Documents, the obligations of each Guarantor under this Agreement and the other Loan Documents shall   be  limited  to  an  aggregate  amount  equal  to  the  largest  amount  that  would  not  render such  obligations   subject to avoidance under Debtor Relief Laws or any comparable provisions of any applicable state law.                                           56  CHAR1\1659840v4 

 

       4.02 Obligations Unconditional.          The  obligations  of  the  Guarantors  under  Section  4.01  are  joint  and  several,  absolute  and   unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the   Loan Documents, or any other agreement or instrument referred to therein, or any substitution, release,   impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest   extent  permitted  by  applicable  law,  irrespective  of  any  law  or  regulation  or  other  circumstance   whatsoever  which  might  otherwise  constitute  a  legal  or  equitable  discharge  or  defense  of  a  surety  or   guarantor, it being the intent of this Section 4.02 that the obligations of the Guarantors hereunder shall be   absolute and unconditional under any and all circumstances.  Each Guarantor agrees that such Guarantor   shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any   other  Guarantor  for  amounts  paid  under  this  Article  IV  until  such  time  as  the  Obligations  (other  than   contingent indemnification obligations for which no claim has been asserted) have been paid in full and   the  Commitments  have  expired  or  terminated.   Without  limiting  the  generality  of  the  foregoing,  it  is   agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following   shall  not  alter  or  impair  the  liability  of  any  Guarantor  hereunder,  which  shall  remain  absolute  and   unconditional as described above:                (a)  at any time or from time to time, without notice to any Guarantor, the time for         any  performance  of  or  compliance  with  any  of  the  Obligations  shall  be  extended,  or  such         performance or compliance shall be waived;                (b)  any of the acts mentioned in any of the provisions of any of the Loan Documents,         or any other agreement or instrument referred to in the Loan Documents shall be done or omitted;                (c)  the  maturity  of  any  of  the  Obligations  shall  be  accelerated,  or  any  of  the         Obligations shall be modified, supplemented or amended in any respect, or any right under any of         the Loan Documents, or any other agreement or instrument referred to in the Loan Documents         shall be waived or any other guarantee of any of the Obligations or any security therefor shall be         released, impaired or exchanged in whole or in part or otherwise dealt with;                (d)  any Lien granted to, or in favor of, any Secured Party as security for any of the         Obligations shall fail to attach or be perfected; or                (e)  any  of  the  Obligations  shall  be  determined  to  be  void  or  voidable  (including,         without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the         claims of any Person (including, without limitation, any creditor of any Guarantor).          With respect to its obligations hereunder, each Guarantor hereby expressly waives, to the extent   permitted  by  applicable  Law,  diligence,  presentment,  demand  of  payment,  protest  and  all  notices   whatsoever, and any requirement that the Secured Parties exhaust any right, power or remedy or proceed   against any Person under any of the Loan Documents, or any other agreement or instrument referred to in   the Loan Documents, or against any other Person under any other guarantee of, or security for, any of the   Obligations.          4.03 Reinstatement.          The obligations of the Guarantors under this Article IV shall be automatically reinstated if and to   the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is   rescinded or must be otherwise restored by any Secured Party, whether as a result of any proceedings in   bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Secured                                          57  CHAR1\1659840v4 

 

Parties on demand for all reasonable costs and expenses (including, without limitation, the fees, charges  and  disbursements  of  counsel)  incurred  by  the  Secured  Parties  in  connection  with  such  rescission  or  restoration, including any such costs and expenses incurred in defending against any claim alleging that  such  payment  constituted  a  preference,  fraudulent  transfer  or  similar  payment  under  any  bankruptcy,  insolvency or similar law.          4.04 Certain Additional Waivers.          Each  Guarantor  agrees  that  such  Guarantor  shall  have  no  right  of  recourse  to  security  for  the   Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02 and through the   exercise  of  rights  of  contribution  pursuant  to  Section  4.06.   For  the  avoidance  of  doubt  and   notwithstanding  the  fact  that  the  obligations  of  each  Brazilian  Guarantor  under  this  Article  IV  are   governed  by  the  law  of  the  State  of  New  York,  each  Brazilian  Guarantor  hereby  irrevocably  and   unconditionally waives the benefits of Articles 827, 829, 830, 834, 835, 837, 838 and 839 of Law No.   10,406, of January 10, 2002 and Articles 130 and 794 of Law No. 10,105, of March 16, 2015.          4.05 Remedies.          The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on   the one hand, and the Secured Parties, on the other hand, the Obligations may be declared to be forthwith   due and payable as provided in Section 9.02 (and shall be deemed to have become automatically due and   payable in the circumstances provided in said Section 9.02) for purposes of Section 4.01 notwithstanding   any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from   becoming  automatically  due  and  payable)  as  against  any  other  Person  and  that,  in  the  event  of  such   declaration  (or  the  Obligations  being  deemed  to  have  become  automatically  due  and  payable),  the   Obligations  (whether  or  not  due  and  payable  by  any  other  Person)  shall  forthwith  become  due  and   payable by the Guarantors for purposes of Section 4.01.  The Guarantors acknowledge and agree that their   obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the   Secured Parties may exercise their remedies thereunder in accordance with the terms thereof.          4.06 Rights of Contribution.          The Guarantors agree among themselves that, in connection with payments made hereunder, each   Guarantor shall have contribution rights against the other Guarantors as permitted under applicable law.    Such contribution rights shall be subordinate and subject in right of payment to the obligations of such   Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until   all Obligations (other than contingent indemnification obligations for which no claim has been asserted)   have been paid in full and the Commitments have terminated.          4.07 Guarantee of Payment; Continuing Guarantee.          The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing   guarantee, and shall apply to all Obligations whenever arising.          4.08 Limitations Applicable to Belgian Loan Parties.                (a)  The total liability of a Belgian Loan Party for the Obligations of any other Loan         Party  under  the  Loan  Documents  shall  at  all  times  be  limited  to  an  amount  (without  double         counting) not exceeding the sum of:                                           58  CHAR1\1659840v4 

 

                  (i)    the aggregate of all principal amounts, either directly or through one or              more other Loan Parties (through intra-group loans or otherwise and whether retained for              its own purposes or on-lent) made available to such Belgian Loan Party (or its direct or              indirect  Subsidiaries)  under  any  intra-group  arrangement  (including  through  the              subscription  of  debt  instruments)  using  proceeds  made  available  pursuant  to  this              Agreement; plus                      (ii)  ninety-five percent (95%) of such Belgian Loan Party’s own net assets               (netto actief/actif net) (as determined in accordance with the second paragraph of article               320, 429 or 617 of the Belgian Companies Code (as applicable) and accounting principles               generally accepted in Belgium and ignoring the Guaranty of such Belgian Loan Party) as               shown by its most recent audited unconsolidated annual financial statements at the date               on which the demand is made on it.                (b)  No Belgian Loan Party shall be liable for the Obligations of any other Loan Party         under  the  Loan  Documents  to  the  extent  that  such  liability  would  result  in  such  guarantee         constituting unlawful financial assistance within the meaning of Article 329, 430 or 629 of the         Belgian Companies Code (as applicable).                                      ARTICLE V.                        CONDITIONS PRECEDENT TO BORROWINGS          5.01 Condition to Effectiveness.          This  Agreement  shall  become  effective  upon  receipt  by  the  Administrative  Agent  of  executed   counterparts of this Agreement, properly executed by a Responsible Officer of each Loan Party and by   each Lender, together with all exhibits and schedules hereto.          5.02 Conditions to Initial Extensions of Credit.          The obligation of each Lender to make its initial Loans hereunder is subject to satisfaction of the   following conditions precedent:                (a)  Investment  Documents.   Receipt  by  the  Administrative  Agent  of  executed         counterparts of the Investment Documents, each properly executed by a Responsible Officer of         the signing Loan Party and each other party to such documents, including, without limitation, the         Share  Purchase  Agreement  and  the  ROFR  Side  Letter,  in  each  case  in  form  and  substance         reasonably satisfactory to the Administrative Agent and the Lenders.                (b)  Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions         of  legal  counsel  to  the  Loan  Parties,  addressed  to  the  Administrative  Agent  and  each  Lender,         dated  as  of  the  Funding  Date,  and  in  form  and  substance  reasonably  satisfactory  to  the         Administrative Agent.                (c)  Financial  Statements;  Due  Diligence.   The  Administrative  Agent  shall  have         received  the  Audited  Financial  Statements,  the  Interim  Financial  Statements  and  such  other         reports,  statements  and  due  diligence  items  as  the  Administrative  Agent  or  any  Lender  shall         request.                                           59  CHAR1\1659840v4 

 

             (d)  No Material Adverse Change.  There shall not have occurred a material adverse         change since December 31, 2016 in the business, financial performance or condition, operations         (including the financial results thereof), assets or properties of the Borrower and its Subsidiaries,         taken as a whole.                (e)  Litigation.   There  shall  not  exist  any  action,  suit,  investigation  or  proceeding         pending or threatened (in writing) in any court or before an arbitrator or Governmental Authority         that  could  reasonably  be  expected,  either  individually  or  in  the  aggregate,  to  have  a  Material         Adverse Effect.                (f)  Organization Documents, Resolutions, Etc.  Receipt by the Administrative Agent         of the following, each of which shall be originals or facsimiles (followed promptly by originals),         in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:                      (i)   copies of the Organization Documents of each Loan Party certified to be               true and complete as of a recent date by (A) the appropriate Governmental Authority of               the state or other jurisdiction of its incorporation or organization, where applicable, or (B)               in  the  case  of  each  Costa  Rican  Loan  Party,  a  notarial  certification,  and  in  each  case               certified by a director, secretary or assistant secretary of such Loan Party to be true and               correct as of the Funding Date;                      (ii) such  certificates  of  resolutions  or  other  action,  incumbency  certificates               and/or other certificates of Responsible Officers of each Loan Party as the Administrative               Agent  may  require evidencing  the identity,  authority  and capacity  of  each  Responsible               Officer  thereof  authorized  to  act  as  a  Responsible  Officer  in  connection  with  this               Agreement and the other Investment Documents to which such Loan Party is a party;                       (iii) such  documents  and  certifications  as  the  Administrative  Agent  may               require  to  evidence  that  each  Loan  Party  is  duly  organized  or  formed,  and  is  validly               existing,  in  good  standing  and  qualified  to  engage  in  business  in  its  state  or  other               jurisdiction  of  organization  or  formation  (such  certifications  to  include,  without               limitation,  a  good  standing  certificate  of  the  Borrower  issued  by  the  Registrar  of               Corporate Affairs in the British Virgin Islands);                       (iv)  a registered agent’s certificate issued by the Borrower’s registered agent               in the British Virgin Islands and dated within one month of the Effective Date;                       (v)  a  copy of  a  resolution  of the  Board  of  Directors  of  each  Belgian  Loan               Party setting out the reasons it is considered that the entry into this Agreement, and in               particular the assumption of its guaranty obligations in accordance with Article IV, is of               benefit to such Belgian Loan Party;                       (vi)  in relation to each Belgian Loan Party, a solvency certificate (attest niet-              faillissement/certificat  de  non-faillite)  and  an uittreksel  van  de  Kruispuntbank  voor               Ondernemingen/extrait  de  la  Banque  Carrefour  des  Entreprises,  each  dated  not  more               than three (3) Business Days prior to the Effective Date; and                      (vii)  a  certificate  of  the  Articles  of  Incorporation  and  organizational               documents, and a recent certificación de personería jurídica, of each Costa Rican Loan               Party.                                           60  CHAR1\1659840v4 

 

             (g)  Perfection  and  Priority  of  Liens.   Receipt  by  the  Administrative  Agent  of  the         following:                      (i)   searches of Uniform Commercial Code filings (or the equivalent) in the               jurisdiction of formation of each Loan Party or where a filing would need to be made in               order to perfect the Administrative Agent’s security interest in the Collateral, copies of               the financing statements (or the equivalent) on file in such jurisdictions and evidence that               no Liens exist other than Permitted Liens;                      (ii) Uniform Commercial Code (or the equivalent) financing statements for               each  appropriate  jurisdiction  as  is  necessary,  in  the  Administrative  Agent’s  sole               discretion,  to  perfect  the  Administrative  Agent’s  security  interest  in  the  Collateral  and               filings of the particulars of the relevant charges with the Registrar of Corporate Affairs in               the  British  Virgin  Islands  in  accordance  with  Section  163  of  the  BVI  Business               Companies Act, 2004;                      (iii) (A) all certificates evidencing any certificated Equity Interests pledged to               the Administrative Agent pursuant to any Pledge Agreement or any Security Agreement               other  than  the  Costa  Rican  Security  Trust  Agreement,  together  with  duly  executed  in               blank and undated stock powers attached thereto and (B) all certificates evidencing the               delivery of any share certificates of any Costa Rican Loan Party to the Trustee pursuant               to the Costa Rican Security Trust Agreement, together with the entries in each such Costa               Rican Loan Party’s Shareholders Registry Book and Shareholders Meeting Minutes Book               regarding the transfer of said secured shares to the Trustee;                      (iv)  searches  of  ownership  of, and  Liens  on,  the  Business  IP  Rights  of  the               Loan Parties in the appropriate governmental offices;                      (v)  duly executed notices of grant of security interest in the form required by               the applicable Security Agreement as are necessary, in the Administrative Agent’s sole               discretion,  to  perfect  the  Administrative  Agent’s  security  interest  in  the  Business  IP               Rights of the Loan Parties;                      (vi)  such Qualifying Control Agreements as shall be necessary to cause the               Loan Parties to be in compliance with Section 7.18;                      (vii) to  the  extent  required  to  be  delivered  pursuant  to  the  terms  of  the               Collateral Documents, all instruments, documents and chattel paper in the possession of               any of the Loan Parties, together with allonges or assignments as may be necessary or               appropriate to perfect the Administrative Agent’s security interest in the Collateral; and                      (viii) in  the  case  of  any  personal  property  Collateral  located  at  a  premises               leased by a Loan Party, such Collateral Access Agreements as may be required by the               Administrative Agent.                (h)  Real Property Collateral.  Receipt by the Administrative Agent of Mortgages and         other Real Property Security Documents with respect to the fee interest of any Loan Party in each         real  property  identified  on  Schedule  6.20(a)  to  the  Disclosure  Letter  (other  than  any  Excluded         Property).                                           61  CHAR1\1659840v4 

 

             (i)   Evidence  of  Insurance.   Receipt  by  the  Administrative  Agent  of  copies  of         insurance policies or certificates of insurance of the Loan Parties evidencing liability and casualty         insurance meeting the requirements set forth in the Loan Documents, including, but not limited         to, naming the Administrative Agent as additional insured (in the case of liability insurance) or         Lender’s loss payee (in the case of hazard insurance) on behalf of the Secured Parties.                (j)   Funding Certificate.  Receipt by the Administrative Agent of a certificate signed         by a Responsible Officer of the Borrower certifying (i) that the conditions specified in Sections         5.02(d), (e) and (l) and Sections 5.03(a) and (b) have been satisfied, (ii) that the Borrower and its         Subsidiaries  (after  giving  effect  to  the  transactions  contemplated  hereby  and  the  incurrence  of         Indebtedness  related  thereto)  are  Solvent  on  a  consolidated  basis  and  (iii)  that  neither  the         Borrower  nor  any  Subsidiary as  of  the  Funding  Date  has  outstanding  any Disqualified  Capital         Stock.                (k)  Existing Indebtedness.                        (i)   All of the existing Indebtedness for borrowed money of the Loan Parties               and  their  respective  Subsidiaries  (including  all  Indebtedness  under  the  Existing  Credit               Agreement but, for the avoidance of doubt, excluding (A) Indebtedness permitted to exist               pursuant to Section 8.03 and (B) the Crown Predator Convertible Indebtedness), shall be               repaid in full and all security interests related thereto shall be terminated on or prior to the               Funding Date.                      (ii) All of the Crown Predator Convertible Indebtedness shall be either (A)               repaid in full or (B) converted into Qualified Capital Stock of the Borrower, and in each               case all security interests related thereto shall be terminated on or prior to the Funding               Date.                (l)   Governmental and Third Party Approvals.  The Loan Parties and their respective         Subsidiaries  shall  have  received  all  governmental,  shareholder  and  third  party  consents  and         approvals necessary in connection with the transactions contemplated by this Agreement and the         other Investment Documents and the other transactions contemplated hereby and all applicable         waiting  periods  shall  have  expired  without  any  action  being  taken  by  any  Person  that  could         reasonably  be  expected  to  restrain,  prevent  or  impose  any  material  adverse  conditions  on  the         Loan Parties or any of their respective Subsidiaries or such other transactions or that could seek to         threaten  any  of  the  foregoing,  and  no  law  or  regulation  shall  be  applicable  which  could         reasonably be expected to have such effect.                (m)   Corporate Structure and Capitalization.  The capital and ownership structure and         the equity holder arrangements of the Borrower and its Subsidiaries on the Funding Date, on a         pro forma basis after giving effect to the transactions contemplated by the Investment Documents         shall be reasonably satisfactory to the Lenders.                (n)  Letter of Direction.  Receipt by the Administrative Agent of a satisfactory letter         of direction containing funds flow information with respect to the proceeds of the Loans to be         made on the Funding Date.                (o)  Fees.  Receipt by the Administrative Agent and the Lenders of any fees required         to be paid on or before the Funding Date.                                           62  CHAR1\1659840v4 

 

             (p)  Attorney Costs; Due Diligence Expenses. The Borrower shall have paid all fees,         charges and disbursements of counsel to the Administrative Agent incurred to the Funding Date,         plus  such  additional  amounts  of  such  fees,  charges  and  disbursements  as  shall  constitute  its         reasonable  estimate  of  such  fees,  charges  and  disbursements  incurred  or  to  be  incurred  by  it         through the closing proceedings (provided, that, such estimate shall not thereafter preclude a final         settling of accounts between the Borrower and the Administrative Agent).                (q)  Condition to Effectiveness.  The condition to effectiveness specified in Section         5.01 shall have been satisfied.                (r)  Equity Documents.  Receipt by the Administrative Agent of a certificate signed         by a Responsible Officer of the Borrower attaching executed copies of each document necessary         to effectuate the Share Purchase Agreement and authorize the Borrower’s entry into the ROFR         Side Letter, including, without limitation, (i) the Restated Articles, (ii) the Rights Agreement, (iii)         the Voting Agreement and (iv) ROFR Agreement, in each case as such terms are defined in the         Share Purchase Agreement and in form and substance satisfactory to the Lenders.                (s)   Termination  of  the  Banco  Davivienda  Documents.   The  Banco  Davivienda         Documents shall be terminated, all existing Indebtedness under the Banco Davivienda Documents         shall be repaid in full and all security interests related thereto shall be terminated on or prior to         the Funding Date.                (t)   Cancellation  of  Certain  Warrants.  The  Borrower  shall  have  cancelled  the         Relativity  Warrant,  JW  Opportunities  Warrant  and  JW  Partners  Warrant  on  or  prior  to  the         Funding Date, on terms and conditions satisfactory to the Administrative Agent.                (u)  Perceptive  Warrant.   The  Borrower  shall  have  committed  to  repurchase  fifty         percent (50%) of the Perceptive Warrant on or prior to the Funding Date on terms and conditions         satisfactory to the Administrative Agent and the Lenders, and the Lenders shall have purchased         the other fifty percent (50%) of the Perceptive Warrant from Perceptive Credit Holdings, LP on         or prior to the Funding Date on terms and conditions satisfactory to the Administrative Agent and         the Lenders.                 (v)  Equity Purchases.  The Lenders shall have purchased (i) 73,560 Class A ordinary         shares of the Borrower from Antoun Nabhan, (ii) 13,580 Class A ordinary shares of the Borrower         from  Marco  Chacon  Quiros  and  (iii)  80,000  Class  A  ordinary  shares  of  the  Borrower  from         Medical Device Holdings, S.A., in each case, on or prior to the Funding Date and on terms and         conditions satisfactory to the Administrative Agent and the Lenders.                 (w)   Other.   Receipt  by  the  Administrative  Agent  and  the  Lenders  of  such  other         documents,  instruments,  agreements  and  information  as  reasonably  requested  by  the         Administrative  Agent  or  any  Lender,  including,  but  not  limited  to,  information  regarding         litigation, tax, accounting, labor, insurance, pension liabilities (actual or contingent), real estate         leases,  material  contracts,  debt  agreements,  property  ownership,  environmental  matters,         contingent liabilities and management of the Borrower and its Subsidiaries.          Without  limiting  the  generality  of  the  provisions  of  the  last  paragraph  of  Section  10.03,  for   purposes of determining compliance with the conditions specified in this Section 5.02, each Lender that   has  funded  its Term  A Loan  on  the Funding  Date  shall be deemed  to  have  consented  to,  approved  or   accepted or to be satisfied with, each document or other matter required thereunder to be consented to or                                           63  CHAR1\1659840v4 

 

approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received  notice from such Lender prior to the proposed Funding Date specifying its objection thereto.          5.03 Conditions to all Borrowings.          The obligation of each Lender to honor any Loan Notice is subject to the following conditions   precedent:                (a)  The representations and warranties of the Borrower and each other Loan Party         contained  in  Article  VI  or  any  other  Investment  Document,  or  which  are  contained  in  any         document furnished at any time under or in connection herewith or therewith, shall be true and         correct  in  all  material  respects  (and  in  all  respects  if  any  such  representation  or  warranty  is         already qualified by materiality or reference to Material Adverse Effect) on and as of the date of         such Borrowing, except to the extent that such representations and warranties specifically refer to         an earlier date, in which case they shall be true and correct in all material respects (and in all         respects if any such representation or warranty is already qualified by materiality or reference to         Material Adverse Effect) as of such earlier date, and except that for purposes of this Section 5.03,         the representations and warranties contained in subsections (a) and (b) of Section 6.05 shall be         deemed  to  refer  to  the  most  recent  statements  furnished  pursuant  to  clauses  (a)  and  (b),         respectively, of Section 7.01.                (b)  No Default or Event of Default shall exist, or would result from such proposed         Borrowing or from the application of the proceeds thereof.                (c)  With respect to any Loan Notice requesting a Borrowing of Term B-1 Loans, the         requested Borrowing shall occur during the Term B-1 Availability Period.                (d)  With respect to any Loan Notice requesting a Borrowing of Term B-2 Loans, the         requested Borrowing shall occur during the Term B-2 Availability Period.                (e)  With respect to any Loan Notice requesting a Borrowing of Term B-3 Loans, the         requested Borrowing shall occur during the Term B-3 Availability Period.                (f)  With respect to any Loan Notice requesting a Borrowing of Term B-4 Loans, the         requested Borrowing shall occur during the Term B-4 Availability Period.                (g)  With respect to any Loan Notice requesting a Borrowing of Term C Loans, the         requested Borrowing shall occur during the Term C Availability Period.                (h)  The Administrative Agent shall have received a Loan Notice in accordance with         the requirements hereof.          Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty   that the conditions specified in Sections 5.03(a) through (g) have been satisfied on and as of the date of   the applicable Borrowing.          5.04 Additional Conditions to Term C Borrowing.          The  obligation  of  each  Lender  to  honor  any  Loan  Notice  requesting  a  Borrowing  of  Term  C   Loans is subject to the additional condition precedent that such Borrowing shall be in compliance with   Section 2.14 in all respects.                                          64  CHAR1\1659840v4 

 

       Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty   that the conditions specified in Sections 5.03(a) through (g) and 5.04 have been satisfied on and as of the   date of the applicable Borrowing.                                     ARTICLE VI.                          REPRESENTATIONS AND WARRANTIES         On the Funding Date, and on each date thereafter on which the representations and warranties set  forth herein are required to be made under any Investment Document (or deemed to be made under any  Investment  Document),  the  Loan  Parties  represent  and  warrant  to  the  Administrative  Agent  and  the  Lenders that:          6.01 Existence, Qualification and Power.          Each  Loan  Party  and  each  Subsidiary  (a)  is  duly  incorporated,  organized  or  formed,  validly   existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b)   has all requisite power and authority and all requisite governmental licenses, authorizations, consents and   approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its   obligations under the Investment Documents to which it is a party and (c) is duly qualified and is licensed   and  in  good  standing  under  the  Laws  of  each  jurisdiction  where  its  ownership,  lease  or  operation  of   properties or the conduct of its business requires such qualification or license; except in each case referred   to in clauses (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a   Material Adverse Effect.          6.02 Authorization; No Contravention.          The execution, delivery and performance by each Loan Party of each Investment Document to   which such Person is party have been duly authorized by all necessary corporate or other organizational   action, and do not (a) contravene the terms of any of such Person’s Organization Documents, (b) conflict   with or result in any breach or contravention of, or the creation of any Lien under, or require any payment   to  be  made  under  (i)  any  Contract  to  which  such  Person  is  a  party  or  affecting  such  Person  or  the   properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any   Governmental  Authority  or  any  arbitral  award  to  which  such  Person  or  its  property  is  subject  or  (c)   violate, in any material respect, any Law (including, without limitation, Regulation U or Regulation X   issued  by  the  FRB),  except  with  respect  to  any  conflict,  breach,  contravention  or  payment  (but  not   creation  of  Liens)  referred  to  in  clause  (b)  to  the  extent  that  such  conflict,  breach,  contravention  or   payment could not reasonably be expected to have a Material Adverse Effect.          6.03 Governmental Authorization; Other Consents.          No approval, consent, exemption, authorization, or other action by, or notice to, or filing with,   any  Governmental  Authority  or  any  other  Person  is  necessary  or  required  in  connection  with  the   execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any   other Investment Document other than (a) those that have already been obtained and are in full force and   effect,  (b)  filings  to  perfect  the  Liens  created  by  the  Collateral  Documents  and  (c)  those  approvals,   consents, exemptions, authorizations, actions, notices or filings described in the Collateral Documents.                                           65  CHAR1\1659840v4 

 

       6.04 Binding Effect.          Each  Investment  Document  has  been  duly  executed  and  delivered  by  each  Loan  Party  that  is   party thereto.  Each Investment Document constitutes a legal, valid and binding obligation of each Loan   Party that is party thereto, enforceable against each such Loan Party in accordance with its terms, subject   to  bankruptcy,  insolvency,  reorganization,  moratorium  and  similar  laws  affecting  the  enforceability  of   creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is   considered in a proceeding in equity or at law).          6.05 Financial Statements; No Material Adverse Effect.                (a)  The Audited Financial Statements (i) were prepared in accordance with GAAP         consistently applied throughout the period covered thereby, except as otherwise expressly noted         therein, (ii) fairly present in all material respects the financial condition of the Borrower and its         Subsidiaries as of the date thereof and their results of operations for the period covered thereby in         accordance  with  GAAP  consistently  applied  throughout  the  period  covered  thereby,  except  as         otherwise  expressly  noted  therein  and  (iii)  show  all  material  indebtedness  and  other  liabilities,         direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including material         liabilities for taxes, commitments and Indebtedness.                (b)  The  Interim  Financial  Statements  (i)  were  prepared  in  accordance  with  GAAP         consistently applied throughout the period covered thereby, except as otherwise expressly noted         therein, (ii) fairly present in all material respects the financial condition of the Borrower and its         Subsidiaries as of the date thereof and their results of operations for the period covered thereby,         subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit         adjustments and (iii) show all material indebtedness and other liabilities, direct or contingent, of         the Borrower and its Subsidiaries as of the date thereof, including material liabilities for taxes,         material commitments and Indebtedness.                (c)  From the date of the Audited Financial Statements to and including the Funding         Date,  there  has  been  no  Disposition  by  any  Loan  Party  or  any  Subsidiary,  or  any  Involuntary         Disposition, of any material part of the business or property of any Loan Party or any Subsidiary,         and no purchase or other acquisition by any of them of any business or property (including any         Equity Interests of any other Person) material to any Loan Party or any Subsidiary, in each case,         which is not reflected in the foregoing financial statements or in the notes thereto and has not         otherwise been disclosed in writing to the Lenders on or prior to the Funding Date.                (d)  The financial statements delivered pursuant to Section 7.01(a) and (b) have been         prepared in accordance with GAAP (except as may otherwise be permitted under Section 7.01(a)         and (b)) and present fairly in all material respects (on the basis disclosed in the footnotes to such         financial statements) the consolidated financial condition, results of operations and cash flows of         the Borrower and its Subsidiaries as of the dates thereof and for the periods covered thereby.                (e)  Since the date of the Audited Financial Statements, there has been no event or         circumstance, either individually or in the aggregate, that has had or could reasonably be expected         to have a Material Adverse Effect.          6.06 Litigation.          There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the   Loan Parties after due and diligent investigation, threatened in writing, at law, in equity, in arbitration or                                          66  CHAR1\1659840v4 

 

before any Governmental Authority, by or against any Loan Party or any of its Subsidiaries or against any  of  their  properties  or  revenues  that  (a)  purport  to  affect  or  pertain  to  this  Agreement  or  any  other  Investment  Document,  or  any  of  the  transactions  contemplated  hereby  or  (b)  could  reasonably  be  expected, either individually or in the aggregate, to have a Material Adverse Effect.          6.07 No Default.                (a)  Neither any Loan Party nor any Subsidiary is in default under or with respect to         any Contract that could reasonably be expected to have a Material Adverse Effect.                (b)  No Default or Event of Default has occurred and is continuing.          6.08 Ownership of Property; Liens.                (a)  Each Loan Party and its Subsidiaries has good record and marketable title in fee         simple  to,  or  valid  leasehold  interests  in,  all  real  property  necessary  or  used  in  the  ordinary         conduct  of  its  business,  except  for  such  defects  in  title  as  could  not,  individually  or  in  the         aggregate, reasonably be expected to have a Material Adverse Effect.  The property of each Loan         Party and its Subsidiaries is subject to no Liens, other than Permitted Liens.                (b)  No  Loan  Party  nor  any  of  their  respective  Subsidiaries  (including,  for  the         avoidance  of  doubt,  any  Subsidiary  in  which  a  Loan  Party  holds  a  minority  interest)  has  any         direct or indirect interest in any real property located in the British Virgin Islands.          6.09 Environmental Compliance.          Except as could not reasonably be expected to have a Material Adverse Effect:                (a)  Each of the Business Facilities and all operations at the Business Facilities are in         compliance  with  all  applicable  Environmental  Laws,  and  there  is  no  violation  of  any         Environmental  Law  with  respect  to  the  Business  Facilities  or  the  Businesses, and  there  are no         conditions  relating  to  the  Business  Facilities  or  the  Businesses  that  could  give  rise  to  liability         under any applicable Environmental Laws.                (b)  None  of  the  Business  Facilities  contains,  or  has  previously  contained,  any         Hazardous  Materials  at,  on  or  under  the  Business  Facilities  in  amounts  or  concentrations  that         constitute or constituted a violation of, or could give rise to liability under, Environmental Laws.                (c)  Neither any Loan Party nor any Subsidiary has received any written notice of, or         inquiry  from  any  Governmental  Authority  regarding,  any  violation,  alleged  violation,  non-        compliance,  liability  or  potential  liability  regarding  environmental  matters  or  compliance  with         Environmental Laws with regard to any of the Business Facilities or the Businesses, nor does any         Responsible Officer of any Loan Party have knowledge or reason to believe that any such notice         will be received or is being threatened.                (d)  Hazardous Materials have not been transported or disposed of from the Business         Facilities, or generated, treated, stored or disposed of at, on or under any of the Business Facilities         or  any  other  location,  in  each  case  by  or  on  behalf  of  any  Loan  Party  or  any  Subsidiary  in         violation of, or in a manner that would be reasonably likely to give rise to liability under, any         applicable Environmental Law.                                           67  CHAR1\1659840v4 

 

