Document:

cibc_pulmonxxarlsaexecut

  Execution Version     AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT  This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”)  originally dated as of February 20, 2020 (the “Closing Date”),as amended on April 17, 2020, as further amended on  December 28, 2020 and as amended and restated on March 29, 2021 is entered into among CANADIAN IMPERIAL  BANK OF COMMERCE (“Lender”), PULMONX CORPORATION, a Delaware corporation (“Pulmonx”), each  other Person party hereto as a borrower from time to time (together with Pulmonx, collectively, “Borrowers”, and  each, a “Borrower”) and each Person party hereto as a Guarantor (as defined below) from time to time.  WHEREAS, the Borrowers and Lender entered into that certain Loan and Security Agreement originally  dated February 20, 2020 between the Borrower and the Lender (as amended on April 17, 2020 and as further amended  on December 28, 2020, the “Original Agreement”); and   WHEREAS, the Borrowers requested certain amendments to the Original Agreement and Lender has agreed  to amend and restate the Original Agreement,  IT IS HEREBY AGREED AS FOLLOWS:  Borrower Representative, each other Borrower from time to time party hereto, each Guarantor from time to  time party hereto and Lender hereby agree as follows:   1. ACCOUNTING AND OTHER TERMS  Accounting terms not defined in this Agreement shall be construed in accordance with GAAP, and  calculations and determinations shall be made following GAAP, consistently applied.  Capitalized terms not otherwise  defined in this Agreement shall have the meanings set forth on Exhibit A.  All other terms contained in this Agreement,  unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.   As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not  exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers  denoting amounts that are set off in brackets are negative.  Unless otherwise specified, all references in this Agreement  or any Annex or Schedule hereto to the preamble or a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”  shall refer to the preamble or the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this  Agreement.  For purposes of the Loan Documents, whenever a representation or warranty is made to a Person’s  knowledge or awareness, knowledge or awareness means the actual knowledge, after reasonable investigation, of any  Responsible Officer of such Person.  References to Persons include their respective successors and assigns (to the  extent and only to the extent permitted by the Loan Documents) or, in the case of Governmental Authorities, Persons  succeeding to the relevant functions of such Persons.  All references in this Agreement or any other Loan Document  to (a) statutes shall include all amendments of same and implementing regulations and any successor statutes and  regulations and (b) any instrument or agreement (including any of the Loan Documents) shall include any and all  modifications and supplements thereto and any and all restatements, extensions or renewals thereof to the extent such  modifications, supplements, restatements, extensions or renewals of any such documents are permitted by the terms  hereof and thereof.  Unless otherwise specifically indicated, definitions of agreements and instruments in Exhibit A  mean and refer to such agreements and instruments as amended, modified, supplemented, restated, substituted or  replaced from time to time in accordance with their respective terms and the terms of this Agreement and the other  Loan Documents.  A Default or an Event of Default shall be deemed to exist at all times during the period commencing  on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is  waived in writing pursuant to this Agreement or, with respect to any Default, is cured within any period of cure  expressly provided in this Agreement.  Whenever in any provision of this Agreement or any other Loan Document  Lender is authorized to take or decline to take any action (including making any determination) in the exercise of its  “discretion,” such provision shall be understood to mean that Lender may take or refrain to take such action in its sole  and absolute discretion.  2. LOANS AND TERMS OF PAYMENT  2.1 Promise to Pay.  Each Borrower hereby unconditionally promises to pay Lender the outstanding  principal amount of all Credit Extensions, accrued and unpaid interest, fees and charges thereon and all other amounts  owing hereunder as and when due in accordance with this Agreement.  

 

    2    2.2 [Intentionally Omitted].  2.3 Term Loans.  (a) Availability.    (i) Subject to the terms and conditions of this Agreement, Lender agrees to  make to Borrowers on the Closing Date a term loan (the “Term A Loan”) in an aggregate principal amount equal to  the Term A Loan Amount.  When repaid, in whole or in part, the Term A Loan may not be re-borrowed.  Lender’s  obligation to lend under this Section 2.3(a)(i) shall terminate upon the making of the Term A Loan as provided above.  (ii) Subject to the terms and conditions of this Agreement, Lender agrees to  make to Borrowers one or more additional term loans (each, a “Term B Loan” and collectively, the “Term B Loans”)  in an aggregate amount of up to the Term B Loan Amount, at the request of Borrowers, on or before February 20,  2022, so long as (W) no Event of Default has occurred on or prior to the date of any such borrowing, (X) the minimum  amount of each Term B Loan shall be $1,000,000, (Y) Borrowers shall have achieved $15,000,000 of Revenue for the  trailing six month period as of the end of the month immediately preceding the proposed funding date of such Term  B Loan, and (Z) the Swiss Security Conditions have been satisfied.  When repaid, in whole or in part, the Term B  Loans may not be re-borrowed.  Lender’s obligation to lend under this Section 2.3(a)(ii) shall terminate upon (A) the  making an aggregate amount of Term B Loans equal to the Term B Loan Amount or (B) the occurrence of any Event  of Default.  (iii) Subject to the terms and conditions of this Agreement, Lender agrees to  make to Borrowers one or more additional term loans (each, a “Term C Loan” and collectively, the “Term C Loans”;  together with the Term A Loan and the Term B Loans, each a “Term Loan” and collectively, the “Term Loans”) in  an aggregate amount of up to the Term C Loan Amount, at the request of Borrowers, on or before February 20, 2022,  so long as (W) no Event of Default has occurred on or prior to the date of any such borrowing, (X) the minimum  amount of each Term C Loan shall be $1,000,000, (Y) Borrowers shall have achieved $20,000,000 of Revenue for the  trailing six month period as of the end of the month immediately preceding the proposed funding date of such Term  C Loan and (Z) the Swiss Security Conditions have been satisfied.  When repaid, in whole or in part, the Term C  Loans may not be re-borrowed.  Lender’s obligation to lend under this Section 2.3(a)(iii) shall terminate upon (A) the  making an aggregate amount of Term C Loans equal to the Term C Loan Amount or (B) the occurrence of any Event  of Default.  (b) Repayment.  Commencing on the Amortization Date, and continuing thereafter on the last  Business Day of each successive month through the Term Loan Maturity Date, Borrowers shall make consecutive  monthly payments of equal principal, based on the Amortization Schedule, plus accrued and unpaid interest.  Any and  all unpaid Obligations, including principal, any accrued and unpaid interest in respect of the Term Loans and other  fees and other sums due hereunder, if any, shall be due and payable in full on the Term Loan Maturity Date.  The  Term Loans may only be prepaid in accordance with Section 2.3(c).  (c) Permitted Prepayment of the Term Loans.  Borrowers shall have the option to prepay all,  or any part of the Term Loans, provided Borrowers provide written notice to Lender of their election to prepay the  Term Loans at least ten days prior to such prepayment, and pay, on the date of such prepayment:  (i) all outstanding principal being prepaid plus any accrued and unpaid interest; plus  (ii) all other sums, if any, that shall have become due and payable, including interest  at the Default Rate with respect to any past due amounts;  and provided further that Borrowers prepay (if prepaying only a part of Term Loans) such part of  the Term Loans in increments that are equal to $5,000,000. Any partial prepayment shall be applied first pro-rata to  all outstanding amounts under the Term A Loan and the Term B Loans, and after the Term A Loan and Term B Loans  have been paid in full, then pro-rata to all outstanding amounts under the Term C Loans.  

