Document:

a062520198kexhibit101fin

                                                                             Exhibit 10.1                              LOAN AND SECURITY AGREEMENT   THIS LOAN AND SECURITY AGREEMENT (as the same may be amended, restated, modified, or supplemented  from time to time, this “Agreement”) dated as of June 25, 2019 (the “Effective Date”) among INNOVATUS LIFE  SCIENCES LENDING FUND I, LP, a Delaware limited partnership, as collateral agent (in such capacity, together  with its successors and assigns in such capacity, “Collateral Agent”), and the Lenders listed on Schedule 1.1 hereof  or otherwise a party hereto from time to time including EAST WEST BANK in its capacity as a Lender (“Bank”),  and CONFORMIS, INC., a Delaware corporation, IMATX, Inc., a California corporation and Conformis Cares LLC,  a Delaware limited liability company (individually and collectively, jointly and severally, “Borrower”), provides the  terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders.  The parties agree as follows:   1.    DEFINITIONS, ACCOUNTING AND OTHER TERMS         1.1    Capitalized terms used herein shall have the meanings set forth in Section 13 to the extent defined  therein.  All other capitalized terms used but not defined herein shall have the meaning given to such terms in the  Code.  Any accounting term used but not defined herein shall be construed in accordance with GAAP and all  calculations shall be made in accordance with GAAP.  The term “financial statements” shall include the accompanying  notes and schedules.  Any section, subsection, schedule or exhibit references are to this Agreement unless otherwise  specified.   2.     LOANS AND TERMS OF PAYMENT         2.1    Promise to Pay.  Borrower hereby unconditionally promises to pay each Lender the outstanding  principal amount of the Term Loan advanced to Borrower by such Lender and accrued and unpaid interest thereon  and any other amounts due hereunder as and when due in accordance with this Agreement.         2.2    Term Loans.                (a)    Availability.  Subject to the terms and conditions of this Agreement, the Lenders agree,  severally and not jointly, to make a term loan to Borrower on the Effective Date in an aggregate principal amount of  Twenty Million Dollars ($20,000,000.00) according to each Lender’s Term Loan Commitment as set forth on  Schedule 1.1 hereto (the “Term Loan”).  After repayment, the Term Loan may not be re borrowed.                (b)    Repayment.  Borrower shall make monthly payments of interest only commencing on the  second (2nd) Payment Date following the Funding Date of the Term Loan, and continuing on the Payment Date of  each successive month thereafter through and including the Payment Date immediately preceding the Amortization  Date.  Borrower agrees to pay, on the Funding Date of the Term Loan, any initial partial monthly interest payment  otherwise due for the period between the Funding Date of such Term Loan and the first Payment Date after such  Funding Date.  Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter,  Borrower shall make consecutive equal monthly payments of principal of the Term Loan and interest, in arrears, to  each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error)  based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section  2.3(a), and (3) a repayment schedule equal to twelve (12) months.  All unpaid principal and accrued and unpaid interest  with respect to the Term Loan is due and payable in full on the Maturity Date.  The Term Loan may only be prepaid  in accordance with Sections 2.2(c) and 2.2(d).                (c)    Mandatory Prepayments.  If an event described in Section 7.2(c)(ii) occurs or the Term  Loan is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders,  payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all  outstanding principal of the Term Loan plus accrued and unpaid interest thereon through the prepayment date, (ii) the  Final Fee, (iii) the Prepayment Fee, plus (iv) all other Obligations that are due and payable, including, without  limitation, Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. Notwithstanding  (but without duplication with) the foregoing, on the Maturity Date, if the Final Fee had not previously been paid in  full in connection with the prepayment of the Term Loan in full, Borrower shall pay to each Lender in accordance  with its respective Pro Rata Share, the Final Fee in respect of the Term Loan.  

 

                                                                                                      (d)    Permitted Prepayment of Term Loan.  After the date that is the first anniversary of the  Effective Date, Borrower shall have the option to prepay all, but not less than all, of the Term Loan advanced by the  Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to  prepay the Term Loan at least seven (7) Business Days prior to such prepayment, and (ii) pays to the Lenders on the  date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal  to the sum of (A) all outstanding principal of the Term Loan plus accrued and unpaid interest thereon through the  prepayment date, (B) the Final Fee, (C) the Prepayment Fee, plus (D) all other Obligations that are due and payable,  including, without limitation, Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts.          2.3   Advances Under Revolving Line.                  (a)    Amount. Subject to and upon the terms and conditions of this Agreement, including  Borrower’s compliance with Section 6.6(d) of this Agreement, Borrower may request from Bank and Bank shall make  Advances in an aggregate outstanding amount from time to time outstanding not to exceed the lesser of (A) the  Revolving Line or (B) the Borrowing Base. Amounts borrowed pursuant to this Section 2.3(a) may be repaid and  reborrowed at any time without penalty or premium prior to the Maturity Date, at which time all Advances under this  Section 2.3(b) shall be immediately due and payable; provided that, in the event of a mandatory or permitted  prepayment of the Term Loan in accordance with Section 2.2(c) or (d) above, Borrower shall, at the same time as such  prepayment, satisfy in full the Obligations owing with respect to the Revolving Line.                (b)    Form of Request. Whenever Borrower desires an Advance, Borrower will notify Bank and  Collateral Agent by electronic mail, facsimile transmission or telephone no later than 12:00 p.m. Pacific time on the  Business Day that the Advance is to be made. Each such notification shall be promptly confirmed by a  Payment/Advance Form in substantially the form of Exhibit B-1; provided that, Borrower shall deliver to Bank, no  less than ten (10) Business Days prior to the first request for an Advance hereunder, a completed Borrowing Base  Certificate, together with detailed aged listings by invoice date of accounts receivable and accounts payable for Bank’s  review and approval in its sole reasonable discretion and an underlying query report identifying credit memos with an  invalid or cancelled purchase order numbers for tracking the non-dilutive accounts receivable entries. Bank is  authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or  a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to  meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any electronic mail,  facsimile or telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a  designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as  a result of such reliance. Bank will credit the amount of Advances made under this Section 2.3(b) to Borrower’s  deposit account.         2.4    Overadvances. If the aggregate amount of the outstanding Advances exceeds the lesser of the  Revolving Line or the Borrowing Base at any time, Borrower shall immediately pay to Bank, in cash, the amount of  such excess.  Notwithstanding the foregoing, Bank shall endeavor to notify Borrower of any over-advance described  in the foregoing sentence that results from the Bank changing the standards of eligibility reasonably in advance of any  payment by Borrower with respect to such over-advance becoming due under this Section 2.4.         2.5    Payment of Interest.                (a)    Interest Rates, Payments, and Calculations.                         (i)    Term Loans.  Subject to Section 2.5(b), the principal amount outstanding under  the Term Loan shall accrue interest at a floating per annum rate equal to the Term Loan Basic Rate, determined by  Collateral Agent on the Funding Date of the Term Loan and monthly thereafter, which interest shall be payable  monthly in arrears in accordance with Sections 2.2(b) and 2.5(e); provided that at the election of Borrower (which  shall be considered elected on the Funding Date of the applicable Term Loan) with no less than five (5) Business  Days’ written notice to Collateral Agent prior to the Funding Date of the applicable Term Loan, 2.50% per annum  of  such Term Loan Basic Rate may be payable in-kind by adding an amount equal to 2.50% per annum of the outstanding  principal amount to the then outstanding principal balance on a monthly basis until the third anniversary of the  Effective Date so as to increase the outstanding principal balance of the applicable Term Loan on each Payment Date  

 

                                                                                         and which amount shall be payable when the principal amount of the applicable Term Loan is payable in accordance  with Sections 2.2(b) and 2.5(e) on which principal amount interest shall be owed pursuant to Section 2.5(a).   Interest shall accrue on the Term Loan commencing on, and including, the Funding Date of the Term Loan, and shall  accrue on the principal amount outstanding under the Term Loan through and including the day on which the Term  Loan is paid in full.                       (ii)  Advances. Subject to Section 2.5(b), the Advances shall bear interest, on the  outstanding daily balance thereof, at a rate equal to half percent (0.50%) above the Prime Rate.                (b)    Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such  payment is due, Borrower shall pay Collateral Agent, for the ratable benefit of the Lenders, a late fee equal to the  lesser of (i) five percent (5.00%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be  charged under applicable law, but not less than Five Dollars ($5.00). Immediately upon the occurrence and during the  continuance of an Event of Default, Obligations shall accrue interest at a floating per annum rate equal to the rate that  is otherwise applicable thereto plus five percentage points (5.00%) (the “Default Rate”). Payment or acceptance of  the increased interest rate provided in this Section 2.5(b) is not a permitted alternative to timely payment and shall not  constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.                (c)    365-Day Year. Interest shall be computed on the basis of a three hundred sixty-five (365)  day year and the actual number of days elapsed.                (d)    Debit of Accounts.  Bank may debit (or ACH) any deposit accounts maintained by  Borrower for principal and interest payments or any other amounts Borrower owes Bank under the Loan Documents  when due. Any such debits (or ACH activity) shall not constitute a set-off.                (e)    Payments.  Except as otherwise expressly provided herein, all payments by Borrower under  the Loan Documents shall be made to Collateral Agent in immediately available funds on the date specified herein.  Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal  and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next  Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day  and additional fees or interest, as applicable, shall continue to accrue until paid. All payments to be made by Borrower  hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses,  indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim, in lawful money of the  United States and in immediately available funds. Collateral Agent shall, within one (1) Business Day of receipt  thereof, remit to the respective Lender to which such payments are owed, at such Lender’s office, all amounts of  principal, interest, fees and/or expenses due to such Lender, and such payments shall be deemed to be received by the  applicable Lender on the date of receipt by Collateral Agent.                (f)    Application of Payments. Unless otherwise agreed or required by applicable law, payments  will be applied first to any accrued unpaid interest as shown on the most recent statement or bill provided to Borrower  (if no statement or bill has been provided for any reason, it shall be applied to the unpaid interest accrued since the  last payment); then to principal; then to any late charges; and then to any unpaid collection costs. Borrower will pay  Collateral Agent at Collateral Agent’s address shown above or at such other place as Collateral Agent may designate  in writing.                (g)    Changes in Prime Rate. In the event the Prime Rate is changed from time to time hereafter,  the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is  changed, by an amount equal to such change in the Prime Rate.          2.6   Fees.  Borrower shall pay to Collateral Agent:                (a)    Term Loan Facility Fee. The Term Loan Facility Fee, which shall be due on the Effective  Date, to be shared among the Lenders in accordance with their respective Pro Rata Shares;  

 

                                                                                                      (b)    Revolving Facility Fee. The Revolving Facility Fee, which shall be due on the Effective  Date with respect to the Revolving Line, payable solely for the account of Bank;                 (c)    Unused Facility Fee. On July 1, 2019 and the first day of each month thereafter prior to the  Maturity Date, and on the Maturity Date, a fee (the “Unused Facility Fee”) equal to fifty hundredths percent (0.50%)  per annum of the average daily unused portion of the Revolving Line, as reasonably determined by Bank, solely for  the account of Bank, and which shall be nonrefundable;                (d)    Final Fee. The Final Fee, when due hereunder, to be shared among the Lenders in  accordance with their fee letter; provided, however, Borrower shall only be responsible for the payment of the Final  Fee to Collateral Agent and is not assumed to have knowledge of the contents of the fee letter;                (e)    Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared among the  Lenders in accordance with their fee letter; and                (f)    Lenders’ Expenses. All Lenders’ Expenses incurred through and after the Effective Date,  when due.          2.7   Withholding.  Payments received by the Collateral Agent or the Lenders from Borrower hereunder  will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties,  deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any  interest, additions to tax or penalties applicable thereto) (“Taxes”).  Specifically, however, if at any time any  Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any  withholding or deduction from any such payment or other sum payable hereunder to the Lenders, Borrower hereby  covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder  will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction,  each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been  required and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority;  provided however, that Borrower shall not be required to pay any additional amount to any Lender with respect to  Excluded Taxes.  Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders  indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any  withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate  and timely proceedings and as to which payment in full is bonded or reserved against by Borrower.  The agreements  and obligations of Borrower  contained in this Section 2.7 shall survive the termination of this Agreement. On the date  of this Agreement, each Lender shall deliver to Borrower a complete and properly executed IRS Form W-9.  If any  assignee of a Lender’s rights under Section 12.4 of this Agreement is not a “United States Person” as defined in  Section 7701(a)(30) of the IRC (“Non-U.S. Lender”), such Non-U.S. Lender shall, upon becoming party to this  Agreement, deliver to Borrower a complete and properly executed IRS Form W-8BEN, W-8ECI or W-8IMY, as  appropriate, or any successor form prescribed by the IRS, certifying that such Non-U.S. Lender is entitled to an  exemption from U.S. withholding tax on interest and other amounts payable under this Agreement.  Notwithstanding  the foregoing, (i) Borrower shall not be required to pay any additional amount to any Non-U.S. Lender hereunder if  such Non-U.S. Lender fails or is unable to deliver the forms, certificates or other evidence described in the preceding  sentence, unless such non-U.S. Lender’s failure or inability to deliver such forms is the result of any change in any  applicable law, treaty or governmental rule, or any change in the interpretation thereof after such Non-U.S. Lender  became a party to this Agreement and (ii) Borrower shall not be required to pay any additional amount to any Non- U.S. Lender hereunder with respect to taxes imposed under Sections 1471 through 1474 of the Internal Revenue Code,  as of the date of this Agreement (or any amended or successor version that is substantively comparable and not  materially more onerous to comply with) and any current or future regulations or official interpretations thereof.                  2.8   Secured Promissory Notes.  The Term Loan and the Revolving Line shall be evidenced by a  Secured Promissory Note or Notes in the forms attached as Exhibit E hereto (each a “Secured Promissory Note”),  and shall be repayable as set forth in this Agreement. Borrower irrevocably authorizes each Lender to make or cause  to be made, on or about the Funding Date of any Credit Extension or at the time of receipt of any payment of principal  on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s Secured Promissory Note  Record reflecting the making of such Credit Extension or (as the case may be) the receipt of such payment. The  outstanding amount of each Credit Extension set forth on such Lender’s Secured Promissory Note Record shall, absent  

 

                                                                                         manifest error, be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the  failure to record, or any error in so recording, any such amount on such Lender’s Secured Promissory Note Record  shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan  Document to make payments of principal of or interest on any Secured Promissory Note when due. Upon receipt of  an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note,  Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof  and of like tenor.   3.    CONDITIONS OF LOANS         3.1    Conditions Precedent to Initial Credit Extension. Each Lender’s obligation to make the initial  Credit Extension is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall  have received, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and  completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate,  including, without limitation:                (a)    original Loan Documents and the Equity Investment Agreement, each duly executed by  Borrower and each Subsidiary, as applicable;                (b)    a completed Perfection Certificate for Borrower and each of its Subsidiaries;                (c)    duly executed original Control Agreements with respect to any Collateral Accounts  maintained by Borrower;                (d)    the Operating Documents and good standing certificates of Borrower and its Subsidiaries  certified by the Secretary of State (or equivalent agency) of Borrower’s and such Subsidiaries’ jurisdiction of  organization or formation and each jurisdiction in which Borrower or the applicable Subsidiary is qualified to conduct  business (provided, however, (i) in the case of a Subsidiary that is not a Borrower (other than ConforMIS Hong Kong  Limited) only good standing certificates from such Subsidiary’s jurisdiction of organization or formation or equivalent  will be required), each as of a date no earlier than thirty (30) days prior to the Effective Date, and (ii) in the case of  ConforMIS Hong Kong Limited, no certificate is required;                (e)    a copy of resolutions of the governing body for Borrower evidencing approval of the Term  Loan and other transactions evidenced by the Loan Documents;                (f)    duly executed original officer’s certificates for Borrower and each Subsidiary that is a party  to the Loan Documents certifying as to (i) the incumbency of each Responsible Officer executing each Loan Document  and (ii) the documents delivered pursuant to Section 3.1(d) and 3.1(e), in a form acceptable to Collateral Agent and  the Lenders;                (g)    certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date,  of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any  UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted  Liens or have been or, in connection with the initial Term Loan, will be terminated or released;                (h)    a duly executed legal opinion of counsel to Borrower dated as of the Effective Date;                (i)    evidence satisfactory to Collateral Agent and the Lenders that the insurance policies  required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable  and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Lenders;                (j)    payment of the Term Loan Facility Fee, Revolving Facility Fee and Lenders’ Expenses  then due as specified in Section 2.6 hereof;  

 

                                                                                                      (k)    payment of the Facility Fee and Lenders’ Expenses then due as specified in Section 2.4  hereof;                (l)    a landlord’s consent executed in favor of Collateral Agent in respect of all of Borrower’s  leased locations;                (m)    a bailee waiver executed in favor of Collateral Agent in respect of each third party bailee  where Borrower maintains Collateral (other than Transitory Collateral) having a book value in excess of Two Hundred  Fifty Thousand Dollars ($250,000.00);                 (n)    the certificate(s) for the certificated Shares, together with Assignment(s) Separate from  Certificate, duly executed in blank;                (o)    a payoff letter from Oxford Finance LLC in respect of the Existing Indebtedness;                (p)    evidence that (i) the Liens securing the Existing Indebtedness will be terminated and (ii)  the documents and/or filings evidencing the perfection of such Liens, including without limitation any financing  statements and/or control agreements, have or will, concurrently with the initial Credit Extension, be terminated; and                (q)    an Automatic Debit Authorization.         3.2    Conditions Precedent to all Credits Extensions.  The obligation of each Lender to extend each  Credit Extension, including the Term Loan, is subject to the following conditions precedent:                (a)    receipt by Collateral Agent of (i) an executed Loan Payment Request Form in the form of  EXHIBIT B-1 attached hereto and (ii) an executed Disbursement Letter in the form of EXHIBIT B-2 attached hereto;                (b)    the representations and warranties in Section 5 hereof shall be true, accurate and complete  in all material respects on the date of each Loan Payment Request Form and the date of each Disbursement Letter and  the Funding Date of each Term Loan; provided, however, that such materiality qualifier shall not be applicable to any  representations and warranties that already are qualified or modified by materiality in the text thereof; and provided,  further that those representations and warranties expressly referring to a specific date shall be true, accurate and  complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or  result from the funding of such Term Loan;                (c)    if such Credit Extension is the initial Advance, (i) Borrower must be in compliance with  its obligations under 6.6(d), (ii) the full amount of Term Loan must have been drawn by Borrower and (iii) the security  interest granted under this Agreement to Collateral Agent for the ratable benefit of the Lenders must already be  effective and constitute a first priority perfected security interest in the Collateral, subject only to Permitted Liens that  are permitted by the terms of this Agreement to have priority to Collateral Agent’s Lien;                  (d)    in such Lender’s reasonable discretion, there has not been any Material Adverse Change;                (e)    no Event of Default or an event that with the passage of time could result in an Event of  Default, shall exist;                (f)    to the extent not delivered at the Effective Date, duly executed original Secured Promissory  Notes, in number, form and content acceptable to each Lender, and in favor of each Lender according to its  Commitment Percentage, with respect to each Credit Extension made by such Lender after the Effective Date; and                (g)    payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.          3.3   Covenant to Deliver.  Borrower agrees to deliver to Collateral Agent and the Lenders each item  required to be delivered to Collateral Agent under this Agreement as a condition precedent to any Term Loan.   Borrower expressly agrees that the Term Loan made prior to the receipt by Collateral Agent or any Lender of any  

 

                                                                                         such item shall not constitute a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such  item, and any such Term Loan in the absence of a required item shall be made in each Lender’s sole discretion.         3.4    Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to  the making of the Credit Extensions set forth in Sections 3.1 and 3.2 of this Agreement, to obtain a Term Loan,  Borrower shall notify the Collateral Agent (each of which notices shall be irrevocable) by electronic mail, facsimile,  or telephone by 12:00 noon New York City time twelve (12) Business Days prior to the date such Credit Extension is  to be made (unless a shorter period for such notice is agreed to by Collateral Agent). Together with any such electronic  mail, facsimile or telephonic notification, Borrower shall deliver to Collateral Agent by electronic mail or facsimile a  completed Disbursement Letter and Loan Advance/Payment Authorization executed by a Responsible Officer or his  or her designee. The Collateral Agent may rely on any telephone notice given by a person whom Collateral Agent  reasonably believes is a Responsible Officer or designee.  Notwithstanding anything herein or in any other Loan  Document to the contrary, the parties agree that Borrower is by its execution hereof hereby requesting the Term Loan  to be funded upon the earliest date when they become available, subject to the prior satisfaction of all other applicable  conditions, and is accordingly notifying the Collateral Agent.   4.    CREATION OF SECURITY INTEREST         4.1    Grant of Security Interest.  Borrower hereby grants Collateral Agent, for the ratable benefit of the  Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and  pledges to Collateral Agent, for the ratable benefit of the Lenders, the Collateral, wherever located, whether now  owned or hereafter acquired or arising, and all proceeds and products thereof.  If Borrower shall acquire a commercial  tort claim (as defined in the Code), Borrower shall grant to Collateral Agent, for the ratable benefit of the Lenders, a  security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in  form and substance reasonably satisfactory to Collateral Agent.   If this Agreement is terminated, Collateral Agent’s Lien in and pledge of the Collateral and Shares shall continue until  the Obligations (other than inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of  the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to extend the  Term Loan has terminated,  Collateral Agent shall, at the sole cost and expense of Borrower,  release its Liens in the  Collateral and all rights therein shall revert to Borrower.         4.2    Authorization to File Financing Statements.  Borrower hereby authorizes Collateral Agent to file  financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral,  without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights  under the Loan Documents.         4.3    Pledge of Collateral.  Borrower hereby pledges, assigns and grants to Collateral Agent, for the  ratable benefit of the Lenders, a security interest in all the Shares, together with all proceeds and substitutions thereof,  all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in  connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the  Obligations.  Within ten (10) Business Days of the Effective Date, or, to the extent not certificated as of the Effective  Date, within ten (10) Business Days of the certification of any Shares, the certificate or certificates for the Shares will  be delivered to Collateral Agent, accompanied by an instrument of assignment duly executed in blank by Borrower.   To the extent required by the terms and conditions governing the Shares, Borrower shall cause the books of each entity  whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares.  Upon the occurrence  and during the continuance of an Event of Default hereunder, Collateral Agent may effect the transfer of any securities  included in the Collateral (including but not limited to the Shares) into the name of Collateral Agent and cause new  (as applicable) certificates representing such securities to be issued in the name of Collateral Agent or its transferee.   Borrower will execute and deliver such documents, and take or cause to be taken such actions, as Collateral Agent  may reasonably request to perfect or continue the perfection of Collateral Agent’s security interest in the Shares.   Unless an Event of Default shall have occurred and be continuing, Borrower shall be entitled to exercise any voting  rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no  vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the  terms of this Agreement or which would constitute or create any violation of any of such terms.  All such rights to  

 

                                                                                         vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of  Default.   5.    REPRESENTATIONS AND WARRANTIES   Borrower represents and warrants to Collateral Agent and the Lenders as follows:          5.1   Due Organization, Authorization: Power and Authority.  Borrower and each of its Subsidiaries  is duly existing and in good standing as a Registered Organization in its jurisdictions of organization or formation and  Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction  in which the conduct of its businesses or its ownership of property requires that it be qualified except  where the failure  to do so could not reasonably be expected to have a Material Adverse Change.  In connection with this Agreement,  Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate and any  updates or supplements thereto on or before the Effective Date (each a “Perfection Certificate” and collectively, the  “Perfection Certificates”).  Borrower represents and warrants that all the information set forth on the Perfection  Certificates pertaining to Borrower and each of its Subsidiaries is accurate and complete in all material respects as of  the Effective Date.   The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which  it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’  organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a  default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any  applicable  order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which  Borrower or such Subsidiary, or any of their property or assets may be bound or affected, (iv) require any action by,  filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority  (except such  Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained  pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower or  any of such Subsidiaries, or their respective properties, is bound.  Neither Borrower nor any of its Subsidiaries is in  default under any agreement to which it is a party or by which it or any of its assets is bound in which such default  could reasonably be expected to have a Material Adverse Change.          5.2   Collateral.                (a)    Borrower and each of its Subsidiaries have good title to, have rights in, and the power to  transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear  of any and all Liens except Permitted Liens, except as permitted under Section 6.6, and neither Borrower nor any of  its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts   other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates  delivered to Collateral Agent in connection herewith or permitted under Section 6.6, with respect of which Borrower  or such Subsidiary has given Collateral Agent notice and, in the case of such accounts as belong to either Borrower  or any of its Subsidiaries that are Guarantors or Borrowers, taken such actions as are necessary to give Collateral  Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.                (b)    The security interest granted herein is and shall at all times continue to be a first priority  perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this  Agreement to have priority to Collateral Agent’s Lien.                (c)    On the Effective Date, and except as disclosed on the Perfection Certificate (i) the  Collateral (other than Transitory Collateral) is not in the possession of any third party bailee, and (ii) no such third  party bailee possesses components of the Collateral (other than Transitory Collateral) in excess of Two Hundred Fifty  Thousand Dollars ($250,000.00).                (d)    All Inventory and Equipment is in all material respects of good and marketable quality,  free from material defects except for normal wear and tear.  