             (e)  No judicial proceeding or governmental or administrative action is pending or, to         the knowledge of the Loan Parties, threatened in writing, under any Environmental Law to which         any Loan Party or any Subsidiary is or will be named as a party, nor are there any consent decrees         or other decrees, consent orders, administrative orders or other orders, or other administrative or         judicial requirements outstanding under any Environmental Law with respect to any Loan Party,         any Subsidiary, the Business Facilities or the Businesses.                (f)  There has been no release or threat of release of Hazardous Materials at or from         the Business Facilities, or arising from or related to the operations (including, without limitation,         disposal)  of  any  Loan  Party  or  any  Subsidiary  in  connection  with  the  Business  Facilities  or         otherwise in connection with the Businesses, in violation of or in amounts or in a manner that         could give rise to liability under Environmental Laws.          6.10 Insurance.                (a)  The properties of the Loan Parties and their respective Subsidiaries are insured         with financially sound and reputable insurance companies that are not Affiliates of the Borrower         or  any  Subsidiary,  in  such  amounts,  with  such  deductibles  and  covering  such  risks  as  are         customarily carried by companies engaged in similar businesses and owning similar properties in         localities where the applicable Loan Party or the applicable Subsidiary operates.  The insurance         coverage of the Loan Parties and their respective Subsidiaries as in effect on the Effective Date is         outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule         6.10 to the Disclosure Letter.                (b)  The Borrower and its Subsidiaries maintain, if available, fully paid flood hazard         insurance on all real property that is located in a special flood hazard area and that constitutes         Collateral  on  such  terms  and  in  such  amounts  as  required  by  The  National  Flood  Insurance         Reform Act of 1994 or as otherwise required by the Administrative Agent.          6.11 Taxes.          The Loan Parties and their respective Subsidiaries have filed all federal, provincial, territorial and   state  income  and  other  material  tax  returns  and  reports  required  to  be filed,  and  have  paid  all federal,   provincial, territorial and state income and other material taxes, assessments, fees and other governmental   charges levied  or imposed  upon them  or their  properties, income  or  assets  otherwise  due  and  payable,   except those which are being contested in good faith by appropriate proceedings diligently conducted and   for which adequate reserves have been provided in accordance with GAAP.  There is no proposed tax   assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect.    Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement with any Person   that is not a Loan Party.          6.12 ERISA Compliance.                (a)  Each Plan is in compliance in all material respects with the applicable provisions         of ERISA, the Internal Revenue Code and other federal or state laws.  Any Pension Plan that is         intended to be a qualified plan under Section 401(a) of the Internal Revenue Code has received a         favorable determination  letter from  the Internal  Revenue Service  to the effect  that the  form  of         such Plan is qualified under Section 401(a) of the Internal Revenue Code and any trust related         thereto has been determined by the Internal Revenue Service to be exempt from federal income         tax under Section 501(a) of the Internal Revenue Code or an application for such a letter will be         timely submitted to the Internal Revenue Service for processing.  To the best knowledge of the                                          68  CHAR1\1659840v4 

 

       Loan Parties, nothing has occurred that would prevent, or cause the loss of, any such tax-qualified         status.                (b)  There are no pending or, to the best knowledge of the Loan Parties, threatened (in         writing) claims, actions or lawsuits, or action by any Governmental Authority, with respect to any         Plan that would reasonably be expected, either individually or in the aggregate, to have a Material         Adverse  Effect.   There  has  been  no  prohibited  transaction  or  violation  of  the  fiduciary         responsibility rules applicable with respect to any Plan that has resulted or would reasonably be         expected, either individually or in the aggregate, to result in a Material Adverse Effect.                (c)  (i)  No  ERISA  Event  has  occurred  and  neither  the  Borrower  nor  any  ERISA         Affiliate  is  aware  of  any  fact,  event  or  circumstance  that  would  reasonably  be  expected  to         constitute or result in an ERISA Event with respect to any Pension Plan, (ii) the Borrower and         each ERISA Affiliate has met any applicable requirements under the Pension Funding Rules in         respect of any Pension Plan, and no waiver of the minimum funding standards under the Pension         Funding Rules has been applied for or obtained by the Borrower or any ERISA Affiliate, (iii) 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 Internal Revenue Code) is sixty percent (60%) or higher         and neither the Borrower nor any ERISA Affiliate knows of any facts or circumstances that could         reasonably be  expected  to cause the funding  target attainment  percentage  for any  such  plan to         drop below sixty percent (60%) as of the most recent valuation date, (iv) neither the Borrower nor         any  ERISA  Affiliate  has  incurred  any  liability  to  the  PBGC  with  respect  to  any  Pension  Plan         other  than for the  payment  of  any  premiums, and  there  are  no premium  payments  which  have         become due that are unpaid, (v) neither the Borrower nor any ERISA Affiliate has engaged in a         transaction  that  could  be  subject  to  Section  4069  or  Section  4212(c)  of  ERISA  and  (vi)  no         Pension  Plan  has  been terminated  by  the  plan  administrator  thereof  nor  by  the  PBGC,  and  no         event  or  circumstance  has  occurred  or  exists  that  could  reasonably  be  expected  to  cause  the         PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.                (d)  Each Loan Party is not and will not be (i) an employee benefit plan subject to         Title I of ERISA, (ii) a plan or account subject to Section 4975 of the Internal Revenue Code; (iii)         an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or         the Internal Revenue Code or (iv) a “governmental plan” within the meaning of ERISA.                (e)  Each  Loan  Party  and  each  of  its  Subsidiaries  is  in  compliance  in  all  material         respects with all applicable Laws and requirements with respect to any Employee Benefit Non-        U.S.  Plan,  and  have  performed  in  all  material  respects  all  their  obligations  under  any  such         Employee Benefit Non-U.S. Plan.  No Employee Benefit Non-U.S. Plan Event has occurred or is         reasonably expected to occur that would reasonably be expected to result in material liability to         any  Loan  Party  or  any  of  its  Subsidiaries.   Any  Employee  Benefit  Non-U.S.  Plan  has  been         maintained  in  material  compliance  with  its  terms  and  with  the  requirements  of  any  and  all         applicable Laws, statutes, rules, regulations and orders and has been maintained, where required,         in  good  standing  with  applicable  regulatory  authorities,  except  as  would  not  reasonably  be         expected, either individually or in the aggregate, to result in a material liability to any Loan Party         or  any  of  its  Subsidiaries. Any contributions required  to  be  made with  respect to  a,  Employee         Benefit Non-U.S. Plan have been timely made. Neither the Borrower nor any of its Subsidiaries         has incurred any material obligation in connection with the termination of, or withdrawal from,         any  Employee  Benefit  Non-U.S.  Plan.  The  present  value  of  the  accrued  benefit  liabilities         (whether or not vested) under any Employee Benefit Non-U.S. Plan, determined as of the end of         the Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions,                                           69  CHAR1\1659840v4 

 

      did not exceed the current value of the assets of such Employee Benefit Non-U.S. Plan allocable        to such benefit liabilities.            6.13 Subsidiaries and Capitalization.                (a)  Set forth on Schedule 6.13(a) to the Disclosure Letter is a complete and accurate         list as of the Effective Date of each Subsidiary (including a designation of each Subsidiary that is         an Excluded Subsidiary as of the Effective Date), together with (i) jurisdiction of organization,         (ii) number of shares of each class of Equity Interests outstanding, (iii) number and percentage of         outstanding  shares  of  each  class  owned  (directly  or  indirectly)  by  any  Loan  Party  or  any         Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of         conversion or purchase and all other similar rights with respect thereto.  The outstanding Equity         Interests of each Subsidiary are validly issued, fully paid and non-assessable.                (b)  Set forth on Schedule 6.13(b) to the Disclosure Letter is a true and complete table         showing the authorized and issued capitalization of the Borrower as of the Effective Date on a         fully diluted basis.  All issued and outstanding Equity Interests of the Borrower and each of its         Subsidiaries are duly authorized and validly issued, fully paid, non-assessable and such Equity         Interests were issued in compliance with all applicable Laws.  All issued and outstanding Equity         Interests of each Subsidiary are free and clear of all Liens.  As of the Effective Date, except as         described on Schedule 6.13(b) to the Disclosure Letter, there are no outstanding commitments or         other obligations of any Loan Party or any Subsidiary to issue, and no rights of any Person to         acquire,  any  shares  of  any  Equity  Interests  of  any  Loan  Party  or  any  of  their  respective         Subsidiaries.   Except  as  set  forth  on  Schedule  6.13(b)  to  the  Disclosure  Letter,  there  are  no         statutory or contractual preemptive rights, rights of first refusal, anti-dilution rights or any similar         rights  held  by  equity  holders  or  option  holders  of  any  Loan  Party.   There  are  no  agreements         (voting or otherwise) among any Loan Party’s equity holders with respect to any other aspect of         such Loan Party’s affairs, except as set forth on Schedule 6.13(b) to the Disclosure Letter.            6.14 Margin Regulations; Investment Company Act.                (a)  The  Borrower  is  not  engaged  and  will  not  engage,  principally  or  as  one  of  its         important activities, in the business of purchasing or carrying margin stock (within the meaning         of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying         margin stock.  Following the application of the proceeds of each Borrowing, not more than 25%         of  the  value  of  the  assets  (of  the  Borrower  only  or  of  the  Borrower  and  its  Subsidiaries  on  a         consolidated  basis)  subject  to  the  provisions  of  Section  8.01  or  Section  8.05  or  subject  to  any         restriction contained  in  any  agreement  or instrument  between the  Borrower  and  any  Lender  or         any Affiliate of any Lender relating to Indebtedness and within the scope of Section 9.01(e) will         be margin stock.                (b)  None of any Loan Party or any Subsidiary is or is required to be registered as an         “investment company” under the Investment Company Act of 1940.          6.15 Disclosure.          Each  Loan  Party  has  disclosed  to  the  Administrative  Agent  and  the  Lenders  all  agreements,   instruments  and  corporate or  other restrictions to  which  it or any of its  Subsidiaries is  subject, and all   other matters known to it, that, either individually or in the aggregate, could reasonably be expected to   result  in  a  Material  Adverse  Effect.   No  report,  financial  statement,  certificate  or  other  information  furnished (whether written or oral) by or on behalf of any Loan Party to the Administrative Agent or any                                          70  CHAR1\1659840v4 

 

 Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or   delivered hereunder or under any other Loan Document (in each case, when taken as a whole, as modified   or supplemented by other information so furnished) contains any material misstatement of fact or omits to   state any fact necessary to make the statements therein, in the light of the circumstances under which they   were made, not misleading; provided, that, with respect to projected financial information, the Borrower   represents only that such information was prepared in good faith based upon assumptions it believed to be   reasonable at the time (it being understood that such projected financial information is not to be viewed as   facts, and that actual results during the period or periods covered by such projections may differ from the   projected results and such differences may be material).          6.16 Compliance with Laws.                (a)  Each  Loan  Party  and  each  Subsidiary  is  in  compliance  with  all  Laws  and  all         orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances         in  which  (i)  such  Law  or  order,  writ, injunction  or  decree  is  being  contested  in  good  faith  by         appropriate  proceedings  diligently  conducted  or  (ii)  the  failure  to  comply  therewith  could  not         reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect.                (b)  (i)  Any  physician,  other  licensed  healthcare  professional,  or  any  other  Person         who is in a position to refer patients or other business to any Loan Party or any Subsidiary (each,         a “Referral Source”) who has a direct ownership, investment, or financial interest in any Loan         Party  or  any  Subsidiary  paid  fair  market  value  for  such  ownership,  investment  or  financial         interest;  (ii)  any  ownership  or  investment  returns  distributed  to  any  Referral  Source  is  in         proportion  to  such  Referral  Source’s  ownership,  investment  or  financial  interest;  and  (iii)  no         preferential  treatment  or  more  favorable  terms  were  or  are  offered  to  such  Referral  Source         compared  to  investors  or  owners  who  are  not in  a  position  to  refer  patients  or  other  business.         Neither any Loan Party nor any Subsidiary, directly or indirectly, has guaranteed a loan, made a         payment toward a loan or otherwise subsidized a loan for any Referral Source including, without         limitation, any loans related to financing the Referral Source’s ownership, investment or financial         interest in such Loan Party or any such Subsidiary.                (c)  Without  limiting  the  generality  of  the  foregoing,  except  where  noncompliance         individually or in the aggregate could not reasonably be expected, either individually or in the         aggregate, to result in a Material Adverse Effect:                      (i)   any  financial  relationships  between  or  among  any  Loan  Party  or  any               Subsidiary, on the one hand, and any Referral Source, on the other hand (A) comply with               all applicable Healthcare Laws including, without limitation, the Federal Anti-Kickback               Statute, the Stark Law and applicable state antikickback and self-referral laws; (B) reflect               fair  market  value,  have  commercially  reasonable  terms  and  were  negotiated  at  arm’s               length  and  (C)  do  not  obligate  the  Referral  Source  to  purchase,  use,  recommend  or               arrange for the use of any products or services of any Loan Party or any Subsidiary; and                      (ii)  each  Loan  Party  and  each  Subsidiary  have  implemented  policies  and               procedures to monitor, collect and report any payments or transfers of value to certain               healthcare providers and teaching hospitals in accordance with the Affordable Care Act               of  2010  and  its  implementing  regulations  and  any  applicable  state  disclosure  and               transparency laws.                (d)  Except  as  set  forth  on  Schedule  6.16(d)  to  the  Disclosure  Letter,  the         consummation  of  the  transactions  contemplated  hereby  and  the  exercise  by  the  Administrative                                          71  CHAR1\1659840v4 

 

      Agent or the Lenders of any right or protection set forth in this Agreement will not constitute a        breach  or  violation  of,  or  otherwise  affect  the  enforceability  or  approval  of,  any  (i)  Device        Clearance Applications, (ii) Product Authorizations or (iii) Regulatory Approvals.          6.17 Intellectual Property; Licenses, Etc.                (a)  Schedule  6.17(a)  to  the  Disclosure  Letter  contains,  with  respect  to  each  Loan         Party and each of its Subsidiaries:                      (i)   a  complete  and  accurate  list  of  all  applied  for,  issued,  or  registered               Patents (A) owned by, (B) constituting Material IP Rights and nonexclusively licensed to               or  (C)  exclusively  licensed  to  a  Loan  Party  or  one  of  its  Subsidiaries,  including  the               jurisdiction and patent number or patent application number;                      (ii) a complete and accurate list of all material unregistered, applied for or               registered  Trademarks  (A)  owned  by,  (B)  constituting  Material  IP  Rights  and               nonexclusively  licensed  to  or  (C)  exclusively  licensed  to  a  Loan  Party  or  one  of  its               Subsidiaries, including the jurisdiction, trademark application or registration number and               the application or registration date; and                      (iii) a  complete  and  accurate  list  of  all  material  applied  for  or  registered               Copyrights  (A)  owned  by,  (B)  constituting  Material  IP  Rights  and  nonexclusively               licensed to or (C) exclusively licensed to a Loan Party or one of its Subsidiaries.                (b)  Except  for  non-exclusive  licenses  granted  in  the  ordinary  course  of  business,         each Loan Party and each of their Subsidiaries is the absolute beneficial owner of all right, title         and  interest  in  and  to  the  Business  IP  Rights  that  it  owns  (including,  without  limitation,  the         Business IP Rights indicated on Schedule 6.17(b) to the Disclosure Letter as being owned by such         Loan Party or Subsidiary), with good and marketable title (and no breaks in chain of title), free         and  clear of  any Liens  or claims of  any  kind  whatsoever  other  than  Permitted Liens  and  each         Loan  Party  and  Subsidiary has the right to  use  all  its  Material  IP  Rights. Without limiting the         foregoing, and except as set forth in Schedule 6.17(b) to the Disclosure Letter:                      (i)   other  than  as  permitted  by  Section  8.05,  no  Loan  Party,  nor  any  of its               Subsidiaries, has transferred ownership of or exclusively licensed any of its Material IP               Rights, in whole or in part, to any Person who is not a Loan Party;                      (ii) other than (A) customary restrictions in in-bound licenses or out-bound               non-exclusive  licenses  of  IP  Rights  and  non-disclosure  agreements, (B)  as  would  have               been or is permitted by Sections 8.01 and 8.05 or (C) non-exclusive licenses granted in               the  ordinary  course  of  business,  there  are  no  covenants  not  to  sue,  permits,  grants,               licenses or other agreements or arrangements relating to such Loan Party’s or any of their               respective  Subsidiary’s  Material  IP  Rights,  including  any  development,  submission,               services,  research,  license  or  support  agreements,  which  bind,  obligate  or  otherwise               restrict such Loan Party or any of its Subsidiaries with respect to any Material IP Rights;                      (iii) (A)  there  are  no  pending  or,  to  the  knowledge  of  any  Loan  Party,               threatened (in writing) claims against any Loan Party or any of its Subsidiaries asserted               by any other Person relating to any Business IP Rights, including any claims of adverse               ownership, invalidity, infringement, misappropriation, violation or other opposition to or               conflict  with  such  Business  IP  Rights  that  could  reasonably  be  expected,  either                                          72  CHAR1\1659840v4 

 

             individually  or  in  the  aggregate,  to  have  a  Material  Adverse  Effect  and  (B)  except  as               could  not  reasonably  be  expected,  either  individually  or  in  the  aggregate,  to  have  a               Material Adverse Effect, there are no pending or, to the knowledge of any Loan Party,               threatened  (in  writing)  claims  against  any  Loan  Party  or  any  of  their  respective               Subsidiaries and no Loan Party or any of their respective Subsidiaries have received any               written  notice  from  any  Person  that  any  Loan  Party’s  or  any  Subsidiary’s  business               and/or the use of any Business IP Rights or any Product, Product Commercialization and               Development  Activities  or  Product  Assets  infringes  upon,  violates  or  constitutes  a               misappropriation of, or may infringe upon, violate or constitute a misappropriation of, or               otherwise  interfere  with  any  IP  Rights  of  any  other  Person  or  otherwise  offering  a               license with respect to any Product;                      (iv)  the Loan Parties have no knowledge that any Business IP Right is being               infringed, violated, misappropriated or otherwise used by any other Person without the               express authorization  of the  Loan  Parties  and,  without  limiting  the  foregoing, no  Loan               Party  nor  any  Subsidiary  has  put  any  other  Person  on  notice  of  actual  or  potential               infringement, violation or misappropriation of any Business IP Rights and no Loan Party               nor  any  Subsidiary  has  initiated  the  enforcement  of  any  claim  with  respect  to  any               Business IP Rights;                      (v)  all relevant current and former employees and contractors of each Loan               Party and each Subsidiary who were or are involved in the creation or development of               Business  IP  Rights  have  executed  written  confidentiality  and  invention  assignment               contracts with such Loan Party or such Subsidiary substantially in the form provided to               the Administrative Agent’s counsel;                      (vi)  the  operation  of  each  Loan  Party’s  and  each  Subsidiary’s  business               and/or the use by each Loan Party and each of their Subsidiaries of any of their respective               Business IP Rights, Products, Product Commercialization and Development Activities or               Product  Assets  does  not  breach,  violate,  infringe  or  interfere  with  or  constitute  a               misappropriation of any valid rights arising under any IP Rights of any other Person that               could  reasonably  be  expected,  either  individually  or  in  the  aggregate,  to  result  in  a               Material Adverse Effect.                (c)  The Business IP Rights are subsisting, valid, unexpired, enforceable and have not         been abandoned.  With respect to the owned Business IP Rights consisting of Patents, except as         set forth in Schedule 6.17(b) to the Disclosure Letter and without limiting the representations and         warranties in clause (b):                      (i)   none  of  the  Patents  or  the  Inventions  claimed  in  any  such  Patent  have               been  dedicated  to  the  public  except  as  a  result  of  intentional  decisions  made  by  the               applicable  Loan  Party  or  Subsidiary  and  no  Loan  Party,  Subsidiary  nor  any  of  their               respective  predecessors-in-interest  has  filed  any  disclaimer  (other  than  a  terminal               disclaimer) or filed any other voluntary reduction in the scope of the Inventions claimed               in such Patents;                      (ii) no Loan Party, Subsidiary, nor, to the knowledge of the Loan Parties, any               prior  owner  of  any  Patent  or  any  of  their  respective  agents  or  representatives  have               engaged  in  any  conduct,  or  omitted  to  perform  any  necessary  act,  the  result  of  which               would invalidate or render unpatentable or unenforceable any Patent, except as could not                                           73  CHAR1\1659840v4 

 

             reasonably be expected,  either  individually  or in the  aggregate, to  result  in  a Material               Adverse Effect;                      (iii) all  maintenance fees,  annuities,  and the like due or  payable  on  or  with               respect to any Patents have been timely paid, except as could not reasonably be expected,               either individually or in the aggregate, to result in a Material Adverse Effect;                      (iv)  no  Patents  are  or  have  been  the  subject  of  any  re-examination,               opposition, any other pre- or post-grant proceedings or of any administrative, arbitration,               judicial  or  other  proceeding,  nor  is  any  Loan  Party  aware  of  any  basis  for  any  such               interference,  re-examination,  opposition,  inter  partes  review,  post  grant  review  or  any               other pre- or post-grant proceedings, judicial proceeding or other proceeding;                      (v)  no  Loan  Party  or  Subsidiary  has  received  any  written  notice  asserting               that any Patents are invalid, unpatentable or unenforceable; and                      (vi)  if  any  Patent  is  terminally  disclaimed  to  another  patent  or  patent               application,  all  patents  and  patent  applications  subject  to  such  terminal  disclaimer  are               included in the Collateral.                (d)  Schedule 6.17(d) to the Disclosure Letter sets forth an accurate list of all Material         IP  Rights,  together  with  an  indication  as  to  whether  the  applicable  Loan  Party  or  applicable         Subsidiary owns or has an exclusive or nonexclusive license to such Material IP Rights.                (e)  None of the IP Rights are subject to any license grant by any Loan Party or any         Subsidiary or similar arrangement, except for (i) license grants solely between the Loan Parties,         (ii)  those  license  grants  disclosed  on  Schedule  6.17(e)  to  the  Disclosure  Letter  and  (iii)  non-        exclusive licenses permitted by Section 8.05 granted in the ordinary course of business.          6.18 Solvency.          The Borrower and its Subsidiaries are Solvent, on a consolidated basis.          6.19 Perfection of Security Interests in the Collateral.          The Collateral Documents create valid security interests in, and Liens on, the Collateral purported   to  be  covered  thereby,  which  security  interests  and  Liens  will  be,  upon  the  timely  and  proper  filings,   deliveries  and  other  actions  contemplated  in  the  Collateral  Documents  perfected  security  interests  and   Liens  (to  the  extent  that  such  security  interests  and  Liens  can  be  perfected  by  such  filings,  deliveries,   notations and other actions), prior to all other Liens other than Permitted Liens.          6.20 Business Locations.          Set forth on Schedule 6.20(a) to the Disclosure Letter is a list of all real property that is owned or   leased by the Loan Parties as of the Effective Date (with (x) a designation of each real property that is   Excluded Property and (y) a designation as to whether such real property is owned or leased).  Set forth   on Schedule 6.20(b) to the Disclosure Letter is the tax payer identification number (or foreign equivalent)   and organizational identification number (or foreign equivalent) of each Loan Party as of the Effective   Date.  The exact legal name and state of organization (or foreign equivalent) of (a) the Borrower is as set   forth on the signature pages hereto and (b) each Guarantor is (i) as set forth on the signature pages hereto,   (ii) as set forth on the signature pages to the Joinder Agreement pursuant to which such Guarantor became                                          74  CHAR1\1659840v4 

 

a party hereto or (iii) as may be otherwise disclosed by the Loan Parties to the Administrative Agent in  accordance with Section 8.12(c).  Set forth on Schedule 6.20(c) to the Disclosure Letter are the locations   of  all  inventory,  equipment  and  other  tangible  personal  property  of  each  BVI  Loan  Party,  as  of  the   Effective Date.  Set forth on Schedule 6.20(d) to the Disclosure Letter are the locations of all inventory,   equipment and other tangible personal property of (x) each Belgian Loan Party and (y) each Loan Party   located in the Kingdom of Belgium, in each case, as of the Effective Date.  Set forth on Schedule 6.20(e)   to the Disclosure Letter are the locations of all inventory, equipment and other tangible personal property   of (x) each Costa Rican Loan Party and (y) each Loan Party located in the Republic of Costa Rica, in each   case, as of the Effective Date.  Set forth on Schedule 6.20(f) to the Disclosure Letter are the locations of   all inventory, equipment and other tangible personal property of (x) each Brazilian Loan Party and (y)   each  Loan  Party  located  in  the  Federative  Republic  of  Brazil,  in  each  case,  as  of  the  Effective  Date.    Except as set forth on Schedule 6.20(g) to the Disclosure Letter, no Loan Party has during the five years   preceding the Effective Date (x) changed its legal name, (y) changed its state of organization (or foreign   equivalent) or (z) been party to a continuation, merger, amalgamation, consolidation or other change in   structure.          6.21 Sanctions  Concerns;  Anti-Corruption  Laws;  PATRIOT  Act;  Anti-Money  Laundering   Laws.                (a)  Sanctions Concerns.  No Loan Party, nor any Subsidiary, nor, to the knowledge         of  the  Loan  Parties  and  their  respective  Subsidiaries,  any  director,  officer,  employee,  agent,         affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by,         any individual or entity that is (i) the subject or target of any Sanctions, (ii) included on OFAC’s         List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets         and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority         or (iii) located, organized or resident in a Designated Jurisdiction.                (b)  Anti-Corruption Laws.  The Loan Parties and their respective Subsidiaries have         conducted their business in material compliance with the United States Foreign Corrupt Practices         Act  of  1977,  the  UK  Bribery  Act  2010  and  other  similar  anti-corruption  legislation  in  other         jurisdictions applicable to any Loan Party or any Subsidiary, and  have instituted and maintained         policies and procedures designed to promote and achieve compliance with such laws.                (c)  PATRIOT Act.  To the extent applicable, each Loan Party and each Subsidiary is         in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and         each of the foreign assets control regulations of the United States Treasury Department (31 CFR,         Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating         thereto and (ii) the Act.                (d)  Anti-Money Laundering Laws.  No Loan Party, nor any Subsidiary, nor, to the         knowledge of the Loan Parties and their respective Subsidiaries, any director, officer, employee,         agent,  affiliate  or  representative  thereof,  (i)  has  been  found  in  violation  of,  charged  with,  or         convicted  of,  money  laundering,  drug  trafficking,  terrorist  related  activities  or  other  money         laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970         (otherwise known as the Bank Secrecy Act), the Act or any other United States law or regulation         governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. economic         sanctions violations, (ii) to each Loan Party’s actual knowledge after making due inquiry, is under         investigation by any Governmental Authority for possible violation of Anti-Money Laundering         Laws or any Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money         Laundering Laws or any Sanctions or (iv) has had any of its funds seized or forfeited in an action         under  any  Anti-Money  Laundering  Law.   Each  Loan  Party  has  established  procedures  and                                          75  CHAR1\1659840v4 

 

       controls which it reasonably believes are adequate (and otherwise comply in all material respects         with  applicable  Law)  to  ensure  that  each  Loan  Party  and  each  Subsidiary  thereof  is  and  will         continue to be in compliance in all material respects with all applicable current and future Anti-        Money Laundering Laws.          6.22 Material Contracts.          Except for Organization Documents of the Loan Parties and their respective Subsidiaries, there   are  no  Material  Contracts  other  than  as  set  forth  on  Schedule  6.22  to  the  Disclosure  Letter  as  of  the   Effective Date.  Schedule 6.22 to the Disclosure Letter sets forth, with respect to each real estate lease   agreement to which any Loan Party or any Subsidiary is a party as of the Effective Date that constitutes a   Material Contract, the address of the subject property and the annual rental rate as of the Effective Date.   The consummation of the transactions contemplated by the Investment Documents and the exercise by the   Administrative Agent or the Lenders of any right or protection set forth in the Investment Documents will   not constitute a breach or violation of, or otherwise affect the enforceability of, or give rise to a right of   termination in favor of any party to any Material Contract.  Except as otherwise disclosed on Schedule   6.22 to the Disclosure Letter (or pursuant to Section 7.02(a)), all Material Contracts are in full force and   effect  without  material  modification  from  the  form  in  which  the  same  were  disclosed  to  the   Administrative Agent.  Except as set forth on Schedule 6.22 to the Disclosure Letter, there are no Material   Contracts which are non-assignable by their terms, or as a matter of law, or which prevent the granting of   a security interest therein.          6.23 Regulatory Approvals.                (a)  With  respect  to  the  Products,  the  Loan  Parties  hold  either  directly  or  through         licensees  and  agents,  all  Regulatory  Approvals  necessary  or  required  for  such  Loan  Party  and         each  of  its  Subsidiaries  to  conduct  all  current  Product  Commercialization  and  Development         Activities with respect to the Products.                (b)  Set forth on Schedule 6.23(b) to the Disclosure Letter is a complete and accurate         list of all Regulatory Approvals referred to in clause (a), setting forth (in reasonable detail and on         a Product-by-Product basis) the Loan Party that holds such Regulatory Approval and identifying         the product related to such Regulatory Approval.  All such Regulatory Approvals are (i) legally         and  beneficially  owned  exclusively  by  such  Loan  Party  identified  on  such  Schedule,  free  and         clear of all Liens other than Permitted Liens, (ii) validly registered and on file with the applicable         Regulatory  Authority  in  compliance  in  all  material  respects  with  all  registration,  filing  and         maintenance requirements (including any fee requirements) thereof and (iii) valid, enforceable, in         good standing and in full force and effect, with the applicable Regulatory Authority.                (c)  All regulatory filings required by any Regulatory Authority or in respect of any         Regulatory  Approval  or  Product  Authorization  with  respect  to  any  Product  or  any  Product         Commercialization and Development Activities have been made (including all required notices,         registrations  and  listings,  supplemental  applications  or  notifications,  reports  (including  field         alerts, Device reports or other reports of adverse experiences) and all other required filings with         respect to the Products or any related Product Commercialization and Development Activities),         and all such filings are complete and correct in all material respects and are in compliance in all         material respects with all applicable Laws.                (d)  Each Loan Party and each Subsidiary and to the knowledge of the Loan Parties,         each  of  their  licensees  and  agents  is  in  compliance  in  all  material  respects  with  all  applicable         Laws  (including  all  Regulatory  Approvals  and  Product  Authorizations)  with  respect  to  each                                          76  CHAR1\1659840v4 

 

       Product as to which such Person conducts, directly or indirectly, any Product Commercialization         and Development Activities.                (e)  Except  as  set  forth  on  Schedule  6.23(e)  to  the  Disclosure  Letter,  and  without         limiting the generality of any other representation or warranty made by any Loan Party hereunder         or under any other Loan Document: (i) all Products comply in all material respects with (A) all         applicable  Laws  of  the  FDA  and  each  other  applicable  Regulatory  Authority,  whether  U.S.  or         non-U.S. and (B) all Product Authorizations and other Regulatory Authorizations; (ii) no Loan         Party nor any of their respective Subsidiaries nor, to the knowledge of any Loan Party, any of         their  respective  agents,  suppliers,  licensors  or  licensees  have  received  any  inspection  reports,         warning letters or notices or similar documents with respect to any Product from any Regulatory         Authority within the last three (3) years that asserts lack of compliance with any applicable Law         or Regulatory Approvals or other orders, injunctions or decrees; (iii) no Loan Party nor any of         their  respective  Subsidiaries  nor,  to  the  knowledge  of  any  Loan  Party,  any  of  their  respective         agents,  suppliers,  licensors  or  licensees  have  received  any  notification  from  any  Regulatory         Authority within the last three (3) years, asserting that any Product lacks a required Regulatory         Approval or  Product Authorization;  (iv)  there is  no pending  regulatory  action,  investigation  or         inquiry  (other  than  non-material  routine  or  periodic  inspections  or  reviews)  against  any  Loan         Party, any of their respective Subsidiaries or, to the knowledge of any Loan Party, any of their         respective suppliers, licensors or licensees with respect to any Product and, to the knowledge of         any Loan Party, there is no reasonable basis for any adverse regulatory action against such Loan         Party or any of their respective Subsidiaries or, to the knowledge of any Loan Party, any of their         respective suppliers, agents, licensors  or licensees  with  respect to  any  Product and  (v) without         limiting  the  foregoing,  (A)  (1)  there  have  been  no  product  recalls,  safety  alerts,  corrections,         withdrawals, marketing  suspensions  or  removals  conducted, undertaken  or  issued  by any  Loan         Party or any Subsidiary, whether voluntary, at the request, demand or order of any Regulatory         Authority or otherwise, with respect to any Product within the last three (3) years, (2) no such         product  recall,  safety  alert,  correction,  withdrawal,  marketing  suspension  or  removal  has  been         requested, demanded or ordered by any Regulatory Authority within the last three (3) years, and,         to the knowledge of any Loan Party, there is no reasonable basis for the issuance of any such         product recall, safety alert, correction, withdrawal, marketing suspension or removal with respect         to any Product and (B) no criminal, injunctive, seizure, detention or civil penalty action has been         commenced or threatened in writing by any Regulatory Authority within the last three (3) years         with respect to or in connection with any Product, there are no consent decrees (including plea         agreements)  that  relate  to  any  Product  and,  to  the  knowledge  of  each  Loan  Party,  there  is  no         reasonable  basis  for  the  commencement  of  any  criminal  injunctive,  seizure,  detention  or  civil         penalty  action  by  any  Regulatory  Authority  relating  to  any  Product  or  for  the  issuance  of  any         consent decree.  To the knowledge of each Loan Party, no Loan Party nor any of their respective         Subsidiaries nor any of their respective agents, suppliers, licensees or licensors is employing or         utilizing the services of any individual who has been debarred or temporarily suspended under         any applicable Law.                (f)  Neither  any  Loan  Party  nor  any  of  their  respective  Subsidiaries,  nor,  to  the         knowledge of the Loan Parties, any of their respective officers, employees or agents, has made an         untrue statement of a material fact or fraudulent statements to the FDA or any other Regulatory         Authority,  failed  to  disclose  a  material  fact  required  to  be  disclosed  to  the  FDA  or  any  other         Regulatory Authority or committed an act, made a statement or failed to make a statement that, at         the time such disclosure was made (or was not made), could reasonably be expected to provide a         basis for the FDA or any other Regulatory Authority 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) or any similar policy.                                          77  CHAR1\1659840v4 