 

    3    2.4 Payment of Interest on the Credit Extensions.    (a) Interest Rate.  Subject to Section 2.4(b), (i) the outstanding principal amount of the Term  A Loan and the Term B Loans shall accrue interest at a floating per annum rate equal to 1.00 percentage point above  the Prime Rate, and (ii) the outstanding principal amount of the Term C Loans shall accrue interest at a floating per  annum rate equal to 1.50 percentage points above the Prime Rate.  All such interest shall be payable monthly in  accordance with Section 2.4(d).  (b) Default Rate.  Immediately upon the occurrence and during the continuance of an Event of  Default, the Obligations shall bear interest at a rate per annum of 12.00% (the “Default Rate”), unless Lender  otherwise elects from time to time in its sole discretion to impose a lesser interest rate.  Fees and expenses which are  required to be paid by Loan Parties pursuant to the Loan Documents (including Lender Expenses) but are not paid  when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations.  Payment or  acceptance of the increased interest rate provided in this Section 2.4(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  Lender.  (c) Adjustment to Interest Rate.  Changes to the interest rate of any Credit Extension based on  changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of  any such change.  (d) Payment; Interest Computation.  Interest is payable monthly in arrears on the last Business  Day of each month and shall be computed on the basis of a 365- or 366-day year, as applicable, for the actual number  of days elapsed.  In computing interest, (i) all payments received after 12:00 p.m. Eastern time on any day shall be  deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit  Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension  is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit  Extension.  (e) Maximum Interest.  Notwithstanding any provision in this Agreement or any other Loan  Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the  maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (the “Maximum  Rate”).  If a court of competent jurisdiction shall finally determine that a Borrower has actually paid to Lender an  amount of interest in excess of the amount that would have been payable if all of the Obligations had at all times borne  interest at the Maximum Rate, then such excess interest actually paid by Borrowers shall be applied as follows:  first,  to the payment of principal outstanding in respect of the Credit Extensions; second, after all principal is repaid, to the  payment of Lender’s accrued interest, costs, expenses, professional fees and any other Obligations; and third, after all  Obligations are repaid, the excess (if any) shall be refunded to Borrowers.  2.5 Fees and Charges.  Borrowers shall pay to Lender:   (a) Lender Expenses.  All Lender Expenses (including reasonable and invoiced attorneys’ fees  and expenses for documentation and negotiation of this Agreement and the other Loan Documents) incurred through  and after the Closing Date, when due (or, if no stated due date, within two Business Days after demand by Lender).  (b) Fees Fully Earned.  In no event shall any Borrower be entitled to any credit, rebate, refund,  reduction, proration or repayment of any fees or charges earned by Lender pursuant to this Agreement notwithstanding  any termination of this Agreement or the suspension or termination of Lender’s obligation to make loans and advances  hereunder and notwithstanding the required payment date for such fees or charges.  (c) Delayed Draw Loan Fees.  On the date of the funding of each Term B Loan and Term C  Loan, a structuring fee in an amount equal to one percent (1.00%) of the amount of such Term B Loan or Term C  Loan, as applicable  

 

    4    2.6 Payments; Application of Payments.   (a) All payments to be made by Loan Parties under any Loan Document, including payments  of principal and interest, all fees, charges, expenses, indemnities and reimbursements or of amounts payable under  Section 2.7 or otherwise, shall be made in immediately available funds in Dollars, without setoff, recoupment or  counterclaim, before 12:00 p.m. Eastern time on the date when due.  Payments of principal and/or interest received  after 12:00 p.m. 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 shall be due the next Business Day, and additional  fees or interest, as applicable, shall continue to accrue until paid.  Unless otherwise directed by Lender or as set forth  in the following proviso, Borrowers shall make all payments due to Lender at Lender’s address specified in Section  10, except that payments pursuant to Section 2.7 shall be made directly to the Persons entitled thereto; provided,  however, that Lender shall have the right to effectuate payment of any and all Obligations due and owing hereunder  or under any other Loan Document by charging any Deposit Account of any Loan Party with Lender or an Affiliate  of Lender.  (b) No Loan Party shall have a right to specify the order or the loan accounts to which Lender  shall allocate or apply any payments made by a Loan Party to Lender or otherwise received by Lender under this  Agreement when any such allocation or application is not expressly specified elsewhere in this Agreement.  2.7 Withholding of Taxes; Gross-Up.  (a) Payments Free of Taxes.  Any and all payments by or on account of any obligation of any  Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as  required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable  withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent,  then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay  the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and,  if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary  so that after such deduction or withholding has been made (including such deductions and withholdings applicable to  additional sums payable under this Section 2.7), the applicable Recipient receives an amount equal to the sum it would  have received had no such deduction or withholding been made.  (b) Payment of Other Taxes by Loan Parties.  The Loan Parties shall timely pay to the relevant  Governmental Authority in accordance with applicable law, or at the option of the applicable Recipient, timely  reimburse it for, Other Taxes.  (c) Evidence of Payment.  As soon as practicable after any payment of Taxes by any Loan  Party to a Governmental Authority pursuant to this Section 2.7, such Loan Party shall deliver to the applicable  Recipient the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment,  a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to such  Recipient.  (d) Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally  indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes  (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.7)  payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any  reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly  or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment  or liability delivered to any Loan Party by the applicable Recipient shall be conclusive absent manifest error.  (e) Status of Lenders.  (i) Any Recipient that is entitled to an exemption from or reduction of  withholding Tax with respect to payments made under any Loan Document shall deliver to Borrower Representative,  at the time or times reasonably requested by Borrower Representative, such properly completed and executed  documentation reasonably requested by Borrower Representative as will permit such payments to be made without  withholding or at a reduced rate of withholding.  In addition, any Recipient, if reasonably requested by Borrower  