 

                                                                                                      (e)    Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each  respectively purports to own, free and clear of all Liens other than Permitted Liens.  Except as noted on the Perfection  Certificates, neither Borrower nor any of its Subsidiaries is a party to, nor is bound by, any material license or other  Material Agreement.           5.3   Litigation.  Except as disclosed (i) on the Perfection Certificates or (ii) on the Compliance  Certificate, there are no actions, suits, or proceedings pending or, to the Knowledge of the Responsible Officers,  threatened in writing, and Borrower has not received notice of any governmental investigations pending or threatened,  by or against Borrower or any of its Subsidiaries involving more than Five Hundred Thousand Dollars ($500,000.00)  or a material claim for infringement of any intellectual property.  Except as disclosed on the Perfection Certificate,  there are no actions, suits, investigations or proceedings pending or, to the Knowledge of the Responsible Officers,  threatened in writing by or against Borrower or any Subsidiaries involving challenges to the validity of the Intellectual  Property.          5.4   No Material Adverse Change; Financial Statements.  All consolidated financial statements for  Borrower and its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, in all material  respects the consolidated financial condition of Borrower and its Subsidiaries, and the consolidated results of  operations of Borrower and its Subsidiaries (except that unaudited financial statements are subject to normal year end  adjustments and do not contain footnotes).  Since the date of the most recent financial statements submitted to any  Lender, there has not been a Material Adverse Change.         5.5    Solvency.  Borrower is Solvent and Borrower and its Subsidiaries, when taken as a whole, are  Solvent.         5.6    Regulatory Compliance.  Neither Borrower nor any of its Subsidiaries is an “investment company”  or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.   Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin  stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower and each of its  Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act.  Neither Borrower nor  any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of  a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005.  Neither  Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably  be expected to have a Material Adverse Change.  Neither Borrower’s nor any of its Subsidiaries’ properties or assets  has been used by Borrower or such Subsidiary or, to Borrower’s Knowledge, by previous Persons, in disposing,  producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable  laws.  Borrower and each of its Subsidiaries has obtained all  consents, approvals and authorizations of, made all  declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their  respective businesses as currently conducted.   None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective  agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i)  in violation of any Anti Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or  avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti  Terrorism Law, or (iii) is a Blocked Person.  None of Borrower, any of its Subsidiaries, or to the Knowledge of  Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions  contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of  funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any  transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar  executive order or other Anti Terrorism Law.         5.7    Investments.  Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership  interests or other equity securities except for Permitted Investments.          5.8   Tax Returns and Payments; Pension Contributions.  Borrower and each of its Subsidiaries has  timely filed all required tax returns and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign,  federal, state, and local taxes, assessments, deposits and contributions owed by Borrower and such Subsidiaries in an  

 

                                                                                         amount greater than Fifty Thousand Dollars ($50,000.00), in all jurisdictions in which Borrower or any such  Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with  the next sentence.  Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that  Borrower or such Subsidiary in good faith contests its obligation to pay the taxes by appropriate proceedings promptly  and diligently instituted and conducted.  Neither Borrower nor any of its Subsidiaries is aware of any claims or  adjustments proposed for any of Borrower’s or such Subsidiaries’ prior tax years which could result in additional taxes  becoming due and payable by Borrower or its Subsidiaries.  Borrower and each of its Subsidiaries have paid all  amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with  their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have not  permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such  plan which could reasonably be expected to result in any liability of Borrower or its Subsidiaries, including any  liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.         5.9    Use of Proceeds.  Borrower shall use the proceeds of the Term Loan solely as working capital and  to fund its general business requirements in accordance with the provisions of this Agreement, and not for personal,  family, household or agricultural purposes. A portion of the proceeds of the Term Loans shall be used by Borrower to  repay the Existing Indebtedness in full on the Effective Date.          5.10  Full Disclosure.  No written representation, warranty or other statement of Borrower or any of its  Subsidiaries in any certificate or written statement given to Collateral Agent or any Lender, as of the date such  representation, warranty, or other statement was made, taken together with all such written certificates and written  statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state  a material fact necessary to make the statements contained in the certificates or statements not misleading (it being  recognized that projections, budgets and forecasts provided by Borrower in good faith and based upon reasonable  assumptions are not viewed as facts and that actual results during the period or periods covered by such projections,  budgets and forecasts may differ from the projected, budgeted or forecasted results).         5.11   Shares.  Borrower has full power and authority to create a first lien on the Shares and no disability  or contractual obligation exists that would prohibit Borrower from pledging the Shares pursuant to this Agreement.   To Borrower’s knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer  relative to, or options exercisable with respect to the Shares.  The Shares have been and will be duly authorized and  validly issued, and are fully paid and non assessable.  To Borrower’s knowledge, the Shares are not the subject of any  present or threatened suit, action, arbitration, administrative or other proceeding, and Borrower knows of no reasonable  grounds for the institution of any such proceedings.         5.12   Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or  warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar  qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible  Officers.   6.    AFFIRMATIVE COVENANTS   Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:          6.1   Government Compliance.                (a)    Maintain its and all its Subsidiaries’ legal existence and good standing in their respective  jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could  reasonably be expected to have a Material Adverse Change.  Comply with all laws, ordinances and regulations to  which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to  have a Material Adverse Change.                (b)    Obtain and keep in full force and effect, all of the material Governmental Approvals  necessary for the performance by Borrower and its Subsidiaries of their respective businesses and obligations under  

 

                                                                                         the Loan Documents and the grant of a security interest to Collateral Agent for the ratable benefit of the Lenders, in  all of the Collateral.         6.2    Financial Statements, Reports, Certificates; Notices.                (a)    Deliver to Collateral Agent and each Lender:                       (i)   (A) as soon as available, but no later than thirty (30) days after the last day of each  month, a company prepared summary monthly financial statements covering the consolidated operations of Borrower  and its Subsidiaries for such month and (B) as soon as available, but no later than forty-five (45) days after the last  day of each quarter a company prepared consolidated and consolidating balance sheet and income statement and  consolidated cash flow statement covering the consolidated operations of Borrower and its Subsidiaries for such  quarter certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent;                       (ii)   as soon as available, but no later than one hundred twenty (120) days after the last  day of Borrower’s fiscal year or within five (5) days of filing with the Securities and Exchange Commission, audited  consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion  on the financial statements from Grant Thornton or another independent certified public accounting firm reasonably  acceptable to Collateral Agent;                       (iii)  as soon as available after approval thereof by Borrower’s board of directors, but  no later than the earlier of ten (10) days after such approval and sixty (60) days after the last day of Borrower’s fiscal  year, Borrower’s annual (A) financial projections and (B) budget, in each case, for the entire current fiscal year as  approved by Borrower’s board of directors; provided that, any revisions to such projections and/or budget approved  by Borrower’s board of directors shall be delivered to Collateral Agent and the Lenders no later than ten (10) days  after such approval);                       (iv)   within five (5) days of delivery, copies of all non-ministerial statements, reports  and notices made available to Borrower’s security holders or holders of Subordinated Debt;                       (v)    in the event that Borrower becomes subject to the reporting requirements under  the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10 K, 10 Q and 8  K filed with the Securities and Exchange Commission;                       (vi)   prompt notice of any amendments of or other changes to the Operating  Documents of Borrower or any of its together with any copies reflecting such amendments or changes with respect  thereto;                       (vii)  as soon as available, but no later than thirty (30) days after the last day of each  month, copies of the month end account statements for each Collateral Account maintained by Borrower or its  Subsidiaries, which statements may be provided to Collateral Agent and each Lender by Borrower or directly from  the applicable institution(s);                       (viii) prompt delivery of (and in any event within five (5) days after the same are sent  or received) copies of all material correspondence, reports, documents and other filings with any Governmental  Authority that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals  material to Borrower’s business or otherwise could reasonably be expected to have a Material Adverse Change;                                         (ix)  prompt notice of any event that (A) could reasonably be expected to materially  and adversely affect the Borrower’s Intellectual Property and (B) could reasonably be expected to result in a Material  Adverse Change;                       (x)   written notice at least ten (10) days’ prior to Borrower’s creation of a New  Subsidiary in accordance with the terms of Section 6.10;  

 

                                                                                                             (xi)   written notice (I) at least (30) days’ (or such shorter period allowed by the  Collateral Agent) prior to Borrower’s (A) adding any new offices or business locations, including warehouses (unless  such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000.00) in assets  or property of Borrower or any of its Subsidiaries (excluding Transitory Collateral), (B) changing its jurisdiction of  organization, (C) changing its organizational structure or type, (D) changing its legal name, or (E) changing any  organizational number (if any) assigned by its jurisdiction of organization,  (II) prompt notice of the registration with  the United States Copyright Office of any copyright, including any subsequent ownership right of Borrower in or to  any such registered copyright, and (III) together with each Compliance Certificate for each fiscal quarter, notice of  any new patent, trademark that has been registered with the US Patent and Trademark Office;                       (xii)  upon Borrower becoming aware of the existence of any Event of Default or event  which, with the giving of notice or passage of time, or both, would constitute an Event of Default, prompt (and in any  event within three (3) Business Days) written notice of such occurrence, which such notice shall include a reasonably  detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both,  would constitute an Event of Default;                       (xiii) immediate notice if Borrower or such Subsidiary has Knowledge that Borrower,  or any Subsidiary or Affiliate of Borrower is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere  to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to  money laundering;                        (xiv) notice of any commercial tort claim and of the general details thereof;                       (xv)  if Borrower or any Guarantor is not now a Registered Organization but later  becomes one, written notice of such occurrence and information regarding such Person’s organizational identification  number within seven (7) Business Days of receiving such organizational identification number; and                       (xvi) other information as reasonably requested by Collateral Agent or any Lender.   Notwithstanding the foregoing or the other provisions of this Agreement, documents required to be delivered pursuant  to the terms hereof (to the extent any such documents are included in materials otherwise filed with the Securities and  Exchange Commission) shall be deemed to have been delivered on the date on which Borrower posts such documents,  or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.                (b)    Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i)(B)  above but no later than forty five (45) days after the last day of each fiscal quarter, deliver to Collateral Agent and  each Lender:                       (i)   a duly completed Compliance Certificate signed by a Responsible Officer;                       (ii)  an updated Perfection Certificate to reflect any amendments, modifications and  updates to certain information in the Perfection Certificate after the Effective Date (or the last date of delivery of a  Perfection Certificate) to the extent such amendments, modifications and updates are permitted by one or more specific  provisions in this Agreement; in each case, subject to the review and approval of Collateral Agent and it being agreed  and understood that such updated Perfection Certificate shall be deemed to be a “Perfection Certificate” for all  purposes under this Agreement;                       (iii) copies of any material Governmental Approvals obtained by Borrower;                       (iv)  written notice of the commencement of, and any material development in, the  proceedings contemplated by Section 5.8 hereof;                       (v)   written notice of any litigation or governmental proceedings pending or  threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in  

 

                                                                                         damages to Borrower or any of its Subsidiaries of more than Three Hundred Fifty Thousand Dollars ($350,000.00);  and                       (vi)  written notice of all returns, recoveries, disputes and claims regarding defective  Inventory that involve more than One Hundred Thousand Dollars ($100,000.00) individually or in the aggregate in  any calendar year.                 (c)    Keep proper, complete and true books of record and account in accordance with GAAP in  all material respects.  Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower,  Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice  shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties,  to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and  analysis of its operations and the Collateral.  Such audits shall be conducted no more often than once every year unless  (and more frequently if) an Event of Default has occurred and is continuing.  Notwithstanding the foregoing, upon  request of any Lender, Borrower agrees to permit such Lender to communicate with Borrower’s accounting firm with  respect to the consolidated financial statements delivered pursuant to this Section 6.2.                (d)    30 days after each such month, deliver to Bank a detailed listing of each Account Debtor  and such Account Debtor’s contact information and a Borrowing Base Certificate signed by a Responsible Officer,  together with detailed aged listings by invoice date of accounts receivable and accounts payable and an updated list  of customer credit limit coverages under Borrower’s foreign account receivable credit insurance policy.  As an  alternative to providing updated lists of customer credit limit coverages, Borrower may provide Bank with the on-line  access to obtain such updated customer credit limit coverages directly from Borrower’s accounts receivable credit  insurance company.  Notwithstanding anything herein to the contrary, Borrower shall not be obligated to comply with  the provisions of this Section 6.2(d) until the first Advance has been made, if within thirty (30) days of the Effective  Date and at all applicable times thereafter Borrower maintains at least 50.5% of its total cash and Cash Equivalents in  Collateral Accounts maintained with Bank; provided, further, nothing herein shall modify or waive Borrower’s  obligations under Section 6.6.          6.3   Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material  defects.  Returns and allowances between Borrower, or any of its Subsidiaries, and their respective Account Debtors  shall follow Borrower’s, or such Subsidiary’s, customary practices as they exist at the Effective Date or as otherwise  approved in writing by the Collateral Agent in its discretion.          6.4   Taxes; Pensions.  Timely file and require each of its Subsidiaries to timely file, all required tax  returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, and  local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries, except as otherwise  permitted pursuant to the terms of Section 5.8 hereof, and shall deliver to Collateral Agent and each Lender, on  demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension,  profit sharing and deferred compensation plans in accordance with the terms of such plans.         6.5    Insurance.  Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and  in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent  may reasonably request, including, but not limited to, D&O insurance reasonably satisfactory to Collateral Agent.   Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral  Agent and the Required Lenders.  All property policies shall have a lender’s loss payable endorsement showing  Collateral Agent as lender loss payee and waive subrogation against Collateral Agent, and all liability policies shall  show, or have endorsements showing, Collateral Agent, as additional insured.  The Collateral Agent shall be named  as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any  Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by  it or by independent instruments furnished to the Collateral Agent, that it will give the Collateral Agent thirty (30)  days’ prior written notice before any such policy or policies shall be materially altered or canceled (other than  cancellation for non-payment of premiums, for which at least ten (10) days’ prior written notice shall be required).  At  Collateral Agent’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.   Proceeds payable under any policy on Borrower’s property shall, at Collateral Agent’s option, be payable to Collateral  Agent, for the ratable benefit of the Lenders, on account of the Obligations.  Notwithstanding the foregoing, (a) so  

 

                                                                                         long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds  of any casualty policy, within 150 days of receipt thereof, up to Five Hundred Thousand Dollars ($500,000.00) with  respect to any loss, but not exceeding Five Hundred Thousand Dollars ($500,000.00), in the aggregate for all losses  under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property;  provided that (x) any such replaced or repaired property (i) shall be of equal, like or greater value as the replaced or  repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority  security interest, and (y) any excess proceeds shall be applied first to the Revolving Line up to an amount of Five  Hundred Thousand Dollars ($500,000.00) or such lesser amount of Revolving Line as is then outstanding and then to  the Lenders in accordance with the fee letter and the Intercreditor Agreement, and (b) after the occurrence and during  the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral  Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders (and to be applied in accordance with the  terms of any fee letter and the Intercreditor Agreement), on account of the Obligations.  If Borrower or any of its  Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required  proof of payment to third persons, Collateral Agent and/or any Lender may make (but has no obligation to do so), at  Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and  take any action under the policies Collateral Agent or such Lender deems prudent.         6.6    Operating Accounts.                 (a)    From and after the date one hundred eighty (180) days from the Effective Date, Borrower  shall maintain its, and its Domestic Subsidiaries’ that are Borrowers or Guarantors, domestic depository and operating  accounts with Bank and Bank’s affiliates, subject to a Control Agreement in favor of, and in form and content  reasonably acceptable to, Collateral Agent; provided, however, that during such one hundred eighty (180) day period,  all Collateral Accounts maintained with any bank or financial institution shall be subject to one or more Control  Agreements in favor of Collateral Agent that are in such form and substance as are reasonably acceptable to Collateral  Agent.  Notwithstanding the foregoing, Borrower may maintain the Lease Deposit Cash Collateral Accounts, accounts  described in the last sentence of Section 6.6(b) (but without duplication), and other accounts not to exceed $100,000  in the aggregate until the first anniversary of the Effective Date and not to exceed $50,000 in the aggregate thereafter,  without any control agreement.                 (b)    Borrower shall provide Collateral Agent ten (10) days’ prior written notice before  Borrower or any of its Subsidiaries establishes any Collateral Account.  In addition, for each Collateral Account that  Borrower or any of its Subsidiaries that is a Borrower or a Guarantor at any time maintains, commencing with the  Funding Date of the first Credit Extension made hereunder, Borrower or such Subsidiary shall cause the applicable  bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control  Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien  in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral  Account, which Control Agreement may not be terminated without prior written consent of Collateral Agent.  The  provisions of the previous sentence and of Section 6.6(a) shall not apply to any Lease Deposit Cash Collateral Account,  or to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to  or for the benefit of Borrower’s, or any of its Subsidiaries’, employees and identified to Collateral Agent by Borrower  as such in the Perfection Certificate or a written notice to Collateral Agent.                (c)    Neither Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except  Collateral Accounts maintained in accordance with Section 6.6.                (d)    Lock Box; Dominion of Funds. Without limiting any of the foregoing:                                     (i)    Borrower shall at its sole expense establish and maintain (and Bank, at Bank's  option, may establish and maintain at Borrower’s expense), prior to the Funding Date of the initial Advance and no  later than one hundred eighty (180) days from the Effective Date:                                                    (1)   A United States Post Office lock box (the “Lock Box”), to which Bank  shall have exclusive access and control. Borrower expressly authorizes Bank, from time to time, to remove the contents  

 

                                                                                         from the Lock Box, for disposition in accordance with this Agreement. Borrower shall notify all account debtors and  other parties obligated to Borrower that all payments made to Borrower (other than payments by electronic funds  transfer) shall be remitted, for the credit of Borrower, to the Lock Box, and Borrower shall include a like statement  on all invoices; and                                                         (2)    A non-interest bearing deposit account with Bank which shall be titled  as designated by Bank (the “Dominion of Funds Account”) to which Bank shall have exclusive access and control.  Borrower shall notify all account debtors that all payments made to Borrower by electronic funds transfer shall be  remitted to the Dominion of Funds Account, and Borrower, at Bank’s request, shall include a like statement on all  invoices. Borrower shall execute all documents and authorizations as required by Bank to establish and maintain the  Lock Box and the Dominion of Funds Account.                                                   (ii)  Borrower shall hold in trust for Bank all amounts that Borrower receives despite  the directions to make payments to the Lock Box or Dominion of Funds Account, and immediately deliver such  payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit  into the Lock Box or Dominion of Funds Account, as applicable;                                            (iii) All items or amounts which are remitted to the Dominion of Funds Account, or  otherwise delivered by or for the benefit of Borrower to Bank on account of partial or full payment of, or with respect  to, any Collateral shall, on a daily basis, be applied to the payment of outstanding Advances, whether then due or not,  with the balance, if any, deposited to Borrower’s operating account maintained at Bank. After the occurrence and  during the continuance of an Event of Default, all items or amounts remitted to the Lock Box, the Dominion of Funds  Account or that Bank has otherwise received shall, in Bank’s sole discretion, be applied to the payment of any  Obligations, whether then due or not, in such order or at such time of application as Bank may determine in its sole  discretion. Bank shall not be liable for any loss or damage which Borrower may suffer as a result of Bank's processing  of items or its exercise of any other rights or remedies under this Agreement, including without limitation indirect,  special or consequential damages, loss of revenues or profits, or any claim, demand or action by any third party arising  out of or in connection with the processing of items or the exercise of any other rights or remedies under this  Agreement. Borrower shall indemnify and hold Bank harmless from and against all such third party claims, demands  or actions, and all related expenses or liabilities, including, without limitation, attorney's fees and including claims,  damages, fines, expenses, liabilities or causes of action of whatever kind resulting from bank's own negligence except  to the extent (but only to the extent) caused by Bank’s gross negligence or willful misconduct.                              6.7    Protection of Intellectual Property Rights.  Borrower and each of its Subsidiaries shall: (a)  use  commercially reasonable efforts consistent with past practices to protect, defend and maintain the validity and  enforceability of its Intellectual Property that is material to its business; (b) promptly advise Collateral Agent in writing  if Borrower is aware of a material infringement by a third party of its or any of its Subsidiaries’ Intellectual Property  (except for any infringement described in the Perfection Certificate) and (c) not allow any Intellectual Property  material to Borrower’s business, or to Borrower and its Subsidiaries’ business taken as a whole, to be abandoned,  forfeited or dedicated to the public without Collateral Agent’s prior written consent.  If Borrower or any of its  Subsidiaries that is a Borrower or Guarantor hereunder (i) obtains any patent, registered trademark or servicemark,  registered copyright, registered mask work, or any pending application for any of the foregoing, whether as owner,  licensee or otherwise, or (ii) applies for any patent or the registration of any trademark or servicemark, then together  with each Compliance Certificate for each quarter of Borrower, Borrower or such Subsidiary shall provide written  notice thereof to Collateral Agent and each Lender and shall execute such intellectual property security agreements  and other documents and take such other actions as Collateral Agent shall reasonably request in its good faith business  judgment to perfect and maintain a first priority perfected security interest in favor of Collateral Agent, for the ratable  benefit of the Lenders, in such property.  If Borrower or any of its Subsidiaries that is a Borrower or Guarantor  hereunder decides to register any copyrights or mask works in the United States Copyright Office, Borrower or such  Subsidiary shall: (x) provide Collateral Agent and each Lender with at least ten (10) days prior written notice of  Borrower’s or such Subsidiary’s intent to register such copyrights or mask works together with a copy of the  application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an  intellectual property security agreement and such other documents and take such other actions as Collateral Agent  may reasonably request in its good faith business judgment to perfect and maintain a first priority perfected security  interest in favor of Collateral Agent, for the ratable benefit of the Lenders, in the copyrights or mask works intended  

 

                                                                                         to be registered with the United States Copyright Office; and (z) hereby does authorize the Collateral Agent to record  such intellectual property security agreement with the United States Copyright Office contemporaneously with filing  the copyright or mask work application(s) with the United States Copyright Office.          6.8    Litigation Cooperation.  Commencing on the Effective Date and continuing through the  termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral  Agent or the Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to the  extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third party  suit or proceeding instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to  Borrower.         6.9    Landlord Waivers; Bailee Waivers.  In the event that Borrower or any of its Subsidiaries, after  the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any  portion of the Collateral (other than Transitory Collateral) with, or deliver any portion of the Collateral (other than  Transitory Collateral) to, a bailee, in each case pursuant to Section 7.2, then Borrower or such Subsidiary will first  provide written notice to Collateral Agent and, in the event that the Collateral (excluding Transitory Collateral) at any  new location is valued in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate, at Collateral  Agent’s election, such bailee or landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver,  as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition of any such new  offices or business locations, or any such storage with or delivery to any such bailee, as the case may be.         6.10   Creation/Acquisition of Subsidiaries.  In the event any Borrower or any Subsidiary of any  Borrower creates or acquires any Subsidiary after the Effective Date, Borrower or such Subsidiary shall promptly  notify Collateral Agent of such creation or acquisition, and Borrower or such Subsidiary that is a Borrower or  Guarantor hereunder shall take all actions reasonably requested by Collateral Agent to achieve any of the following  with respect to such “New Subsidiary” (defined as a Subsidiary formed after the date hereof during the term of this  Agreement by a Borrower or a Subsidiary that is a Borrower or a Guarantor hereunder):  (i) if such New Subsidiary  is organized under the laws of the United States, to cause such New Subsidiary to become either a co-Borrower  hereunder or a secured guarantor with respect to the Obligations; and (ii) to grant and pledge to Collateral Agent a  perfected security interest in the Shares of such New Subsidiary, provided that no more than 65% of the Shares of any  New Subsidiary that is a Foreign Subsidiary shall be pledged to secure the Obligations.          6.11   Further Assurances.  Execute any further instruments and take further action as Collateral Agent  or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the  purposes of this Agreement, including without limitation, permit Collateral Agent or any Lender to discuss Borrower’s  financial condition with Borrower’s accountants; provided, however, an officer or employee of Borrower may be  present during any discussion between Borrower’s accountants and Collateral Agent or any Lender.         6.12   Financial Covenant.  Borrower shall achieve the following minimum T6M Product Revenue at the  end of each of the following quarters:                   Quarter Ending           Minimum T6M Product Revenue in                                                      millions                   December 31, 2019                    $32.5                    March 31, 2020                      $36.0                     June 30, 2020                      $36.0                  September 30, 2020                    $37.0                   December 31, 2020                    $39.5  

 