 

             (g)  The  clinical,  preclinical,  safety  and  other  studies  and  tests  conducted  by  or  on         behalf of or sponsored by any Loan Party or any of their respective Subsidiaries, or in respect of         which any Products or Product candidates under development have participated, were (and if still         pending,  are)  being  conducted  materially  in  accordance  with  standard  medical  and  scientific         research procedures and all applicable Product Authorizations. No Loan Party nor any of their         respective Subsidiaries has received any notices or other correspondence from the FDA or any         other  Regulatory  Authority  requiring  the  termination  or  suspension  of any  clinical,  preclinical,         safety  or  other  studies  or  tests  used  to  support  regulatory  clearance  of,  or  any  Product         Authorization or Regulatory Approval for, any Product.          6.24 Labor Matters.          There are no existing or threatened (in writing) strikes, lockouts or other labor disputes involving   any Loan Party or any Subsidiary that individually or in the aggregate could reasonably be expected to   have a Material Adverse Effect.  Hours worked by and payment made to employees of the Loan Parties   and  their  respective  Subsidiaries  are  not  in  violation  of  the  Fair  Labor  Standards  Act  or  any  other   applicable law, rule or regulation dealing with such matters, except for any such violations as could not   reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect.          6.25 EEA Financial Institutions.          No Loan Party is an EEA Financial Institution.          6.26 Representations as to Foreign Loan Parties.          Each Foreign Loan Party represents and warrants to the Administrative Agent and the Lenders   that:                (a)  Such Foreign Loan Party is subject to civil and commercial Laws with respect to         its obligations under this Agreement and the other Investment Documents to which it is a party         (collectively as to such Foreign Loan Party, the “Applicable Foreign Loan Party Documents” (it         being understood and agreed that the guarantees and security interests provided and granted by         any Belgian Loan Party are limited to those provided and granted in this Agreement, the Belgian         Share  Pledge  Agreement  and  the  Belgian  Receivables  Pledge  Agreement)),  and  the  execution,         delivery  and  performance  by  such  Foreign  Loan  Party  of  the  Applicable  Foreign  Loan  Party         Documents  constitute  and  will  constitute  private  and  commercial  acts  and  not  public  or         governmental acts.  Neither such Foreign Loan Party nor any of its property has any immunity         from  jurisdiction  of  any  court  or  from  any  legal  process  (whether  through  service  or  notice,         attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the         laws of the jurisdiction in which such Foreign Loan Party is organized and existing in respect of         its obligations under the Applicable Foreign Loan Party Documents.                (b)  The Applicable  Foreign  Loan  Party  Documents are in  proper legal form  under         the Laws of the jurisdiction in which such Foreign Loan Party is organized and existing for the         enforcement thereof against such Foreign Loan Party under the Laws of such jurisdiction, and to         ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable         Foreign Loan Party Documents.  It is not necessary to ensure the legality, validity, enforceability,         priority or  admissibility  in  evidence of the  Applicable  Foreign  Loan  Party Documents  that the         Applicable Foreign Loan Party Documents be filed, registered or recorded with, or executed or         notarized before, any court or other authority in the jurisdiction in which such Foreign Loan Party         is organized and existing or that any registration charge or stamp or similar tax be paid on or in                                          78  CHAR1\1659840v4 

 

       respect  of  the  Applicable  Foreign  Loan  Party  Documents  or  any  other  document,  except  for         (i) any such filing, registration, recording, execution or notarization as has been made or is not         required to be made until the Applicable Foreign Loan Party Document or any other document is         sought to be enforced and (ii) any charge or tax as has been timely paid.                (c)  With respect to any Foreign Loan Party that becomes a party to this Agreement         after the Effective Date as contemplated by Section 7.12, there is no tax, levy, impost, duty, fee,         assessment  or  other  governmental  charge,  or  any  deduction  or  withholding,  imposed  by  any         Governmental Authority in or of the jurisdiction in which such Foreign Loan Party is organized         and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Loan         Party Documents or (ii) on any payment to be made by such Foreign Loan Party pursuant to the         Applicable Foreign Loan Party Documents, except as has been disclosed to the Administrative         Agent.                (d)  The execution, delivery and performance of the Applicable Foreign Loan Party         Documents executed by such Foreign Loan Party are, under applicable foreign exchange control         regulations of the jurisdiction in which such Foreign Loan Party is organized and existing, not         subject  to  any  notification  or  authorization  except  (i) such  as  have  been  made  or  obtained  or         (ii) such  as  cannot  be  made  or  obtained  until  a  later  date  (provided  that  any  notification  or         authorization  described  in  clause  (ii) shall  be  made  or  obtained  as  soon  as  is  reasonably         practicable).          6.27 Royalty and Other Payments.          Except as set forth on Schedule 6.27 to the Disclosure Letter, as of the Effective Date, no Loan   Party nor any of their respective Subsidiaries is obligated to pay any royalty, milestone payment, deferred   payment or any other contingent payment in respect of any Product.          6.28 Non-Competes.          Neither the Borrower nor any other Loan Party nor any of their respective Subsidiaries, nor, to the   knowledge of any Loan Party, any of their respective directors, officers or employees, is subject to a non-  compete  agreement  that  prohibits  or  will  interfere  with  any  of  the  Product  Commercialization  and   Development Activities, including the development, commercialization or marketing of any Product.          6.29 Internal Controls.          The  Borrower  acknowledges  that  its  management  is  responsible  for  the  preparation  and  fair   presentation  of  the  financial  statements  of  the  Borrower  and  each  of  its  Subsidiaries  provided  to  the   Administrative Agent or the Lenders pursuant to Sections 7.01 and 7.02, in each case, in accordance with   GAAP.  The  Borrower  has  designed,  implemented  and  maintained  internal  controls  relevant  to  the   preparation and fair presentation of financial statements that are free from material misstatement, whether   due to fraud or error.                                     ARTICLE VII.                               AFFIRMATIVE COVENANTS          On  the  Funding  Date  and  thereafter,  so  long  as  any  Lender  shall  have  any  Commitment   hereunder,  any  Loan  or  other  Obligation  hereunder  shall  remain  unpaid  or  unsatisfied  (other  than                                           79  CHAR1\1659840v4 

 

contingent indemnification obligations for which no claim has been asserted), the Loan Parties shall and  shall cause each Subsidiary to:          7.01 Financial Statements.          Deliver  to  the  Administrative  Agent,  in  form  and  detail  reasonably  satisfactory  to  the   Administrative Agent and the Required Lenders:                (a)  as soon as available, and in any event within one hundred and twenty (120) days         after the end of each fiscal year of the Borrower (or, if earlier, when required to be filed with the         SEC (or foreign equivalent)), a consolidated balance sheet of the Borrower and its Subsidiaries as         at the end of such fiscal year, and the related consolidated statements of income or operations,         changes in shareholders’ equity and cash flows for such fiscal year, setting forth in each case in         comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in         accordance  with  GAAP,  audited  and  accompanied  by  a  report  and  opinion  of  an  independent         certified public accountant of nationally recognized standing acceptable to the Required Lenders,         which  report  and  opinion  shall  be  prepared  in  accordance  with  generally  accepted  auditing         standards and shall not be subject to any “going concern” or like qualification or exception or any         qualification or exception as to the scope of such audit; and                (b)  (i) as soon as available, and in any event within sixty (60) days after the end of         each  of  the  first  three  fiscal  quarters  of  each  fiscal  year  of  the  Borrower  (or,  if  earlier,  when         required  to  be filed  with  the  SEC (or foreign  equivalent)), a  consolidated balance  sheet of the         Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated        statements of income or operations and cash flows for such fiscal quarter and for the portion of         the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures         for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of         the  previous  fiscal  year,  all  in  reasonable  detail  and  certified  by  a  Responsible  Officer  of  the         Borrower as fairly presenting in all material respects the financial condition, results of operations         and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to         normal year-end audit adjustments and the absence of footnotes, and (ii) as soon as available, and         in any event within sixty (60) days after the end of the last fiscal quarter of each fiscal year of the         Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such         fiscal  quarter,  and  the  related  consolidated statements  of  income  or  operations  for  such  fiscal         quarter and for the Borrower’s fiscal year then ended, setting forth in each case in comparative         form the figures for the corresponding fiscal quarter of the previous fiscal year and the previous         fiscal  year,  all  in  reasonable  detail  and  certified  by  a  Responsible  Officer  of  the  Borrower  as         presenting management’s best estimate of the financial condition and results of operations of the         Borrower  and  its  Subsidiaries  in  accordance  with  GAAP,  subject  to  normal  year-end  audit         adjustments and the absence of footnotes.          7.02 Certificates; Other Information.          Deliver  to  the  Administrative  Agent,  in  form  and  detail  reasonably  satisfactory  to  the   Administrative Agent and the Required Lenders:                (a)  concurrently with the delivery of the financial statements referred to in Sections         7.01(a)  and  (b)(i),  (i)  a  duly  completed  Compliance  Certificate  signed  by  a  director,  the  chief         executive officer, chief financial officer, treasurer or controller which is a Responsible Officer of         the  Borrower,  including  (A)  information  regarding  the  amount  and  timing  of  all  Dispositions,         Involuntary Dispositions, Debt Issuances, Extraordinary Receipts and Acquisitions that occurred                                          80  CHAR1\1659840v4 

 

       during the period covered by such Compliance Certificate, (B) a certification as to whether the         Loan Parties and their respective Subsidiaries have performed and observed each covenant and         condition of the Loan Documents applicable to it during the period covered by the Compliance         Certificate (or, if not, a listing of the conditions or covenants that have not been performed or         observed and the nature and status of each such Default), (C) a certification of compliance with         the financial covenants set forth in Sections 8.16 and 8.17, including financial covenant analyses         and  calculation  for  the  period  covered  by  the  Compliance  Certificate,  (D)  a  listing  of  (I)  all         applications by any Loan Party, if any, for Copyrights, Patents or Trademarks made since the date         of  the  prior  certificate  (or,  in  the  case  of  the  first  such  certificate,  the  Effective  Date),  (II)  all         issuances  of  registrations  or  letters  on  existing  applications  by  any  Loan  Party  or  any  of  their         Subsidiaries  for  Copyrights,  Patents  and  Trademarks  received  since  the  date  of  the  prior         certificate (or, in the case of the first such certificate, the Effective Date), (III) all licenses of any         IP  Rights  (other than  non-exclusive licenses  permitted  by  Section 8.05  granted in the  ordinary         course of business) entered into by any Loan Party or any of their Subsidiaries since the date of         the prior certificate (or, in the case of the first such certificate, the Effective Date) and (IV) such         supplements  to  Schedules  6.17(a),  6.17(b),  6.17(d),  6.17(e)  and  6.22,  in  each  case,  to  the         Disclosure Letter as are necessary to cause such schedules to be true and complete as of the date         of  such  certificate,  (E)  the  insurance  binder  or  other  evidence  of  insurance  for  any  insurance         coverage of any Loan Party or any Subsidiary that was renewed, replaced or modified during the         period covered by such financial statements, (F) information regarding the deposit accounts and         other bank accounts and securities accounts of the Loan Parties and their Subsidiaries as of the         end  of  the  period  covered  by  such  Compliance  Certificate  and  (G)  information  regarding  all         Investments made by the Loan Parties and their Subsidiaries pursuant to Sections 8.02(c)(ii) as of         the  end  of  the  period  covered  by  such  Compliance  Certificate,  (ii)  a  copy  of  management’s         discussion  and  analysis  with  respect  to  such  financial  statements,  (iii)  a  list  of  all  litigations,         arbitrations  or  governmental  investigations  or  proceedings  which  were  instituted  during  the         period covered by such financial statements or which, to the knowledge of any Loan Party, are         threatened  (in  writing)  against  any  Loan  Party  or  any  Subsidiary  which,  in  any  case,  could         reasonably be expected to result in losses and/or expenses (other than, for the avoidance of doubt,         legal  and  court  fees,  costs  and  expenses)  in  excess  of  the  Threshold  Amount,  together  with  a         description setting forth the details thereof and stating what action the applicable Loan Party or         Subsidiary has taken and proposes to take with respect thereto and (iv) information regarding, in         each case, to the extent occurring during the period covered by such financial statements, (A) the         termination of any Material Contract, (B) the receipt by any Loan Party or any of its Subsidiaries         of  any  notice  under  any  Material  Contract  (and  a  copy  thereof)  as  to  the  occurrence  of  any         material  breach  or  default  under  or  pursuant  to  such  Material  Contract  that  could  result  in         termination  thereof  or  a  material  liability  in  respect  thereof,  (C)  the  entering  into  of  any  new         Material  Contract  by  a  Loan  Party  or  any  of  its  Subsidiaries  (and  a  copy  thereof)  or  (D)  any         material amendment to a Material Contract (and a copy thereof);                (b)  as soon as available, and in any event within forty-five (45) days after the end of         each fiscal year of the Borrower, (i) the annual budget (or equivalent) and forecast (or equivalent)         of the Borrower and its Subsidiaries, on a consolidated basis, approved by the Board of Directors         of  the  Borrower  for  the  then  current  fiscal  year  and  forecast  period  as  then  prepared  by  the         Borrower,  in  each  case  together  with  such  supporting  materials  as  are  required  by  the         Administrative  Agent  and  in  form  reasonably  satisfactory  to  the  Administrative  Agent,         comprising the balance sheets, statements of income or operations and statements of cash flows         of the Borrower and its Subsidiaries on a quarterly basis for the then current fiscal year and on an         annual  basis  for  the  forecast  period  and  (ii)  a  certificate  of  the  chief  financial  officer  of  the         Borrower certifying that (A) such budget and forecast were prepared by the Borrower in good         faith, (B) the Borrower had at the time of preparation of the budget and forecast, and at all times                                          81  CHAR1\1659840v4 

 

       thereafter (including on and as of the date of delivery to the Administrative Agent of such budget         and forecast) has continued to have, a reasonable basis for all of the assumptions contained in         such budget and forecast and (C) such budget and forecast were prepared in accordance with, and         based upon, such assumptions;                (c)  promptly after the same are available, (i) copies of each annual report, proxy or         financial statement or other report or communication sent to the equityholders of any Loan Party,         (ii) copies of all annual, regular, periodic and special reports and registration statements which a         Loan  Party  may  file  or  be  required  to  file  with  the  SEC  under  Section  13  or  15(d)  of  the         Securities  Exchange  Act  of  1934,  and  not  otherwise  required  to  be  delivered  to  the         Administrative Agent pursuant hereto and (iii) copies of each Form S-1 Registration Statement         filed with the SEC (together with all exhibits and amendments thereto) and all related material         correspondence with the SEC;                (d)  as soon as available, copies of any detailed audit reports or management letters or         recommendations  submitted  to the  Board of  Directors  (or the  audit  committee of the  Board  of         Directors) of the Borrower or any Subsidiary by independent accountants in connection with the         accounts or books of the Borrower or any Subsidiary, or any audit of any of them;                (e)  as soon as available, and in any event within seven (7) Business Days of delivery         to the Board of Directors of the Borrower (or any committee of such Board of Directors), copies         of  all  statements,  reports  and  notices  (including  board  kits)  made  available  to  the  Borrower’s         Board  of  Directors  or  the holders  of  the  Borrower’s  Equity  Interests;  provided,  that,  any  such         material may be redacted by the Borrower to exclude information relating to the Administrative         Agent or the Lenders (including the Borrower’s strategy regarding the Loans) or material that is         subject to attorney-client privilege or contractual confidentiality obligations with third parties;                (f)  promptly after the furnishing thereof, copies of any statement or report furnished         to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms         of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to         the Lenders pursuant to Section 7.01 or any other clause of this Section 7.02;                (g)  promptly, and in any event within five (5) Business Days after receipt thereof by         any  Loan  Party  or  any  Subsidiary  thereof,  (i)  copies  of  each  notice  or  other  correspondence         received  from  the  SEC  (or  comparable  agency  in  any  applicable  non-U.S.  jurisdiction)         concerning any investigation or possible investigation or other inquiry by such agency regarding         financial or other operational results of any Loan Party or any Subsidiary thereof and (ii) copies         of  any  material  written  correspondence  or  any  other  material  written  communication  from  the         FDA or any other regulatory body;                (h)  as soon as practicable, and in any event not later than the last Business Day of         each  month,  copies  of  the  most  recent  monthly  statements  for  each  deposit  account  and  other         bank account or securities account of each Loan Party;                 (i)   promptly after the same are released, copies of all press releases; and                (j)   promptly,  such  additional  information  regarding  the  business,  financial  or         corporate  affairs  of  any  Loan  Party  or  any  Subsidiary,  or  compliance  with  the  terms  of  the         Investment  Documents,  as  the  Administrative  Agent  or  any  Lender  may  from  time  to  time         request.                                           82  CHAR1\1659840v4 

 

      Documents required to be delivered pursuant to Section 7.01 or Section 7.02 may be delivered   electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the   Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at   the  website  address  listed  on  Schedule  11.02  or  (ii)  on  which  such  documents  are  posted  on  the   Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative   Agent  have  access  (whether  a  commercial,  third-party  website  or  whether  sponsored  by  the   Administrative Agent); provided, that: (x) the Borrower shall deliver paper copies of such documents to   the Administrative Agent or any Lender upon its request to the Borrower to deliver such paper copies   until  a  written  request  to  cease  delivering  paper  copies  is  given  by  the  Administrative  Agent  or  such   Lender  and  (y)  the  Borrower  shall  notify  the  Administrative  Agent  and  each  Lender  (by  facsimile  or   electronic  mail)  of  the  posting  of  any  such  documents  and  provide  to  the  Administrative  Agent  by   electronic mail electronic versions (i.e., soft copies) of such documents.  The Administrative Agent shall   have no obligation to request the delivery of or to maintain paper copies of the documents referred to   above, and  in  any  event  shall  have no responsibility  to  monitor  compliance  by the  Borrower  with  any   such request for delivery by a Lender, and each Lender shall be solely responsible for requesting delivery   to it or maintaining its copies of such documents.          The Borrower hereby acknowledges that certain of the Lenders (each, a “Public Lender”) may   have personnel who do not wish to receive material non-public information with respect to the Borrower   or  its  Affiliates,  or  the  respective  securities  of  any  of  the  foregoing,  and  who  may  be  engaged  in   investment  and  other  market-related  activities  with  respect  to  such  Persons’  securities.   The  Borrower   hereby  agrees  that  (1)  it  will  in  good  faith  identify  that  portion  of  the  materials  and/or  information   provided  by,  or  to  be  provided  by,  or  on  behalf  of  the  Borrower  hereunder  that  does  not  constitute   material non-public information with respect to the Borrower or its Affiliates or their respective securities   (the “Public Materials”) and (2) it will clearly and conspicuously mark all Public Materials “PUBLIC”   which,  at  a minimum,  shall mean  that  the word  “PUBLIC”  shall appear prominently on  the first page   thereof  (it  being  understood  that  by  marking  Public  Materials  “PUBLIC,”  the  Loan  Parties  shall  be   deemed to have authorized the Administrative Agent, any Affiliate thereof and the Lenders to treat such   Public Materials as not containing any material non-public information (although it may be sensitive and   proprietary) with respect to the Borrower or its securities for purposes of United States federal and state   securities laws (or any foreign equivalent) (provided, however, that, to the extent such Public Materials   constitute Information, they shall be treated as set forth in Section 11.07)).          7.03 Notices.                (a)  Promptly  (and  in  any  event,  within  two  (2)  Business  Days)  notify  the         Administrative Agent and each Lender of the occurrence of any Default.                (b)  Promptly  (and  in  any  event,  within  five  (5)  Business  Days)  notify  the         Administrative  Agent  and  each  Lender  of  any  matter  that  has  resulted  or  could  reasonably  be         expected to result in a Material Adverse Effect.                (c)  Promptly  (and  in  any  event,  within  five  (5)  Business  Days)  notify  the         Administrative Agent and each Lender of the occurrence of any ERISA Event.                (d)  Promptly  (and  in  any  event,  within  five  (5)  Business  Days)  notify  the         Administrative Agent and each Lender of any material change in accounting policies or financial         reporting practices by the Borrower or any Subsidiary.                                           83  CHAR1\1659840v4 

 

             (e)  Promptly  (and  in  any  event,  within  two  (2)  Business  Days)  notify  the         Administrative Agent and each Lender of the occurrence of any default or event of default under         any Permitted Senior Revolving Credit Document.                (f)  Promptly  (and  in  any  event,  within  five  (5)  Business  Days)  notify  the         Administrative Agent and each Lender of any litigation, arbitration or governmental investigation         or proceeding not previously disclosed by the Loan Parties which has been instituted or, to the         knowledge of any Loan Party, is threatened (in writing) against any Loan Party or any Subsidiary         or to which any of the properties of any thereof is subject which could reasonably be expected to         result in losses and/or expenses in excess of the Threshold Amount.                (g)  Promptly  (and  in  any  event,  within  five  (5)  Business  Days)  notify  the         Administrative  Agent  and  each  Lender  of  any  material  licensing  agreement  or  similar         arrangement entered into by any Loan Party or any of its Subsidiaries following such Loan Party         or such Subsidiary receiving a written claim from the party to such license agreement alleging         infringement of the IP Rights of another Person.          Each notice pursuant to clauses (a) through (g) of this Section 7.03 shall be accompanied by a   statement  of  a  Responsible  Officer  of  the  Borrower  setting  forth  details  of  the  occurrence  referred  to   therein  and  stating  what  action  the applicable  Loan  Party  has  taken  and  proposes  to  take  with  respect   thereto.  Each notice pursuant to Section 7.03(a) shall describe with particularity any and all provisions of   this Agreement and any other Investment Document that have been breached.          7.04 Payment of Obligations.          Pay and discharge, as the same shall become due and payable, all its obligations and liabilities,   including (a) all income and other material tax liabilities, assessments and governmental charges or levies   upon  it  or  its  properties  or  assets,  unless  the  same  are  being  contested  in  good  faith  by  appropriate   proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained   by the Loan Party or such Subsidiary, (b) all lawful claims which, if unpaid, would by law become a Lien   upon its property (other than Permitted Liens) and (c) all Indebtedness, as and when due and payable, but   subject  to  any  subordination  provisions  contained  in  any  instrument  or  agreement  evidencing  such   Indebtedness.          7.05 Preservation of Existence, Etc.                (a)  Preserve, renew and maintain in full force and effect its legal existence under the         Laws of the jurisdiction of its organization except in a transaction permitted by Section 8.04 or         Section 8.05.                (b)  Preserve, renew and maintain in full force and effect its good standing under the         Laws  of  the jurisdiction  of  its  organization, except  to the  extent the  failure  to do  so could  not         reasonably be expected to have a Material Adverse Effect.                (c)  Take  all  commercially  reasonable  action  to  maintain  all  rights,  privileges,         permits,  licenses  and  franchises  necessary  or  desirable  in  the  normal  conduct  of  its  business,         except to the extent that the failure to do so could not reasonably be expected to have a Material         Adverse Effect.                                           84  CHAR1\1659840v4 

 

       7.06 Maintenance of Properties.                (a)  Maintain,  preserve  and  protect  all  of  its  material  properties  and  equipment         necessary in the operation of its business in good working order and condition, ordinary wear and         tear excepted.                (b)  Make all necessary repairs thereto and renewals and replacements thereof, except         where  the  failure  to  do  so  could  not,  either  individually  or  in  the  aggregate,  reasonably  be         expected to have a Material Adverse Effect.                (c)  Use the standard of care typical in the industry in the operation and maintenance         of its facilities.          7.07 Maintenance of Insurance.                (a)  Maintain with financially sound and reputable insurance companies that are not         Affiliates  of  any  Loan  Party  or  any  Subsidiary  insurance  with  respect  to  its  properties  and         business against loss or damage of the kinds customarily insured against by Persons engaged in         the same or similar business, of such types and in such amounts as are customarily carried under         similar circumstances by such other Persons.                (b)  Without limiting the foregoing, (i) maintain, if available, fully paid flood hazard         insurance on all real property that is located in a special flood hazard area and that constitutes         Collateral,  on  such  terms  and  in  such  amounts  as  required  by  The  National  Flood  Insurance         Reform  Act  of  1994  or  as  otherwise  required  by  the  Administrative  Agent,  (ii)  furnish  to  the         Administrative Agent evidence of the renewal (and payment of renewal premiums therefor) of all         such policies prior to the expiration or lapse thereof and (iii) furnish to the Administrative Agent         prompt written notice of any redesignation of any such improved real property into or out of a         special flood hazard area.                (c)  Cause the Administrative Agent and its successors and/or assigns to be named as         lender’s loss payee or mortgagee as its interest may appear, and/or additional insured with respect         to any such insurance providing liability coverage or coverage in respect of any Collateral, and         cause each provider or broker of any such insurance to agree, by endorsement upon the policy or         policies issued by it or by independent instruments furnished to the Administrative Agent, that it         will  give  the  Administrative  Agent  fourteen  (14)  days  (or  such  lesser  amount  as  the         Administrative Agent may agree) prior written notice before any such policy or policies shall be         altered or canceled.          7.08 Compliance with Laws.          Comply  with  the  requirements  of  all  Laws  and  all  orders,  writs,  injunctions  and  decrees   applicable to it or to its business or property, except in such instances in which (a) such requirement of   Law  or  order,  writ,  injunction  or  decree  is  being  contested  in  good  faith  by  appropriate  proceedings   diligently  conducted  or  (b)  the  failure  to  comply  therewith  could  not  reasonably  be  expected,  either   individually or in the aggregate, to have a Material Adverse Effect.          7.09 Books and Records.                (a)  Maintain  proper  books  of  record  and  account  in  a  manner  to  allow  financial         statements to be prepared in accordance with GAAP consistently applied in respect of all material                                          85  CHAR1\1659840v4 

 

       financial  transactions  and  matters  involving  the  assets  and  business  of  such  Loan  Party  or         Subsidiary, as the case may be.                (b)  Maintain  such  books  of  record  and  account  in  material  conformity  with  all         applicable requirements of any Governmental Authority having regulatory jurisdiction over such         Loan Party or such Subsidiary, as the case may be.          7.10 Inspection Rights.                (a)  Permit  representatives and independent contractors of the Administrative Agent         and each Lender, all at the expense of the Loan Parties: (i) to meet on a regular or other basis with         any and all officers and employees of the Loan Parties and their respective Subsidiaries from time         to  time  and  upon  reasonable  advance  notice  to  the  applicable  Loan  Party  or  the  applicable         Subsidiary  and  during  normal  business  hours  for  the  purpose  of  consulting  with,  rendering         advice, recommendations and assistance to, and influencing the management of the Loan Parties         or  their  respective  Subsidiaries  or  obtaining  information  regarding  the  Loan  Parties’  or  any  of         their respective Subsidiaries’ operations, activities and prospects and expressing its views thereon         and (ii) to access the premises and inspect the books, records and properties of the Loan Parties         and their respective Subsidiaries upon reasonable advance notice to the Loan Parties and during         normal  business  hours;  provided,  that,  excluding  any  such  visits  and  inspections  during  the         continuation of an Event of Default, only one such visit and inspection per year shall be at the         Loan Parties’ expense (and only the Administrative Agent may exercise rights under this Section         7.10(a)); provided, further, that, when an Event of Default exists the Administrative Agent and         the Lenders (or any of their respective representatives or independent contractors) may do any of         the foregoing at the expense of the Loan Parties at any time during normal business hours and         without advance notice.                (b)  Consider, in good faith, the recommendations of the Administrative Agent and         the Lenders or their respective designated representatives in connection with the matters on which         they are consulted as described in clause (a) above, recognizing that the ultimate discretion with         respect to all such matters shall be retained by the Loan Parties.          7.11 Use of Proceeds.                (a)  Use the proceeds of the Term A Loans (i) to repay existing indebtedness on the         Funding  Date,  (ii)  for  investment  in  clinical  development  programs  and  the  expansion  of         commercial activities and (iii) for other general corporate purposes; provided, that, in no event         shall the proceeds of the Term A Loans be used in contravention of any Law or of any Investment         Document.                (b)  Use the proceeds of the Term B-1 Loans, Term B-2 Loans, the Term B-3 Loans,         Term B-4 Loans and Term C Loans (i) for investment in clinical development programs and the         expansion of commercial activities and (ii) for other general corporate purposes; provided, that, in         no event shall the proceeds of the Term B-1 Loans, Term B-2 Loans, Term B-3 Loans, Term B-4         Loans or Term C Loans be used in contravention of any Law or of any Investment Document.          7.12 Additional Subsidiaries.                (a)  Within thirty (30) days after the acquisition or formation of any Subsidiary (or         such  later  date  as  the  Administrative  Agent  may  agree  in  its  sole  discretion),  notify  the         Administrative  Agent  thereof  in  writing,  together  with  the  (i)  jurisdiction  of  organization  (or                                          86  CHAR1\1659840v4 

 

       foreign  equivalent),  (ii)  number  of  shares  of  each  class  of  Equity  Interests  outstanding,  (iii)         number and percentage of outstanding shares of each class owned (directly or indirectly) by any         Loan  Party  or  any  Subsidiary,  (iv)  number  and  effect,  if  exercised,  of  all  outstanding  options,         warrants, rights of conversion or purchase and all other similar rights with respect thereto and (v)         identification as to whether such Subsidiary is an Excluded Subsidiary; and                (b)  Within sixty (60) days (or such later date as the Administrative Agent may agree         in  its  sole  discretion)  after  (i)  the  acquisition  or  formation  of  any  Subsidiary  (other  than  any         Excluded  Subsidiary)  or  (ii)  the  date  on  which  any  Subsidiary  that  was  formerly  an  Excluded         Subsidiary ceases to be an Excluded Subsidiary, in each case, cause such Person to (A) become a         Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement or such         other documents as the Administrative Agent shall reasonably request for such purpose and (B)         deliver to the Administrative Agent documents of the types referred to in Sections 5.02(f) and (g)         and  favorable  opinions  of  counsel  to  such  Person  (which  shall  cover,  among  other  things,  the         legality,  validity,  binding  effect  and  enforceability  of  the  documentation  referred  to  in  clause         (A)), all in form, content and scope reasonably satisfactory to the Administrative Agent.                (c)  on the Funding Date, cause each Subsidiary (other than any Excluded Subsidiary)         that was formed or acquired after the Effective Date but prior to the Funding Date to (i) become a         Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement or such         other documents as the Administrative Agent shall reasonably request for such purpose and (ii)         deliver to the Administrative Agent documents of the types referred to in Sections 5.02(f) and (g)         and  favorable  opinions  of  counsel  to  such  Person  (which  shall  cover,  among  other  things,  the         legality, validity, binding effect and enforceability of the documentation referred to in clause (i)),         all in form, content and scope reasonably satisfactory to the Administrative Agent.          7.13 ERISA Compliance.          Do, and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each Plan in   compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code   and other federal or state law, (b) cause each Plan that is qualified under Section 401(a) of the Internal   Revenue Code to maintain such qualification, and (c) make any required contributions to any Plan subject   to Section 412, Section 430 or Section 431 of the Internal Revenue Code.          7.14 Pledged Assets.                (a)  Equity Interests.  Cause 100% of the issued and outstanding Equity Interests of         each  Subsidiary  directly  owned  by  a  Loan  Party  to  be  subject  at  all  times  to  a  first  priority,         perfected  Lien  in  favor  of  the  Administrative  Agent,  for  the  benefit  of  the  Secured  Parties,         pursuant  to  the  terms  and  conditions  of  the  Collateral  Documents,  together  with  opinions  of         counsel and any filings and deliveries necessary in connection therewith to perfect the security         interests  therein,  all  in  form  and  substance  satisfactory  to  the  Administrative  Agent.   It  is         understood and agreed that the Loan Parties shall have thirty (30) days after the acquisition of any         Foreign  Subsidiary  after  the  Funding Date to  comply  with  this  Section  7.14(a) with  respect to         such Loan Party’s pledge of its Equity Interests in such Foreign Subsidiary.                (b)  Other  Property.   (i)  Cause  all  property  (other  than  Excluded  Property) of  each         Loan Party to be subject at all times to first priority perfected Liens, which Liens are superior in         right to any other Person (subject to Permitted Liens) (and, in the case of owned real property,         title insured Liens), in each case, in favor of the Administrative Agent to secure the Obligations         pursuant to the Collateral Documents (and subject to the terms and conditions of the Collateral                                          87  CHAR1\1659840v4 

 