 

    5    Representative, shall deliver such other documentation prescribed by applicable law or reasonably requested by  Borrower Representative as will enable Borrower Representative to determine whether or not such Recipient is subject  to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the  preceding two sentences, the completion, execution and submission of such documentation (other than such  documentation set forth in Sections 2.7(e)(ii)(A), 2.7(e)(ii)(B) and 2.7(e)(ii)(D)) shall not be required if in such  Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any  material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such  Recipient.  (ii) Without limiting the generality of the foregoing,  (A) any Recipient that is a U.S. Person shall deliver to Borrower  Representative on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from  time to time thereafter upon the reasonable request of Borrower Representative), an executed copy of IRS Form W-9  certifying that such Recipient is exempt from U.S. federal backup withholding tax;  (B) any Recipient that is not a U.S. Person shall, to the extent it is  legally entitled to do so, deliver to Borrower Representative (in such number of copies as shall be requested by the  recipient) on or prior to the date on which such Foreign Recipient becomes a Recipient under this Agreement (and  from time to time thereafter upon the reasonable request of Borrower Representative), whichever of the following is  applicable:  (1) in the case of a Foreign Recipient claiming the benefits  of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan  Document, an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form),  establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “interest”  article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form  W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form), establishing an exemption from, or reduction  of, United States federal withholding Tax pursuant to the “business profits” or “other income” article of such tax  treaty;  (2) in the case of a Foreign Recipient claiming that its  extension of credit will generate United States effectively connected income, an executed copy of IRS Form W-8ECI  (or successor form);  (3) in the case of a Foreign Recipient claiming the benefits  of the exemption for portfolio interest under Section 881(c) of the IRC, (x) a certificate substantially in the form of  Exhibit F-1 to the effect that such Foreign Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of  the IRC, a “10 percent shareholder” of Borrower Representative within the meaning of Section 881(c)(3)(B) of the  IRC, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the IRC (a “U.S. Tax Compliance  Certificate”) and (y) an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor  form); or  (4) to the extent a Foreign Recipient is not the beneficial  owner, an executed copy of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI, IRS Form  W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form), a U.S. Tax Compliance Certificate substantially  in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial  owner, as applicable; provided that if the Foreign Recipient is a partnership and one or more direct or indirect partners  of such Foreign Recipient are claiming the portfolio interest exemption, such Foreign Recipient may provide a U.S.  Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such direct and indirect partner;  (C) any Foreign Recipient shall, to the extent it is legally entitled to  do so, deliver to Borrower Representative (in such number of copies as shall be requested by the recipient) on or prior  to the date on which such Foreign Recipient becomes a Recipient under this Agreement (and from time to time  thereafter upon the reasonable request of Borrower Representative), executed copies of any other form prescribed by  applicable law as a basis for claiming exemption from or a reduction in United States federal withholding Tax, duly  

 

    6    completed, together with such supplementary documentation as may be prescribed by applicable law to permit  Borrower Representative to determine the withholding or deduction required to be made; and  (D) if a payment made to a Recipient under any Loan Document  would be subject to United States federal withholding Tax imposed by FATCA if such Recipient were to fail to comply  with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the  IRC, as applicable), such Recipient shall deliver to Borrower Representative at the time or times prescribed by law  and at such time or times reasonably requested by Borrower Representative such documentation prescribed by  applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation  reasonably requested by Borrower Representative as may be necessary for Borrower Representative to comply with  their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations  under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this  clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  (E) Each Recipient agrees that if any form or certification it  previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification  or promptly notify Borrower Representative in writing of its legal inability to do so.  (f) Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in  good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.7  (including by the payment of additional amounts pursuant to this Section 2.7), it shall pay to the indemnifying party  an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.7 with respect  to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party  and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).   Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount  paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant  Governmental Authority) in the event that such indemnified party is required to repay such refund to such  Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.7(f), in no event will the  indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.7(f) the payment  of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would  have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or  otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been  paid.  This paragraph (f) shall not be construed to require any indemnified party to make available its Tax returns (or  any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.  (g) Register.  Lender, acting for this purpose as a non-fiduciary agent of Borrowers, shall  maintain at one of its offices a copy of any assignment and assumption delivered to it and a register for the recordation  of the names and addresses of Lender, and principal amounts (and stated interest) of the Credit Extensions owing to,  Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive  absent manifest error, and the Borrower and Lender shall treat each Person whose name is recorded in the Register  pursuant to the terms hereof as Lender hereunder for all purposes of this Agreement, notwithstanding notice to the  contrary.  (h) Survival.  Notwithstanding anything to the contrary in this Agreement, each party’s  agreements and obligations contained in this Section 2.7 shall survive the termination of this Agreement, any  assignment of rights by, or the replacement of, a Recipient, the termination of the Credit Extensions and the repayment,  satisfaction or discharge of all obligations under any Loan Document.  (i) Defined Terms.  For purposes of this Section 2.7, the term “applicable law” includes  FATCA.  3. CONDITIONS OF LOANS  3.1 [Reserved]  3.2 Conditions Precedent to all Credit Extensions.  Lender’s obligation to make each Credit  Extension, including the Credit Extensions on the Closing Date, is subject to the following conditions precedent:  

 