                                                                                                          March 31, 2021                      $39.5                     June 30, 2021                      $39.5                  September 30, 2021                    $41.0                   December 31, 2021                    $43.0                    March 31, 2022                      $43.5                     June 30, 2022                      $43.5                  September 30, 2022                    $43.5                   December 31, 2022                    $45.5                    March 31, 2023                      $46.0                     June 30, 2023                      $46.0                  September 30, 2023                    $46.0                   December 31, 2023                    $48.0                    March 31, 2024                      $48.0                   Notwithstanding anything herein to the contrary, Borrower shall not be obligated to comply with the  provisions of this Section 6.12 for the quarter immediately following any quarter at the end of which (i) the T6M  Product Revenue of Borrower, as determined by Collateral Agent was at least $45.0 million and (ii) Borrower has  been cash flow positive for two successive quarters.          6.13   Liquidity Covenant.  Borrower shall at all times maintain in a Collateral Account at Bank or subject  to a Control Agreement in favor of Collateral Agent a cash balance of not less than an amount equal to the lesser of  (i) the Minimum Cash Amount or (ii) the Minimum Cash Elected Amount.          6.14   Revolving Line Liquidity Covenant.  At all times when any principal amount under any Advance  is outstanding, Borrower shall maintain in a Collateral Account at Bank or subject to a Control Agreement in favor of  Collateral Agent a cash balance of not less than the Minimum Liquidity.    7.    NEGATIVE COVENANTS   Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written  consent of the Required Lenders:          7.1   Dispositions.  Convey, sell, lease, transfer, assign, dispose of (collectively, “Transfer”), or permit  any of its Subsidiaries to Transfer, all or any part of its business or property (including Intellectual Property), except  for Transfers (a) of Inventory in the ordinary course of business; (b) of worn out or obsolete Equipment; and (c) in  connection with Permitted Liens, Permitted Investments and Permitted Licenses.         7.2    Changes in Business, Management, Ownership, or Business Locations.  (a) Engage in or permit  any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower as of the Effective  Date or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) any Key Person shall cease to be actively engaged  

 

                                                                                         in the management of Borrower unless written notice thereof is provided to Collateral Agent and each Lender within  ten (10) Business Days of such, or (ii) enter into any transaction or series of related transactions (other than (x) a  merger or consolidation expressly permitted under Section 7.3 and (y) a sale of Borrower’s equity securities in a public  offering or a private placement of public equity) in which (A) the stockholders of Borrower who were not stockholders  immediately prior to the first such transaction own more than 49% of the voting stock of Borrower immediately after  giving effect to such transaction or related series of such transactions and (B) Borrower ceases to own 100% of the  ownership interests of a Subsidiary of Borrower.  Borrower shall not, without at least thirty (30) days’ prior written  notice to Collateral Agent: (A) add any new offices or business locations, including warehouses (unless such new  offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000.00) in assets or  property (excluding Transitory Collateral) of Borrower or any of its Subsidiaries; (B) change its jurisdiction of  organization, (C) change its organizational structure or type, (D) change its legal name, or (E) change any  organizational number (if any) assigned by its jurisdiction of organization.         7.3    Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or  consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of  the capital stock, shares or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary  (provided that if one of such Subsidiaries is a co Borrower hereunder, such surviving Subsidiary is a “co Borrower”  hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower  provided Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises  as a result therefrom.         7.4    Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary  to do so, other than Permitted Indebtedness.         7.5    Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey  any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so,  except for  Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except  for Permitted Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor  of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or  has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a  security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is  otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens”.         7.6    Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the  terms of Section 6.6 hereof.         7.7    Restricted Payments. Pay any dividends (other than dividends payable solely in capital stock) or  make any distribution or payment in respect of or redeem, retire or purchase any of its capital stock (other than  (i)  repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements,  stockholder rights plans, director or consultant stock option plans, or similar plans, provided such repurchases do not  exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate per fiscal year, and (ii) dividends,  distributions or payments to a Borrower).         7.8    Investments.  Directly or indirectly make any Investment other than Permitted Investments, or  permit any of its Subsidiaries to do so.         7.9    Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material  transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary  course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to  Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non affiliated Person, (b)  Subordinated Debt or equity investments by Borrower’s investors in Borrower or its Subsidiaries, (c) compensation  arrangements in the ordinary course of business to the extent not prohibited under this Agreement, and (d) transactions  existing and disclosed on the Perfection Certificate(s) as of the Effective Date.         7.10   Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the  terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or  

 

                                                                                         (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof  or adversely affect the subordination thereof to Obligations owed to the Lenders.         7.11   Compliance.  Become an “investment company” or a company controlled by an “investment  company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities  extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the  Federal Reserve System), or use the proceeds of any Term Loan for that purpose; fail to meet the minimum funding  requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to  comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the failure to comply or  violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so;  withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or  permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation  plan which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any  liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.         7.12   Compliance with Anti Terrorism Laws.  Neither Borrower nor any of its Subsidiaries shall, nor  shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any  documents, instruments, agreements or contracts with any Person listed on the OFAC Lists.  Neither Borrower nor  any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries, permit any Affiliate to, directly or indirectly,  (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without  limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked  Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked  pursuant to Executive Order No. 13224 or any similar executive order or other Anti Terrorism Law, or (iii) engage in  or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts  to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti Terrorism Law.         7.13   Material Agreements.  Borrower shall provide Collateral Agent no less than ten (10) days’ notice  after the termination of any Material Agreement.   8.    EVENTS OF DEFAULT   Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:         8.1    Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Term  Loan on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due  and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the  date or acceleration pursuant to Section 9.1 (a) hereof);         8.2    Covenant Default.                (a)    Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections  6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7  (Protection of Intellectual Property Rights), 6.9 (Landlord Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of  Subsidiaries), 6.12 (Financial Covenant), 6.13 (Liquidity Covenant) or 6.14 (Revolving Line Liquidity Covenant);  provided, however, in the event that the Borrower fails to comply with the requirements of the financial covenant set  forth in Section 6.12, Borrower may cure such breach by means of submitting a new financial plan under which  Borrower is expected to break even on a cash flow basis prior to Maturity Date (which financial plan must be  acceptable to Collateral Agent) and raising such amount of capital from the sale and issuance of its equity securities  as required per the new financial plan, during a reasonable period of time to be agreed up on by Collateral Agent and  Borrower, provided, that upon such cure the parties shall amend the covenant in Section 6.12 in accordance with the  new financial plan which amendment must be acceptable to Collateral Agent and provided further that no Default or  Event of Default shall be deemed to exist as a result of any such breach of Section 6.12 if the Collateral Agent has  accepted in writing such new financial plan submitted by Borrower within 60 days of the submission of such plan by  Borrower and Borrower has succeeded in raising such amount of capital on or prior to the expiration of such agreed  period of time; or Borrower violates any provision in Section 7; or  

 

                                                                                                      (b)    Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other  term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any  default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement  that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however,  that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by  Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time,  then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure  such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of  Default;          8.3   Material Adverse Change.  A Material Adverse Change has occurred;          8.4   Attachment; Levy; Restraint on Business.                (a)    (i) The service of process seeking to attach, by trustee or similar process, any funds of  Borrower or any of its Subsidiaries or of any entity under control of Borrower or its Subsidiaries on deposit with any  institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy,  or assessment is filed against Borrower or any of its Subsidiaries or their respective assets by any government agency,  and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged  or stayed (whether through the posting of a bond or otherwise); and                (b)    (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized,  levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents  Borrower or any of its Subsidiaries from conducting any part of its business;          8.5   Insolvency.  (a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any  of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or  any of its Subsidiaries and not dismissed or stayed within forty five (45) days (but no Term Loan shall be extended  while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed);          8.6   Other Agreements.  There is (a) a default in any agreement to which Borrower or any of its  Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not  exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand  Dollars ($250,000.00) or could reasonably be expected to have a Material Adverse Change; or (b) any default under  a Material Agreement that permits the counterparty thereto to accelerate the payments owed thereunder.         8.7    Judgments.  (a) One or more judgments, orders, or decrees for the payment of money in an amount,  individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000.00) (not covered by independent  third party insurance) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied,  unvacated, or unstayed for a period of ten (10) Business Days after the entry thereof or (b) any judgments, orders or  decrees rendered against Borrower that could reasonably be expected to result in a Material Adverse Change;         8.8    Misrepresentations.  Borrower or any of its Subsidiaries or any Person acting for Borrower or any  of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan  Document or in any writing delivered to Collateral Agent and/or Lenders or to induce Collateral Agent and/or the  Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement, when  taken as a whole, is incorrect in any material respect when made;         8.9    Subordinated Debt.  A default or breach occurs under any agreement between Borrower or any of  its Subsidiaries and any creditor of Borrower or any of its Subsidiaries that signed a subordination, intercreditor, or  other similar agreement with Collateral Agent or the Lenders, or any creditor that has signed such an agreement with  Collateral Agent or the Lenders breaches any terms of such agreement;  

 

                                                                                               8.10   Guaranty.  (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; (b)  any Guarantor does not perform any obligation or covenant under any Guaranty; (c) any circumstance described in  Section 8 occurs with respect to any Guarantor; or (d) a Material Adverse Change with respect to any Guarantor;         8.11   Governmental Approvals; FDA Action.  (a) Any Governmental Approval shall have been  revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term  and such revocation, rescission, suspension, modification or non-renewal has resulted in or could reasonably be  expected to result in a Material Adverse Change; or (b) (i) the FDA, DOJ, or other Governmental Authority initiates  a Regulatory Action or any other enforcement action against Borrower or any of its Subsidiaries or any supplier of  Borrower or any of its Subsidiaries that causes Borrower or any of its Subsidiaries to recall, withdraw, remove or  discontinue manufacturing, distributing, and/or marketing any of its products, even if such action is based on  previously disclosed conduct; (ii) the FDA issues a warning letter or Regulatory Action to Borrower or any of its  Subsidiaries with respect to any of its activities or products which could reasonably be expected to result in a Material  Adverse Change; (iii) Borrower or any of its Subsidiaries conducts a mandatory recall which could reasonably be  expected to result in liability and expense to Borrower or any of its Subsidiaries of Three Million Dollars  ($3,000,000.00) or more; (iv) Borrower or any of its Subsidiaries enters into a settlement agreement with the FDA,  DOJ, or other Governmental Authority that results in aggregate liability as to any single or related series of  transactions, incidents or conditions, of Five Hundred Thousand Dollars ($500,000.00) or more, or that could  reasonably be expected to result in a Material Adverse Change even if such settlement agreement is based on  previously disclosed conduct; or (v) Borrower or any of its Subsidiaries fails to remediate observations identified in  an FDA Form 483 notice of inspection observation to Collateral Agent’s or the FDA’s reasonable satisfaction within  six months of receipt (or such later date allowed by the FDA); or (vi) the FDA revokes any authorization or permission  granted under any Registration, or Borrower or any of its Subsidiaries withdraws any Registration, that could  reasonably be expected to result in a Material Adverse Change; or         8.12   Lien Priority; Intellectual Property.  Any Lien created hereunder or by any other Loan Document  shall at any time fail to constitute a valid and perfected Lien on any of the Collateral purported to be secured thereby,  subject to no prior or equal Lien, other than Permitted Liens arising as a matter of applicable law.  Any Intellectual  Property material to Borrower’s business shall cease to be validly owned (other than due to the invalidation of such  Intellectual Property) or licensed by Borrower free and clear of any Liens other than Permitted Liens or a material  portion of Intellectual Property owned by Borrower shall be invalidated.   9.    RIGHTS AND REMEDIES         9.1    Rights and Remedies.                (a)    Upon the occurrence and during the continuance of an Event of Default, Collateral Agent  may, without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower,  (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described  in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Collateral Agent or  the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance  money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower  and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if  any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other  agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any  action by Collateral Agent or the Lenders).                (b)    Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a)  above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right,  without notice or demand, to do any or all of the following:                       (i)   foreclose upon and/or sell or otherwise liquidate, the Collateral;                       (ii)  apply to the Obligations any (a) balances and deposits of Borrower that Collateral  Agent or any Lender holds or controls, or (b) any amount held or controlled by Collateral Agent or any Lender owing  to or for the credit or the account of Borrower; and/or  

 

                                                                                                             (iii)  commence and prosecute an Insolvency Proceeding or consent to Borrower  commencing any Insolvency Proceeding.                (c)    Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a)  and (b) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the  right, without notice or demand, to do any or all of the following:                       (i)    settle or adjust disputes and claims directly with Account Debtors for amounts on  terms and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money of  Collateral Agent’s security interest in such funds, and verify the amount of such account;                       (ii)   make any payments and do any acts it considers necessary or reasonable to protect  the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Collateral Agent  requests and make it available in a location as Collateral Agent reasonably designates.  Collateral Agent may enter  premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase,  contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses  incurred. Borrower grants Collateral Agent a license to enter and occupy any of its premises, without charge, to  exercise any of Collateral Agent’s rights or remedies;                       (iii)  ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or  advertise for sale, the Collateral.  Collateral Agent is hereby granted  a non exclusive, royalty free license or other  right to use, without charge, Borrower’s and each of its Subsidiaries’  labels, Patents, Copyrights, mask works, rights  of use of any name, trade secrets, trade names, Trademarks, service marks, and advertising matter, or any similar  property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral  and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of its  Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the  Lenders;                       (iv)   place a “hold” on any account maintained with Collateral Agent or the Lenders  and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any  Control Agreement or similar agreements providing control of any Collateral;                       (v)    demand and receive possession of Borrower’s Books;                       (vi)   appoint a receiver to seize, manage and realize any of the Collateral, and such  receiver shall have any right and authority as any competent court will grant or authorize in accordance with any  applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries; and                       (vii)  subject to clauses 9.1(a) and (b), exercise all rights and remedies available to  Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided  under the Code (including disposal of the Collateral pursuant to the terms thereof).   Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default,  Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written  consent of Required Lenders following the occurrence of an Exigent Circumstance.          9.2   Power of Attorney.  Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney  in fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s  or any of its Subsidiaries’ name on any checks or other forms of payment or security; (b) sign Borrower’s or any of  its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle  and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral  Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay,  contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any  judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral  into the name of Collateral Agent or a third party as the Code or any applicable law permits.  Borrower hereby appoints  

 

                                                                                         Collateral Agent as its lawful attorney in fact to sign Borrower’s or any of its Subsidiaries’ name on any documents  necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of  whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been  satisfied in full and Collateral Agent and the Lenders are under no further obligation to extend the Term Loan  hereunder.  Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and  all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than  inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’  obligation to provide the Term Loan terminates.         9.3    Protective Payments.  If Borrower or any of its Subsidiaries fail to obtain the insurance called for  by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its  Subsidiaries is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such  insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately  due and payable, bearing interest at the Default Rate, and secured by the Collateral.  Collateral Agent will make  reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such  payment at the time it is obtained or paid or within a reasonable time thereafter.  No such payments by Collateral  Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of  Default.         9.4    Application of Payments and Proceeds.  Notwithstanding anything to the contrary contained in  this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably  waives the right to direct the application of any and all payments at any time or times thereafter received by Collateral  Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between  Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing  and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as  Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the  proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’  Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the  provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount  of the Obligations outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to Collateral  Agent or any Lender under the Loan Documents.  Any balance remaining shall be delivered to Borrower or to whoever  may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.  In carrying out  the foregoing, (x) amounts received shall be applied in the numerical order provided until exhausted prior to the  application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular  category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for  such category.  Any reference in this Agreement to an allocation between or sharing by the Lenders of any right,  interest or obligation “ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share unless expressly  provided otherwise.  Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such  sums as may be necessary to ensure the ratable repayment of each Lender’s portion of any Term Loan and the ratable  distribution of interest, fees and reimbursements paid or made by Borrower.  Notwithstanding the foregoing, a Lender  receiving a scheduled payment shall not be responsible for determining whether the other Lenders also received their  scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its  ratable share of scheduled payments made on any date or dates, then such Lender shall remit to Collateral Agent or  other Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed  by Collateral Agent.  If any payment or distribution of any kind or character, whether in cash, properties or securities,  shall be received by a Lender in excess of its ratable share, then the portion of such payment or distribution in excess  of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid over to the  other Lender for application to the payments of amounts due on the other Lenders’ claims.  To the extent any payment  for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute  to one another as is necessary to ensure that such return of payment is on a pro rata basis.  If any Lender shall obtain  possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral Agent and  other Lenders for purposes of perfecting Collateral Agent’s security interest therein.         9.5    Liability for Collateral.  So long as Collateral Agent and the Lenders comply with reasonable  banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent  and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the  

 

                                                                                         Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or  default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction  of the Collateral.         9.6    No Waiver; Remedies Cumulative.  Failure by Collateral Agent or any Lender, at any time or  times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document  shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance  and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by Collateral Agent and  the Required Lenders and then is only effective for the specific instance and purpose for which it is given.  The rights  and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative.   Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law,  or in equity.  The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral  Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver.  Collateral Agent’s or any Lender’s  delay in exercising any remedy is not a waiver, election, or acquiescence.         9.7    Demand Waiver.  Borrower waives, to the fullest extent permitted by law, demand, notice of  default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release,  compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees  held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.   10.   NOTICES   All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by  any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly  served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S.  mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon  transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a  reputable overnight courier with all charges prepaid; or (d) when delivered, if hand delivered by messenger, all of  which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address  indicated below.  Any of Collateral Agent, Lender or Borrower may change its mailing address or facsimile number  by giving the other party written notice thereof in accordance with the terms of this Section 10.                       If to Borrower:  CONFORMIS, INC.                                   600 Technology Park Drive                       Billerica, MA 01821                                   Attn: Chief Financial Officer                                   Email: paul.weiner@conformis.com               with a copy (which shall               not constitute notice) to:                                                                       Wilmer Cutler Pickering Hale and Dorr, LLP                                   60 State Street                                   Boston, MA 02109                                   Attn: Jamie N. Class, Esq.                                   Email: jamie.class@wilmerhale.com                If to Collateral Agent:  INNOVATUS LIFE SCIENCES                                   LENDING FUND I, LP                                   777 Third Avenue, 25th Floor                                   New York, NY 10017                                   Attn: Claes Ekstrom                                   Email: cekstrom@innovatuscp.com                with a copy to:     EAST WEST BANK                                   2350 Mission College Blvd.                                   Ste. 988   

 

                                                                                                                          Santa Clara, CA 95054                                   Attn: James Tai                                   Email: James.Tai@eastwestbank.com               with a copy (which shall                       not constitute notice) to:    Greenberg Traurig, LLP                                                                  One International Place                                                                  Boston, MA 02110                                   Attn: Abdullah Malik                                   Fax: (617) 897-0983                                   Email: malikab@gtlaw.com   11.   CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER         11.1   Waiver of Jury Trial.  EACH OF BORROWER, COLLATERAL AGENT AND LENDERS  UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF  ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN  DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG  BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS  TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING  ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS.  THE SCOPE OF THIS  WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED  IN ANY COURT. THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER  ORALLY OR IN WRITING.  THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,  RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN  DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION  OR ANY RELATED TRANSACTION.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO  A TRIAL BY THE COURT.         11.2   Governing Law and Jurisdiction.                (a)    THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (EXCLUDING THOSE  LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE LAWS OF  ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND  THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT  OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE  LAWS OF THE STATE OF NEW YORK), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY  AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL, PROVIDED,  HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN  REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD  TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH  LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.                (b)    Submission to Jurisdiction.  Any legal action or proceeding with respect to the Loan  Documents shall be brought exclusively in the courts of the State of New York located in the City of New York,  Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution  and delivery of this Agreement, Borrower hereby accepts for itself and in respect of its Property, generally and  unconditionally, the jurisdiction of the aforesaid courts.  Notwithstanding the foregoing, Collateral Agent and Lenders  shall have the right to bring any action or proceeding against Borrower (or any property of Borrower) in the court of  any other jurisdiction Collateral Agent or Lenders deem necessary or appropriate in order to realize on the Collateral  or other security for the Obligations.  The parties hereto hereby irrevocably waive any objection, including any  objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or  hereafter have to the bringing of any such action or proceeding in such jurisdictions.                (c)    Service of Process.  Borrower irrevocably waives personal service of any and all legal  process, summons, notices and other documents and other service of process of any kind and consents to such service  

 

                                                                                         in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or  in connection with any Loan Document by any means permitted by applicable requirements of law, including by the  mailing thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified herein (and shall  be effective when such mailing shall be effective, as provided therein).  Borrower agrees that a final judgment in any  such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in  any other manner provided by law.                (d)    Non-exclusive Jurisdiction.  Nothing contained in this Section 11.2 shall affect the right of  Collateral Agent or Lenders to serve process in any other manner permitted by applicable requirements of law or  commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.   12.   GENERAL PROVISIONS         12.1   Successors and Assigns. This Agreement binds and is for the benefit of the successors and  permitted assigns of each party.  Borrower may not transfer, pledge or assign this Agreement or any rights or  obligations under it without Collateral Agent’s prior written consent (which may be granted or withheld in Collateral  Agent’s discretion, subject to Section 12.5).  The Lenders have the right, without the consent of or notice to Borrower,  to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or  grant of a participation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights,  and benefits under this Agreement and the other Loan Documents.  Borrower and Collateral Agent shall be entitled to  continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral  Agent shall have received and accepted an effective assignment agreement in form satisfactory to Collateral Agent  executed, delivered and fully completed by the applicable parties thereto, and shall have received such other  information regarding such assignee as Collateral Agent reasonably shall require.  Notwithstanding anything to the  contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other  than a Lender Transfer in connection with (x) assignments by a Lender due to a forced divestiture at the request of  any regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to  a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to any Person  which is an Affiliate or Subsidiary of Borrower, a direct competitor of Borrower or a vulture hedge fund, each as  determined by Collateral Agent.                 12.2   Indemnification.  Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders  and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing  Collateral Agent or the Lenders (each, an “Indemnified Person”) harmless against:  (a) all obligations, demands,  claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with; related to; following;  or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses or Lenders’  Expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or  under, the transactions contemplated by the Loan Documents between Collateral Agent, and/or the Lenders and  Borrower (including reasonable  attorneys’ fees and expenses), except for Claims and/or losses directly caused by  such Indemnified Person’s gross negligence or willful misconduct.  Borrower hereby further indemnifies, defends and  holds each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages,  penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever  (including the  fees and disbursements of counsel for such Indemnified Person) in connection with any investigative,  response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be  designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable   expenses of investigation by engineers, environmental consultants and similar technical personnel and any  commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or  Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred  by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated  hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses,  damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such  Indemnified Person’s gross negligence or willful misconduct.         12.3   Severability of Provisions.  Each provision of this Agreement is severable from every other  provision in determining the enforceability of any provision.  

 

                                                                                               12.4   Correction of Loan Documents.  Collateral Agent may correct patent errors and fill in any blanks  in this Agreement and the other Loan Documents consistent with the agreement of the parties so long as Collateral  Agent provides Borrower with written notice of such correction and allows Borrower at least ten (10) days to object  to such correction. In the event of such objection, such correction shall not be made except by an amendment signed  by Collateral Agent, the Lenders and Borrower.         12.5   Amendments in Writing; Integration.  (a) No amendment, modification, termination or waiver of  any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to  any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall  be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:                       (i)   no such amendment, waiver or other modification that would have the effect of  increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such  Lender without such Lender’s written consent;                       (ii)  no such amendment, waiver or modification that would affect the rights and duties  of Collateral Agent shall be effective without Collateral Agent’s written consent or signature; and                       (iii) no such amendment, waiver or other modification shall, unless signed by all the  Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term  Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any  Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any  Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any  termination of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of  Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any  material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any  material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its guaranty  obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly  permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted  hereunder); (E) amend, waive or otherwise modify this Section 12.5 or the definitions of the terms used in this Section  12.5 insofar as the definitions affect the substance of this Section 12.5; (F) consent to the assignment, delegation or  other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its  payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a  merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or  amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for  the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H)  subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions  of Section 12.5.  It is hereby understood and agreed that all Lenders shall be deemed directly affected by an  amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H)  of the immediately preceding sentence.                (b)    Other than as expressly provided for in Section 12.5(a)(i) (iii), Collateral Agent may, if  requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by  notification to a representative of Borrower.                (c)    This Agreement and the Loan Documents represent the entire agreement about this subject  matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements,  understandings, representations, warranties, and negotiations between the parties about the subject matter of this  Agreement and the Loan Documents merge into this Agreement and the Loan Documents.          12.6  Counterparts.  This Agreement may be executed in any number of counterparts and by different  parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together,  constitute one Agreement.         12.7   Survival.  All covenants, representations and warranties made in this Agreement continue in full  force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate  

 

                                                                                         indemnity obligations and any other obligations which, by their terms, are to survive the termination of this  Agreement) have been satisfied.  The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral  Agent, as well as the confidentiality provisions in Section 12.8 below, shall survive until the statute of limitations with  respect to such claim or cause of action shall have run.         12.8   Confidentiality.  In handling any confidential information of Borrower or its Subsidiaries, the  Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary  information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement,   including these confidentiality provisions, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates; (b) to  Collateral Agent’s or any Lender’s lenders, prospective transferees (other than those identified in (a) above) or  purchasers of any interest in the Term Loan (provided, however, the Lenders and Collateral Agent shall, except upon  the occurrence and during the continuance of an Event of Default, obtain such lender’s, prospective transferee’s or  purchaser’s agreement to the terms of this provision or to similar confidentiality terms for the benefit of Borrower);  (c) as required by law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or as  otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers  appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders  and/or Collateral Agent so long as  such service providers have executed a confidentiality agreement or have agreed  to similar confidentiality terms with the Lenders and Collateral Agent (for the benefit of Borrower) with terms no less  restrictive than those contained herein. Confidential information does not include information that either: (i) is in the  public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral  Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent at no fault of the  Lenders or the Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the  Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information.   Subject to the foreoing, Collateral Agent and the Lenders may use confidential information for any purpose, including,  without limitation, for the development of client databases, reporting purposes, and market analysis.  The provisions  of the immediately preceding sentence shall survive the termination of this Agreement.  The agreements provided  under this Section 12.8 supersede all prior agreements, understanding, representations, warranties, and negotiations  between the parties about the subject matter of this Section 12.8.         12.9   Right of Set Off.  Borrower hereby grants to Collateral Agent and to each Lender, a lien, security  interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now  existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the  possession, custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control of  Collateral Agent or the Lenders (including a Collateral Agent affiliate) or in transit to any of them.  At any time after  the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or the  Lenders may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even  though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL  RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT  TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS  RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF  BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY  BORROWER.         12.10  Cooperation of Borrower.  If necessary, Borrower agrees to (i) execute any documents reasonably  required to effectuate and acknowledge each assignment of a Term Loan Commitment or Term Loan to an assignee  in accordance with Section 12.1, (ii) make Borrower’s management available to meet with Collateral Agent and  prospective participants and assignees of Term Loan Commitments (which meetings shall be conducted no more often  than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral  Agent or the Lenders in the preparation of information relating to the financial affairs of Borrower as any prospective  participant or assignee of a Term Loan Commitment or Term Loan reasonably may request. Subject to the provisions  of Section 12.8, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term  Loan Commitment, any and all information in such Lender’s possession concerning Borrower and its financial affairs  which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been  delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower  prior to entering into this Agreement.  