       Documents) or, with respect to any such property acquired subsequent to the Funding Date, such         other additional security documents as the Administrative Agent shall request and, in connection         with  the  foregoing,  deliver  to  the  Administrative  Agent  such  other  documentation  as  the         Administrative  Agent  may  request  including  filings  and  deliveries  necessary  to  perfect  such         Liens,  Organization  Documents,  resolutions,  Real  Property  Security  Documents  and  favorable         opinions of counsel to such Person, all in form, content and scope reasonably satisfactory to the         Administrative Agent; and (ii) use commercially reasonable efforts to obtain and deliver to the         Administrative Agent Collateral Access Agreements with respect to leased real property to the         extent required by this Agreement and the Collateral Documents.                (c)  Material  Contracts.   Ensure,  and  cause  each  of  their  respective  Subsidiaries  to         ensure, that at all times the exercise of the rights of the Administrative Agent or any Lender under         any Loan Document (including the realization, sale or assignment by the Administrative Agent or         a Lender of any Equity Interests in any Subsidiary directly owned by such Loan Party) would not         conflict  with  (i)  any  Material  Contract  to  which  any  Loan  Party  or  any  of  its  respective         Subsidiaries is a party or which is binding upon such Loan Party or such Subsidiary or any of         such Loan Party’s or such Subsidiary’s assets or (ii) any Loan Party’s Organization Documents.          7.15 Compliance with Material Contracts.          Comply in all respects with each Material Contract of such Person except where the failure to   comply,  either  individually  or  in  the  aggregate,  could  not  reasonably  be  expected  to  have  a  Material   Adverse Effect.          7.16 Maintenance of Regulatory Approvals, Contracts, IP Rights, Etc.          Each  Loan  Party  will,  and  will  cause  each  of  its  Subsidiaries  (to  the  extent  applicable)  to,  (a)   maintain  in  full  force  and  effect  all  Regulatory  Approvals  (including  the  Product  Authorizations),   contracts, or other rights necessary for the operations of such Loan Party’s or such Subsidiary’s business,   as  the  case  may  be,  including  in  respect  of  all  related  Product  Commercialization  and  Development   Activities, (b) promptly after any Loan Party has knowledge thereof, notify the Administrative Agent of   any product recalls, safety alerts, corrections, withdrawals, marketing suspensions or removals conducted,   to  be  undertaken  or  issued  by  such  Loan  Party,  any  of  their  respective  Subsidiaries  or  any  of  their   respective  agents,  suppliers,  licensors  or  licensees,  as  the  case  may  be,  whether  voluntary  or  at  the   request, demand or order of any Regulatory Authority or otherwise with respect to any Product, or the   occurrence of any act, event or omission that is reasonably likely to result in the undertaking or issuing of   any such action or item, (c) maintain in full force and effect, and pay all costs and expenses relating to (i)   all Material Contracts, (ii) all IP Rights owned or controlled by such Loan Party or any such Subsidiary   that  is  related  to  any  Product  or  Product  Commercialization  and  Development  Activities  or  otherwise   useful  in  or  material,  either  individually  or  in  the  aggregate,  to  the  business  of  any  Loan  Party  or   Subsidiary and (iii) all Product Assets owned or controlled by such Loan Party or any Subsidiary that are   used  in  or  necessary  for  related  Product  Commercialization  and  Development  Activities,  (d)  promptly   after  learning  thereof,  notify  the  Administrative  Agent  of  any  infringement  or  other  violation  by  any   Person  of  such  Loan  Party’s  or  any  of  its  Subsidiaries’  IP  Rights,  and  diligently  pursue  any  such   infringement or other violation, except in any specific circumstance where both (i) the Loan Parties are   able to demonstrate that it is not commercially reasonable to do so and (ii) where not doing so does not   materially  adversely  affect  any  Product or  the  Product  Commercialization  and  Development  Activities   related to such Product, (e) use commercially reasonable efforts to pursue and maintain in full force and   effect legal  protection for all  new IP  Rights  developed  or  controlled  by  such Loan  Party  or  any of  its   Subsidiaries,  as  the  case  may  be,  that  is  related  to  any  Product  or  Product  Commercialization  and   Development Activities or otherwise useful in or material, either individually or in the aggregate, to the                                          88  CHAR1\1659840v4 

 

 business  of  any  Loan  Party  or  Subsidiary  and  (f)  promptly  after  learning  thereof,  notify  the   Administrative  Agent  of  any  claim  by  any  Person  that  such  Loan  Party  or  any  of  its  Subsidiaries,   including in connection with any Product Commercialization and Development Activities, has infringed   upon any IP Rights of such Person.          7.17 Anti-Corruption Laws.          Conduct its business in compliance in all material respects with the United States Foreign Corrupt   Practices  Act  of  1977,  the  UK  Bribery  Act  2010  and  other  similar  anti-corruption  legislation  in  other   jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such   laws.          7.18 Cash Management.                (a)  Maintain all deposit accounts (including, without limitation, the Specified Deposit         Account),  disbursement  accounts,  securities  accounts,  investment  accounts  (and  other  similar         accounts) and lockboxes located in the United States or the British Virgin Islands, in each case,         with a bank or financial institution that is acceptable to the Administrative Agent and ensure that         each  such account or lockbox is subject to a  Qualifying  Control  Agreement (each such  deposit         account,  disbursement  account,  securities  account,  investment  account  (or  similar  account)  and         lockbox (a “Controlled Account”)), with all cash, checks and other similar items of payment in         such  account  or  lockbox  securing  payment  of  the  Obligations  and  such  Loan  Party  shall  have         granted  a  Lien  to  the  Administrative  Agent,  for  the  benefit  of  the  Secured  Parties,  over  such         Controlled Accounts;                (b)  Deposit promptly (and in any event no later than five (5) Business Days) all cash,         checks,  drafts  or  other  similar  items  of  payment  relating  to  or  constituting  payments  made  in         respect of any and all accounts and other rights and interests of each BVI Loan Party and each         U.S. Loan Party (including pursuant to clause (c) below) into Controlled Accounts;                (c)  To the extent that any Loan Party or any Subsidiary holds cash on hand (other         than cash maintained in a Controlled Account) in excess of (i) $5,000,000 on an individual basis         for each such Person or (ii) $10,000,000 in the aggregate when taken together with all other Loan         Parties and Subsidiaries, in each case, such excess amount shall, within five (5) Business Days be         (x)  deposited  into  a  Controlled  Account  or  (y)  in  the  case  of  Establishment  Labs  Sociedad         Anonima, deposited into the Specified Deposit Account, in each case, in compliance with clauses         (a) and (b) above; and                (d)  At  any  time  after  the  occurrence  and  during  the  continuance  of  an  Event  of         Default, at the request of the Administrative Agent, cause all payments constituting proceeds of         accounts of each BVI Loan Party, each U.S. Loan Party and each Costa Rican Loan Party to be         directed into lockbox accounts that are subject to Qualifying Control Agreements.          7.19 Post-Closing Obligations.                (a)  Within five (5) Business Days of the Funding Date (or such longer period of time         as may be agreed to by the Administrative Agent in its sole discretion), arrange for the filing of the         particulars  of  a  cessation  of  (i)  that  certain  charge  in  respect  of  the  property  of  the  Borrower         registered  on  September  29,  2016  with  identification  number  MTE6TZ  and  Perceptive  Credit         Holdings, LP as the trustee and (ii) that certain charge in respect of the property of the Borrower         registered on September 14, 2015 with identification number VPHPR3 and CPH TU, LP as the                                          89  CHAR1\1659840v4 

 

      chargee,  in  each  case  with  the  registrar  of  corporate  affairs  in  the  British  Virgin  Islands  in        accordance with section 165 of the BVI Business Companies Act, 2004.                (b)  Within  the  time  periods  set  forth  therefor  on  Schedule  7.19  (or  such  longer         periods of time as may be agreed to by the Administrative Agent in its sole discretion), deliver to         the  Administrative  Agent  such  other  documents,  instruments,  certificates  or  agreements  as  are         listed on Schedule 7.19 or take such other actions as are described on Schedule 7.19, in each case         in form and substance reasonably satisfactory to the Administrative Agent.          7.20 Compliance with Securities Laws.          Comply in all material respects with the Securities Act and the Exchange Act.                                     ARTICLE VIII.                                NEGATIVE COVENANTS          On  the  Funding  Date  and  thereafter,  so  long  as  any  Lender  shall  have  any  Commitment   hereunder, any Loan or other Obligation (other than contingent indemnification obligations for which no   claim has been asserted) hereunder shall remain unpaid or unsatisfied, no Loan Party shall, nor shall it   permit any Subsidiary to, directly or indirectly:          8.01 Liens.          Create,  incur, assume  or  suffer  to  exist any  Lien  upon  any  of  its  property,  assets  or  revenues,   whether now owned or hereafter acquired, other than the following:                (a)  Liens pursuant to any Loan Document;                (b)  Liens existing on the Effective Date and listed on Schedule 8.01 to the Disclosure         Letter;                (c)  Liens  (other  than  any  Liens  imposed  under  ERISA)  for  taxes,  assessments  or         governmental charges  or levies not  yet  due  or  which are being  contested in  good faith  and  by         appropriate  proceedings  diligently  conducted,  if  adequate  reserves  with  respect  thereto  are         maintained on the books of the applicable Person in accordance with GAAP;                (d)  statutory  Liens  of  landlords  and  Liens  of  carriers,  warehousemen,  mechanics,         materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations         or retentions of title arising in the ordinary course of business; provided, that, such Liens secure         only amounts not yet due and payable or, if due and payable, are unfiled and no other action has         been taken to enforce the same or are being contested in good faith by appropriate proceedings         for which adequate reserves determined in accordance with GAAP have been established;                (e)  pledges  or  deposits  in  the  ordinary  course  of  business  in  connection  with         workers’ compensation, unemployment insurance and other social security legislation, other than         any Lien imposed by ERISA;                (f)  deposits to secure the performance of bids, trade contracts and leases (other than         Indebtedness),  statutory  obligations,  surety  and  appeal  bonds,  performance  bonds  and  other         obligations of a like nature incurred in the ordinary course of business;                                          90  CHAR1\1659840v4 

 

             (g)  easements, rights-of-way,  restrictions and  other  similar  encumbrances affecting         real property which, in the aggregate, are not substantial in amount, and which do not in any case         materially detract from the value of the property subject thereto or materially interfere with the         ordinary conduct of the business of the applicable Person;                (h)  Liens securing judgments for the payment of money (or appeal or other surety         bonds relating to such judgments) not constituting an Event of Default under Section 9.01(h);                (i)   Liens securing Indebtedness permitted under Section 8.03(e); provided, that: (i)         such Liens do not at any time encumber any property other than the property financed by such         Indebtedness,  (ii)  the  Indebtedness  secured  thereby  does  not  exceed  the  cost  of  acquiring,         purchasing, constructing or improving such property (negotiated on an arm’s length basis) and         (iii) such Liens attach to such property concurrently with or within one hundred eighty (180) days         after the acquisition thereof (or, in the case of any such property owned by such Loan Party or         such Subsidiary as of the Effective Date, within one hundred eighty (180) days of the Effective         Date);                (j)   licenses,  sublicenses,  leases  or  subleases  (other  than  relating  to  intellectual         property)  granted  to  others  in  the  ordinary  course  of  business  not  interfering  in  any  material         respect with the business of any Loan Party or any Subsidiary;                (k)  bankers’ liens, rights of setoff and similar Liens incurred on deposits made in the         ordinary course of business;                (l)   Liens  of  a  Permitted  Senior  Revolving  Credit  Lender  on  Permitted  Senior         Revolving  Credit  Priority  Collateral  securing  only  the  Permitted  Senior  Revolving  Credit         Indebtedness  owing  to  such  Permitted  Senior  Revolving  Credit  Lender,  subject  to  compliance         with  the  terms  and  provisions  of  Section  8.03(g)  and  the  definition  of  “Permitted  Senior         Revolving Credit Indebtedness”;                 (m)   solely  until  the  Funding  Date,  Liens  securing  Indebtedness  under  the  Existing         Credit Agreement;                (n)  Liens  on  fee  owned  real  property  of  the  Loan  Parties  securing  Indebtedness         permitted by Section 8.03(h);                (o)  any Lien existing on any property or asset prior to the acquisition thereof by the         Borrower or any Subsidiary after the Effective Date or existing on any property or asset prior to         the merger, consolidation or becoming a Subsidiary of any Person that is merged or consolidated         with or into the Borrower or any of its Subsidiaries after the Effective Date or that becomes a         Subsidiary after the Effective Date; provided, that, (i) such Lien is not created in contemplation of         or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be,         (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary         (other than improvements, accessions, proceeds, dividends or distributions in respect thereof and         assets fixed or appurtenant thereto) and (iii) such Lien shall secure only those obligations which it         secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case         may be;                (p)  Liens in favor of a seller solely on any cash earnest money deposits made by the         Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement         with respect to any Permitted Acquisition or other Investment permitted hereunder;                                          91  CHAR1\1659840v4 

 

             (q)  (i)  Liens  of  a  collection  bank  arising  under  Section  4-210  of  the  Uniform         Commercial Code on items in the course of collection and (ii) Liens securing cash management         obligations  and  any  obligations  under  cash  management  agreements  (in  each  case, that  do  not         constitute Indebtedness) in the ordinary course of business;                (r)  licenses  and  sublicenses  of  intellectual  property  permitted  by  Section  8.19(b);         and                (s)   additional  Liens  incurred  by  the  Borrower  and  its  Subsidiaries  so  long  as  the         aggregate outstanding principal amount of Indebtedness and other obligations secured thereby do         not exceed $1,000,000 at any time.          Notwithstanding anything to the contrary in this Section 8.01, no Lien permitted under clauses (b)   through (q), or clause (s) shall apply to any Material IP Rights.          8.02 Investments.          Make any Investments, except:                (a)  Investments  held  by  any  Loan  Party  or  any  Subsidiary  in  the  form  of  cash  or         Cash Equivalents;                (b)  Investments existing as of the Effective Date and set forth in Schedule 8.02 to the         Disclosure Letter;                (c)  (i) Investments by Loan Parties in any Person that is a Qualified Loan Party prior         to giving effect to such Investment, (ii) Investments by (A) Loan Parties (that are not Brazilian         Loan  Parties)  in  Brazilian  Loan  Parties,  in  an  aggregate  amount  not  to  exceed  $25,000,000         (provided, that, such amount shall increase by $0.25 for each $1.00 of cash and Cash Equivalents         received  by  the  Borrower  from  the  issuance  of  its  Qualified  Equity  Interests  (other  than  in         connection with any Specified Cure Contribution) on or after July 1, 2018 (so long as such cash         and Cash Equivalents are not otherwise applied to any other permitted use under this Agreement);         provided,  however,  that,  in  no  event  shall  such  amount  exceed  $40,000,000)  at  any  one  time         outstanding  and  (B)  Brazilian  Loan  Parties  in  Brazilian  Loan  Parties,  (iii)  Investments  by         Subsidiaries that are not Loan Parties in (A) Loan Parties and (B) any other Subsidiary that is not         a  Loan  Party,  (iv)  Investments  by  Qualified  Loan  Parties  in  (A)  Loan  Parties  that  are  not         Qualified Loan Parties (other than Brazilian Loan Parties), in an aggregate amount not to exceed         $10,000,000 at any one time outstanding; provided, that, the aggregate amount of any Investment         made pursuant to clause (ii)(A) that indirectly flows through a Loan Party that is not a Qualified         Loan Party (other than a Brazilian Loan Party) shall not be deemed to apply to this clause (iv)(A),         and (B) Subsidiaries that are not Loan Parties, in an aggregate amount not to exceed, together         with all Investments made pursuant to clause (c)(v)(B), $5,000,000 at any one time outstanding         and (v) Investments by Loan Parties that are not Qualified Loan Parties in (A) other Loan Parties         that are not Qualified Loan Parties (other than Brazilian Loan Parties) and (B) Subsidiaries that         are not Loan Parties, in an aggregate amount not to exceed, together with all Investments made         pursuant to clause (c)(iv)(B), $5,000,000 at any one time outstanding;                (d)  extensions of credit to non-Affiliates in the nature of accounts receivable or notes         receivable arising from the sales of goods or services in the ordinary course of business;                (e)  Permitted Acquisitions and Approved Strategic Investments;                                          92  CHAR1\1659840v4 

 

             (f)  Swap Contracts permitted under Section 8.03(d);                (g)  Investments  (including  debt  obligations)  received  in  connection  with  the         bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations         of, and other disputes with, customers or suppliers arising in the ordinary course of business;                 (h)  Investments consisting of security deposits with utilities and other like Persons         made in the ordinary course of business;                (i)   employee  loans,  travel  advances  and  guarantees  in  accordance  with  the  Loan         Parties’  usual  and  customary  practices  with  respect  thereto  (if  permitted  by  applicable  Law),         which in the aggregate shall not exceed $250,000 outstanding at any time;                 (j)   Investments received in connection with any insolvency proceedings in respect of         any  customers,  suppliers  or  clients  and  in  settlement  of  delinquent  obligations  of,  and  other         disputes with, customers, suppliers or clients;                 (k)  Guarantees  permitted  by  Section  8.03  (other  than  by  reference  to  this  Section         8.02 (or any subclause hereof)); and                (l)   other Investments not permitted by any of the foregoing clauses of this Section         8.02, in an aggregate amount not to exceed $1,000,000 at any one time outstanding.          8.03 Indebtedness.          Create, incur, assume or suffer to exist any Indebtedness, except:                (a)  Indebtedness under the Loan Documents;                (b)  Indebtedness  (other  than  by  reference  to  this  Section  8.03  (or  any  sub-clause         hereof)) existing on the Effective Date and described on Schedule 8.03 to the Disclosure Letter         and Permitted Refinancings thereof;                (c)  (i)  intercompany  Indebtedness  permitted  under  Section  8.02  (other  than  by         reference to this Section 8.03 (or any sub-clause hereof)) and (ii) Guarantees permitted by Section         8.02 (other than by reference to this Section 8.03 (or any subclause hereof));                (d)  obligations  (contingent  or  otherwise)  of  any  Loan  Party  or  any  Subsidiary         existing  or  arising  under  any  Swap  Contract;  provided,  that,  (i)  such  obligations  are  (or  were)         entered  into  by  such  Person  in  the  ordinary  course  of  business  for  the  purpose  of  directly         mitigating risks associated with liabilities, commitments, investments, assets, or property held or         reasonably  anticipated  by  such  Person,  or  changes  in  the  value  of  securities  issued  by  such         Person,  and  not  for  purposes  of  speculation  or  taking  a  “market  view”  and  (ii)  such  Swap         Contract does not contain any provision exonerating the non-defaulting party from its obligation         to make payments on outstanding transactions to the defaulting party;                (e)  purchase money Indebtedness (including obligations in respect of Capital Leases         or Synthetic Leases) incurred by any Loan Party or any of their respective Subsidiaries to finance         the acquisition, purchase, construction or improvement of fixed assets, and renewals, refinancings         and extensions thereof; provided, that, (i) such Indebtedness when incurred shall not exceed the         cost of acquiring, purchasing, constructing or improving such asset(s), (ii) no such Indebtedness                                          93  CHAR1\1659840v4 

 

       shall be refinanced for a principal amount in excess of the principal balance outstanding thereon,         plus  any  fees  and  expenses  incurred  in  connection  with  such  refinancing  and  any  reasonable         premium  paid  in  connection  with  such  refinancing,  (iii)  the  aggregate  outstanding  principal         amount of all Indebtedness outstanding in reliance on this clause (e) shall not exceed $4,000,000         at  any  one  time  outstanding  and  (iv)  the  aggregate  outstanding  principal  amount  of  all         Indebtedness outstanding in reliance on this clause (e), Section 8.03(g) and Section 8.03(h), when         taken together, shall not exceed $12,000,000 at any one time outstanding;                (f)  unsecured  Indebtedness  in  respect  of  netting  services,  overdraft  protections,         employee credit card programs, automatic clearinghouse arrangements and similar arrangements         in each case in connection with deposit accounts and Indebtedness arising from the honoring of a         bank  or  other  financial  institution  of  a  check,  draft  or  similar  instrument  drawn  against         insufficient funds in the ordinary course of business; provided, that, (x) any such Indebtedness is         extinguished within thirty (30) days and (y) the aggregate outstanding principal amount of such         Indebtedness shall not exceed $1,000,000 at any one time outstanding;                (g)  Permitted  Senior  Revolving  Credit  Indebtedness  in  an  aggregate  principal         amount not to exceed at any one time outstanding $4,000,000 pursuant to one or more revolving         credit  facilities;  provided, that,  (x)  no  Default  or  Event  of  Default  shall  have  occurred  and  be         continuing  both  immediately  before  and  immediately  after  the  effectiveness  of  any  Permitted         Senior Revolving Credit Documents, (y) prior to the incurrence of any such Indebtedness, (i) the         Administrative  Agent,  the  Loan  Parties  and  the  applicable  Permitted  Senior  Revolving  Credit         Lender  shall  have  entered  into  an  intercreditor  agreement  reasonably  satisfactory  to  the         Administrative Agent pursuant to which (A) such Permitted Senior Revolving Credit Lender may         be  granted  a  first  priority  security  interest  only  in  the  accounts  receivable  and/or  inventory  of         Establishment Labs Sociedad Anonima and proceeds thereof (collectively, the “Permitted Senior         Revolving  Credit Priority Collateral”),  (B)  the  Administrative  Agent,  on  behalf  of  the  Secured         Parties,  shall  be  granted  a  second  priority  security  interest  in  the  Permitted  Senior  Revolving         Credit Priority Collateral, (C) the Administrative Agent, on behalf of the Secured Parties, shall         maintain  its  first  priority  security  interest  in  all  other  assets  of  the  Loan  Parties  (other  than         Excluded Property) and (D) such Permitted Senior Revolving Credit Lender shall not be granted a         security interest in any property of the Loan Parties other than the Permitted Senior Revolving         Credit  Priority  Collateral  and  (ii)  the  Administrative  Agent  and  the  Loan  Parties  shall  have         entered  into  amendments,  in  each  case  in  form  and  substance  reasonably  satisfactory  to  the         Administrative Agent, to this Agreement and such other Loan Documents as required to, among         other  things,  include  in  the  Loan  Documents  such  additional  representations,  warranties,         covenants  and  defaults  as  are  included  in  the  applicable  Permitted  Senior  Revolving  Credit         Documents  (but  not  included  in  the  Loan  Documents  at  such  time)  and  (z)  the  aggregate         outstanding principal amount of all Indebtedness incurred in reliance on this clause (g), Section         8.03(e) and Section 8.03(h), when taken together, shall not exceed $12,000,000 at any one time         outstanding;                (h)  Indebtedness  hereafter  incurred  by  any  Loan  Party  or  any  of  their  respective         Subsidiaries to finance the purchase, construction or improvement of real property, and renewals         and  extensions  thereof;  provided,  that,  (i)  such  Indebtedness  shall  be  secured  only  by  real         property  (and,  for  the  avoidance  of  doubt,  by  no  other  assets  of  any  Loan  Party  or  any         Subsidiary), (ii) no such Indebtedness shall be refinanced for a principal amount in excess of the         principal balance outstanding thereon at the time of such refinancing, plus any fees and expenses         incurred  in  connection  with  such  refinancing  and  any  reasonable  premium  paid  in  connection         with  such  refinancing,  (iii)  the  aggregate  outstanding  principal  amount  of  all  Indebtedness         incurred in reliance on this clause (h) shall not exceed $10,000,000 at any one time outstanding                                          94  CHAR1\1659840v4 

 

       and (iv) the aggregate outstanding principal amount of all Indebtedness incurred in reliance on         this  clause  (h),  Section  8.03(e)  and  Section  8.03(g),  when  taken  together,  shall  not  exceed         $12,000,000 at any one time outstanding;                (i)   solely until the Funding Date, Indebtedness under the Existing Credit Agreement;                 (j)   accounts payable to trade creditors for goods and services and current operating         liabilities (not the result of the borrowing of money) incurred in the ordinary course of the Loan         Parties and their respective Subsidiaries’ business in accordance with customary terms and paid         within the specified time, unless contested in good faith by appropriate proceedings and reserved         for in accordance with GAAP;               (k)  Indebtedness  consisting  of  guarantees  resulting  from  the  endorsement  of         negotiable instruments for collection in the ordinary course of business;                 (l)   other  unsecured  Indebtedness  not permitted  by  any  of  the  other clauses of  this         Section  8.03,  in  an  aggregate  principal  amount  not  to  exceed  $1,000,000  at  any  one  time         outstanding;                (m)   Indebtedness of any Person that becomes a Subsidiary after the Effective Date;         provided, that, (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is         not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii)         the aggregate principal amount of all such Indebtedness outstanding in reliance on this clause (m)         shall not exceed $500,000 at any one time outstanding;                 (n)  unsecured Earn Out Obligations in connection with Permitted Acquisitions; and                (o)  unsecured Indebtedness of the Borrower owing to (i) solely until August 1, 2019,         JW  Partners,  LP  pursuant  to  that  certain  Warrant  Payment  Agreement  dated  as  of  August  24,         2017  between  the  Borrower  and  JW  Partners,  LP  in  an  aggregate  amount  not  to  exceed         $1,589,488.64  at  any  one  time  outstanding,  (ii)  solely  until  August  1,  2019, JW  Opportunities         Master Fund, Ltd. pursuant to that certain Warrant Payment Agreement dated as of August 24,         2017 between the Borrower and JW Opportunities Master Fund, Ltd. in an aggregate amount not         to exceed $529,829.55 at any one time outstanding, (iii) solely until August 1, 2019, Relativity         Healthcare  Fund,  LLC  pursuant  to  that  certain  Warrant  Cancellation  Agreement  dated  as  of         August  24,  2017  between  the  Borrower  and  Relativity  Healthcare  Fund,  LLC  in  an  aggregate         amount not to exceed $141,287.55 at any one time outstanding and (iv) solely until September 30,         2017,  Perceptive  Credit  Holdings,  LP  pursuant  to  that  certain  Warrant  Repurchase  Agreement         dated  as  of  August  24,  2017  between  the  Borrower  and  Perceptive  Credit  Holdings,  LP  in  an         aggregate amount not to exceed $2,400,000 at any one time outstanding.          8.04 Fundamental Changes.          Merge, dissolve, liquidate, amalgamate or consolidate with or into another Person, or Dispose of   (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now   owned or hereafter acquired) to or in favor of any Person; provided, that, notwithstanding the foregoing   provisions of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, (a) the Borrower may   merge or consolidate with any of its Subsidiaries, provided, that, the Borrower shall be the continuing or   surviving corporation, (b) any Qualified Loan Party (other than the Borrower) may merge, amalgamate or   consolidate with any other Qualified Loan Party (other than the Borrower), (c) any Loan Party that is not   a  Qualified  Loan  Party  may  merge,  amalgamate  or  consolidate  with  any  Loan  Party  (other  than  the                                          95  CHAR1\1659840v4 

 

Borrower), provided, that, if a Qualified Loan Party is a party to such transaction, such Qualified Loan   Party  shall  be the continuing or  surviving  Person,  (d)  any  Subsidiary that  is  not  a  Loan  Party  may  be   merged  or  consolidated  with  or  into  any  Loan  Party,  provided,  that,  such  Loan  Party  shall  be  the   continuing  or  surviving  Person,  (e)  any  Subsidiary  that  is  not  a  Loan  Party   may  be  merged  or   consolidated with or into any other Subsidiary that is not a Loan Party, (f) any Subsidiary that is not a   Loan  Party  may  dissolve, liquidate or  wind  up its  affairs at any  time,  provided,  that,  such  dissolution,   liquidation or winding up could not reasonably be expected to have a Material Adverse Effect and all of   its  assets  and  business  are  transferred  to  a  Loan  Party  prior  to  or  concurrently  with  such  dissolution,   liquidation  or  winding  up  and  (g)  the  Borrower  and  its  Subsidiaries  may  consummate  Permitted   Acquisitions  and  Approved  Strategic  Investments,  provided,  that,  (x)  to  the  extent  applicable,  such   transaction complies with clauses (a) through (f) of the first proviso in this Section 8.04 and (y) to the   extent such transaction involves a merger, amalgamation or consolidation with a Person other than the   Borrower  or  any  Subsidiary,  either  (A)  the  Borrower  or  such  Subsidiary  shall  be  the  continuing  or   surviving Person or (B) the continuing or surviving Person shall comply with the requirements of Section   7.12 and Section 7.14.          8.05 Dispositions.          Make any Disposition unless (a) the consideration paid in connection therewith shall be cash or   Cash Equivalents paid contemporaneous with consummation of the transaction and shall be in an amount   not less than the fair market value of the property disposed of, (b) no Default or Event of Default shall   have occurred and be continuing both immediately prior to and after giving effect to such Disposition, (c)   such  transaction  does  not  involve  the  sale  or  other  disposition  of  a  minority  equity  interest  in  any   Subsidiary and (d) the aggregate net book value of all of the assets sold or otherwise disposed of in such   Disposition together with the aggregate net book value of all assets sold or otherwise disposed of by the   Loan Parties and their respective Subsidiaries in all such transactions occurring during the term of this   Agreement does not exceed $1,000,000.          8.06 Restricted Payments.          Declare or make, directly or indirectly, any Restricted Payment, except that:                (a)  each Subsidiary may make Restricted Payments to any Loan Party;                 (b)  each Loan Party and each Subsidiary may declare and make dividend payments         or other distributions payable solely in the Qualified Capital Stock of such Person;                (c)   (i) the Borrower may purchase, redeem, retire or otherwise acquire its Qualified         Capital Stock solely to the extent such purchase, redemption, retirement or acquisition is made         with proceeds received from a substantially concurrent issuance of new Qualified Capital Stock         of  the  Borrower,  (ii)  to  the  extent  constituting  Restricted  Payments,  the  Borrower  may  repay         Indebtedness permitted by Section 8.03(o) to the extent not prohibited by Section 8.11 and (iii)         the Borrower may purchase, redeem, retire or otherwise acquire shares of its Qualified Capital         Stock from Global Silicone SRL for aggregate consideration not to exceed $2,845,990; provided,         that, with respect to this clause (iii), such purchase occurs within thirty (30) days of the Funding         Date;                (d)  the  Borrower  may  (i)  purchase  or  pay  cash  in  lieu  of  fractional  shares  of  its         Qualified Capital Stock arising out of dividends, splits, or business combinations or in connection         with  the  issuance  of  its  Qualified  Capital  Stock  pursuant  to  mergers,  consolidations  or  other         acquisitions, in each case, permitted by this Agreement, (ii) pay cash in lieu of fractional shares                                          96  CHAR1\1659840v4 

 

       upon  the  exercise  of  warrants,  options  or  other  securities  convertible  into  or  exercisable  for         Qualified Capital Stock of the Borrower and (iii) make payments in connection with the retention         of  Qualified  Capital  Stock  in  payment  of  withholding  taxes  in  connection  with  equity-based         compensation  plans  to  the  extent  that  net  share  settlement  arrangements  are  deemed  to  be         repurchases; and                (e)  the Borrower may make other Restricted Payments not to exceed (i) $600,000 in         the fiscal year of the Borrower ending December 31, 2017 and (ii) $500,000 in any fiscal year of         the Borrower ending thereafter.          8.07 Change in Nature of Business.          Engage  in  any  material  line  of  business  substantially  different  from  those  lines  of  business   conducted by the Borrower and its Subsidiaries on the Effective Date or any business substantially related   or incidental thereto.          8.08 Transactions with Affiliates and Insiders.          Enter into or permit to exist any transaction or series of transactions with any officer, director,   employee or Affiliate of such Person other than (a) advances of working capital to any Loan Party, (b)   transfers  of  cash  and  assets  to  any  Loan  Party,  (c)  intercompany  transactions  expressly  permitted  by   Section 8.02, Section 8.03, Section 8.04, Section 8.05 or Section 8.06, (d) customary compensation and   indemnification  of,  and  other  employment  arrangements  with,  directors,  officers  and  employees  in  the   ordinary  course  of  business,  (e)  issuances  of  Qualified  Capital  Stock  of  the  Borrower  to  Affiliates  in   exchange  for  cash;  provided,  that,  (i)  no  Default  or  Event  of  Default  shall  have  occurred  and  be   continuing (or could reasonably be expected to occur as a result of such issuance) and (ii) the terms of   each such issuance are no less favorable (including the amount of cash received by the Borrower) to the   Borrower than those that would be obtained in a comparable arm’s-length transaction with a Person who   is  not  an  Affiliate  of  the  Borrower  and  (f)  except  as  otherwise  specifically  limited  in  this  Agreement,   other transactions which are entered into in the ordinary course of such Person’s business on terms and   conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-  length transaction with a Person other than an officer, director or Affiliate.          8.09 Burdensome Agreements.          Enter into,  or  permit  to  exist,  any  Contract  that  encumbers  or  restricts  the  ability  of  any  such   Person to (a) make Restricted Payments to any Loan Party, (b) pay any Indebtedness or other obligations   owed to any Loan Party, (c) make loans or advances to any Loan Party, (d) transfer any of its property to   any Loan Party, (e) pledge its property pursuant to the Loan Documents or any renewals, refinancings,   exchanges, refundings or extension thereof or (f) act as a Loan Party pursuant to the Loan Documents or   any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the   matters referred to in clauses (a) through (e) above) for (i) this Agreement and the other Loan Documents,   (ii)  any  document  or  instrument  governing  Indebtedness  incurred  pursuant  to  Section  8.03(b),  Section   8.03(e), Section 8.03(h); provided, that, any such restriction contained therein relates only to the asset or   assets  constructed  or  acquired  in  connection  therewith,  (iii)  customary  restrictions  and  conditions   contained in any agreement relating to the sale of any property permitted under Section 8.05 pending the   consummation of such sale, (iv) any Permitted Senior Revolving Credit Documents, (v) requires the grant   of  any  security  for  any  obligation  if  such  property  is  given  as  security  for  the  Obligations,  (vi)   prohibitions, restrictions and conditions existing on the Effective Date identified on Schedule 8.09 to the   Disclosure Letter, (vii) customary provisions contained in leases, subleases, licenses and sublicenses and   other  contracts  restricting  the  assignment,  subletting  or  encumbrance  thereof,  customary  net  worth                                          97  CHAR1\1659840v4 