    7    (a) timely receipt of a duly executed Loan Request;  (b) the representations and warranties in this Agreement and in the other Loan Documents  shall be true and correct in all material respects (other than such representations and warranties that are already  qualified by materiality, Material Adverse Effect or similar language, in which case such representations and  warranties shall be true and correct in all respects) on the date of the Loan Request and on the Funding Date of each  Credit Extension; provided, however, that those representations and warranties expressly referring to a specific date  shall be true and correct in all material respects (other than such representations and warranties that are already  qualified by materiality, Material Adverse Effect or similar language, in which case such representations and  warranties shall be true and correct in all respects) as of such date,   (c) no Default or Event of Default shall have occurred and be continuing or result from the  Credit Extension;   (d) in Lender’s sole but reasonable discretion, there has not been any event or circumstance  that has had or could reasonably be expected to have a Material Adverse Effect; and   (e) payment of the fees and Lender Expenses then due as specified in Section 2.5 hereof.   3.3 Covenant to Deliver.  Loan Parties agree to deliver to Lender each item required to be delivered to  Lender under this Agreement as a condition precedent to any Credit Extension.  Loan Parties expressly agree that a  Credit Extension made prior to the receipt by Lender of any such item shall not constitute a waiver by Lender of Loan  Parties’ obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall  be in Lender’s sole discretion.  3.4 Procedures for Borrowing.  To obtain a Credit Extension, Loan Parties must notify Lender by  electronic mail or telephone by 12:00 p.m. Eastern Time at least three Business Days prior to the Funding Date of the  Credit Extension.  If such notification is by telephone, Loan Parties must promptly confirm the notification by  delivering to Lender a completed and duly executed Loan Request.  On the Funding Date, Lender shall fund the  applicable Credit Extension in the manner requested by such Loan Request provided that each of the conditions  precedent to such Credit Extension are satisfied.  Lender may make Credit Extensions under this Agreement based on  instructions from a Responsible Officer or his or her designee.  Lender may rely on any telephone notice given by a  person whom such Lender believes is a Responsible Officer or designee.  Except as otherwise provided on the Closing  Date, Borrowers hereby direct Lender to fund the proceeds of all Credit Extensions to a Deposit Account maintained  by a Borrower with CIBC Bank USA.  4. CREATION OF SECURITY INTEREST   4.1 Grant of Security Interest.  Each Loan Party hereby grants Lender, to secure the payment and  performance in full of all of the Obligations, a continuing security interest in, and pledges to Lender, the Collateral,  wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.  If this  Agreement is terminated, Lender’s Lien in the Collateral shall continue until the Obligations (other than contingent  indemnification obligations as to which no claim has been asserted or is known to exist and any other obligations  which, by their terms, are to survive the termination of this Agreement or any other Loan Document) are repaid in full  in cash.  Upon payment in full in cash of the Obligations (other than contingent indemnification obligations as to  which no claim has been asserted or is known to exist and any other obligations which, by their terms, are to survive  the termination of this Agreement or any other Loan Document) and at such time as Lender’s obligation to make  Credit Extensions has terminated, Lender shall, at Loan Parties’ sole cost and expense, release its Liens in the  Collateral and all rights therein shall revert to the applicable Loan Party.  Upon any sale, lease, transfer or other  disposition of any item of Collateral of any Loan Party permitted by, and in accordance with, the terms of the Loan  Documents, or upon the effectiveness of any consent to the release of the security interest granted hereby in any  Collateral pursuant to this Agreement, or upon the release of any Loan Party from its obligations under this Agreement  or the applicable Guaranty, if any, in accordance with the terms of the Loan Documents, Lender will, at such Loan  Party’s sole cost and expense, execute and deliver to such Loan Party such documents as such Loan Party shall  reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted  hereby; provided, however, that (i) at the time of such request and such release no Event of Default shall have occurred  and be continuing and (ii) such Loan Party shall have delivered to Lender, at least ten (10) Business Days’ prior to the  

 

    8    date of the proposed release, a written request for release describing the item of Collateral, together with a form of  release for execution by Lender, and such other information as Lender may reasonably request.  4.2 Priority of Security Interest.  Each Loan Party represents, warrants, and covenants that 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 pursuant to the terms of this Agreement to have superior priority  to Lender’s Lien under this Agreement).  If a Loan Party shall acquire a commercial tort claim with an expected  recovery, individually or in the aggregate, in excess of $500,000 (or its equivalent in other currencies), Loan Parties  shall promptly notify Lender in writing and deliver such other documents as Lender may require to grant Lender a  perfected security interest in such commercial tort claim.  If a Loan Party shall acquire a certificate with respect to  Shares, or any instrument with a value, individually or in the aggregate, in excess of $500,000 (or its equivalent in  other currencies), such Loan Party shall promptly notify Lender and deliver the same together with a stock power or  instrument of transfer and any necessary endorsement, all in form satisfactory to Lender.  4.3 Authorization to File Financing Statements.  Each Loan Party hereby authorizes Lender to file at  any time financing statements, continuation statements and amendments thereto with all appropriate jurisdictions to  perfect or protect Lender’s interest or rights hereunder, and each Loan Party will execute and deliver to Lender such  other instruments or notices, as may be necessary or as Lender may reasonably request, in order to perfect and preserve  the security interest granted or purported to be granted under this Agreement.  Each Loan Party further authorizes  Lender at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and  amendments (a) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of  similar effect, (b) describing the Collateral as being of equal or lesser scope or with greater detail, or (c) that contain  any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance.  Each Loan  Party acknowledges that it is not authorized to file any financing statement or amendment or termination statement  with respect to any financing statement filed in connection with this Agreement without the prior written consent of  Lender, subject to such Loan Party’s rights under Section 9-509(d)(2) of the Code.  4.4 Pledge of Collateral.  Each Loan Party hereby pledges, assigns and grants to Lender a security  interest in all Shares in which such Loan Party has any interest, together with all proceeds and substitutions thereof,  all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in  connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the  Obligations.  On the Closing Date, or, to the extent not certificated as of the Closing Date, within 10 Business Days  of the certification of any Shares, or as required pursuant to Section 6.11, the certificate or certificates for such Shares,  to the extent certificated, will be delivered to Lender, accompanied by a stock power or other appropriate instrument  of assignment duly executed in blank.  To the extent required by the terms and conditions governing the Equity  Interests in which a Loan Party has an interest, such Loan Party shall cause the books of each Person whose Equity  Interests 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, Lender may effect the transfer of any securities included in  the Collateral (including the Shares) into the name of Lender and cause new certificates representing such securities  to be issued in the name of Lender or its transferee.  Each Loan Party will execute and deliver such documents, and  take or cause to be taken such actions, as Lender may reasonably request to perfect or continue the perfection of  Lender’s security interest in the Shares.  Unless an Event of Default shall have occurred and be continuing, each Loan  Party shall be entitled to exercise any voting rights with respect to the Shares in which it has an interest and to give  consents, waivers and ratifications in respect thereof and, in any event, 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 during the continuance of an Event of Default.  5. REPRESENTATIONS AND WARRANTIES  Each Loan Party represents and warrants as follows:   5.1 Due Organization, Authorization; Power and Authority.  (a) Each Loan Party and each of its Subsidiaries are duly existing and in good standing in their  respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any  other jurisdiction in which the conduct of their respective business or ownership of property require that they be  