 

                                                                                               12.11  Public Announcement.  Subject to Section 12.8, Borrower hereby agrees that Collateral Agent and  each Lender may make a public announcement of the transactions contemplated by this Agreement with Borrower’s  consent not to be unreasonably withheld, and may publicize the same in marketing materials, newspapers and other  publications, and otherwise, and in connection therewith may use Borrower’s name, tradenames and logos.                12.12  Collateral Agent and Lender Agreement.  Collateral Agent and each Lender hereby agree to the  terms and conditions set forth on Annex I attached hereto.  Borrower acknowledges and agrees to the terms and  conditions set forth on Annex I attached hereto.         12.13  Intercreditor Agreement.  The Lenders (a) consent to the subordination of Liens provided for in  the Intercreditor Agreement and (b) agree that they will be bound by, and will take no actions contrary to, the  provisions of the Intercreditor Agreement.  Notwithstanding anything herein to the contrary, Borrower is neither a  party to nor expected to have knowledge of or abide by the terms of the Intercreditor Agreement.         12.14  Borrower Liability.  Either Borrower may, acting singly, request Credit Extensions hereunder.   Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to  requesting Credit Extensions hereunder.  Each Borrower hereunder shall be jointly and severally obligated to repay  all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if  each Borrower hereunder directly received all Credit Extensions.  Each Borrower waives (a) any suretyship defenses  available to it under the Code or any other applicable law, and (b) any right to require Collateral Agent or any Lender  to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue  any other remedy.  Collateral Agent and or any Lender may exercise or not exercise any right or remedy it has against  any Borrower or any security it holds (including the right to foreclose by judicial or non judicial sale) without affecting  any Borrower’s liability.  Notwithstanding any other provision of this Agreement or other related document, each  Borrower irrevocably waives until the payment in full of all Obligations all rights that it may have at law or in equity  (including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and the Lenders under  this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower,  or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made  by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might  have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower  with respect to the Obligations in connection with this Agreement or otherwise.  Any agreement providing for  indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void.  If any  payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for  Collateral Agent and the Lenders and such payment shall be promptly delivered to Collateral Agent for application to  the Obligations, whether matured or unmatured.   13.   DEFINITIONS   As used in this Agreement, the following terms have the following meanings:   “Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and  includes, without limitation, all accounts receivable and other sums owing to Borrower.   “Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter  be made under the Code.   “Advance” or “Advances” means a cash advance or cash advances under the Revolving Line.   “Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls  or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers,  directors, partners if such Person is a partnership and, for any Person that is a limited liability company, that Person’s  managers and members.   “Amortization Date” is the forty ninth (49th) Payment Date following the Effective Date.   

 

                                                                                         “Anti Terrorism Laws” are any laws relating to terrorism or money laundering, including without limitation  Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or  implementing the Bank Secrecy Act, and the laws administered by OFAC.   “Bank” is defined in the preamble to this Agreement.   “Blocked Person” is any Person:  (a) listed in the annex to, or is otherwise subject to the provisions of, Executive  Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the  annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender  is prohibited from dealing or otherwise engaging in any transaction by any Anti Terrorism Law, (d) a Person that  commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a  Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC  or other similar list.   “Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state  tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations  or financial condition, and all computer programs or storage or any equipment containing such information.   “Borrowing Base” means an amount equal to (i) eighty five percent (85.00%) of Eligible Accounts, as determined  by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower, subject to a maximum  of 2.50% dilution based upon collections, minus (ii) Borrower’s foreign accounts receivable credit insurance’s  outstanding co-payment and minimum annual deductible (that has not been satisfied at the applicable time.   “Borrowing Base Certificate” is that certain certificate in substantially the form attached hereto as Exhibit D.   “Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.   “Cash Burn” is Borrower’s net cash used in operating activities and acquisition of property and equipment.   “Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States  or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b)  commercial paper maturing no more than one (1) year  after its creation and having  the  highest rating from either  Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) certificates of deposit maturing no more  than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject  to a Control Agreement in favor of Collateral Agent and (d) any cash equivalent investments consistent with the  Borrower’s investment policy approved by its Board of Directors and provided to the Collateral Agent and the  Lenders.   “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State  of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document  and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained  in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of  law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any  Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York,  the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely  for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes  of definitions relating to such provisions.   “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.   “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account  maintained by Borrower or any Subsidiary that is a Guarantor or co-Borrower under this Agreement at any time (other  than any Lease Collateral Cash Collateral Accounts).   “Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.  

 

                                                                                         “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may  hereafter be made under the Code.   “Compliance Certificate” is that certain certificate in substantially the form attached hereto as Exhibit C.   “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a)  any indebtedness, lease, dividend, letter of credit or other obligation of another Person such as an obligation directly  or indirectly guaranteed, endorsed, co made, discounted or sold with recourse by that Person, or for which that Person  is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c)  all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement,  or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency  exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary  course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary  obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated  liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations  under any guarantee or other support arrangement.   “Control Agreement” is any control agreement entered into among the depository institution at which Borrower or  any of its Subsidiaries that are Guarantors or co-Borrowers under this Agreement maintains a Deposit Account or the  securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities  Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent pursuant to which Collateral  Agent, for the benefit of the Lenders, obtains “control” (within the meaning of the Code) over such Deposit Account,  Securities Account, or Commodity Account.   “Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in  each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same  also constitutes a trade secret.   “Credit Extension” is each Advance, Term Loan or any other extension of credit by any Lender to or for the benefit  of Borrower hereunder.   “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter  be made.   “Disbursement Letter” is that certain form attached hereto as EXHIBIT B-2.   “DOJ” means the U.S. Department of Justice or any successor thereto or any other comparable Governmental  Authority.   “Dollars,” “dollars” and “$” each mean lawful money of the United States.   “Eligible Accounts” means those Accounts that arise in the ordinary course of Borrower's business that comply with  all of Borrower's applicable representations and warranties set forth in Section 5.2; provided, that Bank may, in its  reasonable discretion, change the standards of eligibility immediately by giving Borrower a written notice of the  effectiveness of any such change. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the  following:                  (a)    Accounts that the Account Debtor has failed to pay in full within ninety (90) days  of  invoice date; provided that Bank may, with prior notice to Borrower, change such number of days to one hundred  twenty (120) in Bank’s sole discretion based upon the results of Collateral audits;                (b)    Dilution in excess of 2.50% based upon collections of Accounts;                (c)    Uninsured Foreign Accounts;  

 

                                                                                                      (d)    Intercompany Accounts of Borrower;                (e)    Credit balances over ninety (90) days;                (f)    Accounts with respect to an Account Debtor, twenty-five percent (25%) of whose Accounts  the Account Debtor has failed to pay within ninety (90) days of invoice date, except as approved in writing by Bank;                 (g)    Accounts with respect to an Account Debtor, including Subsidiaries and Affiliates, whose  total obligations to Borrower exceed twenty-five percent (25%) of all Accounts, to the extent such obligations exceed  the aforementioned percentage, except as approved in writing by Bank;                 (h)    Accounts with respect to which the goods have not been shipped or delivered, or the  services have not been rendered, to the Account Debtor;                (i)    Accounts consisting of non-trade claims, i.e., freight claims, insurance claims, warranty  claims, claims against government, etc.;                (j)    Accounts arising from cash sales or from collect on delivery sales of inventory;                (k)    Accrued finance charges on Account;                (l)    Accounts which consists of progress billings;                (m)    Accounts with respect to which the Account Debtor is the United States or any department,  agency, or instrumentality of the United States, except for (i) Accounts of the United States, or (ii) Accounts with the  United States Department of Veterans Affairs (and related hospitals), if in each case Borrower has assigned its  payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of 1940 (31  U.S.C, 3727);                (n)    Accounts with respect to which Borrower is liable to the Account Debtor for goods sold or  services rendered by the Account Debtor to Borrower, but only to the extent of any amounts owing to the Account  Debtor against amounts owed to Borrower;                (o)    Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or  return, sale on approval, bill and hold, demo or promotional, or other terms by reason of which the payment by the  Account Debtor may be conditional;                (p)    Accounts with respect to which the Account Debtor is an officer, employee, agent or  Affiliate of Borrower;                (q)    Accounts that have not yet been billed to the Account Debtor or that relate to deposits (such  as good faith deposits) or other property of the Account Debtor held by Borrower for the performance of services or  delivery of goods which Borrower has not yet performed or delivered;                (r)    Accounts with respect to which the Account Debtor disputes liability or makes any claim  with respect thereto as to which Bank believes, in its sole reasonable discretion, that there may be a basis for dispute  (but only to the extent of the amount subject to such dispute or claim), or is subject to any Insolvency Proceeding, has  filed for bankruptcy protection, is or becomes Insolvent, or goes out of business;                (s)    Accounts the collection of which Bank reasonably determines after inquiry and  consultation with Borrower to be doubtful; and                (t)    Retentions and hold-backs.   “Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made,  

 

                                                                                         and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and  any interest in any of the foregoing.   “Equity Investment Agreement” is that certain Investment Agreement regarding the purchase and sale of Borrower’s  common stock, entered into by and between Borrower, Innovatus and the investors party thereto on the date hereof.   “ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.   “Excluded Taxes” means, with respect to the Collateral Agent or a Lender, any Taxes imposed on or measured by  net income (however denominated), franchise Taxes, and branch profits Taxes imposed as a result of such Collateral  Agent or Lender being organized under the laws of, or having its principal office or its applicable lending office  located in, the jurisdiction imposing such Tax (or any political subdivision thereof).   “Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent,  imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such  as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof,  or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty  insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material  diminution in value of the Collateral.   “Existing Indebtedness” is the indebtedness of Borrower to Oxford Finance LLC in the aggregate principal  outstanding principal amount as of the Effective Date of approximately Fifteen Million Dollars ($15,000,000) pursuant  to that certain Loan and Security Agreement, dated January 6, 2017, as amended, entered into by and between Oxford  Finance LLC, Borrower and the other parties thereto.   “FDA” means the U.S. Food and Drug Administration or any successor thereto or any other comparable Governmental  Authority.   “Final Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus  accrued interest or any other fee payable hereunder) due on the earliest to occur of (a) the Maturity Date, or (b) the  acceleration of any Term Loan, or (c) the prepayment of the Term Loan pursuant to Section 2.2(c) or (d), in each case  equal to Five percent (5.00%) multiplied by the Term Loan Commitment, payable to Lenders in accordance with their  respective Pro Rata Shares.   “GMBH Pledge Agreement” is that certain pledge agreement under German law for the pledge to Collateral Agent  by Parent, for the ratable benefit of Lenders, a perfected security interest in all of the outstanding equity interests of  ConforMIS Europe GmbH, in such form and substance as are reasonably satisfactory to Collateral Agent.   “Finance Lease” as defined under GAAP.   “Foreign Currency” means lawful money of a country other than the United States.   “Foreign Subsidiary” is a Subsidiary that is not an entity organized under the laws of the United States or any state  thereof.   “Funding Date” is any date on which the Term Loan is made to or on account of Borrower which shall be a Business  Day.   “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting  Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the  Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a  significant segment of the accounting profession in the United States, which are applicable to the circumstances as of  the date of determination.   “General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such  

 

                                                                                         additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright  applications, copyright registrations and like protections in each work of authorship and derivative work, whether  published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law,  any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented  inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer  lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits,  options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in  contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business  interruption insurance), payments of insurance and rights to payment of any kind.   “Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate,  accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental  Authority.   “Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency,  authority, instrumentality, regulatory body (including, without limitation, the FDA and any state board of pharmacy  or state pharmacy licensing authority), court, central bank or other entity exercising executive, legislative, judicial,  taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self  regulatory organization.   “Guarantor” is any Person providing a Guaranty in favor of Collateral Agent for the benefit of the Lenders.   “Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended,  restated, modified or otherwise supplemented.   “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as  reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,  debentures or similar instruments, (c) Finance Lease obligations, and (d) Contingent Obligations. It is understood and  agreed that the obligations under the Scientific Advisory Board Agreements do not constitute Indebtedness.     “Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or  any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions or  proceedings seeking reorganization, arrangement, or other relief.   “Insolvent” means not Solvent.   “Intellectual Property” means all of Borrower’s or any of its Subsidiaries’ right, title and interest in and to the  following:                (a)    its Copyrights, Trademarks and Patents;                (b)    any and all trade secrets and trade secret rights, including, without limitation, any rights to  unpatented inventions, know how, operating manuals;                (c)    any and all source code;                (d)    any and all design rights which may be available to Borrower;                (e)    any and all claims for damages by way of past, present and future infringement of any of  the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement  of the Intellectual Property rights identified above; and                (f)    all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.   “Intercreditor Agreement” means that certain Intercreditor Agreement, as modified, amended and or restated from  

 

                                                                                         time to time in the sole discretion of Collateral Agent, by and between the Bank and Collateral Agent.    “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as  may hereafter be made under the Code, and includes without limitation all merchandise, raw materials, parts, supplies,  packing and shipping materials, work in process and finished products, including without limitation such inventory as  is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any  documents of title representing any of the above.   “Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other  securities), and any loan, advance or capital contribution to any Person.   “IP Security Agreement” is that certain Intellectual Property Security Agreement executed and delivered by  Borrower to Collateral Agent and dated as of the Effective Date, as may be amended, restated, or otherwise modified  or supplemented from time to time.   “Key Person” is each of Borrower’s (i) President and Chief Executive Officer, who is Mark Augusti as of the Effective  Date, and (ii) Chief Financial Officer, who is Paul Weiner as of the Effective Date.      “Lease Deposit Cash Collateral Account” means (i) a bank account to secure Borrower’s reimbursement obligations  not to exceed Two Thousand Dollars ($2,000.00) with respect to the Borrower’s Wallingford Connecticut leased  location, and (ii) an account to be designated by a financial institution issuing a letter of credit for the benefit of the  lessor of the Billerica location to secure Borrower’s letter of credit reimbursement obligations not to exceed Five  Hundred Thousand Dollars ($500,000).    “Lender” is any one of the Lenders.   “Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement  pursuant to Section 12.1.   “Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable  attorneys’ fees and  expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for  preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without  limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral  Agent and/or the Lenders in connection with the Loan Documents.   “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other similar encumbrance of any  kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.   “Loan Documents” are, collectively, this Agreement, the IP Security Agreement, the Intercreditor Agreement, each  Secured Promissory Note, the Perfection Certificate(s), each Control Agreement, each Compliance Certificate, each  Loan Payment Request Form, each Disbursement Letter, the GMBH Pledge Agreement, the UK Pledge Agreement,  any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any  other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the  Lenders and Collateral Agent in connection with this Agreement (but expressly excluding the Equity Investment  Agreement and all related documents instruments and agreements); all as amended, restated, or otherwise modified  or supplemented from time to time.   “Loan Payment Request Form” is that certain form attached hereto as EXHIBIT B-1.   “Material Adverse Change” is (a) a material adverse change in the business, operations or condition (financial or  otherwise) of Borrower or Borrower and its Subsidiaries, when taken as a whole; (b) a material impairment of the  prospect of repayment of any portion of the Obligations, or (c) a material adverse effect on the Collateral.  

 

                                                                                         “Material Agreement” is any license, agreement or other contractual arrangement with a Person or Governmental  Authority whereby Borrower or any of its Subsidiaries is reasonably likely to be required to transfer, either in-kind or  in cash, prior to the Maturity Date, assets or property valued (book or market) at more than Two Hundred Fifty  Thousand Dollars ($250,000.00) in the aggregate or any license, agreement or other contractual arrangement  conveying rights in or to any intellectual property necessary to make, use or sell any Inventory, products or services  of Borrower or any Subsidiary.   “Maturity Date” is June 25, 2024.   “Minimum Cash Amount” is the lesser of (i) Two Million Dollars ($2,000,000.00) or (ii) the Cash Burn of Borrower  in the immediately preceding three months.    “Minimum Cash Elected Amount” is the greater of (i) (A) Minimum Cash Amount minus (B) such amount under  the Revolving Line (if any) as Borrower can then draw but is not currently drawn by the Borrower or (ii) One Million  Dollars ($1,000,000.00).    “Minimum Liquidity” is the following respective amounts depending upon the outstanding principal amount drawn  under the Revolving Line:             Amount outstanding under Revolving Line             Minimum Liquidity                $1.00 -  $5,000,000.00                        $2,000,000.00             $5,000,001.00 - $7,500,000.00                    $3,000,000.00             $7,500,001.00 - $10,000,000.00                   $4,000,000.00      “Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses,  the Prepayment Fee, the Final Fee, and other amounts Borrower owes the Lenders now or later, in connection with,  related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise,  including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for  drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including  interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of  Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan  Documents.   “OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.   “OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC  pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other  restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable  Executive Orders.   “Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of  State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30)  days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person  is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person  is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments  or modifications thereto.   “Patents” means all patents, patent applications and like protections including without limitation improvements,  

 

                                                                                         divisions, continuations, renewals, reissues, re-examination certificates, utility models, extensions and continuations- in-part of the same.   “Payment Date” is the first (1st) calendar day of each calendar month, commencing on July 1, 2019.   “Permitted Agreements” are, notwithstanding any limitations, restrictions or exclusions on licensing or transferring  of assets, including Intellectual Property, set forth in this Agreement to the contrary, agreements with third parties  for the design, development, manufacture, sale or other commercialization of (i) patient-specific instruments for use  with off-the-shelf (i.e., non-customized / not patient-specific) joint implants and/or (ii) patient-specific instruments  for use with patient-specific joint implants, provided that such agreements do not prevent Borrower from designing,  developing, manufacturing, using, selling or otherwise commercializing its current products and any future  improvements or next generation of its current products and do not result in transfer of any Intellectual Property of  Borrower.   “Permitted Indebtedness” is:                (a)    Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and  the other Loan Documents;                (b)    Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s);                (c)    Subordinated Debt;                (d)    unsecured Indebtedness to trade creditors and Indebtedness in connection with credit cards  incurred in the ordinary course of business;                (e)    Indebtedness consisting of Finance Lease obligations and purchase money Indebtedness,  in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or  construction of fixed or capital assets of such Person, provided that (i) the aggregate outstanding principal amount of  all such Indebtedness does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) at any time and (ii) the  principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so  acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of  such acquisition, repair, improvement or construction is made);                 (f)    Indebtedness incurred to finance insurance premiums, the aggregate amount of which  outstanding at any given time may not exceed Two Million Dollars ($2,000,000.00);                (g)    Indebtedness incurred as a result of endorsing negotiable instruments received in the  ordinary course of Borrower’s business;                 (h)    Indebtedness permitted under clause (f) of the definition of Permitted Investments; and                (i)    extensions, refinancings, modifications, amendments and restatements of any items of  Permitted Indebtedness (a) through (h) above, provided that the principal amount thereof is not increased or the terms  thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case  may be.   “Permitted Investments” are:                (a)    Investments disclosed on the Perfection Certificate(s) and existing on the Effective Date;                (b)    Investments consisting of cash and Cash Equivalents, and (ii) any Investments permitted  by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such  amendment thereto) has been approved in writing by Collateral Agent;  

 

                                                                                                      (c)    Investments consisting of the endorsement of negotiable instruments for deposit or  collection or similar transactions in the ordinary course of Borrower;                (d)    Investments consisting of Deposit Accounts in which Collateral Agent has a perfected  security interest;                (e)    Investments in connection with Transfers permitted by Section 7.1;                (f)    Investments consisting of (i) travel advances and employee relocation loans and other  employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors  relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans  or agreements approved by Borrower’s board of directors, not to exceed One Hundred Thousand Dollars  ($100,000.00) in the aggregate for (i) and (ii) in any fiscal year;                (g)    Investments (including debt obligations) received in connection with the bankruptcy or  reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with,  customers or suppliers arising in the ordinary course of business;                (h)    Investments consisting of notes receivable of, or prepaid royalties and other credit  extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this  paragraph (i) shall not apply to Investments of Borrower in any Subsidiary;                (i)    Investments in Subsidiaries, not to exceed One Hundred Thousand Dollars ($100,000.00)  per fiscal year for each Subsidiary; and                  (j)    Non-cash Investments in joint ventures or strategic alliances in the ordinary course of  Borrower’s business consisting of the non exclusive licensing of technology, the development of technology or the  providing of technical support.   “Permitted Licenses” are any one or more of the following: (A) licenses of over-the-counter software that is  commercially available to the public; (B) non exclusive licenses and exclusive licenses (but specifically excluding  exclusive licenses relating to Borrower’s patient specific implants or for therapeutic uses relating to the treatment of  knees and hips) for the use of the Intellectual Property of Borrower or any of its Subsidiaries (i) entered into in the  ordinary course of business or any reasonable extension of Borrower’s business as determined by the Borrower’s  board of directors, or (ii) in connection with settlement agreements relating to the infringement of the Intellectual  Property of Borrower or any of its Subsidiaries, and pursuant to which Borrower or any of its Subsidiaries license  Intellectual Property to the opposing party; provided, that, (x) with respect to each such license described in clause  (B), the license constitutes an arms length transaction, the terms of which, on their face do not provide for a sale or  assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as  applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property  (y) in the case of any exclusive license described in clause (B) (I) Borrower delivers ten (10) days’ prior written notice  and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and delivers to Collateral  Agent and the Lenders copies of the final executed licensing documents in connection with the exclusive license  promptly upon consummation thereof, (II) any such license is made in connection with a bona fide corporate  collaboration or partnership, and is approved by Borrower’s (or the applicable Subsidiary’s) board of directors, and  (III) any such license could not result in a legal transfer of title of the licensed property but may be exclusive in respects  other than territory and may be exclusive as to territory only as to discrete geographical areas outside of the United  States; and (IV) all upfront payments, royalties, milestone payments or other proceeds arising from such licensing  agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account maintained at Bank  or that is governed by a Control Agreement; (C) Permitted Agreements; and (D) the agreements disclosed to the  Collateral Agent and the Lender on the Perfection Certificate.   “Permitted Liens” are:  

 

                                                                                                      (a)    Liens existing on the Effective Date and disclosed on the Perfection Certificates or  arising  under this Agreement and the other Loan Documents;                (b)    Liens for taxes, fees, assessments or other government charges or levies, either (i) not due  and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books,  provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as  amended, and the Treasury Regulations adopted thereunder;                (c)    Liens securing Indebtedness permitted under clause (e) of the definition of “Permitted  Indebtedness,” provided that (i) such liens exist prior to the acquisition of, or attach substantially simultaneous with,  or within twenty (20) days after the, acquisition, lease, repair, improvement or construction of, such property financed  or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property  (and  proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness;                (d)    Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature  arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the  aggregate amount not to exceed Fifty Thousand Dollars ($50,000.00), and which are not delinquent or remain payable  without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have  the effect of preventing the forfeiture or sale of the property subject thereto;                (e)    Liens to secure payment of workers’ compensation, employment insurance, old age  pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens  imposed by ERISA);                (f)    Liens incurred in the extension, renewal or refinancing of the indebtedness secured by  Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property  encumbered by the existing Lien and the principal amount of the indebtedness may not increase;                (g)    Leases or subleases of real property granted in the ordinary course of Borrower’s business  (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non  exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course  of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the  leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest  therein;                (h)    Banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the  ordinary course of business arising in connection with Borrower’s  deposit accounts or securities accounts held at such  institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained  in compliance with Section 6.6 hereof;                (i)    Liens arising from judgments, decrees or attachments in circumstances not constituting an  Event of Default under Section 8.4 or 8.7;                 (j)    Liens on a segregated bank account of Borrower securing Indebtedness permitted under  clause (f) of the definition of “Permitted Indebtedness,” provided that the account balance in such bank account shall  not exceed Two Million Dollars ($2,000,000.00); and                 (k)    Permitted Licenses.   “Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust,  unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock  company, estate, entity or government agency.   “Prepayment Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by  mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount  

 

                                                                                         equal to:                       (i)   for a prepayment made after the date which is the first anniversary of the Funding  Date of the Term Loan through and including the date which is the second anniversary of the Funding Date of the  Term Loan, two percent (2.00%) of the principal amount of the Term Loan prepaid;                       (ii)  for a prepayment made after the date which is the second anniversary of the  Funding Date of the Term Loan through and including the date which is the third anniversary of the Funding Date of  the Term Loan, one percent (1.00%) of the principal amount of the Term Loan prepaid; and                       (iii) for a prepayment made after the date which is the third anniversary of the Funding  Date of the Term Loan and prior to the Maturity Date, zero percent (0.00%) of the principal amount of the Term Loan  prepaid.         For the purposes of clarification, no voluntary prepayment of a Term Loan may be made prior to the first  anniversary of the Effective Date but in the event of a mandatory prepayment made pursuant to Section 2.2(c) on or  after the Funding Date of the Term Loan through and including the first anniversary of the Funding Date of the Term  Loan, the Prepayment Fee shall be equal to three percent (3.00%) of the principal amount of the Term Loan prepaid.   “Prime Rate” means the greater of (i) Five and one-half percent (5.50%) and (ii) variable rate of interest, per annum,  most recently announced by Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available  from Bank.   “Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible  or intangible.   “Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a  decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of the Term  Loan held by such Lender by the aggregate outstanding principal amount of the Term Loan.   “Registered Organization” is any “registered organization” as defined in the Code with such additions to such term  as may hereafter be made under the Code.   “Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer,  employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and  other advisor and other consultants and agents of or to such Person or any of its Affiliates.   “Registration” means any registration, authorization, approval, license, permit, clearance, certificate, and exemption  issued or allowed by the FDA or state pharmacy licensing authorities (including, without limitation, new drug  applications, abbreviated new drug applications, biologics license applications, investigational new drug applications,  over-the-counter drug monograph, device pre-market approval applications, device pre-market notifications,  investigational device exemptions, product recertifications, manufacturing approvals, registrations and authorizations,  CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent, controlled substance  registrations, and wholesale distributor permits).   “Regulatory Action” means an administrative,  regulatory, or judicial enforcement action, proceeding, investigation  or inspection, FDA Form 483 notice of inspectional observation, warning letter, untitled letter, other notice of violation  letter, recall, seizure, Section 305 notice or other similar written communication, injunction or consent decree, issued  by the FDA or a federal or state court.   “Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an  “Original Lender”) have not assigned or transferred any of their interests in the Term Loan, Lenders holding one  hundred percent (100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and  after any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least fifty one  percent (51%) of the aggregate outstanding principal balance of the Term Loan.  