 

provisions or similar financial maintenance provisions contained therein and other customary provisions  contained in leases, subleases, licenses and sublicenses and other contracts entered into in the ordinary  course of business, (viii) prohibitions, restrictions and conditions that are binding on a Subsidiary at the  time such Subsidiary first becomes a Subsidiary, so long as such restrictions were not entered into solely  in  contemplation  of  such  Person  becoming  a  Subsidiary  and  (ix)  customary  restrictions  under  any  arrangement  with  any  Governmental  Authority  imposed  on  any  Subsidiary  in  connection  with  governmental grants, financial aid, tax holidays or similar benefits or economic interests.          8.10 Use of Proceeds.          Use  the  proceeds  of  any  Loan,  whether  directly  or  indirectly,  and  whether  immediately,   incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the   FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund   indebtedness originally incurred for such purpose.          8.11 Payment of Other Indebtedness.          Make (or give any notice with respect thereto) any voluntary or optional payment or prepayment   or redemption or acquisition for value of (including without limitation, by way of depositing money or   securities with the trustee with respect thereto before due for the purpose of paying when due), refund,   refinance or exchange of any Indebtedness of any Loan Party or any Subsidiary (other than (i) any of the   foregoing payments or transactions relating to (x) Indebtedness arising under the Loan Documents, (y)   any  Permitted  Senior  Revolving  Credit  Indebtedness  and  (z)  the  repayment  of  all  Indebtedness  owing   under the Existing Credit Agreement on the Funding Date, (ii) such payments or transactions that do not   exceed  an  aggregate  amount  of  $1,000,000  per  fiscal  year,  (iii)  Permitted  Refinancings  expressly   permitted hereby and (iv) prepayments by the Borrower of Indebtedness permitted by Section 8.03(o);   provided,  that,  with  respect  to  this  clause  (iv),  (x)  the  funds  utilized  by  the  Borrower  for  any  such   payments shall consist solely of (A) proceeds received from a substantially concurrent issuance of new   Qualified Capital Stock of the Borrower and (B) not more than $1,750,000 of internally generated cash   and Cash Equivalents of the Loan Parties and their Subsidiaries and (y) no proceeds of any Loans or any   other Indebtedness shall be used for any such payments).          8.12 Organization  Documents;  Fiscal  Year;  Legal  Name,  State  of  Formation  and  Form  of   Entity; Certain Amendments.                (a)  Amend,  modify  or  change  its  Organization  Documents  in  a  manner  materially         adverse to the Administrative Agent or the Lenders, in their capacity as the Administrative Agent         or as Lenders, as applicable, under the Loan Documents.                (b)  Change its fiscal year or any fiscal quarter.                (c)  Without providing ten (10) days prior written notice to the Administrative Agent,         change its name, jurisdiction of organization or form of organization (or foreign equivalent).                (d)  Amend, modify or change (or permit the amendment, modification or change of)         any of the terms or provisions of any Permitted Senior Revolving Credit Document in a manner         adverse  to  the  Administrative  Agent  or  any  Secured  Party  or  in  violation  of  the  terms  and         provisions of any intercreditor agreement entered into by the Administrative Agent with respect         thereto  (for  the  avoidance  of  doubt,  any  amendment,  modification  or  change  that  is  permitted         pursuant  to  any  applicable  intercreditor  agreement  shall  not  be  adverse  to  the  Administrative         Agent or any Secured Party).                                          98  CHAR1\1659840v4 

 

             (e)  Make any change in accounting policies or reporting practices, except as required         by GAAP.          8.13 Ownership of Subsidiaries.          Notwithstanding any other provisions of this Agreement to the contrary, (a) permit any Person   (other  than  any  Loan  Party  or  any  Wholly  Owned  Subsidiary)  to  own  any  Equity  Interests  of  any   Subsidiary, except to qualify directors where required by applicable law or to satisfy other requirements   of applicable law with respect to the ownership of Equity Interests of Foreign Subsidiaries, (b) permit any   Loan Party or any Subsidiary to issue or have outstanding any shares of Disqualified Capital Stock or (c)   create, incur, assume or  suffer  to  exist  any  Lien on  any  Equity  Interests  of any  Subsidiary,  except  for   Permitted Liens.          8.14 Sale Leasebacks.          Enter  into  any  Sale  and  Leaseback  Transaction  (other  than  any  Permitted  Sale  and  Leaseback   Transaction).          8.15 Sanctions; Anti-Corruption Laws.                (a)  Directly  or  indirectly,  use  the  proceeds  of  any  Loan,  or  lend,  contribute  or         otherwise make available the proceeds of any Loan to any Person, to fund any activities of or         business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is         the  subject  of  Sanctions,  or  in  any  other  manner  that  will  result  in  a  violation  by  any  Person         (including any Person participating in the transaction, whether as Lender, Administrative Agent,         or otherwise) of Sanctions.                (b)  Directly or indirectly, use the proceeds of any Loan for any purpose which would         breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and         other similar anti-corruption legislation in other jurisdictions.          8.16 Minimum Product Revenues.                (a)  Minimum Product Revenues.  Permit Product Revenues for any four consecutive         fiscal quarter period to be less than (i) $20,000,000, for the four consecutive fiscal quarter period         ending  September  30,  2017,  (ii)  $30,000,000,  for  any  four  consecutive  fiscal  quarter  period         ending during the period from December 31, 2017 through and including September 30, 2018,         (iii)  $45,000,000,  for any  four consecutive fiscal  quarter  period  ending  during the  period  from         December 31, 2018 through and including September 30, 2019, (iv) $60,000,000, for any four         consecutive fiscal quarter period ending during the period from December 31, 2019 through and         including  September  30,  2020,  (v)  $90,000,000,  for  any  four  consecutive  fiscal  quarter  period         ending during the period from December 31, 2020 through and including September 30, 2021,         (vi) $120,000,000, for any four consecutive fiscal quarter period ending during the period from         December 31, 2021 through and including September 30, 2022 and (vii) $150,000,000, for any         four consecutive fiscal quarter period ending thereafter.                (b)  Cure Right.                      (i)   Notwithstanding anything to the contrary contained in Section 8.16(a), in               the event that any Loan Party would otherwise be in default of the financial covenant set               forth  in  Section  8.16(a)  for  any  period,  on  or  before  the  tenth  (10th)  Business  Day                                          99  CHAR1\1659840v4 

 

            subsequent  to  the  due  date  for  delivery  of  the  financial  statements  for  such  period              pursuant  to  Section  7.01(a)  or  (b),  as  applicable  (such  period,  the  “Cure  Period”),  the              Borrower shall have the right to issue its Qualified Capital Stock for cash in an aggregate              amount not to exceed the amount necessary to cure the relevant failure to comply with              Section  8.16(a)  (such  contribution,  a  “Specified  Cure  Contribution”),  and  upon  the              receipt by the Borrower of such Specified Cure Contribution within the Cure Period, the              financial covenant set forth in Section 8.16(a) shall be recalculated giving effect to the              following pro forma adjustments (collectively, the “Cure Right”):                           (A)   Product Revenues shall be increased for the final fiscal quarter of                    such period (the “Applicable Quarter”) and any period of four consecutive fiscal                    quarters that includes the Applicable Quarter, solely for the purpose of measuring                    the financial covenant set forth in Section 8.16(a), and not for any other purpose                    under this Agreement, by  an amount equal to the Specified Cure Contribution;                    and                           (B)  If,  after  giving  effect  to  the  foregoing  recalculation,  the  Loan                    Parties  shall  then  be  in  compliance  with  the  requirements  of  the  financial                    covenant set forth in Section 8.16(a), the Loan Parties shall be deemed to have                    satisfied the requirements of the financial covenant set forth in Section 8.16(a) as                    of  the relevant  date of  determination  with  the  same  effect  as though  there  had                    been  no failure  to  comply  therewith at such date, and  the  applicable breach  or                    default  of  the  covenant  set  forth  in  Section  8.16(a)  that  had  occurred  shall  be                    deemed cured for the purposes of this Agreement.                     (ii) Notwithstanding  anything  herein  to  the  contrary,  (A)  the  Loan  Parties              shall provide notice to the Administrative Agent of their intention to exercise the Cure              Right  no  later  than  the  date  of  delivery  of  the  financial  statements  evidencing  such              noncompliance pursuant to Section 7.01(a) or (b), as applicable, (B) in each four fiscal              quarter  period,  there  shall  be  a  period  of  at  least  two  (2)  fiscal  quarters  in  respect  of              which no Cure Right is exercised, (C) the Cure Right may not be exercised with respect              to  consecutive  fiscal  quarters,  (D)  the  Specified  Cure  Contribution  shall  be  no  greater              than  the  amount  required  for  purposes  of  complying  with  the  financial  covenant  in              Section 8.16(a), (E) the Specified Cure Contribution received pursuant to any exercise of              the  Cure  Right  shall  be  disregarded  for  purposes  of  determining  any  available  basket              under any covenant in this Agreement, (F) the Cure Right may be exercised no more than              three (3) times during the term of this Agreement and (G) the provisions of this Section              8.16(b) shall in no way limit the Borrower’s ability to issue its Qualified Capital Stock at              any  time  and  for  the  avoidance  of  doubt,  any  limitation  with  respect to amount  of the              Specified Cure Contribution is only a limitation with respect to the amount of Product              Revenue that may count as a Specified Cure Contribution pursuant to the terms of this              Section 8.16(b).         8.17 Liquidity.               (a)  Permit Liquidity of the Loan Parties to be less than $10,000,000; and               (b)  Permit Liquidity of the Loan Parties held in Controlled Accounts to be less than        $5,000,000.                                         100  CHAR1\1659840v4 

 

      8.18 Modifications and Terminations of Material Contracts.         Except to the extent such action or omission could not reasonably be expected, either individually  or in the aggregate, to have or result in a Material Adverse Effect, take or omit to take any action that  results in the termination of, or permits any other Person to terminate, any Material Contract or Material  IP Rights, other than any bona fide dispute that is being contested in good faith.         8.19 Inbound and Outbound Licenses.               (a)  Except as set forth on Schedule 8.19(a) to the Disclosure Letter, no Loan Party        shall, nor shall it permit any of its Subsidiaries to, enter into or become or remain bound by (x)        any Material Contract or (y) any material inbound license agreement, unless no Default or Event        of Default has occurred and is continuing (or would reasonably be expected to occur as a result        thereof) and the Loan Parties have (i) provided prior written notice to the Administrative Agent of        the material terms of such agreement with a description of its anticipated and projected impact on        the  relevant  Loan  Party’s  business  or  financial  condition  and  (ii)  taken  such  commercially        reasonable actions as the Administrative Agent may reasonably request to obtain the consent of,        or waiver by, any Person whose consent or waiver is necessary for the Administrative Agent to be        granted  a  valid  and  perfected  Lien  on  such  agreement  and the right  to  fully  exercise its  rights        under  any  of  the  Loan  Documents  in  the  event  of  a  disposition  or  liquidation  (including  in        connection  with  a  foreclosure)  of  the  rights,  assets  or  property  that  is  the  subject  of  such        agreement; provided, that, inbound license agreements in the nature of over the counter software        that are commercially available to the public shall not be prohibited by this clause (a).               (b)  Except as set forth on Schedule 8.19(b) to the Disclosure Letter, no Loan Party        shall, nor shall it permit any of its Subsidiaries to, enter into or become or remain bound by any        outbound license of IP Rights unless such outbound license (i) is duly authorized by the Loan        Parties (pursuant to their customary approval process) and entered into on an arm’s-length basis,        (ii)  is  entered  into  for  the  purpose  of  Product  Commercialization  and  Development  Activities        with respect to a Product, (iii) does not otherwise constitute a Disposition prohibited pursuant to        this Agreement, (iv) to the extent such IP Rights constitute Collateral, (x) could not reasonably be        expected to result in a Material Adverse Effect and (y) does not impair the Administrative Agent        from fully exercising its rights under any of the Loan Documents in the event of a disposition or        liquidation (including in connection with a foreclosure) of the rights, assets or property that is the        subject of such license, (v) is not an exclusive license (whether as to use, geography or otherwise)        and (vi) is not perpetual or irrevocable.                                    ARTICLE IX.                         EVENTS OF DEFAULT AND REMEDIES         9.01 Events of Default.         Any of the following shall constitute an Event of Default:               (a)  Non-Payment.  The Borrower or any other Loan Party fails to pay (i) when and        as required to be paid herein, any amount of principal of any Loan, (ii) within three (3) Business        Days after the same becomes due, any interest on any Loan, or any fee or prepayment premium        due  hereunder  or  (iii) within  five  (5)  Business  Days  after  the  same  becomes  due,  any  other        amount payable hereunder or under any other Investment Document; or                                         101  CHAR1\1659840v4 

 

            (b)  Specific  Covenants.   Any  Loan  Party  fails  to  perform  or  observe  any  term,        covenant or agreement contained in any of Section 7.01, 7.02, 7.03, 7.05, 7.10, 7.11, 7.12, 7.14,        7.15, 7.16, 7.17, 7.18, 7.19 or Article VIII; or               (c)  Other Defaults.  Any Loan Party fails to perform or observe any other covenant        or agreement (not specified in subsection (a) or (b) above) contained in any Investment Document        on its part to be performed or observed and such failure continues for thirty (30) days after the        earlier of the date on which (i) a Responsible Officer of any Loan Party becomes aware of such        failure and (ii) written notice thereof shall have been given to the Borrower by the Administrative        Agent or any Lender; or               (d)  Representations  and  Warranties.   Any  representation,  warranty,  certification  or        statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party        herein, in any other Investment Document, or in any document delivered in connection herewith        or therewith shall be incorrect or misleading in any material respect when made or deemed made;        or               (e)  Cross-Default.   (i)  Any  Loan  Party  or  any  Subsidiary  (A)  fails  to  make  any        payment when due (whether by scheduled maturity, required prepayment, acceleration, demand        or otherwise), but only after the expiration of any grace period applicable thereto, in respect of        any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap        Contracts)  having  an  aggregate  principal  amount  (including  undrawn  committed  or  available        amounts and including amounts owing to all creditors under any combined or syndicated credit        arrangement) of more than the Threshold Amount or (B) fails to observe or perform any other        agreement  or  condition  relating  to  any  such  Indebtedness  or  Guarantee  or  contained  in  any        instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the        effect  of  which  default  or  other  event  is  to  cause,  or  to  permit  the  holder  or  holders  of  such        Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf        of  such  holder  or  holders  or  beneficiary  or  beneficiaries)  to  cause (after  the  expiration  of  any        applicable  grace  or  cure  period  applicable  thereto),  with  the  giving  of  notice  if  required,  such        Indebtedness  to  be  demanded  or  to  become  due  or  to  be  repurchased,  prepaid,  defeased  or        redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such        Indebtedness to  be  made,  prior to its  stated  maturity,  or such  Guarantee to  become  payable  or        cash collateral in respect thereof to be demanded or (ii) there occurs under any Swap Contract an        Early  Termination  Date  (as  defined  in  such  Swap  Contract)  resulting  from  (A)  any  event  of        default under such Swap Contract as to which any Loan Party or any Subsidiary is the Defaulting        Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such        Swap Contract as to which any Loan Party or any Subsidiary is an Affected Party (as so defined)        and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as        a result thereof is greater than the Threshold Amount; or               (f)  Insolvency  Proceedings,  Etc.   (i)  Any  Loan  Party  or  any  of  its  Subsidiaries        institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes        an assignment for the benefit of creditors; or applies for or consents to the appointment of any        receiver,  administrative  receiver,  trustee,  custodian,  conservator,  liquidator,  rehabilitator  or        similar officer for it or for all or any material part of its property; or any receiver, administrative        receiver,  trustee,  custodian,  conservator,  liquidator,  rehabilitator  or  similar  officer  is  appointed        without the application or consent of such Person and the appointment continues undischarged or        unstayed for sixty (60) calendar days or any proceeding under any Debtor Relief Law relating to        any such Person or to all or any material part of its property is instituted without the consent of        such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for                                        102  CHAR1\1659840v4 

 

      relief is entered in any such proceeding or (ii) any BVI Loan Party ceases to be “solvent” as such        term is defined in the Insolvency Act, 2003 of the British Virgin Islands; or               (g)  Inability to Pay Debts; Attachment.  (i) Any Loan Party or any of its Subsidiaries        becomes unable or admits in writing its inability or fails generally to pay its debts as they become        due or (ii) any writ or warrant of attachment or execution or similar process is issued or levied        against all or any material part of the property of any such Person and is not released, vacated or        fully bonded within thirty (30) days after its issue or levy; or               (h)  Judgments.  There is entered against any Loan Party or any Subsidiary (i) one or        more final judgments or orders for the payment of money in an aggregate amount exceeding the        Threshold Amount (to the extent not covered by independent third-party insurance as to which        the insurer does not dispute coverage) or (ii) any one or more non-monetary final judgments that        have,  or  could  reasonably  be  expected  to  have,  individually  or  in  the  aggregate,  a  Material        Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor        upon such judgment or order or (B) there is a period of thirty (30) consecutive days during which        a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in        effect; or               (i)   ERISA.   (i)  An  ERISA  Event  occurs  with  respect  to  any  Pension  Plan  or        Multiemployer Plan which has resulted or would reasonably be expected to result in liability of        any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in        an aggregate amount in excess of the Threshold Amount or (ii) any Loan Party or any ERISA        Affiliate  fails  to  pay  when  due,  after  the  expiration  of  any  applicable  grace  period,  any        installment payment with respect to its withdrawal liability, if any, under Section 4201 of ERISA        under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or               (j)   Employee Benefit Non-U.S. Plans.  (i) There shall occur one or more Employee        Benefit  Non-U.S.  Plan  Events  which  individually  or  in  the  aggregate  results  in  or  would        reasonably be expected to result in liability of the Borrower and its Subsidiaries in excess of the        Threshold  Amount  during  the  term  hereof;  or  (ii)  there  exists  any  fact  or  circumstance  that        reasonably would be expected to result in the imposition of a Lien or security interest under any        applicable Laws, statutes, rules, regulations and orders to which any Employee Benefit Non-U.S.        Plan is subject, on assets of the Borrower or any of its Subsidiaries; or               (k)  Invalidity  of  Investment  Documents.   Any  Investment  Document,  at  any  time        after its execution and delivery and for any reason other than as expressly permitted hereunder or        thereunder, ceases to be in full force and effect; or any Loan Party or any other Person contests in        any manner the validity or enforceability of any Investment Document; or any Loan Party denies        that it has any or further liability or obligation under any Investment Document, or purports to        revoke, terminate or rescind any Investment Document; or               (l)   Change of Control.  There occurs any Change of Control; or               (m)   Invalidity  of  Subordination  Provisions.   Any  subordination  provision  in  any        document  or  instrument  governing  Indebtedness  that  is  purported  to  be  subordinated  to  the        Obligations  or  any  subordination  provision  in  any  subordination  agreement  that  relates  to  any        Indebtedness that is to be subordinated to the Obligations, or any subordination provision in any        guaranty by any Loan Party of any such Indebtedness, shall cease to be in full force and effect, or        any  Person  (including  the  holder  of  any  such  Indebtedness)  shall  contest  in  any  manner  the        validity, binding nature or enforceability of any such provision; or                                        103  CHAR1\1659840v4 

 

            (n)  Permitted  Senior  Revolving  Credit  Indebtedness.   There  occurs  an  “Event  of        Default”  (or  any  comparable  term)  under,  and  as  defined  in,  any  Permitted  Senior  Revolving        Credit Document; or               (o)  Regulatory Matters, Etc.  There occurs any of the following: (i) the FDA or any        other Regulatory Authority initiates an enforcement action against, or issues a warning letter with        respect to, any Loan Party or any of their respective Subsidiaries, any Product or any manufacturing        facilities  for  any  Product  that  causes  any  Loan  Party  or  any  of  their  respective  Subsidiaries  to        discontinue or withdraw, or would reasonably be expected to cause any Loan Party to discontinue        or withdraw, marketing or sales of any Product that has generated or is expected to generate at        least  $1,000,000  in  revenue  for  the  Loan  Parties  and  their  respective  Subsidiaries  on  a        consolidated basis over any period of twelve (12) consecutive months, or causes a delay in the        manufacture  or  sale  of  any  such  Product,  which  discontinuance  or  delay  would  reasonably  be        expected to last for more than thirty (30) days, (ii) a recall of any Product that has generated or is        expected  to  generate  at  least  $1,000,000  in  revenue  for  the  Loan  Parties  and  their  respective        Subsidiaries on a consolidated basis over any period of twelve (12) consecutive months or (iii)        any  Loan  Party  enters  into  a  settlement  agreement  with  the  FDA  or  any  other  Regulatory        Authority  that  results  in  aggregate  liability  as  to  any  single  or  related  series  of  transactions,        incidents or conditions, in excess of $1,000,000; or               (p)  Material Adverse Effect.  There occurs any circumstance or circumstances that        could reasonably be expected, either individually or in the aggregate, to have a Material Adverse        Effect.         9.02 Remedies Upon Event of Default.         If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of,  or may, with the consent of, the Required Lenders, take any or all of the following actions:               (a)  declare  the  commitment  of  each  Lender  to  make  Loans  to  be  terminated,        whereupon such commitments and obligation shall be terminated;               (b)  declare the unpaid principal amount of all outstanding Loans, all interest accrued        and unpaid thereon and all other amounts owing or payable hereunder or under any other Loan        Document  to  be  immediately  due  and  payable,  without  presentment,  demand,  protest  or  other        notice of any kind, all of which are hereby expressly waived by the Loan Parties; and               (c)  exercise on behalf of itself and the Lenders all rights and remedies available to it        and the Lenders under the Loan Documents;   provided,  however,  that,  upon  the occurrence  of  an  actual  or  deemed  entry  of  an  order  for  relief  with  respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to  make Loans shall automatically terminate, the unpaid principal amount of all outstanding Loans and all  interest and other amounts as aforesaid shall automatically become due and payable, in each case without  further act of the Administrative Agent or any Lender.         If the Obligations are accelerated for any reason, the prepayment premium required by Section  2.03(d)  will  also  be  due  and  payable  as  though  such  Obligations  were  voluntarily  prepaid  and  any  discount  on  the  Loans  shall  be  deemed  earned  in  full  and,  in  each  case,  shall  constitute  part  of  the  Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by  mutual agreement of the parties as to a reasonable calculation of each Lender’s lost profits as a result                                        104  CHAR1\1659840v4 

 

thereof.   Any  prepayment  premium  required  by  Section  2.03(d)  payable  pursuant  to  the  preceding  sentence shall be presumed to be the liquidated damages sustained by each Lender as the result of the  early  termination  and  the  Borrower  and  the  other  Loan  Parties  agree  that  it  is  reasonable  under  the  circumstances  currently  existing.   The  prepayment  premium  required  by  Section  2.03(d)  shall  also  be  payable and any discount on the Loans shall be deemed earned in full, in each case, in the event that the  Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial  proceeding), deed in lieu of foreclosure or by any other means.  TO THE EXTENT PERMITTED BY  APPLICABLE LAW, THE BORROWER AND THE OTHER LOAN PARTIES EXPRESSLY WAIVE  THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR  MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM AND ANY  DISCOUNT  ON  THE  LOANS  IN  CONNECTION  WITH  ANY  SUCH  ACCELERATION.   The  Borrower and the other Loan Parties expressly agree that (i) the prepayment premium required by Section  2.03(d) and any discount on the Loans provided for herein is reasonable and is the product of an arm’s  length transaction between sophisticated business people, ably represented by counsel, (ii) the prepayment  premium required by Section 2.03(d) and any discount on the Loans shall be payable notwithstanding the  then prevailing market rates at the time payment is made, (iii) there has been a course of conduct between  the Lenders and the Borrower and the other Loan Parties giving specific consideration in this transaction  for such agreement to pay the prepayment premium required by Section 2.03(d) and any discount on the  Loans, (iv) the Borrower and the other Loan Parties shall be estopped hereafter from claiming differently  than as agreed to in this paragraph and (v) the prepayment premium required by Section 2.03(d) and any  discount on the Loans represent a good faith, reasonable estimate and calculation of the lost profits or  damages of the Lenders and that it would be impractical and extremely difficult to ascertain the actual  amount of damages to the Lenders or profits lost by the Lenders as a result of any early termination.  The  Borrower and the other Loan Parties expressly acknowledge that their agreement to pay the prepayment  premium required by Section 2.03(d) and any discount on the Loans to the Lenders as herein described is  a material inducement to the Lenders to make the Loans hereunder.         9.03 Application of Funds.         After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically  become immediately due and payable as set forth in the proviso to Section 9.02), any amounts received  by  any  Lender  or  the  Administrative  Agent  on  account  of  the  Obligations  shall  be  applied  by  the  Administrative Agent in the following order:               First,  to  payment  of  that  portion  of  the  Obligations  constituting  fees,  indemnities,        expenses  and  other  amounts  (including  fees,  charges  and  disbursements  of  counsel  to  the        Administrative  Agent  and  amounts  payable  under  Article  III)  payable  to  the  Administrative        Agent in its capacity as such;               Second, to payment of that portion of the Obligations constituting fees, indemnities and        other amounts (other than principal and interest) payable to the Lenders (including fees, charges        and disbursements of counsel to the respective Lenders) arising under the Loan Documents and        amounts payable under Article III, ratably among them in proportion to the respective amounts        described in this clause Second payable to them;               Third,  to  payment  of  that  portion  of  the  Obligations  constituting  accrued  and  unpaid        interest  on  and  prepayment  premium  with  respect  to  the  Loans,  ratably  among  the  Lenders  in        proportion to the respective amounts described in this clause Third held by them;                                         105  CHAR1\1659840v4 

 

            Fourth,  to  payment  of  that  portion  of  the  Obligations  constituting  accrued  and  unpaid        principal of the Loans, ratably among the Secured Parties in proportion to the respective amounts        described in this clause Fourth held by them; and               Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to        the Borrower or as otherwise required by Law.                                     ARTICLE X.                              ADMINISTRATIVE AGENT         10.01 Appointment and Authority.               (a)  Each of the Lenders hereby irrevocably appoints Madryn Health Partners, LP to        act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and        authorizes  the  Administrative  Agent  to  take  such  actions  on  its  behalf  and  to  exercise  such        powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with        such actions and powers as are incidental thereto.  The provisions of this Article X are solely for        the benefit of the Administrative Agent and the Lenders, and neither the Borrower nor any other        Loan  Party  shall  have  rights  as  a  third  party  beneficiary  of  any  of  such  provisions.   It  is        understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or        any other similar term) with reference to the Administrative Agent is not intended to connote any        fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable        Law.  Instead such term is used as a matter of market custom, and is intended to create or reflect        only an administrative relationship between contracting parties.               (b)  The Administrative Agent shall also act as the “collateral agent” under the Loan        Documents,  and  each  of  the  Lenders  hereby  irrevocably  appoints  and  authorizes  the        Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and        enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the        Obligations,  together  with  such  powers  and  discretion  as  are  incidental  thereto.   In  this        connection,  the  Administrative  Agent,  as  “collateral  agent”  and  any  co-agents,  sub-agents  and        attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.05 for purposes of        holding  or  enforcing  any  Lien  on  the  Collateral  (or  any  portion  thereof)  granted  under  the        Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the        Administrative  Agent,  shall  be  entitled  to  the  benefits  of  all  provisions  of  this  Article  X  and        Article XI (including Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact        were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect        thereto.         10.02 Rights as a Lender.         The Person serving as the Administrative Agent hereunder shall have the same rights and powers  in  its  capacity  as  a  Lender  as  any  other  Lender  and  may  exercise  the  same  as  though  it  were  not  the  Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or  unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder  in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own  securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any  kind of business with any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were  not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.                                         106  CHAR1\1659840v4 

 

      10.03 Exculpatory Provisions.         The Administrative Agent shall not have any duties or obligations except those expressly set forth  herein  and  in  the  other  Loan  Documents,  and  its  duties  hereunder  shall  be  administrative  in  nature.   Without limiting the generality of the foregoing, the Administrative Agent:               (a)  shall not be subject to any fiduciary or other implied duties, regardless of whether        a Default has occurred and is continuing;               (b)  shall  not  have  any  duty  to  take  any  discretionary  action  or  exercise  any        discretionary powers, except discretionary rights and powers expressly contemplated hereby or by        the  other Loan  Documents that  the  Administrative  Agent  is required  to exercise  as  directed  in        writing by the Required Lenders (or such other number or percentage of the Lenders as shall be        expressly provided for herein or in the other Loan Documents); provided, that, the Administrative        Agent shall not be required to take any action that, in its opinion or the opinion of its counsel,        may expose the Administrative Agent to liability or that is contrary to any Loan Document or        applicable law, including for the avoidance of doubt any action that may be in violation of the        automatic  stay  under  any  Debtor  Relief  Law  or  that  may  affect  a  forfeiture,  modification  or        termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and               (c)  shall not, except as expressly set forth herein and in the other Loan Documents,        have  any  duty  to  disclose,  and  shall  not  be  liable  for  the  failure  to  disclose,  any  information        relating  to  any  Loan  Party  or  any  of  its  Affiliates  that  is  communicated  to  or  obtained  by  the        Person serving as the Administrative Agent or any of its Affiliates in any capacity.         The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the  consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as  shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the  circumstances  as  provided  in  Section  11.01  and  Section  9.02)  or  (ii)  in  the  absence  of  its  own  gross  negligence or willful misconduct as determined by a court of competent jurisdiction by final and non- appealable judgment.  The Administrative Agent shall be deemed not to have knowledge of any Default  unless  and until notice describing  such  Default is given  in  writing  to the  Administrative  Agent  by the  Borrower or a Lender.         The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire  into (i) any statement, warranty or representation made in or in connection with this Agreement or any  other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or  thereunder  or  in  connection  herewith  or  therewith,  (iii)  the  performance  or  observance  of  any  of  the  covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any  Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan  Document or any other agreement, instrument or document or (v) the satisfaction of any condition set  forth  in  Article V  or  elsewhere  herein,  other  than to  confirm receipt  of items  expressly  required  to be  delivered to the Administrative Agent.         10.04 Reliance by Administrative Agent.         The  Administrative  Agent  shall  be  entitled  to  rely  upon,  and  shall  not  incur  any  liability  for  relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing  (including any electronic message, Internet or intranet website posting or other distribution) believed by it  to  be  genuine  and  to  have  been  signed,  sent  or  otherwise  authenticated  by  the  proper  Person.   The  Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by                                        107  CHAR1\1659840v4 