 

    9    qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.   Borrower Representative is a Registered Organization.  In connection with this Agreement, Borrower Representative  has delivered to Lender a completed certificate signed by Borrower Representative entitled “Perfection Certificate”.   Except to the extent Borrower Representative has provided notice of a legal name change to Lender in accordance  with Section 7.2, (i) each Loan Party’s and each Subsidiary’s exact legal name is that indicated on the Perfection  Certificate and on the signature page hereof; (ii) each Loan Party and each Subsidiary is an organization of the type  and is organized in the jurisdiction set forth in the Perfection Certificate; (iii) the Perfection Certificate accurately sets  forth each Loan Party’s and each Subsidiary’s organizational identification number or accurately states that such Loan  Party has none; (iv) the Perfection Certificate accurately sets forth each Loan Party’s and each Subsidiary’s place of  business, or, if more than one, its chief executive office as well as such Loan Party’s and each Subsidiary’s mailing  address (if different than its chief executive office); (v) except as set forth in the Perfection Certificate, each Loan  Party and each Subsidiary (and each of its predecessors) has not, in the past five years, changed its jurisdiction of  formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (vi) all other  information set forth on the Perfection Certificate pertaining to each Loan Party and each of its Subsidiaries is accurate  and complete in all material respects (it being understood and agreed that such Loan Party may from time to time  update certain information in the Perfection Certificate (including the information set forth in clause (iv) above) after  the Closing Date to the extent permitted by one or more specific provisions in this Agreement; such updated Perfection  Certificate subject to the review and approval of Lender). If any Loan Party or any of its Subsidiaries is not now a  Registered Organization but later becomes one, such Loan Party shall notify Lender of such occurrence and provide  Lender with such Person’s organizational identification number within 5 Business Days of receiving such  organizational identification number.  (b) The execution, delivery and performance by each Loan Party of the Loan Documents to  which it is a party have been duly authorized, and do not (i) conflict with such Loan Party’s Operating Documents or  other organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material  Requirement of Law, (iii) contravene, conflict or violate, in any material respect, any applicable order, writ, judgment,  injunction, decree, determination or award of any Governmental Authority by which such Loan Party or any of its  Subsidiaries 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 (v) conflict with, contravene,  constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement  by which such Loan Party is bound.  No Loan Party is in default under any agreement to which it is a party or by  which it is bound in which the default could reasonably be expected to have a Material Adverse Effect.  No Subsidiary  which is not a Loan Party owns any material Intellectual Property.  5.2 Collateral.  (a) Each Loan Party has good title to, rights in, and the power to transfer each item of the  Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.  (b) Except for the Collateral Accounts described in the Perfection Certificate or in a notice  timely delivered pursuant to Section 6.6, no Loan Party has any Collateral Accounts at or with any bank, broker or  other financial institution, and each Loan Party has taken such actions as are necessary to give Lender a perfected  security interest therein as required pursuant to the terms of Section 6.6(b).  The Accounts are bona fide, existing  obligations of the Account Debtors.     (c) On the Closing Date, and except as disclosed on the Perfection Certificate, (i) the Collateral  is not in the possession of any third party bailee (such as a warehouse), and (ii) no such third party bailee possesses  any Collateral with an aggregate value in excess of $250,000. None of the Collateral shall be maintained at locations  other than as disclosed in the Perfection Certificates on the Closing Date or as permitted pursuant to Section 6.12.  (d) Each Loan Party is the sole owner of the Intellectual Property which it owns or purports to  own except for (i) licenses constituting Permitted Transfers, (ii) open-source software, (iii) over-the-counter software  that is commercially available to the public, (iv) material Intellectual Property licensed to such Loan Party and noted  on the Perfection Certificate or as disclosed pursuant to Section 6.7(b), and (v) immaterial Intellectual Property  licensed to such Loan Party.  To the best of each Loan Party’s knowledge, each Patent (other than patent applications)  which it owns or purports to own and which is material to such Loan Party’s business is valid and enforceable, and no  

 

    10    part of the Intellectual Property which a Loan Party owns or purports to own and which is material to Loan Parties’  business has been judged invalid or unenforceable, in whole or in part.  To the best of each Loan Party’s knowledge,  no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the  extent such claim could not reasonably be expected to have a Material Adverse Effect.  Except as noted on the  Perfection Certificate or as disclosed pursuant to Section 6.7(b), no Loan Party is a party to, nor is it bound by, any  Restricted License.  (e) As of the Closing Date, no Collateral consisting of promissory notes is evidenced by an  original instrument, and except for the Shares of Subsidiaries, no Investments consisting of equity interests of a third  person are evidenced by certificates.  All Collateral consisting of certificated securities or instruments has been  delivered to Lender to be held as possessory collateral with such powers or allonges as Lender may require.  5.3 Litigation and Proceedings.  Except as set forth in the Perfection Certificate or as disclosed in  writing pursuant to Section 6.2, there are no actions, suits, litigations or proceedings, at law or in equity, pending, or,  to the knowledge of any Responsible Officer, threatened in writing, by or against any Loan Party, any of its  Subsidiaries or any officers or directors of the foregoing involving more than, individually or in the aggregate for all  related proceedings, $250,000.  None of such actions, suits, litigations or proceedings, individually or collectively,  could reasonably be expected to have a Material Adverse Effect.  5.4 Financial Statements; Financial Condition.  All financial statements for Loan Parties and each of  their Subsidiaries delivered to Lender fairly present in all material respects the consolidated financial condition and  results of operations of Loan Parties and each of their Subsidiaries as of the respective dates and for the respective  periods then ended, and there are no material liabilities (including any contingent liabilities) which are not reflected  in such financial statements.  There has not been any material deterioration in the consolidated financial condition of  any Loan Party or any of its Subsidiaries or the Collateral since the date of the most recent financial statements  submitted to Lender.    5.5 Solvency.  The fair salable value of the assets (including goodwill minus disposition costs) of Loan  Parties and each of their Subsidiaries, on a consolidated basis, exceeds the fair value of liabilities of Loan Parties’ and  each of their Subsidiaries, on a consolidated basis; no Loan Party is left with unreasonably small capital after the  transactions in this Agreement; and each Loan Party is able to pay its debts (including trade debts) as they mature.  5.6 Consents; Approvals.  Each Loan Party has obtained all third party or governmental consents,  licenses, approvals, waivers, made all declarations or filings with, and given all notices to, all Governmental  Authorities that are necessary to enter into the Loan Documents and consummate the transactions contemplated  thereby.  Each Loan Party and each of its Subsidiaries has obtained all third party or governmental consents, licenses,  approvals, waivers, 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, except where failure to do so could not  reasonably be expected to result in a Material Adverse Effect.  5.7 Subsidiaries; Investments.  No Loan Party has any Subsidiaries, except as noted on the Perfection  Certificate or as disclosed to Lender pursuant to Section 6.11.  No Loan Party owns any stock, partnership, or other  ownership interest or other Equity Interests except for Permitted Investments.  5.8 Tax Returns and Payments; Pension Contributions.  Each Loan Party and each of its Material  Subsidiaries has timely filed all required tax returns and reports (or appropriate extensions therefor), and such Loan  Party and each of its Material Subsidiaries has timely paid all foreign, federal, state and local Taxes, assessments,  deposits and contributions owed by such Loan Party or such Material Subsidiary, as applicable, except to the extent  such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted,  so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have  been made therefor.  No Loan Party is aware of any written claims or adjustments proposed for any prior tax years of  any Loan Party or any of its Material Subsidiaries which could result in a material amount of additional Taxes  becoming due and payable by a Loan Party or any of its Material Subsidiaries.  Each Loan Party and each of its  Material Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred  compensation plans in accordance with their terms, and neither such Loan Party nor any of its Material 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  