 

                                                                                         “Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law  (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental  Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or  any of its property is subject.   “Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting  alone.   “Revolving Facility Fee” is a fee due on the Effective Date equal to Thirty-Five Hundredths percent (0.35%) of the  Revolving Line; payable solely for the account of Bank.   “Revolving Line” means a Credit Extension by Bank of up to Ten Million Dollars ($10,000,000.00) from time to  time outstanding.   “Revolving Line Commitments” is, for any Lender, the obligation of such Lender to make Advances, up to the  principal amount shown on Schedule 1.1; it being agreed and understood that neither INNOVATUS LIFE SCIENCES  LENDING FUND I, LP nor any of its Affiliates has any Revolving Line Commitment.   “Scientific Advisory Board Agreement” is an agreement entered into from time to time in the ordinary course of  business by the Borrower or any of its Subsidiaries with advisors pursuant to which the Borrower or its Subsidiaries  are required to pay compensation based on a combination of stock-based compensation, revenue share and hourly  cash compensation for additional services, and to pay the reasonable, ordinary and necessary travel and other expenses.   “Secured Promissory Note” is defined in Section 2.6.   “Secured Promissory Note Record” is a record maintained by each Lender with respect to the outstanding  Obligations owed by Borrower to Lender and credits made thereto.   “Securities Account” is any “securities account” as defined in the Code with such additions to such term as may  hereafter be made under the Code.   “Shares” is all of the issued and outstanding stock, units or other evidence of ownership held by Borrower or its  Subsidiaries of any Subsidiary.   “Solvent” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill  minus disposition costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably  small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts)  as they mature in the ordinary course (without taking into account any forbearance and extensions related thereto).   “Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness  of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar  agreement in form and substance satisfactory to Collateral Agent and the Lenders entered into between Collateral  Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms  acceptable to Collateral Agent and  the Lenders.   “Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or  other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by  such Person or through one or more intermediaries.  Unless otherwise specified, references herein to a Subsidiary  means a Subsidiary of Borrower.   “T6M Product Revenue” means trailing six (6) months’ revenue of Borrower from the sale of its products,  determined in accordance with GAAP, as of any date of determination.   “Term Loan” is defined in Section 2.2(a) hereof.  

 

                                                                                         “Term Loan Basic Rate” is with respect to Term Loan, the floating per annum rate of interest (based on a year of  three hundred sixty five (365) days) equal to the sum of (a) the Prime Rate, subject to Section 2.5(g), and (b) Three  and seventy-five hundredths percent (3.75%).   “Term Loan Commitment” is, for any Lender, the obligation of such Lender to make the Term Loan, up to the  principal amount shown on Schedule 1.1.  “Term Loan Commitments” means the aggregate amount of such  commitments of all Lenders.   “Term Loan Facility Fee” is a fee due on the Effective Date equal to one percent (1.00%) of the total funded Term  Loan.   “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and  registrations of the same and like protections, and the entire goodwill of the business of Borrower and each of its  Subsidiaries connected with and symbolized by such trademarks.   “Transitory Collateral” are trays, instruments and customized implants that are located at or in transit to  hospitals,  surgery centers and medical locations, in the ordinary course of business, in advance of patient procedures; Collateral  held for repair or in transit; and laptops, peripherals and other equipment maintained with employees from time to  time in the ordinary course of business.   “Uninsured Foreign Account” is an Account of an Account Debtor that does not have its principal place of business  in the United States and with respect to which Account Debtor there is not in effect a Borrower’s accounts receivable  credit insurance policy that is acceptable to Bank and that has a minimum credit coverage percentage of 90% of the  Accounts for such Account Debtor.   “UK Pledge Agreement” means an agreement under the laws of England and Wales entered into by Borrower under  which Borrower pledges all of the Shares of the ConforMIS UK Limited to Collateral Agent for the Lenders’ ratable  benefit to secure the Obligations, in such form and substance as are reasonably satisfactory to Collateral Agent.                               [Balance of Page Intentionally Left Blank]    

 

                                                                                         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.   BORROWER:    CONFORMIS, INC.      By  /s/ Paul Weiner  Name:  Paul Weiner  Title:  Chief Financial Officer      BORROWER:    IMATX, INC.      By  /s/ Paul Weiner  Name:  Paul Weiner  Title:  Chief Financial Officer    BORROWER:    CONFORMIS CARES LLC      By  /s/ Paul Weiner  Name:  Paul Weiner  Title:  Chief Financial Officer        COLLATERAL AGENT AND LENDER:    INNOVATUS LIFE SCIENCES LENDING FUND I, LP    By: Innovatus Life Sciences GP, LP  Its: General Partner       By  /s/ Andrew Dym      Name:  Andrew Dym                            Title:  Authorized Signatory                    EAST WEST BANK:    EAST WEST BANK      By  /s/ James Tai  Name:  James Tai  Title:  Managing Director / Head of Life Sciences      

 

                                                                                                                                SCHEDULE 1.1                                                                                 Lenders and Commitments                                              Term Loan                                      Lender                Term Loan Commitment       Commitment Percentage  INNOVATUS LIFE SCIENCES LENDING          $20,000,000.00 100.00%  FUND I, LP                TOTAL $20,000,000.00 100.00%                                               Revolving Line         Lender                    Revolving Line Commitment      Commitment Percentage         EAST WEST BANK                  $10,000,000.00                  100.00%              TOTAL $10,000,000.00_ 100.00%  

 

                                                                                                                               EXHIBIT A                                                                                Description of Collateral   The Collateral consists of all of Borrower’s right, title and interest in and to the following property:          All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to  payment of money, leases, license agreements, franchise agreements, General Intangibles (including Intellectual  Property), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether  tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters  of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment  property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located;  and          All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the  above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements,  products, proceeds and insurance proceeds of any or all of the foregoing.     Notwithstanding the foregoing, the Collateral does not include (i) equipment subject to a Lien described in clause (c)  of the definition of Permitted Liens if the granting of a Lien in such equipment is prohibited by or would constitute a  default under the agreement governing such equipment (but (A) only to the extent such prohibition is enforceable  under applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to  Sections 9-406, 9-407, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the  termination, lapsing or expiration of any such prohibition, such equipment or other property shall automatically be  subject to the security interest granted in favor of Collateral Agent and each Lender hereunder and become part of  the Collateral without any action by Borrower, Collateral Agent or any Lender, (ii) more than sixty five percent  (65%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by  the Borrower (the “Shares”) of any Foreign Subsidiary, (iii) any license or contract, in each case if the granting of a  Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such  license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than  to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any  other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such  prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in  favor of Collateral Agent hereunder and become part of the “Collateral”, and (iv) the Lease Deposit Cash Collateral  Accounts.  

 

                                                                                                                                         EXHIBIT B-1                                                                                   Loan Payment Request Form (Term Loan)   Fax To:                                                             Date: _____________________   LOAN PAYMENT:                                        CONFORMIS, INC.                                                  From Account #________________________________  To Account  #__________________________________________________  (Deposit Account #)      (Loan Account #)  Principal $____________________________________  and/or Interest  $________________________________________________    Authorized Signature:                        Phone Number:                            Print Name/Title:                         LOAN ADVANCE:    Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing  wire.    From Account #________________________________  To Account  #__________________________________________________  (Loan Account #)      (Deposit Account #)    Amount of Advance $___________________________    All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all  material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be  applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;  and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate  and complete in all material respects as of such date:    Authorized Signature:                        Phone Number:                           Print Name/Title:                       OUTGOING WIRE REQUEST:  Complete only if all or a portion of funds from the loan advance above is to be wired.      Beneficiary Name: _____________________________                                        Amount of Wire: $                                   Beneficiary Bank: ______________________________   Account Number:    City and State:                           Beneficiary Bank Transit (ABA) #:          Beneficiary Bank Code (Swift, Sort, Chip, etc.):    (For International Wire Only)  Intermediary Bank:                         Transit (ABA) #:                               For Further Credit to:                                                                      Special Instruction:                                                                      By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance  with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which  agreements(s) were previously received and executed by me (us).  

 

                                                                                                Authorized Signature: ___________________________  2nd Signature (if required):  _______________________________________  Print Name/Title: ______________________________  Print Name/Title:  ______________________________________________  Telephone #:      Telephone #:                                                                                                            

 

                                                                                                                                                                                                                                                                                                                                                                                     LOAN ADVANCE / PAYMENT AUTHORIZATION                                                                                                                       (MUST BE RECEIVED BY 5:00 PM PST FOR SAME DAY PROCESSING)                                                                                                                       WHEN COMPLETED E-MAIL TO:                                  AdvanceGroup@EastWestBank.com                                                                                                   (Rev. 03/2017)                                                                                                                           OR FAX TO: 626-927-2088                                                                                                         LOAN REQUEST FORM                                                                                               (TO BE COMPLETED BY BORROWER)                                                                                                                                                          Borrower Name:                              Date of Request:    Borrower Contact No.:                                                                                            Loan / Note  No.:                                                                                                            (“Loan”)                                                                                                       LOAN ADVANCE REQUEST                                                                                                (TO BE COMPLETED BY BORROWER)        Effective Date                                                  Credit To                                                                    Description                                                Amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       UCC Equipment Filing Require:                                     Yes                            No                                                  If yes, please provide a copy of supporting documents                                                                                                      LOAN PAYMENT REQUEST                                                                                               (TO BE COMPLETED BY BORROWER)                                                                                                                                          Credit to                                                      Payment Type                                            Total Amount       Effective Date                               Debit From                                                                                             Loan/Note No.                              Principal                     Interest                     Fee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      CERTIFICATION OF BORROWER  This request is made to East West Bank by an authorized representative(s) of Borrower, who signs below and who certifies that: (i) The representations and warranties by Borrower set forth in the Business Loan Agreement and  Related Loan Documents (collectively “Loan Documents”) are true and correct in all material respects (or, if conditioned on materiality, in all respects) as of the date made and as of the date of this advance request except that that  those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (ii) Borrower is not in violation of any of the terms of the Loan Documents;  (iii) no Event of Default has occurred and is continuing or would result from making the Loan Advance; and, (iv) there has been no material adverse change in Borrower's financial condition since the Loan Documents were  executed.  Authorized Signature:                                                                                          Printed Name/Title:                                                                                                    Authorized Signature:                                                                                          Printed Name/Title:                                                                                                                                                                            EAST WEST BANK OFFICE USE ONLY  EWB Verification:                           Authorize Signature                       ABL                     Availability: $                                                       Maturity Date:                                                                                                       SPECIAL INSTRUCTIONS                                                                                                                                                              Prepared By:                       Printed Name/Title:                                                                                                                                             Signature                                                                     Approved By:                       Printed Name/Title:                                                                                                                                            Signature                                                                                                                                                LOAN SERVICING DEPARTMENT ONLY    Processed By:                                                                                                                                              Date:                  

 

                                                                                EXHIBIT B-2               Form of Disbursement Letter         [see attached]  

 

                                                                                                                                     EXHIBIT C-1                                                                                       Compliance Certificate     TO:          INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as Collateral Agent and Lender                 EAST WEST BANK, as Lender    FROM:        CONFORMIS, INC., as Borrower                      The undersigned authorized officer (“Officer”) of CONFORMIS, INC., hereby certifies on behalf of all Borrowers     that in accordance with the terms and conditions of the Loan and Security Agreement dated as of [June [_], 2019,] by     and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;”     capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),             (a)   Borrower is in complete compliance for the period ending _______________ with all required     covenants except as noted below;             (b)   There are no Defaults or Events of Default, except as noted below;             (c)   Except as noted below, all representations and warranties of Borrower stated in the Loan Documents     are true and correct in all material respects on this date and for the period described in (a), above; provided, however,     that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified     or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly     referring to a specific date shall be true, accurate and complete in all material respects as of such date.             (d)   Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports,     Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and material local taxes,     assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to     the terms of Section 5.8 of the Loan Agreement;             (e)   No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to     unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral     Agent and the Lenders.                   Attached are the required documents, if any, supporting our certification(s).  The Officer, on behalf of Borrower,     further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting     Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying     letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject     to year-end audit adjustments as to the interim financial statements.      Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under     “Complies” column.    Reporting Covenant Requirement Actual Complies                                    Summary within 30 days of month  1)      Financial statements                                   Yes No N/A                                    end and Quarterly within 45 days  2)      Annual (CPA Audited) statements Within 120 days after FYE           Yes    No     N/A                    Annual Financial          Annually (within earlier 10 days of                                    approval or 60 days of FYE), and  3)      Projections/Budget (prepared on a                      Yes No N/A          monthly basis)            when revised (no later than 10                                    business days of approval)  4)      8-K, 10-K and 10-Q Filings If applicable, within 5 days of filing  Yes     No     N/A            5)      Month-end account statements Monthly within 30 days                 Yes    No     N/A            

 

                                                                                            6)      Compliance Certificate    Quarterly within 45days                   Yes    No     N/A            7)      IP Report                 When required                             Yes    No     N/A                    Total amount of Borrower’s cash  8)      and cash equivalents at the last day                  $________ Yes No N/A          of the measurement period                    Total amount of Borrower’s          Subsidiaries’ cash and cash  9)      equivalents at the last day of the  $________ Yes No N/A          measurement period                    Loan confirmation submitted to          the fund administrator for          Innovatus Life Sciences Lending  10)                               Quarterly within 45 days                  Yes    No     N/A          Fund I, LP (see Exhibit C-2 to the          Loan Agreement)            11)     Borrowing Base Certificate  Monthly within 30 days                  Yes    No     N/A                                                                                   12)     A/R & A/P agings          If applicable                             Yes    No     N/A                                                                                          Material                                                                                          Agreeme 13)     Material Agreements (§ 7.13)           Yes No N/A 13)                                                                                          nts (§                                                                                          7.13)                                                                                                Negative Covenant Compliance     Negative Covenant                                                               Complies   1)   Dispositions (§ 7.1)                                                    Yes No N/A           2)   Changes in Business, Management, Ownership, or Business Locations (§ 7.2) Yes No N/A           3)   Mergers or Acquisitions (§ 7.3)                                         Yes No N/A           4)   Indebtedness (§ 7.4)                                                    Yes No N/A           5)   Encumbrance (§ 7.5)                                                     Yes No N/A           6)   Maintenance of Collateral Accounts (§ 7.6)                              Yes No N/A           7)   Restricted Payments (§ 7.7)                                             Yes No N/A           8)   Investments (§ 7.8)                                                     Yes No N/A           9)   Transactions with Affiliates (§ 7.9)                                    Yes No N/A           10)  Subordinated Debt (§ 7.10)                                              Yes No N/A           11)  Compliance (§ 7.11)                                                     Yes No N/A           12)  Compliance with Anti-Terrorism Laws (§ 7.12)                            Yes No N/A              Please attach supporting documentation and calculations for the below financial covenants.    Financial Covenant Requirement                               Actual  Complies  1)       Minimum TTM Revenue      T6M Product Revenue (Section 6.12) $______  Yes  No     N/A                                                                                               2)       Minimum Cash Balance     Set forth in Section 6.13   $______       Yes    No     N/A  

 

                                                                                                                                                                                         3)       Minimum Cash Balance     Set forth in Section 6.14   $                                                                              Yes    No     N/A                              Deposit and Securities Accounts     (Please list all accounts since last Compliance Certificate; attach separate sheet if additional space needed)                                                                     Account Control Agreement in          Institution Name     Account Number          New Account?                                                                    place?     1)                                                  Yes No Yes No     2)                                                  Yes No Yes No     3)                                                  Yes No Yes No     4)                                                  Yes No Yes No      Other Matters       1)   Have there been any changes in any Key Person since the last Compliance Certificate?  Yes  No                                                                                               Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by      2)                                                                         Yes No           the Loan Agreement?                                                                                               Have there been any new or pending claims or causes of action by or against Borrower      3)                                                                         Yes No           required to be disclosed under Section 5.3?                                                                                               Have there been any amendments of or other changes to the Operating Documents of      4)   Borrower or any of its Subsidiaries?  If yes, provide copies of any such amendments or Yes No           changes with the Compliance Certificate.                                                                                                                                                                                   Has Borrower provided the Collateral Agent with all notices required to be delivered      5)                                                                         Yes No           under Sections 6.2(a) and 6.2(b) of the Loan Agreement?                                                                                               Has Borrower or any Subsidiary terminated any Material Agreement? If yes, please      6)                                                                         Yes No           explain and provide a copy of the Material Agreement(s) and/or amendment(s).                                                                                               Have there been any material updates to the contents of the Perfection Certificate last      7)                                                                         Yes No           delivered?  If yes, please explain.  

 

                                                                                         Exceptions   Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.”   Attach separate sheet if additional space needed.)    CONFORMIS, INC., on behalf of  all Borrowers   By:     Name:                        Title:                        Date:                                             COLLATERAL AGENT USE ONLY                                                                               Received by:                        Date:                                                                                  Verified by:                        Date:                                                                                  Compliance Status:   Yes          No                                                

 

                                                                                                                                Exhibit C-2                                      Loan Confirmation        In accordance with the loan documents, Innovatus Life Sciences Lending Fund I, LP and Innovatus Life Sciences  Offshore Fund I, LP (collectively, the “Funds”), managed by Innovatus Capital Partners, LLC, please complete the  information below on a quarterly basis and sign and date this confirmation.  Please then send directly to the Funds  administrator, SS&C Technologies Inc., the following information related to the Funds’ total investment in  CONFORMIS, INC.:       1)   Please provide the following information as it relates to the Funds (Include: Date, Loan Description,              Principal Outstanding): Please see table below           Date – For the Quarter Ended     Loan Description               Principal Outstanding                                                                                                                                                 Total   Please sign, date, and email a copy of your response to SS&C Technologies at innovatuscp.pe@sscinc.com and  copy kbergen@innovatuscp.com no later than 30 days after quarter end.        CONFIRMATION:      Signature:         __________________________________________    Print Name:      __________________________________________    Title:                  __________________________________________    Date:                  __________________________________________    Phone:               __________________________________________                                                                

 

                                                                                              EXHIBIT D    BORROWING BASE CERTIFICATE         [to be provided by Bank]                  

 

                                                                   EXHIBIT E                 Form of Secured Promissory Note           [see attached]  

 

                                                                                                                      SECURED PROMISSORY NOTE                                        (Term Loan)   $20,000,000.00                                                        Dated: June [_], 2019          FOR VALUE RECEIVED, the undersigned, CONFORMIS, INC., a Delaware corporation, IMATX, Inc., a  California corporation and Conformis Cares LLC, a Delaware limited liability company (individually and collectively,  jointly and severally, “Borrower”) HEREBY PROMISES TO PAY to the order of INNOVATUS LIFE SCIENCES  LENDING FUND I, LP (“Lender”) the principal amount of TWENTY MILLION DOLLARS ($20,000,000.00) or  such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by Lender,  plus interest on the aggregate unpaid principal amount of such Term Loan, at the rates and in accordance with the  terms of the Loan and Security Agreement dated June [_], 2019 by and among Borrower, Lender, INNOVATUS LIFE  SCIENCES LENDING FUND I, LP, as Collateral Agent, and the other Lenders from time to time party thereto (as  amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  If not sooner  paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity  Date as set forth in the Loan Agreement.  Any capitalized term not otherwise defined herein shall have the meaning  attributed to such term in the Loan Agreement.   Principal, interest and all other amounts due with respect to the Term Loan, are payable in lawful money of the United  States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”).  The  principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall  be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this  Note.   The Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrower,  and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.   This Note may not be prepaid except as set forth in Section 2.2(c) and Section 2.2(d) of the Loan Agreement.   This Note and the obligation of Borrower to repay the unpaid principal amount of the Term Loan, interest on the  Term Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.   Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with  the execution, delivery, performance and enforcement of this Note are hereby waived.   Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and  costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not  performed when due.   This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of  New York.   The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its  agent.  Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on,  this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is  identified as the owner of an interest in the obligation.  Borrower shall be entitled to treat the registered holder of this  Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to  recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.                                 [Balance of Page Intentionally Left Blank]  

 

                                                                                               IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto  duly authorized on the date hereof.                                              BORROWER:     CONFORMIS, INC.           By     Name:                                                      BORROWER:                                                                           IMATX, INC.           By     Name:                                                BORROWER:     CONFORMIS CARES LLC           By     Name:     Title:     

 

                                                                                                                      SECURED PROMISSORY NOTE                                       (Revolving Line)   $10,000,000.00                                                        Dated:  June [_], 2019   FOR VALUE RECEIVED, the undersigned, CONFORMIS, INC., a Delaware corporation, IMATX, Inc., a California  corporation and Conformis Cares LLC, a Delaware limited liability company (individually and collectively, jointly  and severally, “Borrower”) HEREBY PROMISES TO PAY to the order of EAST WEST BANK (“Lender”) the  principal amount of TEN MILLION DOLLARS ($10,000,000.00) or such lesser amount as shall equal the outstanding  principal balance of the Revolving Line made to Borrower by Lender, plus interest on the aggregate unpaid principal  amount of such Revolving Line, at the rates and in accordance with the terms of the Loan and Security Agreement  dated June [_], 2019, by and among Borrower, Lender, INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as  Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or  otherwise modified from time to time, the “Loan Agreement”).  If not sooner paid, the entire principal amount and  all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan  Agreement.  Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the  Loan Agreement.   Principal, interest and all other amounts due with respect to the Revolving Line, are payable in lawful money of the  United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”).   The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto,  shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this  Note.   The Loan Agreement, among other things, (a) provides for the making of secured Advances by Lender to Borrower,  and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.   This Note may be prepaid in accordance with Section 2.3(a) of the Loan Agreement.   This Note and the obligation of Borrower to repay the unpaid principal amount of the Revolving Line, interest on the  Revolving Line and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.   Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with  the execution, delivery, performance and enforcement of this Note are hereby waived.   Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and  costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not  performed when due.   This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of  New York.   The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its  agent.  Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on,  this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is  identified as the owner of an interest in the obligation.  Borrower shall be entitled to treat the registered holder of this  Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to  recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.                                 [Balance of Page Intentionally Left Blank]  