 

it  to  have  been  made  by  the  proper  Person,  and  shall  not  incur  any  liability  for  relying  thereon.   In  determining compliance with any condition hereunder to the making of a Loan, that by its terms must be  fulfilled  to  the  satisfaction  of  a  Lender,  the  Administrative  Agent  may  presume  that such  condition  is  satisfactory  to  such  Lender  unless the  Administrative Agent  shall have  received  notice  to  the contrary  from such Lender prior to the making of such Loan.  The Administrative Agent may consult with legal  counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by  it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such  counsel, accountants or experts.         10.05 Delegation of Duties.         The Administrative Agent may perform any and all of its duties and exercise its rights and powers  hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the  Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its  duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory  provisions  of  this  Article  X  shall  apply  to  any  such  sub-agent  and  to  the  Related  Parties  of  the  Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection  with the syndication of the Facilities provided for herein as well as activities as Administrative Agent.   The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents  except  to  the  extent  that  a  court  of  competent  jurisdiction  determines  in  a  final  and  non-appealable  judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection  of such sub-agents.         10.06 Resignation of Administrative Agent.         The Administrative Agent may resign as Administrative Agent at any time by giving thirty (30)  days advance notice thereof to the Lenders and the Borrower and, thereafter, the retiring Administrative  Agent  shall  be  discharged  from  its  duties  and  obligations  hereunder.   Upon  any  such  resignation,  the  Required Lenders shall have the right, subject to the approval of the Borrower (so long as no Event of  Default  has  occurred  and  is  continuing;  such  approval  not  to  be  unreasonably  withheld),  to  appoint  a  successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by  the Required Lenders, been approved (so long as no Event of Default has occurred and is continuing) by  the Borrower or have accepted such appointment within thirty (30) days after the Administrative Agent’s  giving of notice of resignation, then the Administrative Agent may, on behalf of the Lenders, appoint a  successor Administrative Agent reasonably acceptable to the Borrower (so long as no Default or Event of  Default  has  occurred  and  is  continuing).   Upon  the  acceptance  of  any  appointment  as  Administrative  Agent  hereunder  by  a  successor  Administrative  Agent,  such  successor  Administrative  Agent  shall  thereupon  succeed  to  and  become  vested  with  all  rights,  powers,  privileges  and  duties  of  the  retiring  Administrative Agent.  After any retiring Administrative Agent’s resignation hereunder as Administrative  Agent, the provisions of this Section 10.06 shall continue in effect for its benefit in respect of any actions  taken  or  omitted  to  be  taken  by  it  while  it  was  acting  as  Administrative  Agent.   If  no  successor  has  accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring  Administrative  Agent’s  notice  of  resignation,  the  retiring  Administrative  Agent’s  resignation  shall  nevertheless thereupon become effective and the Required Lenders shall perform all of the duties of the  Administrative  Agent  hereunder  until  such  time,  if  any,  as  the  Required  Lenders  appoint  a  successor  agent as provided for above.         10.07 Non-Reliance on Administrative Agent and Other Lenders.         Each  Lender  acknowledges  that  it  has,  independently  and  without  reliance  upon  the  Administrative Agent or any other Lender or any of their Related Parties and based on such documents                                        108  CHAR1\1659840v4 

 

and information as it has deemed appropriate, made its own credit analysis and decision to enter into this  Agreement.   Each  Lender also acknowledges that  it will,  independently  and  without reliance upon the  Administrative Agent or any other Lender or any of their Related Parties and based on such documents  and information as it shall from time to time deem appropriate, continue to make its own decisions in  taking or not taking action under or based upon this Agreement, any other Loan Document or any related  agreement or any document furnished hereunder or thereunder.         10.08 Administrative Agent May File Proofs of Claim.         In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,  arrangement,  adjustment,  composition  or  other  judicial  proceeding  relative  to  any  Loan  Party,  the  Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as  herein  expressed  or  by  declaration  or  otherwise  and  irrespective  of  whether  the  Administrative  Agent  shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such  proceeding or otherwise:               (a)  to file and prove a claim for the whole amount of the principal and interest owing        and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file        such other documents as may be necessary or advisable in order to have the claims of the Lenders        and the Administrative Agent (including any claim for the reasonable compensation, expenses,        disbursements  and  advances  of the  Lenders  and  the Administrative  Agent  and  their  respective        agents and counsel and all other amounts due the Lenders and the Administrative Agent under        Section 11.04) allowed in such judicial proceeding; and               (b)  to collect and receive any monies or other property payable or deliverable on any        such claims and to distribute the same;   and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such  judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative  Agent  and,  in  the  event  that  the  Administrative  Agent  shall  consent  to  the  making  of  such  payments  directly  to  the  Lenders,  to  pay  to  the  Administrative  Agent  any  amount  due  for  the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the  Administrative  Agent  and  its  agents  and  counsel, and any other amounts due the Administrative Agent under Section 11.04.         Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or  consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment  or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative  Agent to vote in respect of the claim of any Lender in any such proceeding.         10.09 Collateral and Guaranty Matters.         The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion,               (a)  to  release any  Lien  on any  Collateral granted to  or held  by  the  Administrative        Agent under any Loan Document (i) upon termination of all unused Commitments and payment        in full of all Obligations (other than contingent indemnification obligations for which no claim        has been asserted), (ii) that is sold or otherwise disposed of or to be sold or otherwise disposed of        as part of or in connection with any sale or other Disposition permitted hereunder or under any        other  Loan  Document  or  any  Involuntary  Disposition  or  (iii)  as  approved  in  accordance  with        Section 11.01;                                         109  CHAR1\1659840v4 

 

            (b)  to subordinate any Lien on any property granted to or held by the Administrative        Agent under any Loan Document to the holder of any Lien on such property that is permitted by        Section 8.01(i); and               (c)  to release any Guarantor from its obligations under the Guaranty if such Person        ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.         Upon  request  by  the  Administrative  Agent  at  any  time,  the  Required  Lenders  will  confirm  in        writing  the  Administrative  Agent’s  authority  to  release  or  subordinate  its  interest  in  particular        types or items of property, or to release any Guarantor from its obligations under the Guaranty,        pursuant to this Section 10.09.         The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into        any representation or warranty regarding the existence, value or collectability of the Collateral,        the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate        prepared  by  any  Loan  Party  in  connection  therewith,  nor  shall  the  Administrative  Agent  be        responsible  or  liable  to  the  Lenders  for  any  failure  to  monitor  or  maintain  any  portion  of  the        Collateral.                                    ARTICLE XI.                                  MISCELLANEOUS         11.01 Amendments, Etc.         No amendment or waiver of any provision of this Agreement or any other Loan Document, and  no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless  in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may  be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective  only in the specific instance and for the specific purpose for which given; provided, further, that:               (a)  no such amendment, waiver or consent shall:                     (i)   extend  or  increase  the  Commitment  of  a  Lender  (or  reinstate  any              Commitment  terminated  pursuant  to  Section  9.02)  without  the  written  consent  of  such              Lender  whose  Commitment  is  being  extended  or  increased  (it  being  understood  and              agreed that a waiver of any condition precedent set forth in Section 5.03 or of any Default              or a mandatory reduction in Commitments is not considered an extension or increase in              Commitments of any Lender);                     (ii) postpone any date fixed by this Agreement or any other Loan Document              for any  payment  of principal (excluding  mandatory prepayments),  interest,  prepayment              premiums, fees or other amounts due to the Lenders (or any of them) or any scheduled or              mandatory reduction of the Commitments hereunder or under any other Loan Document              without  the  written  consent  of each  Lender  entitled to receive  such  payment or  whose              Commitments are to be reduced;                     (iii) reduce  the  principal  of,  the  rate  of  interest  specified  herein  on  or  the              prepayment premium specified herein on any Loan, or any fees or other amounts payable              hereunder or under any other Loan Document without the written consent of each Lender              entitled to receive such payment of principal, interest, fees or other amounts; provided,                                        110  CHAR1\1659840v4 

 

            however, that, only the consent of the Required Lenders shall be necessary to amend the              definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at              the Default Rate;                     (iv)  change  any  provision  of  this  Section  11.01(a)  or  the  definition  of              “Required Lenders” without the written consent of each Lender directly affected thereby;                     (v)  except  in  connection  with  a  Disposition  permitted  under  Section  8.05,              release all or substantially all of the Collateral without the written consent of each Lender              directly affected thereby;                     (vi)  release  the  Borrower  or,  except  in  connection  with  a  merger  or              consolidation permitted under Section 8.04 or a Disposition permitted under Section 8.05,              all  or  substantially  all  of  the  Guarantors  without  the  written  consent  of  each  Lender              directly affected thereby, except to the extent the release of any Guarantor is permitted              pursuant to Section 10.09 (in which case such release may be made by the Administrative              Agent acting alone); and               (b)  unless  also  signed  by  the  Administrative  Agent,  no  amendment,  waiver  or        consent shall affect the rights or duties of the Administrative Agent under this Agreement or any        other Loan Document;   provided, however, that, notwithstanding anything to the contrary herein, (i) no Defaulting Lender shall  have  any  right  to  approve  or  disapprove  any  amendment,  waiver  or  consent  hereunder  (and  any  amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected  Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except  that (x) the Commitments of any Defaulting Lender may not be increased or extended without the consent  of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or  each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected  Lenders shall require the consent of such Defaulting Lender, (ii) each Lender is entitled to vote as such  Lender  sees  fit  on  any  bankruptcy  reorganization  plan  that  affects  the  Loans  and  each  Lender  acknowledges  that  the  provisions  of  Section  1126(c)  of  the  Bankruptcy  Code  of  the  United  States  supersedes  the  unanimous  consent  provisions  set  forth  herein  and  (iii)  the  Required  Lenders  shall  determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or  insolvency proceeding and such determination shall be binding on all of the Lenders.  Notwithstanding  anything to the contrary set forth herein, in order to implement the Term C Facility, this Agreement may  be amended for such purpose by the Loan Parties, the Administrative Agent and the Term C Lenders.   It  is  understood  and  agreed  that,  following  the  Funding  Date,  subject  to  the  written  consent  of  the  Administrative  Agent  and  the  Required  Lenders  (such  consent  not  to  be  unreasonably  withheld  or  delayed) effectuated in accordance with this Section 11.01, the Loan Parties shall be permitted to convey  the Business IP Rights to a Qualified Loan Party in order to facilitate the Borrower’s intellectual property  strategy.   Notwithstanding any provision herein to the contrary, the Administrative Agent and the Borrower may  make amendments contemplated by Section 3.05.         11.02 Notices and Other Communications; Facsimile Copies.               (a)  Notices  Generally.   Except  in  the  case  of  notices  and  other  communications        expressly permitted to be given by telephone (and except as provided in subsection (b) below), all                                        111  CHAR1\1659840v4 

 

      notices and other communications provided for herein shall be in writing and shall be delivered        by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as        follows, and all notices and other communications expressly permitted hereunder to be given by        telephone shall be made to the applicable telephone number, as follows:                     (i)   if to the Borrower or any other Loan Party or the Administrative Agent,              to the address, facsimile number, electronic mail address or telephone number specified              for such Person on Schedule 11.02; and                     (ii) if to any other Lender, to the address, facsimile number, electronic mail              address or telephone number of its Lending Office (whether specified on Schedule 11.02              or separately specified to the Borrower and the Administrative Agent).               Notices and other communications sent by hand or overnight courier service, or mailed        by certified or registered mail, shall be deemed to have been given when received; notices and        other communications sent by facsimile shall be deemed to have been given when sent (except        that, if not given during normal business hours for the recipient, shall be deemed to have been        given at the opening of business on the next Business Day for the recipient).  Notices and other        communications  delivered  through  electronic  communications  to  the  extent  provided  in        subsection (b) below, shall be effective as provided in such subsection (b).               (b)  Electronic Communications.  Notices and other communications to the Lenders        hereunder  may  be  delivered  or  furnished  by  electronic  communication  (including  e-mail  and        Internet  or  intranet  websites)  pursuant  to  procedures  approved  by  the  Administrative  Agent;        provided, that, the foregoing shall not apply to notices to any Lender pursuant to Article II if such        Lender has notified the Administrative Agent that it is incapable of receiving notices under such        Article by electronic communication.  The Administrative Agent or the Borrower may each, in        their respective discretion, agree to accept notices and other communications to it hereunder by        electronic  communications  pursuant  to  procedures  approved  by  it;  provided,  that,  approval  of        such procedures may be limited to particular notices or communications.               Unless  the  Administrative  Agent  otherwise  prescribes,  (i)  notices  and  other        communications sent to an e-mail address shall be deemed received upon the sender’s receipt of        an  acknowledgement  from  the  intended  recipient  (such  as  by  the  “return  receipt  requested”        function,  as  available,  return  e-mail  or  other  written  acknowledgement)  and  (ii)  notices  or        communications  posted  to  an  Internet  or  intranet  website  shall  be  deemed  received  upon  the        deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause        (i)  of  notification  that  such  notice  or  communication  is  available  and  identifying  the  website        address  therefor;  provided,  that,  for  both  clauses  (i)  and  (ii),  if  such  notice,  email  or  other        communication is not sent during the normal business hours of the recipient, such notice, email or        communication shall be deemed to have been sent at the opening of business on the next business        day for the recipient.               (c)  Change  of  Address,  Etc.   Each  of  the  Borrower,  the  Lenders  and  the        Administrative  Agent  may  change  its  address,  facsimile  or  telephone  number  for  notices  and        other communications hereunder by notice to the other parties hereto.  In addition, each Lender        agrees  to  notify  the  Administrative  Agent  from  time  to  time  to  ensure that  the  Administrative        Agent has on record (i) an effective address, contact name, telephone number, facsimile number        and  electronic  mail  address  to  which  notices  and  other  communications  may  be  sent  and  (ii)        accurate wire instructions for such Lender.                                         112  CHAR1\1659840v4 

 

            (d)  Reliance by Administrative Agent and Lenders. The Administrative Agent and        the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic        Loan Notices) purportedly given by or on behalf of any Loan Party even if (i) such notices were        not made in a manner specified herein, were incomplete or were not preceded or followed by any        other  form  of  notice  specified  herein  or  (ii)  the  terms  thereof,  as  understood  by  the  recipient,        varied  from  any  confirmation  thereof.   The  Loan  Parties  shall  indemnify  the  Administrative        Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and        liabilities resulting from the reliance by such Person on each notice purportedly given by or on        behalf of a Loan Party.  All telephonic notices to and other telephonic communications with the        Administrative  Agent  may  be  recorded  by  the  Administrative  Agent,  and  each  of  the  parties        hereto hereby consents to such recording.         11.03 No Waiver; Cumulative Remedies; Enforcement.         No  failure  by  any  Lender  or  the  Administrative  Agent  to  exercise,  and  no  delay  by  any  such  Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document  shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or  privilege  hereunder  preclude  any  other  or  further  exercise  thereof  or  the  exercise  of  any  other  right,  remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided  under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and  privileges provided by law.         Notwithstanding anything to the contrary contained herein or in any other Loan Document, the  authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan  Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection  with  such  enforcement  shall  be  instituted  and  maintained  exclusively  by,  the  Administrative  Agent  in  accordance  with  Section  10.01  for  the  benefit  of  all  the  Secured  Parties;  provided,  however,  that,  the  foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and  remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the  other  Loan  Documents, (b)  any  Lender  from  exercising  setoff  rights in  accordance  with  Section 11.08  (subject to the terms of Section 2.11) or (c) any Lender from filing proofs of claim or appearing and filing  pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any  Debtor Relief Law; and provided, further, that, if at any time there is no Person acting as Administrative  Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights  otherwise  ascribed  to  the  Administrative  Agent  pursuant  to  Section  10.01  and  (ii)  in  addition  to  the  matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 2.11, any Lender  may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as  authorized by the Required Lenders.         11.04 Expenses; Indemnity; and Damage Waiver.               (a)  Costs and Expenses.  The Loan Parties shall pay (i) all out-of-pocket expenses        incurred  by  the  Administrative  Agent  and  its  Affiliates  (including  the  fees,  charges  and        disbursements  of  one  primary counsel  and, as  reasonably necessary,  one  local counsel  in  each        relevant  jurisdiction  for  the  Administrative  Agent  and  one  specialty  counsel  in  each  relevant        specialty  for  the  Administrative  Agent),  in  connection  with  the  preparation,  negotiation,        execution, delivery and administration of this Agreement and the other Investment Documents or        any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the        transactions contemplated hereby or thereby shall be consummated) or the administration of this        Agreement and the other Investment Documents and (ii) all out-of-pocket expenses incurred by        the Administrative Agent or any Lender (including the fees, charges and disbursements of one                                        113  CHAR1\1659840v4 

 

      primary counsel for the Administrative Agent and the Lenders and, as reasonably necessary, one        local counsel for the Administrative Agent and the Lenders in any relevant jurisdiction and one        specialty counsel in each relevant specialty for the Administrative Agent and the Lenders (and of        such other counsel as necessary in the event of a conflict), and shall pay all fees and time charges        for attorneys who may be employees of the Administrative Agent or any Lender, in connection        with the enforcement or protection of its rights (A) in connection with this Agreement and the        other Investment Documents, including its rights under this Section 11.04 or (B) in connection        with the Loans made hereunder, including all such out-of-pocket expenses incurred during any        workout, restructuring or negotiations in respect of such Loans.              (b)  Indemnification  by  the  Loan  Parties.   The  Loan  Parties  shall  indemnify  the        Administrative Agent  (and  any  sub-agent  thereof)  and  each  Lender,  and each Related  Party  of        any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold        each  Indemnitee  harmless  from,  any  and  all  losses,  claims,  damages,  liabilities  and  related        expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and        shall  indemnify  and  hold  harmless  each  Indemnitee  from  all  fees  and  time  charges  and        disbursements  for  attorneys  who  may  be  employees  of  any  Indemnitee,  incurred  by  any        Indemnitee  or  asserted  against  any  Indemnitee  by  any  Person  (including  the  Borrower  or  any        other Loan Party) arising out of, in connection with, or as a result of (i) the execution or delivery        of this Agreement, any other Investment Document or any agreement or instrument contemplated        hereby or thereby, the performance by the parties hereto of their respective obligations hereunder        or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the        case  of  the  Administrative  Agent  (and  any  sub-agent  thereof) and its  Related  Parties  only, the        administration of this Agreement and the other Investment Documents, (ii) any Loan or the use or        proposed  use  of  the  proceeds  therefrom,  (iii)  any  actual  or  alleged  presence  or  release  of        Hazardous Materials on or from any property owned or operated by a Loan Party or any of its        Subsidiaries,  or  any  Environmental  Liability  related  in  any  way  to  a  Loan  Party  or  any  of  its        Subsidiaries, (iv) any actual or prospective claim, litigation, investigation or proceeding relating        to  an  allegation  that  the  use,  advertisement,  display,  importation,  manufacture,  marketing,        offering  for  sale,  performance,  preparation  of  derivative  works  based  upon,  promotion,        reproduction, sale, use and/or other distribution of a Product by any Loan Party, any Subsidiary or        any of their respective licensees, or the conduct of the Businesses, constitutes the infringement,        violation or misappropriation of the rights of any Person or (v) any actual or prospective claim,        litigation, investigation or proceeding relating to any of the foregoing, whether based on contract,        tort or any other theory, whether brought by a third party or by the Borrower or any other Loan        Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not        caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence        of the Indemnitee; provided, that, such indemnity shall not, as to any Indemnitee, be available to        the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a        court of competent jurisdiction by final and nonappealable judgment to have resulted from the        gross negligence or willful misconduct of such Indemnitee, if such Borrower or such Loan Party        has obtained a final and nonappealable judgment in its favor on such claim as determined by a        court of competent jurisdiction or (y) arise solely from a dispute between or among Indemnitees        and  (1)  do  not  involve  any  action  or  inaction  by  any  Loan  Party  or  any  of  their  respective        Affiliates  or  (2)  do  not  relate  to  any  action  of  such  Indemnitee  in  its  capacity  as  the        Administrative  Agent  as  determined  by  a  court  of  competent  jurisdiction  in  a  final  and        nonappealable judgment.  This Section 11.04(b) shall not apply with respect to taxes other than        any taxes that represent losses, claims, damages, etc. arising from any non-tax claim.               (c)  Reimbursement by Lenders.  To the extent that the Loan Parties for any reason        fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section 11.04 to                                        114  CHAR1\1659840v4 

 

      be  paid  by  them  to  the  Administrative  Agent  (or  any  sub-agent  thereof)  or  any  Related  Party        thereof, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent)        or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the        time  that  the  applicable  unreimbursed  expense  or  indemnity  payment  is  sought  based  on  each        Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any        such unpaid amount in respect of a claim asserted by such Lender), such payment to be made        severally among them based on such Lenders’ Applicable Percentages (determined as of the time        that  the  applicable  unreimbursed  expense  or  indemnity  payment  is  sought);  provided,  further,        that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as        the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-       agent), or against any Related Party thereof acting for the Administrative Agent (or any such sub-       agent) in connection with such capacity.  The obligations of the Lenders under this subsection (c)        are subject to the provisions of Section 2.10(b).               (d)  Waiver  of  Consequential  Damages,  Etc.   To  the  fullest  extent  permitted  by        applicable law, no Loan Party shall assert, and each Loan Party hereby waives, and acknowledges        that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for        special,  indirect,  consequential  or  punitive  damages  (as  opposed  to  direct  or  actual  damages)        arising  out  of,  in  connection  with,  or  as  a  result  of,  this  Agreement,  any  other  Investment        Document  or  any agreement  or instrument  contemplated hereby,  the transactions contemplated        hereby or thereby,  any  Loan  or the  use  of  the  proceeds thereof.   No  Indemnitee  referred to  in        subsection (b) above shall be liable for any damages arising from the use by unintended recipients        of any information or other materials distributed by it through telecommunications, electronic or        other  information  transmission  systems  in  connection  with  this  Agreement  or  the  other        Investment Documents or the transactions contemplated hereby or thereby.               (e)  Payments.  All amounts due under this Section 11.04 shall be payable not later        than ten (10) Business Days after demand therefor.               (f)  Survival.  The agreements in this Section 11.04 and the indemnity provisions of        Section  11.02(d) shall  survive  the  resignation  of  the  Administrative  Agent,  the  replacement  of        any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of        all the other Obligations.         11.05 Payments Set Aside.         To the extent that any payment by or on behalf of any Loan Party is made to the Administrative  Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such  payment  or  the  proceeds  of  such  setoff  or  any  part  thereof is  subsequently  invalidated,  declared  to  be  fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the  Administrative  Agent  or  such  Lender  in  its  discretion)  to  be  repaid  to  a trustee,  receiver  or  any  other  party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent  of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and  continued in full force and effect as if such payment had not been made or such setoff had not occurred,  and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share  (without  duplication)  of  any  amount  so  recovered  from  or  repaid  by  the  Administrative  Agent,  plus  interest thereon from the date of such demand to the date such payment is made at a rate per annum equal  to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under clause (b) of  the preceding sentence shall survive the payment in full of the Obligations and the termination of this  Agreement.                                         115  CHAR1\1659840v4 

 

      11.06 Successors and Assigns.               (a)  Successors  and  Assigns  Generally.   The  provisions  of  this  Agreement  and  the        other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and        thereto  and  their  respective  successors  and  assigns  permitted  hereby,  except  that  the  Borrower        may not assign or otherwise transfer any of their rights or obligations hereunder or thereunder        without the  prior  written  consent  of the  Administrative  Agent  and each  Lender  and no  Lender        may  assign  or  otherwise  transfer  any  of  its  rights  or  obligations  hereunder  except  (i)  to  an        assignee in accordance with the provisions of subsection (b) of this Section 11.06, (ii) by way of        participation in accordance with the provisions of subsection (d) of this Section 11.06 or (iii) by        way of pledge or assignment of a security interest subject to the restrictions of subsection (e) of        this Section 11.06 (and any other attempted assignment or transfer by any party hereto shall be        null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer        upon any Person (other than the parties hereto, their respective successors and assigns permitted        hereby,  Participants  to  the  extent  provided  in  subsection  (e)  of  this  Section  11.06  and,  to  the        extent expressly  contemplated hereby,  the  Related  Parties of each  of the  Administrative  Agent        and  the  Lenders)  any  legal  or  equitable  right,  remedy  or  claim  under  or  by  reason  of  this        Agreement.               (b)  Assignments by Lenders.  Any Lender  may at any time assign to one or  more        assignees all or a portion of its rights and obligations under this Agreement and the other Loan        Documents (including all or a portion of its Commitments under any Facility and the Loans at the        time owing to it (in each case with respect to any Facility)); provided, that, any such assignment        shall be subject to the following conditions:                     (i)   Minimum Amounts.                           (A)   in the case of an assignment of the entire remaining amount of                    the assigning Lender’s Commitment with respect to any Facility and/or the Loans                    with  respect  to  any  Facility  at  the  time  owing  to  it  or  contemporaneous                    assignments to related Approved Funds that equal at least the amount specified in                    subsection (b)(i)(B)  of this  Section 11.06 in the aggregate  or  in the  case  of  an                    assignment  to  a  Lender,  an  Affiliate  of  a  Lender  or  an  Approved  Fund,  no                    minimum amount need be assigned; and                           (B)  in any case not described in subsection (b)(i)(A) of this Section                    11.06,  the  aggregate  amount  of  the  applicable  Commitment  (which  for  this                    purpose  includes  Loans  outstanding  thereunder)  or,  if  the  applicable                    Commitment is not then in effect, the principal outstanding balance of the Loans                    with  respect  to  such  Facility  of  the  assigning  Lender  subject  to  each  such                    assignment,  determined  as  of  the  date  the  Assignment  and  Assumption  with                    respect to such assignment is delivered to the Administrative Agent or, if “Trade                    Date” is specified in the Assignment and Assumption, as of the Trade Date, shall                    not be less than $1,000,000 unless each of the Administrative Agent and, so long                    as no Event of Default has occurred and is continuing, the Borrower otherwise                    consents (each such consent not to be unreasonably withheld or delayed);                     (ii) Proportionate  Amounts.   Each  partial  assignment  shall  be  made  as  an              assignment of a proportionate part of all of the assigning Lender’s rights and obligations              under this Agreement with respect to the Loans or the Commitment assigned.                                         116  CHAR1\1659840v4 

 

                  (iii) Required  Consents.   No  consent  shall  be  required  for  any  assignment              except  to  the  extent  required  by  subsection  (b)(i)(B)  of  this  Section  11.06  and,  in              addition:                           (A)   the  consent  of  the  Borrower  (such  consent  not  to  be                    unreasonably  withheld  or  delayed)  shall  be  required  unless  (1)  an  Event  of                    Default has occurred and is continuing at the time of such assignment or (2) such                    assignment  is  to  a  Lender,  an  Affiliate  of  a  Lender  or  an  Approved  Fund;                    provided,  that,  the  Borrower  shall  be  deemed  to  have  consented  to  any  such                    assignment unless it shall object thereto by written notice to the Administrative                    Agent within five (5) Business Days after having received notice thereof;                           (B)  the consent of the Administrative Agent (such consent not to be                    unreasonably withheld or delayed) shall be required for assignments in respect of                    (i)  any  unfunded  Commitment  if  such  assignment  is  to  a  Person  that  is  not  a                    Lender with a Commitment in respect of the applicable Facility, an Affiliate of                    such Lender or an Approved Fund with respect to such Lender or (ii) any Loan to                    a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund;                     (iv)  Assignment  and  Assumption.   The  parties  to  each  assignment  shall              execute and deliver to the Administrative Agent an Assignment and Assumption.  The              assignee, if it is not a Lender, shall deliver to the Administrative Agent such information,              including notice information, as the Administrative Agent shall reasonably require.                     (v)  No Assignment to Certain Persons.  No such assignment shall be made              (A)  to  the  Borrower  or  any  of  the  Borrower’s  Affiliates  or  Subsidiaries,  (B)  to  any              Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming a Lender              hereunder, would constitute any of the foregoing Persons described in this clause (B) or              (C) to a natural Person.                     (vi)  Certain  Additional  Payments.   In  connection  with  any  assignment  of              rights and obligations of any Defaulting Lender hereunder, no such assignment shall be              effective unless and until, in addition to the other conditions thereto set forth herein, the              parties  to  the  assignment  shall  make  such  additional  payments  to  the  Administrative              Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which              may  be  outright  payment,  purchases  by  the  assignee  of  participations  or              subparticipations, or other compensating actions, including funding, with the consent of              the  Borrower  and  the  Administrative  Agent,  the  applicable pro  rata  share  of  Loans              previously  requested  but  not  funded  by  the  Defaulting  Lender,  to  each  of  which  the              applicable assignee  and  assignor  hereby  irrevocably  consent), to  (x)  pay  and  satisfy  in              full  all  payment  liabilities then  owed  by such  Defaulting  Lender  to  the  Administrative              Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund              as  appropriate)  its  full pro  rata  share  of  all  Loans  in  accordance  with  its  Applicable              Percentage.  Notwithstanding  the foregoing,  in  the  event  that  any  assignment  of  rights              and  obligations  of  any  Defaulting  Lender  hereunder  shall  become  effective  under              applicable  Law  without  compliance  with  the  provisions  of  this  paragraph,  then  the              assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of              this Agreement until such compliance occurs.         Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection        (c)  of  this  Section  11.06,  from  and  after  the  effective  date  specified  in  each  Assignment  and                                        117  CHAR1\1659840v4 

 

      Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the        interest  assigned  by  such  Assignment  and  Assumption,  have  the  rights  and  obligations  of  a        Lender  under  this  Agreement,  and  the  assigning  Lender  thereunder  shall,  to  the  extent  of  the        interest assigned by such Assignment and Assumption, be released from its obligations under this        Agreement  (and,  in  the  case  of  an  Assignment  and  Assumption  covering  all  of  the  assigning        Lender’s  rights  and  obligations  under  this  Agreement,  such  Lender  shall  cease  to  be  a  party        hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.02, 3.04 and 11.04 with        respect to facts and circumstances occurring prior to the effective date of such assignment.  Upon        request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.         Any assignment or transfer by a Lender of rights or obligations under this Agreement that does        not comply with this subsection shall be treated for purposes of this Agreement as a sale by such        Lender of a participation in such rights and obligations in accordance with subsection (d) of this        Section 11.06.               (c)  Register.  The Administrative Agent, acting solely for this purpose as an agent of        the  Borrower  (and  such  agency  being  solely  for  tax  purposes),  shall  maintain  at  the        Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the        equivalent  thereof  in  electronic  form)  and  a  register  for  the  recordation  of  the  names  and        addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of        the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).         The  entries  in  the  Register  shall  be  conclusive  absent  manifest  error,  and  the  Borrower,  the        Administrative  Agent  and  the  Lenders  shall  treat  each  Person  whose  name  is  recorded  in  the        Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.         In  addition, the  Administrative  Agent  shall  maintain  on the Register information  regarding the        designation, and revocation of designation, of any Lender as a Defaulting Lender.  The Register        shall  be  available  for  inspection  by  the  Borrower  and  any  Lender,  at  any  reasonable  time  and        from time to time upon reasonable prior notice.               (d)  Participations.  Any Lender may at any time, without the consent of, or notice to,        the Borrower or the Administrative Agent, sell participations to any Person (other than a natural        Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries)        (each, a “Participant”) in all  or  a portion  of  such  Lender’s rights and/or obligations  under this        Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided,        that, (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender        shall remain solely responsible to the other parties hereto for the performance of such obligations        and  (iii)  the  Borrower,  the  Administrative  Agent  and  the  other  Lenders  shall  continue  to  deal        solely  and  directly  with  such  Lender  in  connection  with  such  Lender’s  rights  and  obligations        under  this  Agreement.   For  the  avoidance  of  doubt,  each  Lender  shall  be  responsible  for  the        indemnity under Section 11.04(c) without regard to the existence of any participation.               Any agreement or instrument pursuant to which a Lender sells such a participation shall        provide that such Lender shall retain the sole right to enforce this Agreement and to approve any        amendment,  modification  or  waiver  of  any  provision  of  this  Agreement;  provided,  that,  such        agreement  or  instrument  may  provide  that  such  Lender  will  not,  without  the  consent  of  the        Participant,  agree  to  any  amendment,  waiver  or  other  modification  described  in  clauses  (i)        through  (vi)  of  Section  11.01(a)  that  affects  such  Participant.   The  Borrower  agrees  that  each        Participant  shall  be  entitled  to  the  benefits  of  Sections  3.01,  3.02  and  3.04  (subject  to  the        requirements and limitations therein (it being understood that the documentation required under        Section 3.01(c) shall be delivered to the participating Lender)) to the same extent as if it were a        Lender  and  had  acquired  its  interest  by  assignment  pursuant  to  subsection  (b)  of  this  Section        11.06; provided, that, such Participant (A) agrees to be subject to the provisions of Sections 3.03                                        118  CHAR1\1659840v4 