 

    11    liability of such Loan Party or its Material Subsidiaries, including any liability to the Pension Benefit Guaranty  Corporation or its successors or any other Governmental Authority.  5.9 Shares.  Such Loan Party has full power and authority to create a first lien on the Shares and no  disability or contractual obligation exists that would prohibit such Loan Party from pledging the Shares pursuant to  this Agreement.  To such Loan Party’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 the extent such concepts exist under  applicable law).  To such Loan Party’s knowledge, the Shares are not the subject of any present or threatened suit,  action, arbitration, administrative or other proceeding, and such Loan Party knows of no reasonable grounds for the  institution of any such proceedings.  5.10 Compliance with Laws.    (a) No Loan Party or Subsidiary of a Loan Party is an “investment company” or an “affiliated  person” of, or “promoter” or “principal underwriter” for, an “investment company”, as such terms are defined in the  Investment Company Act of 1940 as amended.    (b) No Loan Party or Subsidiary of a Loan Party is engaged, nor will it engage, principally or  as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any  “margin security” as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to  time hereafter in effect (such securities being referred to herein as “Margin Stock”).  None of the proceeds of the  Credit Extensions or other extensions of credit under this Agreement have been (or will be) used, directly or indirectly,  for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness  which was originally incurred to purchase or carry any Margin Stock or for any other purpose which might cause any  of the Credit Extensions or other extensions of credit under this Agreement to be considered a “purpose credit” within  the meaning of Regulation T, U or X of the Federal Reserve Board.    (c) No Loan Party has taken or permitted to be taken any action which might cause any Loan  Document to violate any regulation of the Federal Reserve Board.  Neither the making of the Credit Extensions by the  Lender hereunder nor Loan Parties’ use of the proceeds thereof will violate the Trading with the Enemy Act, as  amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle  B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.  No Loan Party, nor any of  its Subsidiaries, nor, to the knowledge of any Loan Party, any Affiliate of any Loan Party or of any Subsidiary, nor  any present holder of Equity Interests of any of the foregoing (i) is, or will become, a Person described or designated  in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control of the United  States Department of Treasury (“OFAC”) or in Section 1 of the Anti-Terrorism Order, (ii) is, or will become, a citizen  or resident of any country that is subject to embargo or trade sanctions enforced by OFAC, (iii) is, or will become, a  Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of the Anti- Terrorism Order or similar sanctions laws of any other Governmental Authority, or (iv) engages or will engage in any  dealings or transactions, or is or will be otherwise associated, with any such Person.   (d) Each Loan Party and its Subsidiaries are in compliance, in all material respects, with the  USA Patriot Act.  No part of the proceeds from the Credit Extensions made hereunder has been (or will be) used,  directly or indirectly, for any payments to any governmental official or employee, political party, official of a political  party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct  business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977,  as amended, assuming in all cases that such Act applies to Loan Parties and their Subsidiaries.  (e) No Reportable Event or Prohibited Transaction, as defined in ERISA has occurred or is  reasonably expected to occur, and no Loan Party has failed to meet the minimum funding requirements of ERISA. No  Loan Party has violated any applicable environmental laws in any material respect, maintains any properties or assets  which have been designated in any manner pursuant to any environmental protection statute as a hazardous materials  disposal site, or has received any notice, summons, citation or directive from the Environmental Protection Agency  or any other similar Governmental Authority.  

 