 

                                                                                         IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly  authorized on the date hereof.     BORROWER:     CONFORMIS, INC.      By   Name:     BORROWER:     IMATX, INC.      By   Name:     BORROWER:     CONFORMIS CARES LLC      By   Name:   Title:                                                                     

 

                                                                                                                 CORPORATE BORROWING CERTIFICATE    BORROWER:   [CONFORMIS, INC.][IMATX,                         DATE: [DATE]               INC.][CONFORMIS CARES LLC]   LENDERS:    INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as                  Collateral Agent and Lender               EAST WEST BANK, as Lender                            I hereby certify as follows, as of the date set forth above:   1.     I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.   2.    Borrower’s exact legal name is set forth above.  Borrower is a corporation existing under the laws of the  State of Delaware.   3.    Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of  (i) Borrower’s Articles/Certificate of Incorporation (including amendments), as filed with the Secretary of State of the  state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws.  Neither such  Articles/Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or  supplemented, and such Articles/Certificate of Incorporation and such Bylaws remain in full force and effect as of the  date hereof.     4.    The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held  meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such  resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded,  amended or revoked, have been or will be filed in the minutes of the proceedings of the Board of Directors, and the  Lenders may rely on them until each Lender receives written notice of revocation from Borrower.                                                                     [Balance of Page Intentionally Left Blank]  

 

                                                                                      RESOLVED, that any one of the following officers or employees of Borrower, whose names, titles   and signatures are below, may act on behalf of Borrower:                                                                                Authorized to                                                                               Add or Remove  Name                          Title                      Signature            Signatories                                                                                     □                                                                                     □                                                                                     □                                                                                     □                                                                                                                                                                                 [Balance of Page Intentionally Left Blank]  

 

                                                                                         5.    The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to  their names.     By:      Name:      Title:      *** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions  set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second  authorized officer or director of Borrower.   I, the __________________________ of Borrower, hereby certify as to paragraphs 1 through 5 above, as                         [print title]  of the date set forth above.     By:      Name:      Title:   

 

                                                                                         EXHIBIT A                            Articles/Certificate of Incorporation (including amendments)                      [see attached]  

 

                                                   EXHIBIT B           Bylaws   [see attached]  

 

                                                                                                                                ANNEX I                                                                            Collateral Agent and Lender Terms                             1.    Collateral Agent and Lender Terms         1.     Appointment of Collateral Agent.                (a)    Each Lender hereby appoints INNOVATUS LIFE SCIENCES LENDING FUND I, LP  (together with any successor Collateral Agent pursuant to Section 7 of this Annex I) as Collateral Agent under the  Loan Documents and authorizes Collateral Agent to (i) execute and deliver the Loan Documents and accept delivery  thereof on its behalf from Borrower, (ii) take such action on its behalf and to exercise all rights, powers and remedies  and perform the duties as are expressly delegated to Collateral Agent under such Loan Documents and (iii) exercise  such powers as are reasonably incidental thereto.                (b)    Without limiting the generality of clause (a) above, Collateral Agent shall have the sole  and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing  and collecting agent for the Lenders with respect to all payments and collections arising in connection with the Loan  Documents (including in any other bankruptcy, insolvency or similar proceeding), and each Person making any  payment in connection with any Loan Document to any Lender is hereby authorized to make such payment to  Collateral Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of  Collateral Agent and Lenders with respect to any Obligation in any bankruptcy, insolvency or similar proceeding (but  not to vote, consent or otherwise act on behalf of such Lender), (iii) act as collateral agent for Collateral Agent and  each Lender for purposes of the perfection of all Liens created by the Loan Documents and all other purposes stated  therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or  desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents,  (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to Collateral Agent and  the other Lenders with respect to the Borrower and/or the Collateral, whether under the Loan Documents, applicable  Requirements of Law or otherwise and (vii) execute any amendment, consent or waiver under the Loan Documents  on behalf of any Lender that has consented in writing to such amendment, consent or waiver; provided, however, that  Collateral Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for Collateral Agent  and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any Deposit  Account maintained by Borrower with, and cash and Cash Equivalents held by, such Lender, and may further authorize  and direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise  to transfer the Collateral subject thereto to Collateral Agent, and each Lender hereby agrees to take such further actions  to the extent, and only to the extent, so authorized and directed.  Collateral Agent may, upon any term or condition it  specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties  or any other action with respect to, any Loan Document by or through any trustee, co-agent, employee, attorney-in- fact and any other Person (including any Lender).  Any such Person shall benefit from this Annex I to the extent  provided by Collateral Agent.                I      Under the Loan Documents, Collateral Agent (i) is acting solely on behalf of the Lenders,  with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Collateral Agent”,  the terms “agent”, “Collateral Agent” and “collateral agent” and similar terms in any Loan Document to refer to  Collateral Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Loan  Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or  any other Person and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under  any Loan Document, and each Lender, by accepting the benefits of the Loan Documents, hereby waives and agrees  not to assert any claim against Collateral Agent based on the roles, duties and legal relationships expressly disclaimed  in clauses (i) through (iii) above.  Except as expressly set forth in the Loan Documents, Collateral Agent shall not  have any duty to disclose, and shall not be liable for failure to disclose, any information relating to Borrower or any  of its Subsidiaries that is communicated to or obtained by [LENDER 2] or any of its Affiliates in any capacity.         2.     Binding Effect; Use of Discretion; E-Systems.                (a)    Each Lender, by accepting the benefits of the Loan Documents, agrees that (i) any action  

 

                                                                                         taken by Collateral Agent or Required Lenders (or, if expressly required in any Loan Document, a greater proportion  of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by Collateral Agent in  reliance upon the instructions of Required Lenders (or, where so required, such greater proportion) and (iii) the  exercise by Collateral Agent or Required Lenders (or, where so required, such greater proportion) of the powers set  forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and  binding upon all of Lenders.                (b)    If Collateral Agent shall request instructions from Required Lenders or all affected Lenders  with respect to any act or action (including failure to act) in connection with any Loan Document, then Collateral  Agent shall be entitled to refrain from such act or taking such action unless and until Collateral Agent shall have  received instructions from Required Lenders or all affected Lenders, as the case may be, and Collateral Agent shall  not incur liability to any Person by reason of so refraining.  Collateral Agent shall be fully justified in failing or  refusing to take any action under any Loan Document (i) if such action would, in the opinion of Collateral Agent, be  contrary to any Requirement of Law or any Loan Document, (ii) if such action would, in the opinion of Collateral  Agent, expose Collateral Agent to any potential liability under any Requirement of Law or (iii) if Collateral Agent  shall not first be indemnified to its satisfaction against any and all liability and expense which may be incurred by it  by reason of taking or continuing to take any such action.  Without limiting the foregoing, no Lender shall have any  right of action whatsoever against Collateral Agent as a result of Collateral Agent acting or refraining from acting  under any Loan Document in accordance with the instructions of Required Lenders or all affected Lenders, as  applicable.                I      Collateral Agent is hereby authorized by Borrower and each Lender to establish procedures  (and to amend such procedures from time to time) to facilitate administration and servicing of the Term Loan and  other matters incidental thereto.  Without limiting the generality of the foregoing, Collateral Agent is hereby  authorized to establish procedures to make available or deliver, or to accept, notices, documents (including, without  limitation, borrowing base certificates) and similar items on, by posting to or submitting and/or completion, on E- Systems.  Borrower and each Lender acknowledges and agrees that the use of transmissions via an E-System or  electronic mail is not necessarily secure and that there are risks associated with such use, including risks of  interception, disclosure and abuse, and Borrower and each Lender assumes and accepts such risks by hereby  authorizing the transmission via E-Systems or electronic mail.  Each “e-signature” on any such posting shall be  deemed sufficient to satisfy any requirement for a “signature”, and each such posting shall be deemed sufficient to  satisfy any requirement for a “writing”, in each case including pursuant to any Loan Document, any applicable  provision of any Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and  National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter. All  uses of an E-System shall be governed by and subject to, in addition to this Section, the separate terms, conditions and  privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated  from time to time, including on such E-System) and related contractual obligations executed by Collateral Agent,  Borrower and/or Lenders in connection with the use of such E-System. ALL E-SYSTEMS AND ELECTRONIC  TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”.  NO REPRESENTATION OR  WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS  IN CONNECTION WITH ANY E-SYSTEMS.         3.     Collateral Agent’s Reliance, Etc.  Collateral Agent may, without incurring any liability hereunder,  (a) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other  experts (including advisors to, and accountants and experts engaged by, Borrower) and (b) rely and act upon any  document and information (including those transmitted by electronic transmission) and any telephone message or  conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the  appropriate parties.  None of Collateral Agent and its Related Persons shall be liable for any action taken or omitted  to be taken by any of them under or in connection with any Loan Document, and each Lender and Borrower hereby  waives and shall not assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any right, claim  or cause of action based thereon, except to the extent of liabilities resulting from the gross negligence or willful  misconduct of Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non- appealable judgment of a court of competent jurisdiction) in connection with the duties of Collateral Agent expressly  set forth herein.  Without limiting the foregoing, Collateral Agent: (i) shall not be responsible or otherwise incur  liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions  or omissions of any of its Related Persons, except to the extent that a court of competent jurisdiction determines in a  

 

                                                                                         final non-appealable judgment that Collateral Agent acted with gross negligence or willful misconduct in the selection  of such Related Person; (ii) shall not be responsible to any Lender or other Person for the due execution, legality,  validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of  any Lien created or purported to be created under or in connection with, any Loan Document; (iii) makes no warranty  or representation, and shall not be responsible, to any Lender or other Person for any statement, document,  information, representation or warranty made or furnished by or on behalf of Borrower or any Related Person of  Borrower in connection with any Loan Document or any transaction contemplated therein or any other document or  information with respect to Borrower, whether or not transmitted or (except for documents expressly required under  any Loan Document to be transmitted to the Lenders) omitted to be transmitted by Collateral Agent, including as to  completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed  by Collateral Agent in connection with the Loan Documents; and (iv) shall not have any duty to ascertain or to inquire  as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any  Loan Document is satisfied or waived, as to the financial condition of Borrower or as to the existence or continuation  or possible occurrence or continuation of any Event of Default, and shall not be deemed to have notice or Knowledge  of such occurrence or continuation unless it has received a notice from Borrower or any Lender describing such Event  of Default that is clearly labeled “notice of default” (in which case Collateral Agent shall promptly give notice of such  receipt to all Lenders, provided that Collateral Agent shall not be liable to any Lender for any failure to do so, except  to the extent that such failure is attributable to Collateral Agent’s gross negligence or willful misconduct as determined  by a final non-appealable judgment of a court of competent jurisdiction); and, for each of the items set forth in clauses  (i) through (iv) above, each Lender and Borrower hereby waives and agrees not to assert (and Borrower shall cause  its Subsidiaries to waive and agree not to assert) any right, claim or cause of action it might have against Collateral  Agent based thereon.         4. Collateral Agent Individually.  Collateral Agent and its Affiliates may make loans and other  extensions of credit to, acquire stock and stock equivalents of, engage in any kind of business with, Borrower or any  Affiliate of Borrower as though it were not acting as Collateral Agent and may receive separate fees and other  payments therefor.  To the extent Collateral Agent or any of its Affiliates makes the Term Loan or otherwise becomes  a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the  same obligations and liabilities as any other Lender and the terms “Lender”, “Required Lender” and any similar terms  shall, except where otherwise expressly provided in any Loan Document, include, without limitation, Collateral Agent  or such Affiliate, as the case may be, in its individual capacity as Lender, or as one of the Required Lenders.          5.    Lender Credit Decision; Collateral Agent Report.  Each Lender acknowledges that it shall,  independently and without reliance upon Collateral Agent, any Lender or any of their Related Persons or upon any  document solely or in part because such document was transmitted by Collateral Agent or any of its Related Persons,  conduct its own independent investigation of the financial condition and affairs of Borrower and make and continue  to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan  Document or with respect to any transaction contemplated in any Loan Document, in each case based on such  documents and information as it shall deem appropriate.  Except for documents expressly required by any Loan  Document to be transmitted by Collateral Agent to the Lenders, Collateral Agent shall not have any duty or  responsibility to provide any Lender with any credit or other information concerning the business, prospects,  operations, Property, financial and other condition or creditworthiness of Borrower or any Affiliate of Borrower that  may come in to the possession of Collateral Agent or any of its Related Persons.  Each Lender agrees that is shall not  rely on any field examination, audit or other report provided by Collateral Agent or its Related Persons (a “Collateral  Agent Report”).  Each Lender further acknowledges that any Collateral Agent Report (a) is provided to the Lenders  solely as a courtesy, without consideration, and based upon the understanding that such Lender will not rely on such  Collateral Agent Report, (b) was prepared by Collateral Agent or its Related Persons based upon information provided  by Borrower solely for Collateral Agent’s own internal use, and (c) may not be complete and may not reflect all  information and findings obtained by Collateral Agent or its Related Persons regarding the operations and condition  of Borrower.  Neither Collateral Agent nor any of its Related Persons makes any representations or warranties of any  kind with respect to (i) any existing or proposed financing, (ii) the accuracy or completeness of the information  contained in any Collateral Agent Report or in any related documentation, (iii) the scope or adequacy of Collateral  Agent’s and its Related Persons’ due diligence, or the presence or absence of any errors or omissions contained in any  Collateral Agent Report or in any related documentation, and (iv) any work performed by Collateral Agent or  Collateral Agent’s Related Persons in connection with or using any Collateral Agent Report or any related  documentation.  Neither Collateral Agent nor any of its Related Persons shall have any duties or obligations in  

 

                                                                                         connection with or as a result of any Lender receiving a copy of any Collateral Agent Report. Without limiting the  generality of the forgoing, neither Collateral Agent nor any of its Related Persons shall have any responsibility for the  accuracy or completeness of any Collateral Agent Report, or the appropriateness of any Collateral Agent Report for  any Lender’s purposes, and shall have no duty or responsibility to correct or update any Collateral Agent Report or  disclose to any Lender any other information not embodied in any Collateral Agent Report, including any  supplemental information obtained after the date of any Collateral Agent Report.  Each Lender releases, and agrees  that it will not assert, any claim against Collateral Agent or its Related Persons that in any way relates to any Collateral  Agent Report or arises out of any Lender having access to any Collateral Agent Report or any discussion of its  contents, and agrees to indemnify and hold harmless Collateral Agent and its Related Persons from all claims,  liabilities and expenses relating to a breach by any Lender arising out of such Lender’s access to any Collateral Agent  Report or any discussion of its contents.         6. Indemnification.  Each Lender agrees to reimburse Collateral Agent and each of its Related Persons  (to the extent not reimbursed by Borrower as required under the Loan Documents) promptly upon demand for its Pro  Rata Share of any out-of-pocket costs and expenses (including, without limitation, fees, charges and disbursements of  financial, legal and other advisors and any taxes or insurance paid in the name of, or on behalf of, Borrower) incurred  by Collateral Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery,  administration, modification, amendment, consent, waiver or enforcement of, or the taking of any other action  (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding  (including, without limitation, preparation for and/or response to any subpoena or request for document production  relating thereto) or otherwise) in respect of, or legal advice with respect to, its rights or responsibilities under, any  Loan Document.  Each Lender further agrees to indemnify Collateral Agent and each of its Related Persons (to the  extent not reimbursed by Borrower as required under the Loan Documents), ratably according to its Pro Rata Share,  from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,  expenses or disbursements of any kind or nature whatsoever (including, to the extent not indemnified by the applicable  Lender, taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made  to or for the account of any Lender) that may be imposed on, incurred by, or asserted against Collateral Agent or any  of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document  or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any  action taken or omitted to be taken by Collateral Agent or any of its Related Persons under or with respect to the  foregoing; provided that no Lender shall be liable to Collateral Agent or any of its Related Persons under this Section  6 of this Annex I to the extent such liability has resulted from the gross negligence or willful misconduct of Collateral  Agent or, as the case may be, such Related Person, as determined by a final non-appealable judgment of a court of  competent jurisdiction.  To the extent required by any applicable Requirement of Law, Collateral Agent may withhold  from any payment to any Lender under a Loan Document an amount equal to any applicable withholding tax.  If the  Internal Revenue Service or any other Governmental Authority asserts a claim that Collateral Agent did not properly  withhold tax from amounts paid to or for the account of any Lender for any reason, or if Collateral Agent reasonably  determines that it was required to withhold taxes from a prior payment to or for the account of any Lender but failed  to do so, such Lender shall promptly indemnify Collateral Agent fully for all amounts paid, directly or indirectly, by  Collateral Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by  Collateral Agent.  Collateral Agent may offset against any payment to any Lender under a Loan Document, any  applicable withholding tax that was required to be withheld from any prior payment to such Lender but which was not  so withheld, as well as any other amounts for which Collateral Agent is entitled to indemnification from such Lender  under the immediately preceding sentence of this Section 6 of this Annex I.         7.     Successor Collateral Agent.  Collateral Agent may resign at any time by delivering notice of such  resignation to the Lenders and Borrower, effective on the date set forth in such notice or, if no such date is set forth  therein, upon the date such notice shall be effective, in accordance with the terms of this Section 7 of this Annex I.  If  Collateral Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Collateral  Agent.  If, after 30 days after the date of the retiring Collateral Agent’s notice of resignation, no successor Collateral  Agent has been appointed by the Required Lenders that has accepted such appointment, then the retiring Collateral  Agent may, on behalf of the Lenders, appoint a successor Collateral Agent from among the Lenders.  Effective  immediately upon its resignation, (a) the retiring Collateral Agent shall be discharged from its duties and obligations  under the Loan Documents, (b) the Lenders shall assume and perform all of the duties of Collateral Agent until a  successor Collateral Agent shall have accepted a valid appointment hereunder, (c) the retiring Collateral Agent and  its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to  

 

                                                                                         any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent  had been, validly acting as Collateral Agent under the Loan Documents, and (iv) subject to its rights under Section  2(b) of this Annex I, the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to  the successor Collateral Agent its rights as Collateral Agent under the Loan Documents.  Effective immediately upon  its acceptance of a valid appointment as Collateral Agent, a successor Collateral Agent shall succeed to, and become  vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the Loan Documents.         8. Release of Collateral.  Each Lender hereby consents to the release and hereby directs Collateral  Agent to release (or in the case of clause (b)(ii) below, release or subordinate) the following:                (a)    any Guarantor or Subsidiary “co-Borrower” if all of the stock of such Subsidiary owned  by Borrower is sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a valid  waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to  guaranty any Obligations pursuant to any Loan Document; and                (b)    any Lien held by Collateral Agent for the benefit of itself and the Lenders against (i) any  Collateral that is sold or otherwise disposed of by Borrower in a transaction permitted by the Loan Documents  (including pursuant to a valid waiver or consent), (ii) any Collateral subject to a Lien that is expressly permitted under  clause (c) of the definition of the term “Permitted Lien” and (iii) all of the Collateral and Borrower, upon (A)  termination of all of the Commitments, (B) payment in full in cash of all of the Obligations that Collateral Agent has  theretofore been notified in writing by the holder of such Obligation are then due and payable, and (C) to the extent  requested by Collateral Agent, receipt by Collateral Agent and Lenders of liability releases from Borrower in form  and substance acceptable to Collateral Agent (the satisfaction of the conditions in this clause (iii), the “Termination  Date”).         9.     Setoff and Sharing of Payments.  In addition to any rights now or hereafter granted under any  applicable requirement of law and not by way of limitation of any such rights, upon the occurrence and during the  continuance of any Event of Default and subject to Section 10(d) of this Annex I, each Lender is hereby authorized at  any time or from time to time upon the direction of Collateral Agent, without notice to Borrower or any other Person,  any such notice being hereby expressly waived, to setoff and to appropriate and to apply any and all balances held by  it at any of its offices for the account of Borrower (regardless of whether such balances are then due to Borrower) and  any other properties or assets at any time held or owing by that Lender or that holder to or for the credit or for the  account of Borrower against and on account of any of the Obligations that are not paid when due.  Any Lender  exercising a right of setoff or otherwise receiving any payment on account of the Obligations in excess of its Pro Rata  Share thereof shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such  other Lender’s or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share the  amount so offset or otherwise received with each other Lender or holder in accordance with their respective Pro Rata  Shares of the Obligations.  Borrower agrees, to the fullest extent permitted by law, that (a) any Lender may exercise  its right to offset with respect to amounts in excess of its Pro Rata Share of the Obligations and may purchase  participations in accordance with the preceding sentence and (b) any Lender so purchasing a participation in the Term  Loan made or other Obligations held by other Lenders or holders may exercise all rights of offset, bankers’ lien,  counterclaim or similar rights with respect to such participation as fully as if such Lender or holder were a direct  holder of the Term Loan and the other Obligations in the amount of such participation.  Notwithstanding the foregoing,  if all or any portion of the offset amount or payment otherwise received is thereafter recovered from the Lender that  has exercised the right of offset, the purchase of participations by that Lender shall be rescinded and the purchase  price restored without interest.         10. Advances; Payments; Non-Funding Lenders; Actions in Concert.                (a)    Advances; Payments.  If Collateral Agent receives any payment with respect to the Term  Loan for the account of Lenders on or prior to 2:00 p.m. (New York time) on any Business Day, Collateral Agent  shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on such Business Day. If Collateral  Agent receives any payment with respect to the Term Loan for the account of Lenders after 2:00 p.m. (New York  time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of  such payment on the next Business Day.  

 

                                                                                                      (b) Return of Payments.                       (i)   If Collateral Agent pays an amount to a Lender under this Agreement in the belief  or expectation that a related payment has been or will be received by Collateral Agent from Borrower and such related  payment is not received by Collateral Agent, then Collateral Agent will be entitled to recover such amount (including  interest accruing on such amount at the rate otherwise applicable to such Obligation) from such Lender on demand  without setoff, counterclaim or deduction of any kind.                       (ii)   If Collateral Agent determines at any time that any amount received by Collateral  Agent under any Loan Document must be returned to Borrower or paid to any other Person pursuant to any insolvency  law or otherwise, then, notwithstanding any other term or condition of any Loan Document, Collateral Agent will not  be required to distribute any portion thereof to any Lender.  In addition, each Lender will repay to Collateral Agent  on demand any portion of such amount that Collateral Agent has distributed to such Lender, together with interest at  such rate, if any, as Collateral Agent is required to pay to Borrower or such other Person, without setoff, counterclaim  or deduction of any kind and Collateral Agent will be entitled to set off against future distributions to such Lender any  such amounts (with interest) that are not repaid on demand.                I Non-Funding Lenders.                       (i)    Unless Collateral Agent shall have received notice from a Lender prior to the date  of any Term Loan that such Lender will not make available to Collateral Agent such Lender’s Pro Rata Share of such  Term Loan, Collateral Agent may assume that such Lender will make such amount available to it on the date of such  Term Loan in accordance with Section 2(b) of this Annex I, and Collateral Agent may (but shall not be obligated to),  in reliance upon such assumption, make available a corresponding amount for the account of Borrower on such date.   If and to the extent that such Lender shall not have made such amount available to Collateral Agent, such Lender and  Borrower severally agree to repay to Collateral Agent forthwith on demand such corresponding amount together with  interest thereon, for each day from the day such amount is made available to Borrower until the day such amount is  repaid to Collateral Agent, at a rate per annum equal to the interest rate applicable to the Obligation that would have  been created when Collateral Agent made available such amount to Borrower had such Lender made a corresponding  payment available. If such Lender shall repay such corresponding amount to Collateral Agent, the amount so repaid  shall constitute such Lender’s portion of such Term Loan for purposes of this Agreement.                       (ii)  To the extent that any Lender has failed to fund any Term Loan or any other  payments required to be made by it under the Loan Documents after any such Term Loan is required to be made or  such payment is due (a “Non-Funding Lender”), Collateral Agent shall be entitled to set off the funding short-fall  against that Non-Funding Lender’s Pro Rata Share of all payments received from Borrower.  The failure of any  Non-Funding Lender to make any Term Loan or any payment required by it hereunder shall not relieve any other  Lender (each such other Lender, an “Other Lender”) of its obligations to make such Term Loan, but neither any  Other Lender nor Collateral Agent shall be responsible for the failure of any Non-Funding Lender to make such Term  Loan or make any other payment required hereunder.  Notwithstanding anything set forth herein to the contrary, a  Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or  constitute a “Lender” (or be included in the calculation of “Required Lender” hereunder) for any voting or consent  rights under or with respect to any Loan Document.  At Borrower’s request, Collateral Agent or a Person reasonably  acceptable to Collateral Agent shall have the right with Collateral Agent’s consent and in Collateral Agent’s sole  discretion (but Collateral Agent or any such Person shall have no obligation) to purchase from any Non-Funding  Lender, and each Lender agrees that if it becomes a Non-Funding Lender it shall, at Collateral Agent’s request, sell  and assign to Collateral Agent or such Person, all of the Term Loan Commitment (if any), and all of the outstanding  Term Loan of that Non-Funding Lender for an amount equal to the aggregate outstanding principal balance of the  Term Loan held by such Non-Funding Lender and all accrued interest with respect thereto through the date of sale,  such purchase and sale to be consummated pursuant to an executed assignment agreement in form and substance  reasonably satisfactory to, and acknowledged by, Collateral Agent.         (d)    Actions in Concert.  Anything in this Agreement to the contrary notwithstanding, each Lender  hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights arising out  of any Loan Document (including exercising any rights of setoff) without first obtaining the prior written consent of  Collateral Agent or Required Lenders, it being the intent of Lenders that any such action to protect or enforce rights  

 

                                                                                         under any Loan Document shall be taken in concert and at the direction or with the consent of Collateral Agent or  Required Lenders.  