 

      and  11.13  as  if  it  were  an  assignee  under  paragraph  (b)  of  this  Section;  and  (B)  shall  not  be        entitled  to  receive  any  greater  payment  under  Section  3.01  or  3.02,  with  respect  to  any        participation,  than  its  participating  Lender  would  have  been  entitled  to  receive,  except  to  the        extent such entitlement to receive a greater payment results from a Change in Law that occurs        after the Participant acquired the applicable participation.  Each Lender that sells a participation        agrees,  at  the  Borrower's  request  and  expense,  to  use  reasonable  efforts  to  cooperate  with  the        Borrower to effectuate the provisions of Section 11.13 with respect to any Participant.  To the        fullest extent permitted by law, each Participant also shall be entitled to the benefits of Section        11.08 as though it were a Lender; provided, that, such Participant agrees to be subject to Section        2.11 as though it were a Lender.               (e)  Certain Pledges.  Any Lender may at any time pledge or assign a security interest        in all or any portion of its rights under this Agreement (including under its Note, if any) to secure        obligations of such Lender, including any pledge or assignment to secure obligations to a Federal        Reserve Bank; provided, that, no such pledge or assignment shall release such Lender from any        of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party        hereto.         11.07 Treatment of Certain Information; Confidentiality.         Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the  Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its  Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of  the confidential nature of such Information and will be instructed to keep such Information confidential),  (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over  such  Person  or  its  Related  Parties  (including  any  self-regulatory  authority,  such  as  the  National  Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or  by  any  subpoena  or  similar  legal  process,  (d)  to  any  other  party  hereto,  (e)  as  may  be  reasonably  necessary  in  connection  with  the  exercise  of  any  remedies  hereunder  or  under  any  other  Investment  Document or any action or proceeding relating to this Agreement or any other Investment Document or  the  enforcement  of  rights  hereunder  or  thereunder,  (f) subject  to  an  agreement  containing  provisions  substantially  the  same  as  those  of  this  Section  11.07,  to  (i)  any  assignee  of  or  Participant  in,  or  any  prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any  actual  or  prospective  party  (or  its  Related  Parties)  to  any  swap,  derivative  or  other  transaction  under  which  payments  are  to  be  made  by  reference  to  a  Loan  Party  and  its  obligations,  this  Agreement  or  payments  hereunder, (g)  on  a confidential  basis to (i) any  rating  agency  in  connection  with rating  any  Loan Party or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau  or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market  identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower, (i)  to the members of its investment committee and its limited partners (it being understood that the Persons  to  whom  such  disclosure is made  will  be  informed  of  the  confidential  nature  of  such  Information  and  instructed  to  keep  such  Information  confidential)  or  (j)  to  the  extent  such  Information  (x)  becomes  publicly available other than as a result of a breach of this Section 11.07 or (y) becomes available to the  Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a  source other than the Borrower.         For purposes of this Section 11.07, “Information” means all information received from a Loan  Party  or  any  Subsidiary  relating  to  the  Loan  Parties  or  any  Subsidiary  or  any  of  their  respective  businesses, other than any such information that is available to the Administrative Agent or any Lender  on a nonconfidential basis prior to disclosure by such Loan Party or any Subsidiary; provided, that, in the  case of information received from a Loan Party or any Subsidiary after the date hereof, such information                                        119  CHAR1\1659840v4 

 

is  clearly  identified  at  the  time  of  delivery  as  confidential.   Any  Person  required  to  maintain  the  confidentiality of Information as provided in this Section 11.07 shall be considered to have complied with  its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality  of such Information as such Person would accord to its own confidential information.         11.08 Set-off.         If  an  Event  of  Default  shall  have  occurred  and  be  continuing,  each  Lender  and  each  of  their  respective  Affiliates  is  hereby  authorized  at  any  time  and  from  time  to  time,  after  obtaining  the  prior  written consent of the Administrative Agent, 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 such Lender  or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against  any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this  Agreement or any other Loan Document to such Lender or its Affiliates, irrespective of whether or not  such Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document  and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are  owed to a branch office or Affiliate of such Lender different from the branch office or Affiliate holding  such deposit or obligated on such indebtedness; provided, that, in the event that any Defaulting Lender  shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the  Administrative  Agent  for  further  application  in  accordance  with  the  provisions  of  Section  2.12  and,  pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed  held in trust for the benefit of the Administrative Agent and the Lenders and (y) the Defaulting Lender  shall  provide  promptly  to  the  Administrative  Agent  a  statement  describing  in  reasonable  detail  the  Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of  each Lender and their respective Affiliates under this Section 11.08 are in addition to other rights and  remedies (including other rights of setoff) that such Lender or their respective Affiliates may have.  Each  Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and  application; provided, that, the failure to give such notice shall not affect the validity of such setoff and  application.        11.09 Interest Rate Limitation.         Notwithstanding  anything  to  the  contrary  contained  in  any  Investment  Document,  the  interest  (actual  or  deemed)  paid  or  agreed  to  be  paid  under  the  Investment  Documents  shall  not  exceed  the  maximum  rate  of  non-usurious  interest  permitted  by  applicable  Law  (the  “Maximum  Rate”).   If  the  Administrative Agent or any Lender shall receive interest (including, without limitation, all charges, fees,  exactions or other sums which may at any time be deemed to be interest) in an amount that exceeds the  Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such  unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged,  or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person 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.         11.10 Counterparts; Integration; Effectiveness.         This  Agreement  may  be  executed  in  counterparts  (and  by  different  parties  hereto  in  different  counterparts),  each  of  which  shall  constitute  an  original,  but  all  of  which  when  taken  together  shall  constitute a single contract.  This Agreement, the other Investment Documents, and any separate letter                                        120  CHAR1\1659840v4 

 

agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among  the  parties  relating  to  the  subject  matter  hereof  and  supersede  any  and  all  previous  agreements  and  understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 5.01,  this Agreement shall become effective when it shall have been executed by the Administrative Agent and  when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the  signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of  this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as  delivery of a manually executed counterpart of this Agreement.         11.11 Survival of Representations and Warranties.         All  representations  and  warranties  made  hereunder  and  in  any  other  Investment  Document  or  other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive  the execution and delivery hereof and thereof and shall continue in full force and effect as long as any  Loan  or  other  Obligation  hereunder  shall  remain  unpaid  or  unsatisfied.   Such  representations  and  warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of  any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding  that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time  of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation  hereunder shall remain unpaid or unsatisfied.         11.12 Severability.         If  any  provision  of  this  Agreement  or  the  other  Investment  Documents  is  held  to  be  illegal,  invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this  Agreement  and  the  other  Investment  Documents  shall  not  be  affected  or  impaired  thereby  and  (b)  the  parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions  with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid  or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate  or  render  unenforceable  such  provision  in  any  other  jurisdiction.   Without  limiting  the  foregoing  provisions  of  this  Section  11.12,  if  and  to  the  extent  that  the  enforceability  of  any  provisions  in  this  Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good  faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent  not so limited.         11.13 Replacement of Lenders.         If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.03, or if any  Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense  and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and  delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents  required by, Section 11.06), all of its interests, rights (other than its existing rights to payments pursuant  to Sections 3.01 and 3.02) and obligations under this Agreement and the related Loan Documents to an  Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender  accepts such assignment), provided, that:               (a)  such  Lender  shall  have  received  payment  of  an  amount  equal  to  one  hundred        percent (100%) of (x) the outstanding principal of its Loans, accrued interest thereon and all other        amounts payable  to it hereunder  and  under  the other  Loan Documents  (other  than  prepayment        premium) from the assignee (to the extent of such outstanding principal and accrued interest) or        the  Borrower  (in  the  case  of  all  other  amounts)  and  (y)  the  prepayment  premium  required  by                                        121  CHAR1\1659840v4 

 

      Section  2.03(d)  from  the  Borrower,  as  if  such  assignment  was  a  prepayment  of  one  hundred        percent (100%) of the outstanding principal amount of such assignor’s Loans on the effective date        of such assignment;               (b)  in the case of any such assignment resulting from a claim for compensation under        Section  3.02  or  payments  required  to  be  made  pursuant  to  Section  3.01,  such  assignment  will        result in a reduction in such compensation or payments thereafter;              (c)  such assignment does not conflict with applicable Laws; and              (d)  in  the  case  of  any  such  assignment  resulting  from  a  Non-Consenting  Lender’s        failure  to  consent  to  a  proposed  change,  waiver,  discharge  or  termination  with  respect  to  any        Loan Document, the applicable replacement bank, financial institution or Fund consents to the        proposed  change,  waiver,  discharge  or  termination;  provided,  that,  the  failure  by  such  Non-       Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the        validity of the removal of such Non-Consenting Lender and the mandatory assignment of such        Non-Consenting  Lender’s  Commitments  and  outstanding  Loans  pursuant to  this  Section  11.13        shall  nevertheless  be  effective  without  the  execution  by  such  Non-Consenting  Lender  of  an        Assignment and Assumption.         A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a  result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such  assignment and delegation cease to apply.         11.14 Governing Law; Jurisdiction; Etc.               (a)  GOVERNING LAW.  THIS AGREEMENT AND THE OTHER INVESTMENT        DOCUMENTS  (EXCEPT,  AS  TO  ANY  OTHER  INVESTMENT  DOCUMENT,  AS        EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE OR        CAUSE  OF  ACTION  (WHETHER  IN  CONTRACT  OR  TORT  OR  OTHERWISE)  BASED        UPON,  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  OR  ANY  OTHER        INVESTMENT DOCUMENT (EXCEPT, AS TO ANY OTHER INVESTMENT DOCUMENT,        AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED        HEREBY  AND  THEREBY  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN        ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.               (b)  SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER        LOAN  PARTY  IRREVOCABLY  AND  UNCONDITIONALLY  AGREES  THAT  IT  WILL        NOT  COMMENCE  ANY  ACTION,  LITIGATION  OR  PROCEEDING  OF  ANY  KIND  OR        DESCRIPTION,  WHETHER  IN  LAW  OR  EQUITY,  WHETHER  IN  CONTRACT  OR  IN        TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR        ANY  RELATED  PARTY  OF  THE  FOREGOING  IN  ANY  WAY  RELATING  TO  THIS        AGREEMENT  OR  ANY  OTHER  INVESTMENT  DOCUMENT  OR  THE  TRANSACTIONS        RELATING  HERETO  OR  THERETO,  IN  ANY  OTHER  FORUM  OTHER  THAN  THE        COURTS  OF  THE  STATE  OF  NEW  YORK  AND  ANY  UNITED  STATES  DISTRICT        COURT  IN  THE  STATE  OF  NEW  YORK,  IN  EACH  CASE  LOCATED  IN  NEW  YORK        COUNTY,  NEW  YORK,  AND  ANY  APPELLATE  COURT  FROM  ANY  THEREOF,  AND        EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS        TO  THE  JURISDICTION  OF  SUCH  COURTS  AND  AGREES  THAT  ALL  CLAIMS  IN        RESPECT  OF  ANY  SUCH  ACTION,  LITIGATION  OR  PROCEEDING  MAY  BE  HEARD        AND  DETERMINED  IN  SUCH  NEW  YORK  STATE  COURT  OR,  TO  THE  FULLEST                                        122  CHAR1\1659840v4 

 

      EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF        THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION        OR  PROCEEDING  SHALL  BE  CONCLUSIVE  AND  MAY  BE  ENFORCED  IN  OTHER        JURISDICTIONS  BY  SUIT  ON  THE  JUDGMENT  OR  IN  ANY  OTHER  MANNER        PROVIDED  BY  LAW.   NOTHING  IN  THIS  AGREEMENT  OR  IN  ANY  OTHER        INVESTMENT    DOCUMENT     SHALL    AFFECT   ANY    RIGHT   THAT    THE        ADMINISTRATIVE  AGENT  OR  ANY  LENDER  MAY  OTHERWISE  HAVE  TO  BRING        ANY  ACTION  OR  PROCEEDING  RELATING  TO  THIS  AGREEMENT  OR  ANY  OTHER        INVESTMENT DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY        OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.               (c)  WAIVER  OF  VENUE.   THE  BORROWER  AND  EACH  OTHER  LOAN        PARTY  IRREVOCABLY  AND  UNCONDITIONALLY  WAIVES,  TO  THE  FULLEST        EXTENT  PERMITTED  BY  APPLICABLE  LAW,  ANY  OBJECTION  THAT  IT MAY  NOW        OR  HEREAFTER  HAVE  TO  THE  LAYING  OF  VENUE  OF  ANY  ACTION  OR        PROCEEDING  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  OR  ANY        OTHER  INVESTMENT  DOCUMENT  IN  ANY  COURT  REFERRED  TO  IN  SUBSECTION        (B)  OF  THIS  SECTION  11.14.   EACH  OF  THE  PARTIES  HERETO  HEREBY        IRREVOCABLY  WAIVES,  TO  THE  FULLEST  EXTENT  PERMITTED  BY  APPLICABLE        LAW,  THE  DEFENSE  OF  AN  INCONVENIENT  FORUM  TO  THE  MAINTENANCE  OF        SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.               (d)  SERVICE  OF  PROCESS.   EACH  PARTY  HERETO  IRREVOCABLY        CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN        SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY        PARTY  HERETO  TO  SERVE  PROCESS  IN  ANY  OTHER  MANNER  PERMITTED  BY        APPLICABLE LAW.         11.15 Waiver of Right to Trial by Jury.         EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT  PERMITTED  BY  APPLICABLE  LAW,  ANY  RIGHT  IT  MAY  HAVE  TO  A  TRIAL  BY  JURY  IN  ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO  THIS  AGREEMENT  OR  ANY  OTHER  INVESTMENT  DOCUMENT  OR  THE  TRANSACTIONS  CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY  OTHER  THEORY).   EACH  PARTY  HERETO  (A)  CERTIFIES  THAT  NO  REPRESENTATIVE,  AGENT  OR  ATTORNEY  OF  ANY  OTHER  PERSON  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH  OTHER  PERSON  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (B)  ACKNOWLEDGES  THAT  IT  AND  THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT  AND THE OTHER INVESTMENT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL  WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.15.         11.16 Electronic Execution of Assignments and Certain Other Documents.         The  words  “execute,”  “execution,”  “signed,”  “signature”  and  words  of  like  import  in  any  Assignment and Assumption or in any amendment or other modification hereof (including waivers and  consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms  and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of  records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a  manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the                                        123  CHAR1\1659840v4 

 

extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global  and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other  similar state laws based on the Uniform Electronic Transactions Act.         11.17 USA PATRIOT Act.         Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for  itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements  of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it  is required to obtain,  verify  and  record information that identifies  the  Loan  Parties, which  information  includes the name and address of the Loan Parties, information concerning its direct and indirect holders  of Equity Interests and other Persons exercising Control over it, and its and their respective directors and  officers, and other information that will allow such Lender or the Administrative Agent, as applicable, to  identify  the  Loan  Parties  in  accordance  with  the  Act.   The  Loan  Parties  shall,  promptly  following  a  request by the Administrative Agent or any Lender, provide all documentation and other information that  the  Administrative  Agent  or  such  Lender  reasonably  requests  in  order  to  comply  with  its  ongoing  obligations  under  applicable  “know  your  customer”  and  anti-money  laundering  laws,  rules  and  regulations, including the Act.         11.18 No Advisory or Fiduciary Relationship.         In connection with all aspects of each transaction contemplated hereby (including in connection  with any amendment, waiver or other modification hereof or of any other Investment Document), each  Loan  Party  acknowledges  and  agrees,  and  acknowledges  its  Affiliates’  understanding,  that:  (a)(i)  the  arranging  and  other  services  regarding  this  Agreement  provided  by  the  Administrative  Agent  and  the  Lenders are arm’s-length commercial transactions between the Loan Parties and their Affiliates, on the  one hand, and the Administrative Agent, the Lenders and their respective Affiliates on the other hand, (ii)  the Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they  have deemed appropriate and (iii) each Loan Party is capable of evaluating, and understands and accepts,  the  terms,  risks  and  conditions  of  the  transactions  contemplated  hereby  and  by  the  other  Investment  Documents; (b)(i) the Administrative Agent, each Lender and each of their respective 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 any Loan Party or any Loan Party’s  Affiliates  or  any  other  Person  and  (ii)  neither  the  Administrative  Agent,  any  Lender  nor  any  of  their  respective Affiliates has any obligation to the Loan Parties or any of their Affiliates with respect to the  transactions  contemplated  hereby  except  those  obligations  expressly  set  forth  herein  and  in  the  other  Investment Documents; and (c) the Administrative Agent, the Lenders and their respective Affiliates may  be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties  and  their  Affiliates,  and  neither  the  Administrative  Agent  nor  any  Lender  nor  any  of  their  respective  Affiliates has any obligation to disclose any of such interests to the Loan Parties or their Affiliates.  To  the fullest extent permitted by law, the Loan Parties hereby waive and release any claims that they may  have against the Administrative Agent, any Lender or any of their respective Affiliates with respect to any  breach  or  alleged  breach of  agency  or fiduciary  duty  in connection  with any  aspect  of any  transaction  contemplated hereby.         11.19 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.         Solely to the extent any Lender that is an EEA Financial Institution is a party to this Agreement  and  notwithstanding  anything  to  the  contrary  in  any  Investment  Document  or in  any  other agreement,  arrangement or understanding among any such parties, each party hereto acknowledges that any liability  of any Lender that is an EEA Financial Institution arising under any Investment Document, to the extent                                        124  CHAR1\1659840v4 

 

such  liability  is  unsecured,  may  be  subject  to  the  write-down  and  conversion  powers  of  an  EEA  Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:               (a)  the  application  of  any  Write-Down  and  Conversion  Powers  by  an  EEA        Resolution Authority to any such liabilities arising hereunder which may be payable to it by any        Lender that is an EEA Financial Institution; and               (b)  the effects of any Bail-In Action on any such liability, including, if applicable:                     (i)   a reduction in full or in part or cancellation of any such liability;                     (ii) a  conversion  of  all,  or  a  portion  of,  such  liability  into  shares  or  other              instruments of ownership in such EEA Financial Institution, its parent undertaking, or a              bridge  institution  that  may  be  issued  to  it  or  otherwise  conferred  on  it,  and  that  such              shares or other instruments of ownership will be accepted by it in lieu of any rights with              respect to any such liability under this Agreement or any other Investment Document; or                     (iii) the variation of the terms of such liability in connection with the exercise              of the write-down and conversion powers of any EEA Resolution Authority.         11.20 Funding Date.         The parties hereto agree that if the Funding Date does not occur on or before August 24, 2017,  this Agreement and all other Loan Documents shall be automatically terminated.                                         125  CHAR1\1659840v4 

 

                                 SCHEDULE 2                    EXHIBIT A TO AMENDED CREDIT AGREEMENT                                    See Attached.    CHAR1\1664782v2 

 

                                  EXHIBIT A                              FORM OF LOAN NOTICE   Date:  __________, 20__   To:  Madryn Health Partners, LP, as Administrative Agent   Re:   Credit Agreement dated as of August 24, 2017 (as amended, modified, restated, supplemented or        extended from time to time, the “Credit Agreement”), among Establishment Labs Holdings Inc., a        BVI business company, limited by shares and incorporated under the laws of the British Virgin        Islands (the “Borrower”), the Guarantors from time to time party thereto, the Lenders from time to        time party thereto and Madryn Health Partners, LP, as Administrative Agent.  Capitalized terms        used but not otherwise defined herein have the meanings provided in the Credit Agreement.   Ladies and Gentlemen:   The undersigned hereby requests a Borrowing of _________________.1  1.   on [_______________, 20__] (which is a Business Day).   2.   in the principal amount of $_____________________.   [The Borrower hereby represents and warrants that each of the conditions set forth in Sections 5.02 and  5.03 of the Credit Agreement has been satisfied on and as of the date of such Borrowing.]2  [The Borrower hereby represents and warrants that each of the conditions set forth in Section 5.03 of the  Credit Agreement has been satisfied on and as of the date of such Borrowing.] 3  [The Borrower hereby represents and warrants that each of the conditions set forth in Sections 5.03 and  5.04 of the Credit Agreement has been satisfied on and as of the date of such Borrowing.] 4                            [SIGNATURE PAGE FOLLOWS]   1 Note: Select appropriate tranche as applicable (e.g. “Term A Loans”, “Term B-1 Loans”, “Term B-2 Loans”, “Term B-3  Loans”, “Term B-4 Loans”, “Term C Loans”, etc.).  2 Note: For use with the Borrowing of Term A Loans only. 3 Note: For use with the Borrowing of Term B-1 Loans, Term B-2 Loans, Term B-3 Loans or Term B-4 Loans only. 4 Note: For use with the Borrowing of Term C Loans only.   CHAR1\1664782v2 

 

      IN WITNESS WHEREOF, the undersigned has caused this Loan Notice to be executed as of the  date first above written.                                       ESTABLISHMENT LABS HOLDINGS INC.,                                      a  BVI  business  company,  limited  by  shares  and                                      incorporated under the laws of the British Virgin Islands                                       By:                                       Name:                                      Title:    CHAR1\1664782v2 

 

                                 SCHEDULE 3                   EXHIBIT B-5 TO AMENDED CREDIT AGREEMENT                                    See Attached.    CHAR1\1664782v2 

 

                                 EXHIBIT B-5                              FORM OF TERM B-4 NOTE                                                                  __________, 20__   FOR VALUE RECEIVED, the undersigned (the “Borrower”) promises to pay to _____________________  or  registered  assigns  (the  “Lender”),  in  accordance  with  the  provisions  of  the  Credit  Agreement  (as  hereinafter defined), the principal amount of the Term B-4 Loans from time to time made by the Lender to  the Borrower under that certain Credit Agreement dated as of August 24, 2017 (as amended, modified,  restated, supplemented or extended from time to time, the “Credit Agreement”), among the Borrower, the  Guarantors from time to time party thereto, the Lenders from time to time party thereto and Madryn Health  Partners, LP, as Administrative Agent.  Capitalized terms used but not otherwise defined herein have the  meanings provided in the Credit Agreement.   The Borrower promises to pay interest on the unpaid principal amount of each Term B-4 Loan made by the  Lender from the date of such Term B-4 Loan until such principal amount is paid in full, at such interest  rates and at such times as provided in the Credit Agreement.  All payments of principal and interest shall  be made to the Lender in Dollars in immediately available funds at the Lending Office of the Lender or as  otherwise directed by the Lender.  If any amount is not paid in full when due hereunder, such unpaid amount  shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and  before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.   This Term B-4 Note is one of the Term B-4 Notes referred to in the Credit Agreement, is entitled to the  benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.   Upon the occurrence  and continuation  of one  or  more  of the  Events  of  Default  specified  in  the  Credit  Agreement, all amounts then remaining unpaid on this Term B-4 Note shall become, or may be declared to  be, immediately due and payable all as provided in and subject to the Credit Agreement.  The Term B-4  Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the  Lender in the ordinary course of business. The Lender may also attach schedules to this Term B-4 Note and  endorse thereon the date, amount and maturity of the Term B-4 Loans made by the Lender and payments  with respect thereto.   The  Borrower, for  itself,  its  successors  and  assigns,  hereby  waives  diligence,  presentment, protest  and  demand and notice of protest, demand, dishonor and nonpayment of this Term B-4 Note.   This Term B-4 Note may only be transferred in accordance with the limitations and restrictions set forth in  the Credit Agreement.  THIS TERM B-4 NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN  ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.                             [SIGNATURE PAGE FOLLOWS]   CHAR1\1664782v2 

 

      IN WITNESS WHEREOF, the Borrower has caused this Term B-4 Note to be duly executed and  delivered as of the date first above written.                                       ESTABLISHMENT LABS HOLDINGS INC.,                                      a  BVI  business  company,  limited  by  shares  and                                      incorporated under the laws of the British Virgin Islands                                       By:                                       Name:                                      Title:    CHAR1\1664782v2 

 

                                 SCHEDULE 4                    EXHIBIT E TO AMENDED CREDIT AGREEMENT                                    See Attached.    CHAR1\1664782v2 

 

                                  EXHIBIT E                        FORM OF COMPLIANCE CERTIFICATE                                             Financial Statement Date:[    , 20__]   To:  Madryn Health Partners, LP, as Administrative Agent   Re:   Credit Agreement dated as of August 24, 2017 (as amended, modified, restated, supplemented or        extended from time to time, the “Credit Agreement”), among Establishment Labs Holdings Inc., a        BVI business company, limited by shares and incorporated under the laws of the British Virgin        Islands (the “Borrower”), the Guarantors from time to time party thereto, the Lenders from time to        time party thereto and Madryn Health Partners, LP, as Administrative Agent.  Capitalized terms        used but not otherwise defined herein have the meanings provided in the Credit Agreement.   Date:[__________, 20__]   Ladies and Gentlemen:   The undersigned Responsible Officer hereby certifies as of the date hereof that [he/she] is the [Director,  Chief Executive Officer, Chief Financial Officer, Treasurer or Controller] of the Borrower, and that, in  [his/her] capacity as such, [he/she] is authorized to execute and deliver this Compliance Certificate to the  Administrative Agent on the behalf of the Borrower, and that:   [Use following paragraph 1 for financial statements delivered pursuant to Section 7.01(a) of the Credit  Agreement:]   [1.  [Attached hereto as Schedule 1 are the year-end audited financial statements of the Borrower and  its  Subsidiaries,  together  with  the  report  and  opinion  of  an  independent  certified  public  accountant  in  satisfaction of their requirements under Section 7.01(a) of the Credit Agreement for the fiscal year of the  Borrower ended as of the Financial Statement Date.]   [Use following paragraph 1 for financial statements delivered pursuant to Section 7.01(b) of the Credit  Agreement:]   [1.  [Attached  hereto  as  Schedule  1  are  the  unaudited  financial  statements  of  the  Borrower  and  its  Subsidiaries in satisfaction of their requirements under Section 7.01(b) of the Credit Agreement for the  fiscal quarter of the Borrower ended as of the Financial Statement Date. Such financial statements fairly  present in all material respects the financial condition, results of operations, shareholders’ equity and cash  flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period,  subject only to normal year end audit adjustments and the absence of footnotes.]   2.   The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made,  or  has  caused  to  be  made,  a reasonably detailed review  of  the transactions and  condition  (financial  or  otherwise) of the Loan Parties during the accounting period covered by such financial statements.   3.   A review of the activities of the Loan Parties and their respective Subsidiaries during the accounting  period covered by such financial statements has been made under the supervision of the undersigned with  a view to determining whether during such fiscal period the Loan Parties and their respective Subsidiaries  performed and observed all of their respective obligations under the Loan Documents, and     CHAR1\1664782v2 

 

[select one:]   [to  the  knowledge  of  the  undersigned  during  such  fiscal  period,  the  Loan  Parties  and  their  respective  Subsidiaries performed and observed each covenant and condition of the Loan Documents applicable to  them, and no Default has occurred and is continuing.]   [or:]   [the following covenants or conditions have not been performed or observed and the following is a list of  each such Default and its nature and status:]   4.   The financial covenant analyses and calculation of (i) Product Revenues for the four consecutive  fiscal quarter period most recently ended on or prior to the date of this Compliance Certificate and (ii)  Liquidity, in each case, set forth on Schedule 2 attached hereto are true and accurate on and as of the date  of this Compliance Certificate.   5.   Attached hereto as Schedule 3 is a supplement setting forth information regarding the amount and  timing  of  all  Dispositions,  Involuntary  Dispositions,  Debt  Issuances,  Extraordinary  Receipts  and  Acquisitions that occurred during the period covered by the attached financial statements.   6.   Attached  hereto  as  Schedule  4  is  a  list  of  (i)  all  applications  by  any  Loan  Party,  if  any,  for  Copyrights,  Patents  or  Trademarks  made  since  [the  Effective  Date]  [the  date  of  the  prior  Compliance  Certificate],  (ii)  all  issuances  of  registrations  or  letters  on  existing  applications  by  any  Loan  Party  for  Copyrights, Patents and Trademarks received since [the Effective Date] [the date of the prior Compliance  Certificate], (iii) licenses of any IP Rights (other than non-exclusive licenses permitted by Section 8.05 of  the Credit Agreement granted in the ordinary course of business) entered into by any Loan Party since [the  Effective  Date]  [the  date  of  the  prior  Compliance  Certificate]  and  (iv)  such  supplements  to  Schedules  6.17(a), 6.17(b), 6.17(d), 6.17(e) and 6.22 of the Disclosure Letter as are necessary to cause such schedules  to be true and complete in all material respects as of the date of this Compliance Certificate.   7.   Attached  hereto  as  Schedule  5  is  the  insurance  binder  or  other  evidence  of  insurance  for  any  insurance coverage of any Loan Party or any Subsidiary that was renewed, replaced or modified during the  period covered by the attached financial statements.   8.   Attached hereto as Schedule 6 is a copy of management’s discussion and analysis with respect to  such financial statements.   9.   Attached hereto as Schedule 7 is a list of all litigations, arbitrations or governmental investigations  or proceedings which were instituted during the period covered by such financial statements or which, to  the knowledge of any Loan Party, are threatened (in writing) against any Loan Party or any Subsidiary  which, in any case, could reasonably be expected to result in losses and/or expenses (other than, for the  avoidance of doubt, legal and court fees, costs and expenses) in excess of the Threshold Amount, together  with a description setting forth the details thereof and stating what action the applicable Loan Party or  Subsidiary has taken and proposes to take with respect thereto.   10.  Attached hereto as Schedule 8 is information regarding, in each case, to the extent occurring during  the period covered by such financial statements, (i) the termination of any Material Contract, (ii) the receipt  by any Loan Party or any of its Subsidiaries of any notice under any Material Contract (and a copy thereof)  as to the occurrence of any material breach or default under or pursuant to such Material Contract that could  result in termination thereof or a material liability in respect thereof, (iii) the entering into of any new    CHAR1\1664782v2 

 

Material Contract  by  a  Loan  Party  or  any of  its  Subsidiaries  (and  a copy  thereof)  or (iv)  any  material  amendment to a Material Contract (and a copy thereof).   11.  Attached hereto as Schedule 9 is a listing of all deposit accounts and other bank accounts and  securities accounts of the Loan Parties and their Subsidiaries (including, for the avoidance of doubt, the  Controlled Accounts) as of the Financial Statement Date (which listing shall include the location of each  such account and the balance of each such account as of the Financial Statement Date).   12.  Attached hereto as Schedule 10 is a listing of all Investments made by any Loan Party or any  Subsidiary thereof pursuant to Section 8.02(c)(ii) of the Credit Agreement as of the Financial Statement  Date.                             [SIGNATURE PAGES FOLLOW]    CHAR1\1664782v2 

 

      IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of  __________, 20__.                                       ESTABLISHMENT LABS HOLDINGS INC.,                                      a  BVI  business  company,  limited  by  shares  and                                      incorporated under the laws of the British Virgin Islands                                       By:                                       Name:                                      Title:    CHAR1\1664782v2 

 

                                    Schedule 1            [Audited][Unaudited] Financial Statements of the Borrower and its Subsidiaries    CHAR1\1664782v2 

 

                                    Schedule 2      1. Product Revenues.      A. For the four fiscal quarter period most recently        ended  as  of  the  date  of  this  Compliance        Certificate, all amounts paid to and received by        the  Borrower  and  its  Subsidiaries  in  the        ordinary course of business that, in accordance        with  GAAP,  would  be  classified  as  net        revenue,  excluding  upfront  payments,        milestones,  royalties  and  other  similar  one-       time payments received by the Borrower and        its Subsidiaries that are not related to the sale        of products or services5:                               $      B. Minimum amount required by Section 8.16 of        the Credit Agreement for such period:                   $   Compliance:                                                                                 [Yes] [No]      2. Liquidity.      A. Aggregate  Unrestricted  Cash  maintained  by        the Loan Parties (without duplication) for each        day during the four fiscal quarter period most        recently  ended  as  of  the  date  of  this        Compliance Certificate:                                 $      B. Minimum amount required by Section 8.17(a)        of the Credit Agreement:                                $10,000,000   Compliance:                                                                                 [Yes] [No]      A. Aggregate  Unrestricted  Cash  maintained  by        the Loan Parties (without duplication) for each        day during the four fiscal quarter period most        recently  ended  as  of  the  date  of  this        Compliance Certificate and which is held in a        Controlled Account:                                     $      B. Minimum amount required by Section 8.17(b)        of the Credit Agreement:                                $5,000,000   Compliance:                                                       [Yes] [No]   5 “Product Revenues” shall exclude the revenues generated by any Subsidiary to the extent that the declaration or  payment of dividends or similar distributions by that Subsidiary of the income resulting from such revenue is not at  the time permitted by operation of the terms of its Organization Documents or any agreement, instrument, judgment,  decree, order, statute, rule, or governmental regulation applicable to that Subsidiary.    CHAR1\1664782v2 

 

                                  Schedule 3      Dispositions, Involuntary Dispositions, Debt Issuances Extraordinary Receipts and Acquisitions    CHAR1\1664782v2 

 

                                  Schedule 4                                  IP Schedule Updates    CHAR1\1664782v2 

 

                                  Schedule 5                                   Insurance Binders    CHAR1\1664782v2 

 

                                  Schedule 6                            Management’s Discussion and Analysis     CHAR1\1664782v2 

 

                                  Schedule 7               Litigations, Arbitrations, or Governmental Investigations or Proceedings     CHAR1\1664782v2 

 

                                  Schedule 8                                   Material Contracts    CHAR1\1664782v2 

 

                                  Schedule 9              Listing of Deposit Accounts, Other Bank Accounts and Securities Accounts    CHAR1\1664782v2 

 

                                  Schedule 10                        Listing of Investments in Brazilian Loan Parties   CHAR1\1664782v2 

 

                                 SCHEDULE 5                  SCHEDULE 2.01 TO AMENDED CREDIT AGREEMENT                                    See Attached.    CHAR1\1664782v2 

 

                   Term A                                  Term B-1            Applicable          Term B-2            Applicable                                        Applicable                Commitment (as in                         Commitment (as     Percentage of Term   Commitment (as     Percentage of Term     Lender                         Percentage of Term                   effect on the                           in effect on the         B-1            in effect on the         B-2                                      A Commitments                  Effective Date)                          Effective Date)     Commitments         Effective Date)     Commitments   Madryn   Health   Partners, LP     $13,636,363.64       45.454545455%       $2,272,727.27       45.454545455%        $2,272,727.27       45.454545455%   Madryn   Health   Partners   (Cayman   Master), LP      $16,363,636.36       54.545454545%       $2,727,272.73       54.545454545%        $2,727,272.73       54.545454545%     Total:                    $30,000,000.00      100.000000000%       $5,000,000.00      100.000000000%        $5,000,000.00      100.000000000%                                        Applicable                               Applicable                                                                                                                         Applicable                    Term B-3       Percentage of Term       Term B-4        Percentage of Term        Term C     Lender                                                                                                          Percentage of Term                  Commitment               B-3             Commitment              B-4             Commitment                                                                                                                      C Commitments                                      Commitments                              Commitments   Madryn   Health   Partners, LP     $4,545,454.55       45.454545455%        $6,818,181.82       45.454545455%        $4,545,454.55       45.454545455%   Madryn   Health   Partners   (Cayman   Master), LP      $5,454,545.45       54.545454545%        $8,181,818.18       54.545454545%        $5,454,545.45       54.545454545%     Total:                   $10,000,000.00      100.000000000%       $15,000,000.00      100.000000000%       $10,000,000.00      100.000000000%    CHAR1\1664782v2leds-ex101_17.htm

Appendix

SEMILEDS CORPORATION

 

2010 EQUITY INCENTIVE PLAN

 

(AS ADOPTED NOVEMBER 2, 2010 AND EFFECTIVE DECEMBER 8, 2010)
(AS AMENDED JANUARY 9, 2014 AND APPROVED BY STOCKHOLDERS ON APRIL 10, 2014)

(AS AMENDED JUNE 14, 2019 AND SUBJECT TO APPROVAL OF
STOCKHOLDERS ON JULY 31, 2019)

 

TABLE OF CONTENTS

 

	
 
	
 
	
 
	
 
	
Page

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 1.
	