    12    5.11 Broker.  No Person has any agreement or option to provide financial advisory services to any Loan  Party or any of its Subsidiaries or to receive any finder’s fee or similar fee with respect to this Agreement.  5.12 Accounts Receivable.    (a) Each Account and each document, instrument, and agreement relating thereto or executed  in connection therewith:  (i) is genuine and enforceable in all material respects in accordance with its terms except for  such limits thereon arising from bankruptcy and similar laws relating to creditors’ rights; (ii) is not subject to any  deduction or discount (other than as stated in the invoice and disclosed to Lender in writing), defense, set-off, claim,  or counterclaim, in each case, of a material nature against such Loan Party except as to which such Loan Party  promptly notified Lender in writing; (iii) is not subject to any other circumstances that would impair, in any material  respect, the validity, enforceability or amount of such Collateral except as to which such Loan Party promptly notified  Lender in writing; (iv) arises from a bona fide sale of goods or delivery of services in the ordinary course and in  accordance with the terms and conditions of any applicable purchase order, contract or agreement; (v) is free of all  Liens other than Permitted Liens; and (vi) is for a liquidated amount due as stated in the invoice therefor.  (b) All statements made and all unpaid balances appearing in all invoices, instruments and  other documents evidencing each Account are and shall be true and correct and all such invoices, instruments and  other documents, and all of Loan Parties’ Books, are genuine and in all material respects what they purport to be.  At  all times while an Event of Default has occurred and is continuing, and otherwise no more than once per year  (including pursuant to a field examination), Lender may notify any Account Debtor owing any Borrower money of  Lender’s security interest in such funds and verify the amount of such Account.  All sales and other transactions  underlying or giving rise to each Account shall comply in all material respects with all applicable laws and  governmental rules and regulations.  Borrowers have no knowledge of any actual or imminent Insolvency Proceeding  of any Account Debtor whose outstanding obligations to Borrower are, in the aggregate, material.  5.13 Full Disclosure.  No written representation, warranty or other statement of a Loan Party or any of  its Subsidiaries in any certificate or written statement given to Lender by or on behalf of a Loan Party or any of its  Subsidiaries, as of the date such representation, warranty, or other statement was made, taken together with all such  written certificates and written statements given to 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 in  light of the circumstances under which they were made (after giving effect to all supplements and updates thereto) (it  being recognized by Lender that the projections and forecasts provided by any Loan Party in good faith and based  upon assumptions believed by such Loan Party to be reasonable are not viewed as facts and that actual results during  the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).  6. AFFIRMATIVE COVENANTS  Each Loan Party shall, and shall cause each of its Subsidiaries to, do all of the following:  6.1 Government Compliance.  Maintain its and all its Subsidiaries’ legal existence and good standing  in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so  qualify could reasonably be expected to have a Material Adverse Effect; comply, and cause each Subsidiary to comply,  with all laws, ordinances and regulations to which it is subject except where a failure to do so could not reasonably be  expected to have a Material Adverse Effect; obtain all of the Governmental Approvals required in connection with  such Loan Party’s business and for the performance by each Loan Party of its obligations under the Loan Documents  to which it is a party and the grant of a security interest to Lender in the Collateral, and comply with all terms and  conditions with respect to such Governmental Approvals.  Borrower Representative shall promptly provide copies to  Lender of any material Governmental Approvals obtained by any Loan Party or any of its Subsidiaries.  6.2 Financial Statements, Reports, Certificates.  Provide Lender with the following:  (a) Quarterly Financial Statements.  Within 45 days after the last day of the first three fiscal  quarters of each fiscal year of Borrower Representative, and within 60 days after the last day of the last fiscal quarter  of each fiscal year of Borrower Representative, a company prepared consolidated balance sheet and income statement  covering Borrower and its Subsidiaries’ consolidated operations for such fiscal quarter (which in the case of the  balance sheet and income statement for the last fiscal quarter of Borrower Representative’s fiscal year, shall be  

 

    13    unaudited and subject to revision so that such balance sheet and income statement reflect the financial statements  delivered pursuant to Section 6.2(d) for that fiscal year), prepared in accordance with GAAP, consistently applied,  except for the absence of footnotes, and subject to normal year-end adjustments..  (b) [Reserved]  (c) Annual Operating Budget and Financial Projections.  Within 60 days after the end of each  fiscal year of Borrower Representative (and promptly and within five days of any material modification thereto), (i)  annual operating budgets, on a consolidated basis (including income statements, balance sheets and cash flow  statements, by month) for the upcoming fiscal year of Borrower Representative, and (ii) annual financial projections  for such fiscal year (on a monthly consolidated basis), in each case, as approved by Borrower Representative’s Board  (such annual financial projections as originally delivered to Lender are referred to herein as the “Annual Projections”;  provided that, any revisions to the Annual Projections approved by Borrower Representative’s Board shall be  delivered to Lender no later than seven days after such approval), together with any related business forecasts used in  the preparation of such annual financial projections and a comparison to the last year’s results for the same period, in  each case, in form and substance acceptable to Lender.  (d) Annual Audited Financial Statements.  As soon as available, but no later than 90 days after  the last day of Borrower Representative’s fiscal year (or, if applicable, a later date, not to exceed 180 days after the  last day of Borrower Representative’s fiscal year, to which the SEC has extended the applicable deadline for the  Borrower to file disclosure reports containing such financial statements), audited consolidated financial statements  prepared in accordance with GAAP, consistently applied.  The annual consolidated financial statements shall be  audited by an independent certified public accounting firm reasonably acceptable to Lender (it being understood that  BDO USA, LLP and any other accounting firm of national standing are reasonably acceptable to Lender) and  accompanied by an unqualified opinion on such financial statements from such independent certified public  accounting firm (except for any qualification relating to the scheduled maturity of Permitted Indebtedness occurring  within twelve (12) months of the date of the relevant audit).  (e) Compliance Certificate.  Together with the financial statements delivered pursuant to  Sections 6.2(a) and 6.2(d), a duly completed Compliance Certificate signed by a Responsible Officer, certifying that  as of the end of such month, Loan Parties were in full compliance with all of the terms and conditions of this  Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement  and such other information as Lender may reasonably request, including a description of recent events during the  relevant period.  (f) [Reserved]  (g) SEC Filings.  Copies of all periodic and other reports, proxy statements and other materials  filed by Borrower Representative with the Securities and Exchange Commission within five days after such reports,  proxy statements and/or other materials were filed.    (h) Legal Action Notice.  A prompt report of any legal actions pending or threatened in writing  against any Loan Party or any of its Subsidiaries that could reasonably be expected to result in damages or costs to  any Loan Party or any of its Subsidiaries of, individually or in the aggregate for all related proceedings, $250,000 (or  its equivalent in other currencies) or more or which could reasonably be expected to have a Material Adverse Effect,  or of any Loan Party or any of its Subsidiaries taking or threatening legal action against any third person with respect  to a material claim, and with respect to any pending action or threatened action, a prompt report of any material  development with respect thereto.  If an estimate of such Loan Party’s or such Subsidiary’s liability may commercially  reasonably be determined in such party’s reasonable discretion at the time of each applicable notice or report, such  notice or report shall include such an estimate, which estimate shall be determined reasonably and in good faith;  provided, that each such estimate may be updated reasonably and in good faith by such Loan Party or Subsidiary from  time to time.  (i) [Reserved]  (j) [Reserved]  

 