 

                                          ANNEX X                      LOAN INTEREST RATE AND PAYMENT OF PRINCIPAL                                        (Term Loan)                                   PLEASE SEE ATTACHED    146182320 v1   

 

                                           Beginning                                                                               Ending       Beginning Ending Payment     Loan      Prime Interest  Interest    PIK       Cash      Principal      Total Loan Month   Date    Date     Date     Balance     Rate   Rate    Earned    Interest   Interest  Amortization   Payment      Balance     --  6/25/19  6/30/19        $20,000,000.00 5.50% 9.25%   $30,410.96 $8,219.18         --           --           -- $20,008,219.18    1     7/1/19 7/31/19  8/1/19 $20,008,219.18 5.50% 9.25% $157,187.86 $42,483.21 $114,704.65         --  $114,704.65 $20,050,702.38    2     8/1/19 8/31/19  9/1/19 $20,050,702.38 5.50% 9.25% $157,521.61 $42,573.41 $114,948.20         --  $114,948.20 $20,093,275.79    3     9/1/19 9/30/19 10/1/19 $20,093,275.79 5.50% 9.25% $152,763.95 $41,287.55 $111,476.39         --  $111,476.39 $20,134,563.35    4    10/1/19 10/31/19 11/1/19 $20,134,563.35 5.50% 9.25% $158,180.44 $42,751.47 $115,428.97        --  $115,428.97 $20,177,314.82    5    11/1/19 11/30/19 12/1/19 $20,177,314.82 5.50% 9.25% $153,402.87 $41,460.24 $111,942.64        --  $111,942.64 $20,218,775.05    6    12/1/19 12/31/19 1/1/20 $20,218,775.05 5.50% 9.25% $158,842.02 $42,930.28 $115,911.74         --  $115,911.74 $20,261,705.33    7     1/1/20 1/31/20  2/1/20 $20,261,705.33 5.50% 9.25% $159,179.29 $43,021.43 $116,157.86         --  $116,157.86 $20,304,726.76    8     2/1/20 2/29/20  3/1/20 $20,304,726.76 5.50% 9.25% $149,225.83 $40,331.31 $108,894.53         --  $108,894.53 $20,345,058.06    9     3/1/20 3/31/20  4/1/20 $20,345,058.06 5.50% 9.25% $159,834.12 $43,198.41 $116,635.71         --  $116,635.71 $20,388,256.47   10     4/1/20 4/30/20  5/1/20 $20,388,256.47 5.50% 9.25% $155,006.61 $41,893.68 $113,112.93         --  $113,112.93 $20,430,150.15   11     5/1/20 5/31/20  6/1/20 $20,430,150.15 5.50% 9.25% $160,502.62 $43,379.09 $117,123.53         --  $117,123.53 $20,473,529.24   12     6/1/20 6/30/20  7/1/20 $20,473,529.24 5.50% 9.25% $155,654.91 $42,068.90 $113,586.02         --  $113,586.02 $20,515,598.13   13     7/1/20 7/31/20  8/1/20 $20,515,598.13 5.50% 9.25% $161,173.91 $43,560.52 $117,613.39         --  $117,613.39 $20,559,158.65   14     8/1/20 8/31/20  9/1/20 $20,559,158.65 5.50% 9.25% $161,516.13 $43,653.01 $117,863.12         --  $117,863.12 $20,602,811.66   15     9/1/20 9/30/20 10/1/20 $20,602,811.66 5.50% 9.25% $156,637.81 $42,334.54 $114,303.27         --  $114,303.27 $20,645,146.20   16   10/1/20 10/31/20 11/1/20 $20,645,146.20 5.50% 9.25% $162,191.66 $43,835.58 $118,356.08         --  $118,356.08 $20,688,981.79   17   11/1/20 11/30/20 12/1/20 $20,688,981.79 5.50% 9.25% $157,292.94 $42,511.61 $114,781.34         --  $114,781.34 $20,731,493.39   18   12/1/20 12/31/20  1/1/21 $20,731,493.39 5.50% 9.25% $162,870.02 $44,018.92 $118,851.10         --  $118,851.10 $20,775,512.32   19    1/1/21  1/31/21  2/1/21 $20,775,512.32 5.50% 9.25% $163,215.84 $44,112.39 $119,103.45         --  $119,103.45 $20,819,624.71   20    2/1/21  2/28/21  3/1/21 $20,819,624.71 5.50% 9.25% $147,733.78 $39,928.05 $107,805.73         --  $107,805.73 $20,859,552.75   21     3/1/21 3/31/21  4/1/21 $20,859,552.75 5.50% 9.25% $163,876.08 $44,290.83 $119,585.24         --  $119,585.24 $20,903,843.59   22     4/1/21 4/30/21  5/1/21 $20,903,843.59 5.50% 9.25% $158,926.48 $42,953.10 $115,973.38         --  $115,973.38 $20,946,796.69   23     5/1/21 5/31/21  6/1/21 $20,946,796.69 5.50% 9.25% $164,561.48 $44,476.08 $120,085.40         --  $120,085.40 $20,991,272.76   24     6/1/21 6/30/21  7/1/21 $20,991,272.76 5.50% 9.25% $159,591.18 $43,132.75 $116,458.43         --  $116,458.43 $21,034,405.52   25     7/1/21 7/31/21  8/1/21 $21,034,405.52 5.50% 9.25% $165,249.75 $44,662.09 $120,587.65         --  $120,587.65 $21,079,067.61   26     8/1/21 8/31/21  9/1/21 $21,079,067.61 5.50% 9.25% $165,600.62 $44,756.92 $120,843.70         --  $120,843.70 $21,123,824.53   27     9/1/21 9/30/21 10/1/21 $21,123,824.53 5.50% 9.25% $160,598.94 $43,405.12 $117,193.82         --  $117,193.82 $21,167,229.65   28   10/1/21 10/31/21 11/1/21 $21,167,229.65 5.50% 9.25% $166,293.24 $44,944.12 $121,349.12         --  $121,349.12 $21,212,173.77   29   11/1/21 11/30/21 12/1/21 $21,212,173.77 5.50% 9.25% $161,270.64 $43,586.66 $117,683.98         --  $117,683.98 $21,255,760.43   30   12/1/21 12/31/21  1/1/22 $21,255,760.43 5.50% 9.25% $166,988.75 $45,132.09 $121,856.65         --  $121,856.65 $21,300,892.52   31    1/1/22  1/31/22  2/1/22 $21,300,892.52 5.50% 9.25% $167,343.31 $45,227.92 $122,115.39         --  $122,115.39 $21,346,120.45   32    2/1/22  2/28/22  3/1/22 $21,346,120.45 5.50% 9.25% $151,469.73 $40,937.77 $110,531.97         --  $110,531.97 $21,387,058.21   33    3/1/22  3/31/22  4/1/22 $21,387,058.21 5.50% 9.25% $168,020.24 $45,410.88 $122,609.37         --  $122,609.37 $21,432,469.09   34    4/1/22  4/30/22  5/1/22 $21,432,469.09 5.50% 9.25% $162,945.48 $44,039.32 $118,906.16         --  $118,906.16 $21,476,508.41   35    5/1/22  5/31/22  6/1/22 $21,476,508.41 5.50% 9.25% $168,722.98 $45,600.81 $123,122.17         --  $123,122.17 $21,522,109.21   36    6/1/22  6/30/22  7/1/22 $21,522,109.21 5.50% 9.25% $163,626.99 $44,223.51 $119,403.48         --  $119,403.48 $21,566,332.73   37    7/1/22  7/31/22  8/1/22 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   38    8/1/22  8/31/22  9/1/22 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   39    9/1/22  9/30/22 10/1/22 $21,566,332.73 5.50% 9.25% $163,963.21        -- $163,963.21          --  $163,963.21 $21,566,332.73   40    10/1/22 10/31/22 11/1/22 $21,566,332.73 5.50% 9.25% $169,428.66       -- $169,428.66          --  $169,428.66 $21,566,332.73   41   11/1/22 11/30/22 12/1/22 $21,566,332.73 5.50% 9.25% $163,963.21        -- $163,963.21          --  $163,963.21 $21,566,332.73   42   12/1/22 12/31/22  1/1/23 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   43     1/1/23 1/31/23  2/1/23 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   44     2/1/23 2/28/23  3/1/23 $21,566,332.73 5.50% 9.25% $153,032.33        -- $153,032.33          --  $153,032.33 $21,566,332.73   45     3/1/23 3/31/23  4/1/23 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   46     4/1/23 4/30/23  5/1/23 $21,566,332.73 5.50% 9.25% $163,963.21        -- $163,963.21          --  $163,963.21 $21,566,332.73   47     5/1/23 5/31/23  6/1/23 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66          --  $169,428.66 $21,566,332.73   48     6/1/23 6/30/23  7/1/23 $21,566,332.73 5.50% 9.25% $163,963.21        -- $163,963.21          --  $163,963.21 $21,566,332.73   49     7/1/23 7/31/23  8/1/23 $21,566,332.73 5.50% 9.25% $169,428.66        -- $169,428.66 $1,797,194.39 $1,966,623.05 $19,769,138.33   50     8/1/23 8/31/23  9/1/23 $19,769,138.33 5.50% 9.25% $155,309.60        -- $155,309.60 $1,797,194.39 $1,952,503.99 $17,971,943.94   51     9/1/23 9/30/23 10/1/23 $17,971,943.94 5.50% 9.25% $136,636.01        -- $136,636.01 $1,797,194.39 $1,933,830.41 $16,174,749.54   52   10/1/23 10/31/23 11/1/23 $16,174,749.54 5.50% 9.25% $127,071.49        -- $127,071.49 $1,797,194.39 $1,924,265.89 $14,377,555.15   53   11/1/23 11/30/23 12/1/23 $14,377,555.15 5.50% 9.25% $109,308.81        -- $109,308.81 $1,797,194.39 $1,906,503.20 $12,580,360.76   54   12/1/23 12/31/23  1/1/24 $12,580,360.76 5.50% 9.25%  $98,833.38        -- $98,833.38 $1,797,194.39 $1,896,027.78 $10,783,166.36   55     1/1/24 1/31/24  2/1/24 $10,783,166.36 5.50% 9.25%  $84,714.33        -- $84,714.33 $1,797,194.39 $1,881,908.72 $8,985,971.97   56     2/1/24 2/29/24  3/1/24 $8,985,971.97 5.50% 9.25%   $66,040.74        -- $66,040.74 $1,797,194.39 $1,863,235.13 $7,188,777.58   57     3/1/24 3/31/24  4/1/24 $7,188,777.58 5.50% 9.25%   $56,476.22        -- $56,476.22 $1,797,194.39 $1,853,670.61 $5,391,583.18   58     4/1/24 4/30/24  5/1/24 $5,391,583.18 5.50% 9.25%   $40,990.80        -- $40,990.80 $1,797,194.39 $1,838,185.20 $3,594,388.79   59     5/1/24 5/31/24  6/1/24 $3,594,388.79 5.50% 9.25%   $28,238.11        -- $28,238.11 $1,797,194.39 $1,825,432.50 $1,797,194.39   60     6/1/24 6/25/24 6/25/24 $1,797,194.39 5.50% 9.25%   $11,386.33        -- $11,386.33 $1,797,194.39 $1,808,580.73      $0.00           146182320 v1Exhibit

Exhibit 10.2

INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2019 by and among Conformis, Inc., a Delaware corporation (the “Company”), and the Investors identified on Exhibit A attached hereto (each an “Investor” and collectively the “Investors”).
RECITALS
A.The Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”);
B.    The Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and subject to the conditions stated in this Agreement, shares (the “Shares”) of the Company’s common stock, $0.00001 par value per share (the “Common Stock”); and
C.    Contemporaneously with the sale of the Shares, the parties will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights in respect of the Shares under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.
In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.Definitions.  For the purposes of this Agreement, the following terms shall have the meanings set forth below:
“1933 Act” has the meaning set forth in the Recitals.
“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“2018 Form 10-K” means the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on March 13, 2019.
 “Affiliate” means, with respect to any Person, a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners if such Person is a partnership and, for any Person that is a limited liability company, that Person’s managers and members.
“Anti-Terrorism Laws” are any laws relating to terrorism or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the 

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USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.
“Blocked Person” is any Person:  (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Investor is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.
“Business Day” means any day that is not a Saturday, Sunday, or a day on which banks in New York City are closed.
“Closing” has the meaning set forth in Section 3.1.
“Closing Date” has the meaning set forth in Section 3.1.
“Company’s Knowledge” means to the actual knowledge, after reasonable investigation, of the President, Chief Executive Officer, or Chief Financial Officer of the Company.
“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.
“Intellectual Property” means all of the Company’s or any Subsidiary’s right, title and interest in and to the following: (a) Copyrights, Trademarks and Patents; (b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know how, operating manuals; (c) any and all source code; (d) any and all design rights which may be available to the Company; (e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.
“Loan Agreement” means that certain Loan and Security Agreement, of even date herewith, by and among Innovatus Life Sciences Lending Fund I, LP, a Delaware limited 

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partnership, as collateral agent, the lenders named therein, the Company, IMATX, Inc., a California corporation, and Conformis Cares LLC, a Delaware limited liability company.
“Material Adverse Effect” means a material adverse effect on (i) the business, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries, when taken as a whole, (ii) the legality or enforceability of any of the Transaction Documents, or (iii) the ability of the Company to perform its obligations under the Transaction Documents, except that for purposes of Section 6.1(g) of this Agreement, in no event shall a change in the market price of the Common Stock alone constitute a “Material Adverse Effect”.
“Material Contract” means any contract, instrument or other agreement to which the Company is a party or by which it is bound that has been filed or was required to have been filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) and (b)(10) of Regulation S-K.
“Nasdaq” means The Nasdaq Stock Market LLC.
“OFAC” means the United States Department of Treasury Office of Foreign Assets Control.
“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, re-examination certificates, utility models, extensions and continuations-in-part of the same.
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“Registration Rights Agreement” has the meaning set forth in the Recitals.
“SEC Filings” means the filings made by the Company pursuant to the 1934 Act.
“Shares” has the meaning set forth in the Recitals.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the 1934 Act.
“Subscription Amount” means, as to an Investor, the aggregate amount to be paid for the Shares purchased hereunder as specified opposite such Investor’s name on Exhibit A, under the column entitled “Aggregate Purchase Price of Shares,” in U.S. Dollars and in immediately available funds.
“Subsidiary” means, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.  Unless otherwise specified, references herein to a Subsidiary mean a Subsidiary of the Company.

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“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of the Company and its Subsidiaries connected with and symbolized by such trademarks.
“Trading Day” means a day on which the Nasdaq is open for trading.
“Transaction Documents” means this Agreement and the Registration Rights Agreement.
“Transfer Agent” has the meaning set forth in Section 7.4.
“USPTO” has the meaning set forth in Section 4.11(b).
2.    Purchase and Sale of the Shares.  On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company will issue and sell, and the Investors will purchase, severally and not jointly, the number of Shares set forth opposite the name of such Investor under the heading “Number of Shares to be Purchased” on Exhibit A at a price per Share equal to $3.87.
3.    Closing.
3.1.    Upon the satisfaction of the conditions set forth in Section 6, the completion of the purchase and sale of the Shares (the “Closing”) shall occur remotely via exchange of documents and signatures at a time (the “Closing Date”) to be agreed to by the Company and the Investors, and if no time is so agreed, then at 10:00 am, Boston time, on the second Trading Day following the date hereof.
3.2.    On the Closing Date, each Investor shall deliver or cause to be delivered to the Company the Subscription Amount via wire transfer of immediately available funds pursuant to the wire instructions delivered to such Investor by the Company prior to the Closing Date.
3.3.    On the Closing Date, the Company shall deliver or cause to be delivered to each Investor a number of Shares, registered in the name of the Investor, in the amount set forth opposite the name of such Investor under the heading “Number of Shares to be Purchased” on Exhibit A; provided that, if an Investor requests a physical stock certificate, the Company shall promptly cause the Transfer Agent to deliver facsimile or “.pdf” copies of such certificates, with the original stock certificates to be delivered within 10 days after the Closing Date.
4.    Representations and Warranties of the Company.  The Company hereby represents and warrants to each Investor that, except as set forth on the schedules delivered herewith or as described in the SEC Filings, which exceptions shall qualify these representations and warranties in their entirety, the following representations are true and correct as of the date hereof and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date: 

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4.1.    Organization.
(a)    The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own or lease its property and to conduct its business as described in the SEC Filings and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.
(b)    Each Subsidiary has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the SEC Filings and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.
4.2.    Authorization.  The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary for, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (a) the authorization, execution and delivery of the Transaction Documents, (b) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (c) the authorization, issuance (or reservation for issuance) and delivery of the Shares.  The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.
4.3.    Capitalization.  The Company had an authorized and outstanding capitalization as set forth in the 2018 Form 10-K as of the dates set forth therein.  The shares of Common Stock outstanding prior to the issuance of the Shares have been duly authorized and are validly issued, fully paid and non-assessable.  Except as described in the 2019 Form 10-Q, there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company or any Subsidiary any shares of the capital stock of the Company or any Subsidiary, subject to the grant of equity incentive awards consistent with past practices.  The description of the Company’s equity incentive, stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the SEC Filings accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights.
4.4.    Valid Issuance.  The Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights or any restrictions on transfer or voting, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.

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4.5.    Consents.  None of the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, or the issuance and sale of the Shares, will (a) conflict with any of the Company’s organizational documents, (b) contravene, conflict with, constitute a default under or violate any provision of applicable law or any Material Contract, or (c) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any governmental authority by which the Company or a Subsidiary, or any of their property or assets, may be bound or affected, except in the cases of clause (b) above, where such contravention, conflict, breach, violation or default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement.
4.6.    Use of Proceeds.  The net proceeds of the sale of the Shares hereunder shall be used by the Company for general corporate purposes.
4.7.    No Material Adverse Change.  Since March 31, 2019, there has not been any event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect.
4.8.    SEC Filings.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under 1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof, for the one-year period preceding the date hereof.  At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1933 Act or 1934 Act, as applicable, and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
4.9.    Compliance.
(a)    None of the Company or any Subsidiary is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  None of the Company or any Subsidiary has violated any laws, ordinances or regulations of any governmental authority, the violation of which could reasonably be expected to have a Material Adverse Effect.  None of the Company’s or any Subsidiary’s properties or assets has been used by the Company or a Subsidiary or, to the Company’s Knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws.  The Company and each Subsidiary has obtained all material consents, approvals and authorizations of all governmental authorities that are necessary to continue their respective businesses as currently conducted.
(b)    None of the Company, any Subsidiary, or to the Company’s Knowledge, any of their respective Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any 

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Anti-Terrorism Law, or (iii) is a Blocked Person.  None of the Company, any Subsidiary, or to the Company’s Knowledge, any of their respective Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.
4.10.    Tax Returns and Payments; Pension Contributions.  The Company and each Subsidiary has timely filed all federal and state income and all other material tax returns and reports, and the Company and each Subsidiary has timely paid all material foreign, federal, state, and local taxes, assessments, deposits and contributions owed by the Company and the Subsidiaries in an amount greater than Fifty Thousand Dollars ($50,000.00), in all jurisdictions in which the Company or any Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the next sentence.  The Company and each Subsidiary may defer payment of any contested taxes, provided that the Company or such Subsidiary in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted.  None of the Company or any Subsidiary is aware of any claims or adjustments proposed for any of the Company’s or such Subsidiary’s prior tax years which could result in additional taxes becoming due and payable by the Company or any Subsidiary.
4.11.    Intellectual Property.
(a)    The Company and its Subsidiaries own or have existing licenses under Intellectual Property used in or necessary for the conduct of the business of the Company and its Subsidiaries, in the manner described in the SEC Filings, and such licenses are enforceable against the Company and, to the Company’s Knowledge, enforceable against the counterparties to the license agreements under which such licenses were granted to the Company, except as certain rights under any licenses may be limited by bankruptcy and other similar laws affecting the rights of creditors generally and general principles of equity; to the Company’s Knowledge, except as set forth on the schedules delivered herewith or as described in the SEC Filings, the patents, trademarks, and copyrights, if any, included within the Intellectual Property are valid, enforceable, and subsisting.
(b)    Except as set forth on the schedules delivered herewith or as set forth in the SEC Filings, (i) neither the Company nor any Subsidiary is obligated to pay a material royalty, grant a material license to, or provide other material consideration to any third party in connection with the Intellectual Property, (ii) neither the Company nor any Subsidiary has received any written notice of any claim of infringement, misappropriation of or conflict with asserted rights of others with respect to any of the Company’s or a Subsidiary’s product candidates, processes or Intellectual Property, (iii) to the Company’s Knowledge, with the exception of the review of pending applications in the United States Patent and Trademark Office (“USPTO”) or corresponding foreign patent offices, no action, suit, claim or other proceeding is pending or, to the Company’s Knowledge, is threatened, challenging the Company’s or any 

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Subsidiary’s rights in or to any Intellectual Property, or challenging the validity, enforceability or scope of any Intellectual Property, (iv) to the Company’s Knowledge, none of the development, manufacture, sale or use of any of the discoveries, inventions, product candidates or processes of the Company in the manner presently contemplated by the Company and referred to in the SEC Filings do or will infringe, or violate any right or issued patent claim of any third party in any material respect, (v) to the Company’s Knowledge, no third party has any ownership right in or to any Intellectual Property that is owned by the Company, other than any co-owner of any patent constituting Intellectual Property who is listed on the records of the USPTO and any co-owner of any patent application constituting Intellectual Property who is named in such patent application, (vi) except as would not, individually or in the aggregate, have a Material Adverse Effect, the Intellectual Property owned by the Company and its Subsidiaries is free and clear of all liens or encumbrances, and (vii) to the Company’s Knowledge, none of the Intellectual Property employed by the Company or any Subsidiary in the conduct of the business in the manner described in the SEC Filings has been obtained or is being used by the Company or any Subsidiary in material violation of any contractual obligation binding on the Company or, to the Company’s Knowledge, upon any of its officers, consultants, directors or employees.
4.12.    Litigation.  Except as disclosed under the Loan Agreement, there are no actions, suits, or proceedings pending or, to the Company’s Knowledge, threatened in writing, and the Company has not received notice of any governmental investigations pending or threatened, by or against the Company or any Subsidiary involving more than Three Hundred Fifty Thousand Dollars ($350,000.00) or a material claim for infringement of any of Intellectual Property.  Except as disclosed under the Loan Agreement, there are no actions, suits, investigations or proceedings pending or, to the Company’s Knowledge, threatened in writing by or against the Company or any Subsidiary involving challenges to the validity of the Intellectual Property.
4.13.    Financial Statements.  The consolidated financial statements of the Company and its Subsidiaries included in the SEC Filings fairly present, in conformity with GAAP, in all material respects the consolidated financial condition of the Company and its Subsidiaries, and the consolidated results of operations of the Company and its Subsidiaries (except that unaudited financial statements are subject to normal year-end adjustments and do not contain footnotes).  The consolidated financial statements of the Company and its Subsidiaries included in the 2018 Form 10-K comply in all material respects with the applicable requirements of the 1934 Act.  
4.14.    Internal Controls; Disclosure Controls.  The Company and each Subsidiary maintain a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference.  Except as described in the 2018 Form 10-K, since the end of the Company’s most 

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recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.  The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that comply with the requirements of the 1934 Act and applicable regulations thereunder; such disclosure controls and procedures have been designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and principal financial officer by others within the Company.
4.15.    Compliance with Nasdaq Continued Listing Requirements.  The Company is in compliance with applicable Nasdaq continued listing requirements.  There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock on Nasdaq and the Company has not received any notice of, nor to the Company’s Knowledge is there any reasonable basis for, the delisting of the Common Stock from Nasdaq.
4.16.    Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.  No Investor shall have any obligation with respect to any fees, or with respect to any claims made by or on behalf of other Persons for fees, in each case of the type contemplated by this Section 4.16 that may be due in connection with the transactions contemplated by this Agreement or the Transaction Documents.
4.17.    No Directed Selling Efforts or General Solicitation.  None of the Company, any Subsidiary or any Person acting on their behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Shares.
4.18.    No Integrated Offering.  None of the Company, any Subsidiary or any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Shares under the 1933 Act.
4.19.    Private Placement.  Assuming the accuracy of the representations and warranties of the Investors set forth in Section 5, the offer and sale of the Shares to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act.  The issuance and sale of the shares does not contravene the rules and regulations of Nasdaq.
4.20.    Disclosures.  No written representation, warranty or other statement of the Company or any Subsidiary in any certificate or written statement given to the Investors, as of the date such representation, warranty, or other statement was made, taken together with all such 

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written certificates and written statements given to the Investors, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that projections, budgets and forecasts provided by the Company in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections, budgets and forecasts may differ from the projected, budgeted or forecasted results).
5.    Representations and Warranties of the Investors.  Each of the Investors hereby severally, and not jointly, represents and warrants to the Company that:
5.1.    Organization and Existence.  Such Investor is a duly incorporated or organized and validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to enter into and consummate the transactions contemplated by the Transaction Documents and to carry out its obligations hereunder and thereunder, and to invest in the Shares pursuant to this Agreement, and is in good standing under the laws of the jurisdiction of its incorporation or organization.
5.2.    Authorization.  The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and each has been duly executed and when delivered will constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.
5.3.    Purchase Entirely for Own Account.  The Shares to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, for the purpose of investment and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, subject however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Shares for any period of time.  Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.
5.4.    Investment Experience.  Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.
5.5.    Disclosure of Information.  Such Investor has had an opportunity to receive, review and understand all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares, has conducted and completed its own independent due diligence, and has acquired sufficient information about the Company to reach 

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an informed and knowledgeable decision to purchase the Shares.  Such Investor acknowledges that copies of the SEC Filings are available on the EDGAR system.  Based on the information such Investor has deemed appropriate, it has independently made its own analysis and decision to enter into the Transaction Documents.  Such Investor is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it deems appropriate) with respect to the execution, delivery and performance of the Transaction Documents, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.  Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, limit or otherwise affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.
5.6.    Restricted Securities.  Such Investor understands that the Shares are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.
5.7.    Legends.  It is understood that, except as provided below, certificates or book entry accounts evidencing the Shares may bear the following or any similar legend: 
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”
If required by the authorities of any state in connection with the issuance of sale of the Shares, the legend required by such state authority.
5.8.    Accredited Investor.  Such Investor is an “accredited investor” within the meaning of Rule 501 under the 1933 Act.  Such investor is a sophisticated institutional investor with sufficient knowledge and experience in investing in private equity transactions to properly evaluate the risks and merits of its purchase of the Shares.
5.9.    No General Solicitation.  Such Investor did not learn of the investment in the Shares as a result of any general solicitation or general advertising.