 
	
INTRODUCTION
	
 
	
1

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 2.
	
 
	
ADMINISTRATION
	
 
	
1

	
 
	
 
	
 
	
 
	
 

	
2.1
	
 
	
Committee Composition
	
 
	
1

	
2.2
	
 
	
Committee Responsibilities
	
 
	
1

	
2.3
	
 
	
Non-Officer Grants
	
 
	
1

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 3.
	
 
	
SHARES AVAILABLE FOR GRANTS
	
 
	
2

	
 
	
 
	
 
	
 
	
 

	
3.1
	
 
	
Basic Limitation
	
 
	
2

	
3.2
	
 
	
Shares Returned to Reserve
	
 
	
2

	
3.3
	
 
	
Dividend Equivalents
	
 
	
2

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 4.
	
 
	
GENERAL
	
 
	
2

	
 
	
 
	
 
	
 
	
 

	
4.1
	
 
	
Eligibility
	
 
	
2

	
4.2
	
 
	
Incentive Stock Options
	
 
	
2

	
4.3
	
 
	
Other Grants
	
 
	
2

	
4.4
	
 
	
Restrictions on Shares
	
 
	
2

	
4.5
	
 
	
Beneficiaries
	
 
	
3

	
4.6
	
 
	
Performance Conditions
	
 
	
3

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 5.
	
 
	
OPTIONS
	
 
	
3

	
 
	
 
	
 
	
 
	
 

	
5.1
	
 
	
Stock Option Agreement
	
 
	
3

	
5.2
	
 
	
Number of Shares
	
 
	
3

	
5.3
	
 
	
Exercise Price
	
 
	
3

	
5.4
	
 
	
Exercisability and Term
	
 
	
3

	
5.5
	
 
	
Modification or Assumption of Options
	
 
	
4

	
5.6
	
 
	
Buyout Provisions
	
 
	
4

	
5.7
	
 
	
Assignment or Transfer of Options
	
 
	
4

	
 
	
 
	
 
	
 
	
 

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
	
 
	
 
	
 
	
Page

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 6.
	
 
	
PAYMENT FOR OPTION SHARES
	
 
	
4

	
 
	
 
	
 
	
 
	
 

	
6.1
	
 
	
General Rule
	
 
	
4

	
6.2
	
 
	
Surrender of Stock
	
 
	
4

	
6.3
	
 
	
Exercise/Sale
	
 
	
4

	
6.4
	
 
	
Other Forms of Payment
	
 
	
4

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 7.
	
 
	
STOCK APPRECIATION RIGHTS
	
 
	
5

	
 
	
 
	
 
	
 
	
 

	
7.1
	
 
	
SAR Agreement
	
 
	
5

	
7.2
	
 
	
Number of Shares
	
 
	
5

	
7.3
	
 
	
Exercise Price
	
 
	
5

	
7.4
	
 
	
Exercisability and Term
	
 
	
5

	
7.5
	
 
	
Exercise of SARs
	
 
	
5

	
7.6
	
 
	
Modification or Assumption of SARs
	
 
	
5

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 8.
	
 
	
RESTRICTED SHARES
	
 
	
5

	
 
	
 
	
 
	
 
	
 

	
8.1
	
 
	
Restricted Stock Agreement
	
 
	
5

	
8.2
	
 
	
Payment for Awards
	
 
	
6

	
8.3
	
 
	
Vesting Conditions
	
 
	
6

	
8.4
	
 
	
Voting and Dividend Rights
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 9.
	
 
	
STOCK UNITS
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
9.1
	
 
	
Stock Unit Agreement
	
 
	
6

	
9.2
	
 
	
Payment for Awards
	
 
	
6

	
9.3
	
 
	
Vesting Conditions
	
 
	
6

	
9.4
	
 
	
Voting and Dividend Rights
	
 
	
7

	
9.5
	
 
	
Form and Time of Settlement of Stock Units
	
 
	
7

	
9.6
	
 
	
Death of Recipient
	
 
	
7

	
9.7
	
 
	
Creditors’ Rights
	
 
	
7

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 10.
	
 
	
PROTECTION AGAINST DILUTION
	
 
	
7

	
 
	
 
	
 
	
 
	
 

	
10.1
	
 
	
Adjustments
	
 
	
7

	
10.2
	
 
	
Dissolution or Liquidation
	
 
	
8

	
10.3
	
 
	
Change in Control
	
 
	
8

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 11.
	
 
	
AWARDS UNDER OTHER PLANS
	
 
	
9

	
 
	
 
	
 
	
 
	
 

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
	
 
	
 
	
 
	
Page

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 12.
	
 
	
PAYMENT OF DIRECTOR’S FEES IN SECURITIES
	
 
	
9

	
 
	
 
	
 
	
 
	
 

	
12.1
	
 
	
Effective Date
	
 
	
9

	
12.2
	
 
	
Elections to Receive NSOs, Restricted Shares or Stock Units
	
 
	
9

	
12.3
	
 
	
Number and Terms of NSOs, Restricted Shares or Stock Units
	
 
	
9

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 13.
	
 
	
LIMITATION ON RIGHTS
	
 
	
9

	
13.1
	
 
	
Retention Rights
	
 
	
9

	
13.2
	
 
	
Stockholders’ Rights
	
 
	
10

	
13.3
	
 
	
Regulatory Requirements
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 14.
	
 
	
WITHHOLDING TAXES
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
14.1
	
 
	
General
	
 
	
10

	
14.2
	
 
	
Share Withholding
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 15.
	
 
	
FUTURE OF THE PLAN
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
15.1
	
 
	
Term of the Plan
	
 
	
10

	
15.2
	
 
	
Amendment or Termination
	
 
	
10

	
15.3
	
 
	
Stockholder Approval
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 16.
	
 
	
DEFINITIONS
	
 
	
11

 

iii

 

 

SEMILEDS CORPORATION
2010 EQUITY INCENTIVE PLAN

 

ARTICLE 1.                        INTRODUCTION.

 

The Plan was adopted by the Board effective as of the IPO Date.  The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and Consultants directly to stockholder interests through increased stock ownership.  The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, Stock Units, Options (which may constitute ISOs or NSOs) or stock appreciation rights.

 

The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except their choice-of-law provisions).

 

ARTICLE 2.                        ADMINISTRATION

 

2.1                               Committee Composition.  The Compensation Committee of the Board shall administer the Plan.  The Committee shall consist exclusively of members of the Board, who shall be appointed by the Board.  In addition, each member of the Committee shall meet the following requirements:

 

(a)                                 Any listing standards prescribed by the principal securities market on which the Company’s equity securities are traded;

 

(b)                              Such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

 

(c)                                 Any other requirements imposed by applicable law, regulations or rules.

 

2.2                               Committee Responsibilities.  The Committee shall (a) select the Employees, Outside Directors and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) amend any outstanding Awards, (d) accelerate the vesting or extend the post-termination exercise term of Awards at any time and under such terms and conditions as it deems appropriate, (e) correct any defect, supplying any omission or reconciling any inconsistency in the Plan or any agreement evidencing an Award, (f) interpret the Plan, (g) make all other decisions relating to the operation of the Plan, (h) adopt such plans or subplans as may be deemed necessary or appropriate to provide for the participation by service providers of the Company, its Parent, Subsidiaries and Affiliates who reside outside of the U.S., which plans and/or subplans shall be attached hereto as Appendices and (i) carry out any other duties delegated to it by the Board under the Plan.  The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan.  The Committee’s determinations under the Plan shall be final and binding on all persons.

 

2.3                               Non-Officer Grants.  The Board may also appoint additional committees of the Board composed of one or more directors of the Company.  The additional committees need not satisfy the requirements of Section 2.1.  Such committees may (a) administer the Plan with respect to Employees and Consultants who are not Outside Directors and are not considered executive officers of the Company under section 16 of the Exchange Act, (b) grant Awards under the Plan to such Employees and Consultants and (c) determine all features and conditions of such Awards.  Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include these additional committees to whom the Board has delegated the required authority under this Section 2.3.

 

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ARTICLE 3.                        SHARES AVAILABLE FOR GRANTS.

 

3.1                               Basic Limitation.  Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares.  The aggregate number of Common Shares issued under the Plan shall not exceed (a) one million twenty-one thousand four hundred twenty-eight (1,021,428) (1) Common Shares plus (b) the additional Common Shares described in Sections 3.2.  The number of Common Shares that are subject to Awards outstanding at any time under the Plan shall not exceed the number of Common Shares that then remain available for issuance under the Plan.  All Common Shares available under the Plan may be issued upon the exercise of ISOs.  The limitation of this Section 3.1 shall be subject to adjustment pursuant to Article 10.

 

3.2                               Shares Returned to Reserve.  If Options, SARs or Stock Units are forfeited or terminate for any other reason before being exercised or settled, then the Common Shares subject to such Options, SARs or Stock Units shall again become available for issuance under the Plan.  If SARs are exercised, then only the number of Common Shares (if any) actually issued in settlement of such SARs shall reduce the number available under Section 3.1 and the balance shall again become available for issuance under the Plan.  If Stock Units are settled, then only the number of Common Shares (if any) actually issued in settlement of such Stock Units shall reduce the number available under Section 3.1 and the balance shall again become available for issuance under the Plan.  If Restricted Shares or Common Shares issued upon the exercise of Options are reacquired by the Company pursuant to a forfeiture provision or for any other reason, then such Common Shares shall again become available for issuance under the Plan.

 

3.3                               Dividend Equivalents.  Any dividend equivalents paid or credited under the Plan shall not be applied against the number of Common Shares that may be issued under the Plan, whether or not such dividend equivalents are converted into Stock Units.

 

ARTICLE 4.                        GENERAL.

 

4.1                               Eligibility.  Only Employees, Outside Directors, and Consultants shall be eligible to participate in the Plan.

 

4.2                               Incentive Stock Options.  Only Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.  In addition, an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries shall not be eligible for the grant of an ISO unless the additional requirements set forth in section 422(c)(5) of the Code are satisfied.

 

4.3                               Other Grants.  Only Employees, Outside Directors and Consultants shall be eligible for the grant of Restricted Shares, Stock Units, NSOs or SARs.

 

4.4                               Restrictions on Shares.  Any Shares issued pursuant to an Award shall be subject to such rights of repurchase and other transfer restrictions as the Committee may determine, in its sole discretion.  Such restrictions shall apply in addition to any restrictions that may apply to holders of Shares generally and shall also comply to the extent necessary with applicable law.  In no event shall the Company be required to issue fractional Shares under this Plan.

 

(1)  Such amount as well as all other share numbers in this Plan have been adjusted to reflect the one-for-fourteen reverse stock split effective as of the IPO date.

 

2

 

4.5                               Beneficiaries.  Unless stated otherwise in an agreement evidencing an Award and then only to the extent permitted by applicable law, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death.  If no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate.

 

4.6                               Performance Conditions.  The Committee may, in its discretion, include performance conditions in an Award.  If performance conditions are included in Awards, then such Awards will be subject to the achievement of Performance Goals with respect to a Performance Period established by the Committee.  Before any Shares underlying an Award or any Award payments are released with respect to a Performance Period, the Committee shall certify in writing that the Performance Goals for such Performance Period have been satisfied. 

 

ARTICLE 5.                        OPTIONS.

 

5.1                               Stock Option Agreement.  Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company.  Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The Stock Option Agreement shall specify whether the Option is an ISO or an NSO.  The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.  Subject to an Optionee’s consent, Options may be granted in consideration of a reduction in the Optionee’s other compensation.

 

5.2                               Number of Shares.  Each Stock Option Agreement shall specify the number of Common Shares subject to the Option, which shall be subject to adjustment in accordance with Article 10.  Options granted to an Optionee in a single fiscal year of the Company shall not cover more than 35,000 Common Shares.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10.

 

5.3                               Exercise Price.  Each Stock Option Agreement shall specify the Exercise Price.  In the case of an ISO (a) granted to an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries, the Exercise Price shall be no less than 110% of the Fair Market Value on the date of grant; and (b) granted to any other Employee, the Exercise Price shall be no less than 100% of the Fair Market Value on the date of grant.

 

5.4                               Exercisability and Term.  Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become exercisable.  The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of grant, except that the term of an ISO granted to an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries shall in no event exceed 5 years from the date of grant.  A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service.  Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited.

 

 

3

 

 

 

5.5                               Modification or Assumption of Options.  Within the limitations of the Plan, the Committee may modify, reprice, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such Option.

 

5.6                               Buyout Provisions.  The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.

 

5.7          Assignment or Transfer of Options.  No Option or interest therein shall be transferred, assigned, pledged or hypothecated by the Optionee during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process, other than (i) by will or by the laws of descent and distribution, or (ii) in the case of an NSO, as otherwise expressly permitted by the Committee including, if so permitted, pursuant to a transfer to such Optionee’s Immediate Family.  An Option may be exercised, subject to the terms of the Plan and the applicable Stock Option Agreement, only by the Optionee, the guardian or legal representative of the Optionee, a beneficiary designated pursuant to Section 4.5, or any person to whom such Option is transferred pursuant to this paragraph.

 

ARTICLE 6.                        PAYMENT FOR OPTION SHARES.

 

6.1                               General Rule.  The entire Exercise Price of Common Shares issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such Common Shares are purchased, except that the Committee at its sole discretion may accept payment of the Exercise Price in any other form(s) described in this Article 6.  However, if the Optionee is an Outside Director or executive officer of the Company, he or she may pay the Exercise Price in a form other than cash or cash equivalents only to the extent permitted by section 13(k) of the Exchange Act.

 

6.2                               Surrender of Stock.  With the Committee’s consent, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Common Shares that are already owned by the Optionee.  Such Common Shares shall be valued at their Fair Market Value on the date when the new Common Shares are purchased under the Plan.

 

6.3                               Exercise/Sale.  With the Committee’s consent, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company.

 

6.4                               Other Forms of Payment.  With the Committee’s consent, all or any part of the Exercise Price and any withholding taxes may be paid in any other form that is consistent with applicable laws, regulations and rules.

 

 

4

 

ARTICLE 7.                        STOCK APPRECIATION RIGHTS.

 

7.1                               SAR Agreement.  Each grant of an SAR under the Plan shall be evidenced by an SAR Agreement between the Optionee and the Company.  Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various SAR Agreements entered into under the Plan need not be identical.  Subject to an Optionee’s consent, SARs may be granted in consideration of a reduction in the Optionee’s other compensation.

 

7.2                               Number of Shares.  Each SAR Agreement shall specify the number of Common Shares to which the SAR pertains and shall be subject to adjustment in accordance with Article 10.  SARs granted to an Optionee in a single fiscal year shall in no event pertain to more than 35,000 Common Shares.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10.

 

7.3                               Exercise Price.  Each SAR Agreement shall specify the Exercise Price.

 

7.4                               Exercisability and Term.  Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable and/or may include time-based vesting or performance-based vesting (including Performance Goals pursuant to Section 4.6).  The SAR Agreement shall also specify the term of the SAR, which shall not exceed ten (10) years from the date of grant.  An SAR Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service.  SARs may be awarded in combination with Options or Restricted Shares, and such an Award may provide that the SARs will not be exercisable unless the related Options or Restricted Shares are forfeited.  An SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter.  Notwithstanding any other provision of the Plan or the SAR Agreement, no SAR can be exercised after the expiration date provided in the applicable SAR Agreement.

 

7.5                               Exercise of SARs.  Upon exercise of an SAR, the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Common Shares, (b) cash or (c) a combination of Common Shares and cash, as the Committee shall determine.  The amount of cash and/or the Fair Market Value of Common Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Common Shares subject to the SARs exceeds the Exercise Price.  If, on the date when an SAR expires, the Exercise Price is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion.  An SAR Agreement may also provide for an automatic exercise of the SAR on an earlier date.

 

7.6                               Modification or Assumption of SARs.  Within the limitations of the Plan, the Committee may modify, reprice, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of shares and at the same or a different exercise price.  The foregoing notwithstanding, no modification of an SAR shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such SAR.

 

ARTICLE 8.                        RESTRICTED SHARES.

 

8.1                               Restricted Stock Agreement.  Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company.  Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical.

 

 

5

 

8.2                               Payment for Awards.  Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, property, past services and future services.

 

8.3                               Vesting Conditions.  Each Award of Restricted Shares may or may not be subject to vesting.  Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement.  The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a specified period of one or more fiscal years equal or exceed a target determined in advance by the Committee.  The Committee shall determine such performance.  Such target may be based on one or more of the criteria set forth in the Performance Goals.  The Committee shall identify such target not later than the 90th day of such period.  In no event shall more than 35,000 Restricted Shares that are subject to performance-based vesting conditions be granted to any Participant in a single fiscal year of the Company.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10.  A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events.

 

8.4                               Voting and Dividend Rights.  The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders.  A Restricted Stock Agreement, however, may require that any cash dividends paid on Restricted Shares (a) be accumulated and paid when such Restricted Shares vest or (b) be invested in additional Restricted Shares.  Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid.

 

ARTICLE 9.                        STOCK UNITS.

 

9.1                               Stock Unit Agreement.  Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company.  Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical.  Subject to a recipient’s consent, Stock Units may be granted in consideration of a reduction in the recipient’s other compensation.

 

9.2                               Payment for Awards.  To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.

 

9.3                               Vesting Conditions.  Each Award of Stock Units may or may not be subject to vesting.  Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement.  The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a specified period of one or more fiscal years equal or exceed a target determined in advance by the Committee.  The Committee shall determine such performance.  Such target may be based on one or more of the criteria set forth in the Performance Goals.  The Committee shall identify such target not later than the 90th day of such period.  In no event shall more than 35,000 Stock Units that are subject to performance-based vesting conditions be granted to any Participant in a single fiscal year of the Company, except that up to 35,000 Stock Units subject to performance-based vesting conditions may be granted to a new Employee in the fiscal year of the Company in which his or her Service commences.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10.  A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. 

 

6

9.4         Voting and Dividend Rights.  The holders of Stock Units shall have no voting rights.  Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents.  Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Common Share while the Stock Unit is outstanding.  Dividend equivalents may be converted into additional Stock Units.  Settlement of dividend equivalents may be made in the form of cash, in the form of Common Shares, or in a combination of both.  Prior to distribution, any dividend equivalents that are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach.

 

 

9.5                               Form and Time of Settlement of Stock Units.  Settlement of vested Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Committee.  The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors.  Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Common Shares over a series of trading days.  Vested Stock Units may be settled in a lump sum or in installments.  The distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date.  The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents.  Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Article 10.

 

9.6                               Death of Recipient.  Any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries.  Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death.  If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s estate.

 

9.7                               Creditors’ Rights.  A holder of Stock Units shall have no rights other than those of a general creditor of the Company.  Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.

 

ARTICLE 10.                                         PROTECTION AGAINST DILUTION.

 

10.1                        Adjustments.  In the event of a subdivision of the outstanding Common Shares, a stock split, a reverse stock split, a declaration of a dividend payable in Common Shares or a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares, or any other increase or decrease in the number of issued Common Shares effected without receipt of consideration by the Company, corresponding adjustments shall automatically be made in each of the following:

 

(a)                                 The number of Options, SARs, Restricted Shares and Stock Units available for future Awards under Article 3;

 

(b)                                 The limitations set forth in Sections 5.2, 7.2, 8.3 and 9.3;

 

(c)                                  The number of Common Shares covered by each outstanding Option and SAR;

 

(d)                                 The Exercise Price under each outstanding Option and SAR; and

 

(e)                                  The number of Stock Units included in any prior Award that has not yet been settled.

 

 

7

In the event of a declaration of an extraordinary dividend with respect to the Common Shares payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a recapitalization, a rights offering, a reorganization, a merger, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of the foregoing, and its determination shall be final, binding and conclusive.  Except as provided in this Article 10, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class.

 

10.2                        Dissolution or Liquidation.  To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

 

10.3                        Change in Control.  Individual agreements evidencing Awards may provide for vesting acceleration if the Company is subject to a Change in Control.  In addition, in the event that the Company is subject to a Change in Control, outstanding Options, SARs, Stock Units and Restricted Shares acquired under the Plan shall be subject to the agreement evidencing the Change in Control, which need not treat all outstanding Options, SARs or Stock Units (or portion thereof) in an identical manner.  Such agreement, without each Participant’s consent, may dispose of Options, SARs or Stock Units (or portions thereof) that are not vested as of the effective date of such Change in Control in any manner permitted by applicable law, including (without limitation) the cancellation of such Options, SARs or Stock Units (or portions thereof) without the payment of any consideration.  Such agreement, without each Participant’s consent, may provide for one or more of the following with respect to Options, SARs or Stock Units (or portions thereof) granted to each Participant that are vested and exercisable as of the closing date of such Change in Control:

 

(a)                                 The continuation of such outstanding Awards (or portion thereof) by the Company (if the Company is the surviving corporation).

 

(b)                                 The assumption of such outstanding Awards (or portion thereof) by the surviving corporation or its parent, provided that the assumption of Options or SARs shall comply with section 424(a) of the Code (whether or not the Options are ISOs).

 

(c)                                  The substitution by the surviving corporation or its parent of new awards for such outstanding Awards (or portion thereof), provided that the substitution of Options or SARs shall comply with section 424(a) of the Code (whether or not the Options are ISOs).

 

(d)                                 The cancellation of outstanding Options and SARs (or portion thereof) and a payment to the Participants equal to the excess of (i) the Fair Market Value of the Common Shares subject to such Options and SARs as of the closing date of such Change in Control over (ii) their Exercise Price.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount or any combination of the foregoing consideration.  If the Exercise Price of the Common Shares subject to such Options and SARs exceeds the Fair Market Value of such Common Shares, then such Options and SARs may be cancelled without making a payment to the Optionees.  For purposes of this Subsection (d), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

 

 

8

 

 

 

(e)                                  The cancellation of outstanding Stock Units (or portion thereof) and a payment to the Participants equal to the Fair Market Value of the Common Shares subject to such Stock Units as of the closing date of such Change in Control.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount or any combination of the foregoing consideration.  For purposes of this Subsection (e), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

 

(f)                                   The cancellation of outstanding Options and SARs (or portion thereof) for no consideration.

 

 

Immediately following a Change in Control, all outstanding Options, SARs and Stock Units shall terminate and cease to be outstanding, except to the extent such Options, SARs and Stock Units (or portion thereof) have been continued or assumed, as described in Sections 10.3(a) and/or 10.3(b).

 

ARTICLE 11.                                         AWARDS UNDER OTHER PLANS.

 

The Company may grant awards under other plans or programs.  Such awards may be settled in the form of Common Shares issued under this Plan.  Such Common Shares shall be treated for all purposes under the Plan like Common Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Common Shares available under Article 3.

 

ARTICLE 12.                                         PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

 

12.1                        Effective Date.  No provision of this Article 12 shall be effective unless and until the Board has determined to implement such provision.

 

12.2                        Elections to Receive NSOs, Restricted Shares or Stock Units.  An Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, Restricted Shares or Stock Units, or a combination thereof, as determined by the Board.  Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan.  An election under this Article 12 shall be filed with the Company on the prescribed form.

 

12.3                        Number and Terms of NSOs, Restricted Shares or Stock Units.  The number of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board.  The Board shall also determine the terms of such NSOs, Restricted Shares or Stock Units.

 

 ARTICLE 13.                                         LIMITATION ON RIGHTS.

 

13.1                        Retention Rights.  Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee, Outside Director or Consultant.  The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the Service of any Employee, Outside Director or Consultant at any time, with or without cause or notice, subject to applicable laws, the Company’s certificate of incorporation and by-laws and a written employment or consulting agreement (if any).

 

 

 

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13.2                        Stockholders’ Rights.  A Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any Common Shares covered by his or her Award prior to the time when a stock certificate for such Common Shares is issued or, if applicable, the time when he or she becomes entitled to receive such Common Shares by filing any required notice of exercise and paying any required Exercise Price.  No adjustment shall be made for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.

 

13.3                        Regulatory Requirements.  Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required.  The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing.

 

ARTICLE 14.                                         WITHHOLDING TAXES.

 

14.1                        General.  To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan.  The Company shall not be required to issue any Common Shares or make any cash payment under the Plan until such obligations are satisfied.

 

14.2                        Share Withholding.  To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any Common Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Common Shares that he or she previously acquired.  Such Common Shares shall be valued at their Fair Market Value on the date when they are withheld or surrendered.  This Section 14.2 shall apply only to the minimum extent required by applicable tax laws.

 

ARTICLE 15.                                         FUTURE OF THE PLAN.

 

15.1                        Term of the Plan.  The Plan, as set forth herein, shall become effective on the IPO Date.  The Plan shall remain in effect until the earlier of (a) the date when the Plan is terminated under Section 15.2 or (b) the 13th anniversary of the date when the Board adopted the Plan.

 

15.2                        Amendment or Termination.  The Board may, at any time and for any reason, amend or terminate the Plan.  No Awards shall be granted under the Plan after the termination thereof.  The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan.

 

15.3                        Stockholder Approval.  An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules.

 

 

 

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ARTICLE 16.                                         DEFINITIONS.

 

16.1                        “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

 

16.2                        “Award” means any award of an Option, an SAR, a Restricted Share or a Stock Unit under the Plan.

 

16.3                        “Board” means the Company’s Board of Directors, as constituted from time to time.

 

16.4                        “Change in Control” means:

 

(a)                                 The consummation of a merger or consolidation of the Company or any other corporate reorganization or business combination transaction of the Company with or into another corporation, entity or person;

 

(b)                                 The sale, transfer or other disposition of all or substantially all of the Company’s assets;

 

(c)                                  A change in the composition of the Board, as a result of which fewer than 50% of the incumbent directors are directors who either:

 

(i)                                     Had been directors of the Company on the date 24 months prior to the date of such change in the composition of the Board (the “Original Directors”); or

 

(ii)                                  Were appointed to the Board, or nominated for election to the Board, with the affirmative votes of at least a majority of the aggregate of (A) the Original Directors who were in office at the time of their appointment or nomination and (B) the directors whose appointment or nomination was previously approved in a manner consistent with this Paragraph (ii); or

 

(d)                                 Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities.  For purposes of this Subsection (d), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

 

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

 

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16.5                        “Code” means the Internal Revenue Code of 1986, as amended.

 

16.6                        “Committee” means the Compensation Committee of the Board, as further described in Article 2.

 

16.7                        “Common Share” means one share of the common stock of the Company.

 

16.8                        “Company” means SemiLEDs Corporation, a Delaware corporation.

 

16.9                        “Consultant” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor.

 

16.10                 “Employee” means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate.

 

16.11                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

16.12                 “Exercise Price,” in the case of an Option, means the amount for which one Common Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement.  “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common Share in determining the amount payable upon exercise of such SAR.

 

16.13                 “Fair Market Value” means the market price of a Common Share as determined in good faith by the Committee.  Such determination shall be conclusive and binding on all persons.  The Fair Market Value shall be determined by the following:

 

(i)                     If the Common Shares are admitted to trading on any established national stock exchange or market system on the date in question then the Fair Market Value shall be equal to the closing sales price for such Common Shares as quoted on such national exchange or system on such date; or

 

(ii)                  if the Common Shares are admitted to quotation or are regularly quoted by a recognized securities dealer but selling prices are not reported on the date in question, then the Fair Market Value shall be equal to the mean between the bid and asked prices of the Common Shares reported for such date.

 

In each case, the applicable price shall be the price reported in The Wall Street Journal or such other source as the Committee deems reliable; provided, however, that if there is no such reported price for the Common Shares for the date in question, then the Fair Market Value shall be equal to the price reported on the last preceding date for which such price exists.  If neither (i) or (ii) are applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

 

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16.14                 “Immediate Family” means, except as otherwise defined by the Committee, any child, sibling, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, sister-in-law, or brother-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Participant) own more than fifty percent (50%) or more of the voting interests.

 

16.15                 “IPO Date” means the effective date of the registration statement filed by the Company with the Securities and Exchange Commission for its initial offering of Common Shares to the public.

 

16.16                 “ISO” means an incentive stock option described in section 422(b) of the Code.

 

16.17                 “NSO” means a stock option not described in sections 422 or 423 of the Code.

 

16.18                 “Option” means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares.

 

16.19                 “Optionee” means an individual, estate or other person holding an Option or SAR.

 

16.20                 “Outside Director” means a member of the Board who is not an Employee.

 

16.21                 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

16.22                 “Participant” means an individual, estate or other person holding an Award.

 

16.23                 “Performance Goals” means specific financial performance criteria determined by the Committee with respect to each Performance Period utilizing one or more of the following factors and any objectively verifiable adjustment(s) thereto permitted and pre-established by the Committee: revenue, operating income, adjusted operating income (adjusted to add back items such as non-cash stock compensation expense), EBITDA and/or net earnings (either before or after interest, taxes, depreciation and amortization), adjusted EBITDA, net income (either before or after taxes), earnings per share, earnings as determined other than pursuant to United States generally accepted accounting principles (“GAAP”), return on gross or net assets, return on equity, return on invested capital, cash flow (including, but not limited to, operating cash flow and free cash flow), operating or gross margins, net margins, stock price appreciation, total stockholder return, customer satisfaction metrics, customer count, customer retention, cost per customer acquisition, and transaction volume, any of which may be measured with respect to the Company, or any Subsidiary, affiliate or other business unit of the Company, either in absolute terms, terms of growth or as compared to any incremental increase, as compared to results of a peer group.  Awards may also take into account other factors (including subjective factors).

 

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The Committee may, in its discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under GAAP; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the Performance Period; or (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; or (xiv) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions.

 

16.24                 “Performance Period” means any period not exceeding seven (7) years as determined by the Committee, in its sole discretion.  The Committee may establish different Performance Periods for different Participants and the Committee may establish concurrent or overlapping Performance Periods.

 

16.25                 “Plan” means this SemiLEDs Corporation 2010 Equity Incentive Plan, as amended from time to time.

 

16.26                 “Restricted Share” means a Common Share awarded under the Plan.

 

16.27                 “Restricted Stock Agreement” means the agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share.

 

16.28                 “SAR” means a stock appreciation right granted under the Plan.

 

16.29                 “SAR Agreement” means the agreement between the Company and a Participant that contains the terms, conditions and restrictions pertaining to his or her SAR.

 

16.30                 “Service” means service as an Employee, Outside Director or Consultant.

 

16.31                 “Stock Option Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.

 

16.32                 “Stock Unit” means a bookkeeping entry representing the equivalent of one Common Share, as awarded under the Plan.

 

16.33                 “Stock Unit Agreement” means the agreement between the Company and the recipient of a Stock Unit that contains the terms, conditions and restrictions pertaining to such Stock Unit.

 

16.34                 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

 

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