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5.10.    Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.
5.11.    Short Sales and Confidentiality Prior to the Date Hereof.  Such Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Investor was first contacted by the Company regarding the transactions contemplated hereby and ending immediately prior to the date hereof.  Other than to other Persons party to this Agreement, such Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
5.12.    No Government Recommendation or Approval.  Such Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Shares.
5.13.    No Intent to Effect a Change of Control.  Such Investor has no present intent to effect a “change of control” of the Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the 1934 Act.
5.14.    No Conflicts.  The execution, delivery and performance by such Investor of the Transaction Documents and the consummation by such Investor of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Investor, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Investor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the ability of such Investor to perform its obligations hereunder.
5.15.    Residency.  Such Investor is a resident of the jurisdiction specified below its address on the Schedule of Investors.
6.    Conditions to Closing.
6.1.    Conditions to the Investors’ Obligations.  The obligation of each Investor to purchase Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by such Investor (as to itself only):

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(a)    The representations and warranties made by the Company in Section 4 shall be true and correct as of the date hereof and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date.
(b)    The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.
(c)    The Company shall have obtained all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.
(d)    The Company shall have executed and delivered the Registration Rights Agreement.
(e)    [Reserved].
(f)    No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents. 
(g)    There shall have been no Material Adverse Effect with respect to the Company since the date hereof.
(h)    The Company shall have delivered a certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (c), (e), (f), (g) and (j) of this Section 6.1.
(i)    The Company shall have delivered a certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying (i) the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, (ii) the current version of the certificate of incorporation and bylaws of the Company, (iii) the good standing of the Company as evidenced by a certificate of good standing from the Secretary of State of the State of Delaware, and (iv) as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company.
(j)    The Investors shall have received an opinion from Wilmer Cutler Pickering Hale and Dorr LLP, counsel for the Company, dated as of the Closing Date, in form and substance reasonably acceptable to the Investors and addressing such legal matters as the Investors may reasonably request.

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(k)    No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.
6.2.    Conditions to Obligations of the Company.  The Company’s obligation to sell and issue Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which (other than Sections 6.2(b) and 6.2(d)) may be waived by the Company:
(a)    The representations and warranties made by the Investors in Section 5 shall be true and correct as of the date hereof and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date.
(b)    The Investors shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date.
(c)    The Investors shall have executed and delivered the Registration Rights Agreement.
(d)    Any Investor purchasing Shares at the Closing shall have paid in full its Subscription Amount to the Company.
6.3.    Termination of Obligations to Effect Closing; Effects.
(a)    The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:
(i)    Upon the mutual written consent of the Company and each Investor;
(ii)    By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;
(iii)    By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or
(iv)    By either the Company or any Investor (with respect to itself only) if the Closing has not occurred on or prior to June 28, 2019.
provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

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(b)    In the event of termination by the Company or any Investor of its obligations to effect the Closing pursuant to this Section 6.3, written notice thereof shall be given to the other Investors by the Company and the other Investors shall have the right to terminate their obligations to effect the Closing upon written notice to the Company and the other Investors.  Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.
7.    Covenants and Agreements of the Company.
7.1.    No Conflicting Agreements.  The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investors under the Transaction Documents.
7.2.    Nasdaq Listing.  The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on the Nasdaq and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such exchange.
7.3.    Termination of Covenants.  The provisions of Sections 7.1 and 7.2 shall terminate and be of no further force and effect on the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate.
7.4.    Removal of Legends.
(a)    In connection with any sale, assignment, transfer or other disposition of the Shares by an Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the requirements of this Agreement, if requested by the Investor, the Company shall cause the transfer agent for the Common Stock (the “Transfer Agent”) to timely remove any restrictive legends related to the certificates or book-entry account holding such Shares, as applicable, and issue an unlegended certificate or make a new, unlegended entry for such book-entry Shares, as applicable, sold or disposed of without restrictive legends within three (3) Business Days of the request of the Investor, provided that the Company has timely received from the Investor customary representations and other documentation reasonably acceptable to the Company in connection therewith.
(b)    Subject to receipt from the Investor by the Company and the Transfer Agent of customary representations and other customary documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith, upon the earliest of (i) the Shares being subject to an effective registration statement covering the resale of the Shares, (ii) such time as the Shares have been sold pursuant to Rule 144, or (iii) such time as the Shares are eligible for resale under Rule 144(b)(1) or any successor provision (such earliest date, the 

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“Effective Date”), the Company shall (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall issue a new, unlegended certificate or make a new, unlegended entry for such book entry Shares, as applicable, and (B) cause its counsel to deliver to the Transfer Agent, no later than three (3) Trading Days after the Effective Date, one or more opinions to the effect that the removal of such legends in such circumstances may be effected under the 1933 Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions of this Agreement.  The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 7.4, it will, no later than three (3) Trading Days following the delivery by an Investor to the Company or the Transfer Agent of a certificate representing Shares issued with a restrictive legend, deliver or cause to be delivered to such Investor a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 7.4.  Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Investor by crediting the account of the Investor’s prime broker with the DTC System as directed by such Investor.  The Company shall be responsible for the fees of its Transfer Agent and all DTC fees associated with such issuance.
7.5.    Short Sales and Confidentiality After the Date Hereof.  Each Investor covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof until the latest of such time as (a) after the transactions contemplated by this Agreement are first publicly announced, (b) after the Closing, or (c) this Agreement is terminated in full.  Each Investor covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Investor will maintain the confidentiality of the existence and terms of this transaction.
8.    Survival and Indemnification.
8.1.    Survival.  The representations and warranties in this Agreement shall survive the Closing of the transactions contemplated by this Agreement for one year following the Closing, and the covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement for two years following the Closing.
8.2.    Indemnification.  The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, trustees, members, managers, employees and agents, and their respective successors and assigns, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable and documented attorney fees and disbursements and other documented expenses reasonably incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

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8.3.    Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder shall (a) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (b) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (i) the indemnifying party has agreed to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (iii) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.  No indemnified party will, except with the consent of the indemnifying party, consent to entry of any judgment or enter into any settlement.
9.    Miscellaneous.
9.1.    Successors and Assigns.  This Agreement may not be assigned by a party without the prior written consent of the Company or the Investors, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction complying with applicable securities laws without the prior written consent of the Company or the other Investors, provided such assignee agrees in writing to be bound by the provisions hereof that apply to Investors.  The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Without limiting the generality of the foregoing, in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which shares of Common Stock are converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Shares” shall be deemed to refer to the securities received by the Investors in connection with such transaction.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties to this Agreement or their 

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respective permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
9.2.    Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.
9.3.    Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
9.4.    Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  The Company or any Investor may change its mailing address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 9.4.
If to the Company:
Attn: Chief Financial Officer
600 Technology Park Drive
Billerica, MA 01821
Facsimile: (781) 345-0147
Email: paul.weiner@conformis.com

with a copy (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP
Attn: Hal Leibowitz, Esq.
60 State Street
Boston, MA 02109
Facsimile: (617) 526-5000 
Email: hal.leibowitz@wilmerhale.com
If to the Investors: 
to the addresses set forth on the signature pages to this Agreement
with a copy (which shall not constitute notice) to:
Greenberg Traurig, LLP
Attn: Abdullah Malik, Esq.

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One International Place, Suite 2000
Boston, Massachusetts 02110
Facsimile: (617) 897-0983
Email:  malikab@gtlaw.com
9.5.    Expenses.  The parties shall pay their own costs and expenses in connection herewith regardless of whether the transactions contemplated hereby are consummated; it being understood that each of the Company and each Investor has relied on the advice of its own respective counsel.  If legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable documented out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.
9.6.    Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investors.  Notwithstanding the foregoing, this Agreement may not be amended and the observance of any term of this Agreement may not be waived with respect to any Investor without the written consent of such Investor unless such amendment or waiver applies to all Investors in the same fashion.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon (a) prior to Closing, each Investor and (b) following the Closing, each holder of any Shares purchased under this Agreement at the time outstanding, and in each case, each future holder of all such Shares and the Company.
9.7.    Publicity.  Except as set forth below, no public release or announcement concerning the transactions contemplated hereby shall be issued by the Company without the prior written consent of the Investors (which consent shall not be unreasonably withheld), except as such release or announcement may be required by law or regulations or the applicable rules or regulations of any securities exchange or securities market, in which case the Company shall allow the Investors, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or announcement in advance of such issuance.  By 8:30 a.m. (New York City time) on the Trading Day immediately following the date this Agreement is executed, the Company shall file a Current Report on Form 8-K or issue a press release, reasonably acceptable to the Investors, disclosing all material terms of transactions contemplated by this Agreement, the Loan Agreement and the Registration Rights Agreement.  Except as contemplated by this Section 9.7 or under the Loan Agreement, neither the Company nor any its Subsidiary shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Investor, to make any press release or other public disclosure with respect to such transactions as is required by applicable law or regulations or the applicable rules or regulations of any securities exchange or securities market.
9.8.    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such 

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prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.
9.9.    Entire Agreement.  This Agreement and the other Transaction Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.
9.10.    Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.
9.11.    Governing Law; Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
(a)    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
(b)    Any legal action or proceeding with respect to this Agreement shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
(c)    The Company irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with this Agreement by any means permitted by applicable requirements of law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of the Company specified herein (and shall be effective when such mailing shall be effective, as provided therein).  The Company agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

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(d)    THE COMPANY AND EACH INVESTOR UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.  THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING.  THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(e)    Nothing contained in this Section 9.11 shall affect the right of the Investors to serve process in any other manner permitted by applicable requirements of law or commence legal proceedings or otherwise proceed against the Company in any other jurisdiction.
[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.
	
			
	COMPANY:
	CONFORMIS, INC.

	 
	 
	 

	 
	By:
	/s/ Paul Weiner

	 
	Name:
	Paul Weiner

	 
	Title:
	Chief Financial Officer

Signature Page to Investment Agreement

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES OFFSHORE FUND I, LP

	 
	 

	 
	By:  Innovatus Life Sciences Offshore GP, LP,

	 
	its General Partner

	 
	 

	 
	By:  Innovatus Flagship Offshore Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	/s/ Andrew Dym

	 
	Name:
	Andrew Dym

	 
	Title:
	Authorized Signatory

Investor Information

Entity Name: Innovatus Life Sciences Offshore Fund I, LP
Contact Person: Claes Ekstrom
Address:   777 Third Avenue, 25th Floor
                 New York, NY  10017

Telephone: (212) 698-4583
Facsimile:
Email:  cekstrom@innovatuscp.com
Tax ID#:
Name in which Shares should be issued:  Innovatus Life Sciences Offshore Fund I, LP

Signature Page to Investment Agreement
ACTIVE 43844688v4

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES LENDING FUND I, LP

	 
	 

	 
	By:  Innovatus Life Sciences GP, LP,

	 
	its General Partner

	 
	 

	 
	By:  Innovatus Flagship Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	/s/ Andrew Dym

	 
	Name:
	Andrew Dym

	 
	Title:
	Authorized Signatory

Investor Information

Entity Name: Innovatus Life Sciences Lending Fund I, LP
Contact Person: Claes Ekstrom
Address:   777 Third Avenue, 25th Floor
                 New York, NY  10017

Telephone: (212) 698-4583
Facsimile:
Email:  cekstrom@innovatuscp.com
Tax ID#:
Name in which Shares should be issued:  Innovatus Life Sciences Lending Fund I, LP

Signature Page to Investment Agreement

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES OFFSHORE FUND I-A, LP

	 
	 

	 
	By:  Innovatus Life Sciences Offshore GP, LP,

	 
	its General Partner

	 
	 

	 
	By:  Innovatus Flagship Offshore Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	/s/ Andrew Dym

	 
	Name:
	Andrew Dym

	 
	Title:
	Authorized Signatory

Investor Information

Entity Name: Innovatus Life Sciences Offshore Fund I-A, LP
Contact Person: Claes Ekstrom
Address:   777 Third Avenue, 25th Floor
                 New York, NY  10017

Telephone: (212) 698-4583
Facsimile:
Email:  cekstrom@innovatuscp.com
Tax ID#:
Name in which Shares should be issued:  Innovatus Life Sciences Offshore Fund I-A, LP

Signature Page to Investment Agreement

EXHIBIT A

Schedule of Investors

	
					
	Investor Name and Address
	Number of Shares 
to be Purchased
	Aggregate 
Purchase Price of Shares

	Innovatus Life Sciences Lending Fund I LP
777 Third Avenue, 25th Floor
New York, NY 10017
Attn: Claes Ekstrom
Email: cekstrom@innovatuscp.com

	499,486
	

	$1,933,010.82
	

	Innovatus Life Sciences Offshore Fund I, LP
777 Third Avenue, 25th Floor
New York, NY 10017
Attn: Claes Ekstrom
Email: cekstrom@innovatuscp.com

	132,154
	

	$511,435.98
	

	Innovatus Life Sciences Offshore Fund I-A, LP
777 Third Avenue, 25th Floor
New York, NY 10017
Attn: Claes Ekstrom
Email: cekstrom@innovatuscp.com

	143,554
	

	$555,553.98
	

ACTIVE 43844688v4

EXHIBIT B

Registration Rights Agreement

ACTIVE 43844688v4

REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of June [__], 2019 by and among Conformis, Inc., a Delaware corporation (the “Company”), and the “Investors” named in that certain Investment Agreement, dated as of the date hereof, by and among the Company and the Investors (the “Purchase Agreement”).  Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.
The parties hereby agree as follows:
1.Certain Definitions.
As used in this Agreement, the following terms shall have the following meanings:
“Investors” means the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent holder of Registrable Securities.
“Prospectus” means (a) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (b) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.
“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.
“Registrable Securities” means (a) the Shares and (b) any other securities issued or issuable with respect to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided, that, a security shall cease to be a Registrable Security upon (i) a sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (ii) such security becoming eligible for sale without restriction by the Investors pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act.
“Registration Statement” means a registration statement of the Company on Form S-3 under the 1933 Act (or if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities) that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

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2.    Registration.
(a)    Registration Statement on Form S-3.  Subject to the terms of this Agreement, in the event that the Company receives a written request from the Investors that the Company file with the Securities and Exchange Commission (the “SEC”) a Registration Statement covering the resale of all of the Registrable Securities (a “Request”), the Company shall promptly but no later than one hundred twenty (120) days after the date of such Request prepare and file with the SEC one Registration Statement covering the resale of all of the Registrable Securities.  Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities.  Such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(a)(iii) to the Investors prior to its filing or other submission.
(b)    Expenses.  The Company will pay all expenses associated with any Registration Statement, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws, listing fees, but excluding discounts, commissions and fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.
(c)    Effectiveness.
(i)    The Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after filing.  The Company shall notify the Investors simultaneously by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. 
(ii)    The Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (1) notify each Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of an Investor) disclose to such Investor any material non-public information giving rise to an Allowed Delay (provided that disclosure to the Board observer associated with such Investor, in such observer’s capacity as an observer, shall not be deemed to be a breach of 

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this clause), (2) advise the Investors in writing to cease all sales under such Registration Statement until the end of the Allowed Delay and (3) use commercially reasonable efforts to terminate an Allowed Delay as promptly as reasonably practicable.
3.    Company Obligations.  
(a)    In the event that the Company receives a Request, the Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as reasonably practicable:
(i)    use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration Statement may be sold without restriction pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act (the “Effectiveness Period”) and advise the Investors promptly in writing when the Effectiveness Period has expired;
(ii)    use commercially reasonable efforts to prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;
(iii)    provide copies to and permit any counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto (but excluding any documents incorporated by reference in such Registration Statement, amendments or supplements that are available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (or any successor system)) no fewer than three (3) days prior to their filing with the SEC and to furnish reasonable comments thereon;
(iv)    furnish to each Investor whose Registrable Securities are included in any Registration Statement (i) promptly after the same is prepared and filed with the SEC, if requested by the Investor, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor that are covered by such Registration Statement;

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(v)    use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest practical moment;
(vi)    prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for the offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(a)(vi), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(a)(vi), or (iii) file a general consent to service of process in any such jurisdiction;
(vii)    use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;
(viii)    promptly notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and
(ix)    otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder, and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection (ix), “Availability Date” means the 45th day following the end of the fourth 

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fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter).
(b)    The Company shall, with a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the later of (A) 12 months after the date of this Agreement or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.
(c)    The Company shall, upon reasonable prior notice, make available, during normal business hours, for inspection and review by the Investors, and advisors to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company) (collectively, the “Inspectors”), all pertinent financial and other records, and all other corporate documents and properties of the Company (collectively, the “Records”) as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Inspectors (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of such Registration Statement for the sole purpose of enabling such Investor and its accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement; provided, however, that each Inspector shall agree in writing to hold in strict confidence and shall not make any disclosure (except to such Investor) or use of any Records or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other Transaction Document.
Notwithstanding the foregoing, the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review 

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and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto; provided, however, that disclosure to the Board observer associated with an Investor, in such observer’s capacity as an observer, shall not be deemed to be a breach of this paragraph.
(d)    Until the later of (i) the termination of the Loan Agreement or (ii) when all Registrable Securities have been sold by the Investors, the Company shall provide to the Investors (i) a copy of the Company’s insider trading policy, and any updates or amendments thereto (the “Policy”), and (ii) notice pursuant to Section 6(b) of the periods when Persons subject to the Policy are permitted to (or prohibited from) trading in the Company’s securities pursuant to the Policy.
4.    Obligations of the Investors.
(a)    Each Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.  At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor of the information the Company requires from such Investor if such Investor elects to have any of the Registrable Securities included in such Registration Statement.  An Investor shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have any of the Registrable Securities included in such Registration Statement.
(b)    Each Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement. 
(c)    Each Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii), or (ii) the happening of an event pursuant to Section 3(a)(viii), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions may again be made.
(d)    Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any Registration Statement.
(e)    Each Investor agrees to use its best efforts not to make a Request, including, for the avoidance of doubt, by effecting any planned sales of Registrable Securities under Rule 144.  

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5.    Indemnification.
(a)    Indemnification by the Company.  The Company will indemnify and hold harmless each Investor and its officers, directors, members, employees and agents, successors and assigns, and each other person, if any, who controls such Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act or 1934 Act applicable to the Company or its agents; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer, director or member and each such controlling person for any legal or other documented expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (1) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus, (2) the use by an Investor of an outdated or defective Prospectus after the Company has notified such Investor in writing that such Prospectus is outdated or defective, (3) an Investor’s failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of Registrable Securities, (4) the disposition of any Registrable Securities pursuant to any Registration Statement or Prospectus covering such Registrable Securities during an Allowed Delay, or (5) an Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct.
(b)    Indemnification by the Investors.  Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements 

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therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto.  Except to the extent that any such losses, claims, damages, liabilities or expenses are finally judicially determined to have resulted from an Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the liability of an Investor under this Section 5(b) be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Investor in connection with any claim relating to this Section 5 and the amount of any damages such Investor has otherwise been required to pay by reason of such untrue statement or omission) received by such Investor upon the sale of the Registrable Securities included in such Registration Statement giving rise to such indemnification obligation.
(c)    Conduct of Indemnification Proceedings.  Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (1) the indemnifying party has agreed in writing to pay such fees or expenses, (2) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (3) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further that the failure of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, which shall not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
(d)    Contribution.  If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation.  

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Except to the extent that any such losses, claims, damages or liabilities are finally judicially determined to have resulted from a holder of Registrable Securities’ bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 5 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
6.    Miscellaneous.
(a)    Amendments and Waivers.  This Agreement may be amended only by a writing signed by the Company and the Investors.  The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the Investors.
(b)    Notices.  All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase Agreement, mutatis mutandis.
(c)    Assignments and Transfers by Investors.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective successors and assigns.  An Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that such Investor complies with all laws applicable thereto, and the provisions of the Purchase Agreement, and provides written notice of assignment to the Company promptly after such assignment is effected, and such person agrees in writing to be bound by all of the provisions contained herein.
(d)    Assignments and Transfers by the Company.  This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Investors, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the shares of Common Stock are converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investors in connection with such transaction unless such securities are otherwise freely tradable by the Investors after giving effect to such transaction.
(e)    Benefits of the Agreement.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties to this Agreement or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

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(f)    Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.
(g)    Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
(h)    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.
(i)    Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.
(j)    Entire Agreement.  This Agreement, together with the Purchase Agreement, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the understanding of the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
(k)    Governing Law; Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
(i)    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
(ii)    Any legal action or proceeding with respect to this Agreement shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereby irrevocably waive any objection, including any objection to the laying of 

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venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
(iii)    The Company irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with this Agreement by any means permitted by applicable requirements of law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of the Company specified herein (and shall be effective when such mailing shall be effective, as provided therein).  The Company 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.
(iv)    THE COMPANY AND EACH INVESTOR UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.  THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING.  THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(v)    Nothing contained in this Section 6(k) shall affect the right of the Investors to serve process in any other manner permitted by applicable requirements of law or commence legal proceedings or otherwise proceed against the Company in any other jurisdiction.
[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.
	
			
	COMPANY:
	CONFORMIS, INC.

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

	 
	 
	 

Signature Page to Registration Rights Agreement

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES LENDING FUND I , LP

	 
	 
	 

	 
	By: Innovatus Life Sciences GP, LP,

	 
	its General Partner

	 
	 
	 

	 
	By: Innovatus Flagship Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

Signature Page to Registration Rights Agreement

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES OFFSHORE FUND I , LP

	 
	 
	 

	 
	By: Innovatus Life Sciences Offshore GP, LP,

	 
	its General Partner

	 
	 
	 

	 
	By: Innovatus Flagship Offshore Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

Signature Page to Registration Rights Agreement

	
			
	INVESTOR:
	INNOVATUS LIFE SCIENCES LENDING FUND I-A , LP

	 
	 
	 

	 
	By: Innovatus Life Sciences Offshore GP, LP,

	 
	its General Partner

	 
	 
	 

	 
	By: Innovatus Flagship Offshore Parent GP, LLC,

	 
	its General Partner

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

Signature Page to Registration Rights Agreement

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