    14    (k) Intellectual Property Report.  (i) Together with the Compliance Certificate delivered for  the end of each calendar month constituting the end of a fiscal quarter, a report in form reasonably acceptable to  Lender, listing (X) any material change in the composition of the Intellectual Property, (Y) any Patent, registered  Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, whether  as owner, licensee or otherwise, obtained by any Loan Party, and (Z) applications for any Patent or the registration of  any Trademark made by any Loan Party, and (ii) prompt notice of any event that could reasonably be expected to  materially and adversely affect the value of the Intellectual Property.  (l) Other Reports and Information.  Together with the financial statements delivered pursuant  to Sections 6.2(a) and (d), in form acceptable to Lender, any information related to the financial or business condition  of any Loan Party as and when reasonably requested by Lender.   (m) Bank Account Statement.  Together with the financial statements delivered pursuant to  Sections 6.2(a) and (d), evidence satisfactory to Lender of the balance maintained in each Deposit Account or  Securities Account of a Loan Party or any of its Subsidiaries not held at Lender.  (n) [Reserved]  (o) Operating Documents.  Prompt notice of any material amendments of or other material  changes to the Operating Documents of any Loan Party or any of its Subsidiaries, together with any copies reflecting  such amendments or changes with respect thereto and prior to an initial public offering of Borrower Representative’s  common stock, any material amendments and material changes to the capitalization table of Borrower Representative  upon Lender’s request and in any event annually, together with Borrower Representative’s delivery of its audited  consolidated financial statements;  (p) Insurance.  Notice of any reduction in insurance coverage at least 30 days prior to the  proposed effective date of such reduction.  (q) Defaults.  Without limiting or contradicting any other more specific provision of this  Agreement, promptly (and in any event within three Business Days) upon any Loan Party becoming aware of the  existence of any Default or Event of Default, such Loan Party shall give written notice to Lender of such occurrence,  which such notice shall include a reasonably detailed description of such Default or Event of Default.  (r) Delivery of Documents.  Documents required to be delivered pursuant to Sections 6.2(a),  (b) and (d) may be delivered electronically and if so delivered, shall be deemed to have been delivered to, and received  by, the Lender on the date on which Pulmonx (i) posts such documents, or provides a link thereto, on its website  https://pulmonx.com/, or (ii) has filed such reports with the SEC via the EDGAR filing system; provided that at the  request of the Lender, Pulmonx shall provide by electronic mail electronic versions (i.e., soft copies) of such  documents.  6.3 Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material  defects.  Returns and allowances between a Loan Party or any Subsidiary, on the one hand, and its Account Debtors,  on the other hand, shall follow such Loan Party’s customary practices as they exist at the Closing Date.  Borrower  Representative shall promptly notify Lender of all returns, recoveries, disputes and claims that involve more than  $250,000 (or its equivalent in other currencies) individually or in the aggregate in any calendar year.  6.4 Taxes; Pensions.  (a) Timely file, and cause each of its Material Subsidiaries to timely file, all  required tax returns and reports, (b) timely pay, and require each of its Material Subsidiaries to timely pay, all foreign,  federal, state and local Taxes, assessments, deposits and contributions owed by such Loan Party and each of its  Material Subsidiaries, except, in each case, for deferred payment of any Taxes contested pursuant to the terms of  Section 5.8, and (c) deliver to 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  their terms.  

 

    15    6.5 Insurance.    (a) Keep, and cause each Subsidiary to keep, its business and the Collateral insured for risks  and in amounts standard for companies in Loan Parties’ industry and location and as Lender may reasonably request.   Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates  of any Loan Party, and in amounts that are reasonably satisfactory to Lender.  (b) Ensure that proceeds payable under any property policy with respect to Collateral or key  man insurance are, at Lender’s option, payable to Lender on account of the Obligations.  To that end, all property  policies shall have a lender’s loss payable endorsement showing Lender as lender loss payee, all liability policies shall  show, or have endorsements showing, Lender as an additional insured, in each case, in form satisfactory to Lender  and as set forth on Exhibit E.  (c) Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is  continuing, Loan Parties shall have the option of applying the proceeds of any casualty policy up to $100,000 (or its  equivalent in other currencies) with respect to any loss, but not exceeding $250,000 (or its equivalent in other  currencies) in the aggregate for all losses, under all casualty or property policies in any fiscal year, toward the prompt  replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall  be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Lender has  been granted a first priority security interest and (b) after the occurrence and during the continuance of an Event of  Default, all such proceeds shall, at the option of Lender, be payable to Lender on account of the Obligations.    (d) At Lender’s request, Borrower Representative shall deliver certified copies of insurance  policies and evidence of all premium payments.  Each provider of any such insurance required under this Section 6.5  shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Lender,  that it will give Lender 30 days prior written notice before any such policy or policies shall be canceled (or 10 days’  notice for cancellation for non-payment of premiums).  (e) If any Loan Party 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 and Lender, Lender may make all or part of such  payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Lender  deems prudent.  Lender shall endeavor to give written notice to Borrower prior to taking such action, but any failure  to so endeavor or to give such notice shall not be a breach of this Agreement.  6.6 Accounts.  (a) [reserved]  (b) Without prejudice to Section 6.6(c), if any Loan Party establishes any Collateral Account  at or with any Person other than Lender, it shall (i) within sixty (60) days of the date such Collateral Account is  established, cause such Person to execute and deliver an Account Control Agreement with respect to such Collateral  Account to perfect Lender’s Lien in such Collateral Account in accordance with the terms hereunder, and (ii) not  terminate such Account Control Agreement without the prior written consent of Lender, provided that this Section  6.6(b) shall not apply to any account which is (A) on and after the date the Swiss Security Conditions have been  satisfied, a Collateral Account maintained by Pulmonx Switzerland in jurisdictions in which Account Control  Agreements are not required to perfect or enhance the priority of Lender’s Lien in such Collateral Accounts, (B) a  Deposit Account maintained by Loan Parties which is exclusively used for payroll, payroll taxes, and other employee  wage and benefit payments to or for the benefit of Loan Parties’ employees and identified to Lender by Loan Parties  as such, or (C) provided Pulmonx maintains cash in an amount which, at any time, is not less than 110% of the  aggregate amount of the Obligations outstanding at such time in Collateral Accounts in the United States with Lender  which or otherwise comply with Section 6.6(b)(i) and (ii), any other Deposit Account maintained by Pulmonx and its  Subsidiaries.  (c) Without prejudice to Section 6.6(b), on and at all times after the Effective Date the  Borrowers shall maintain in Collateral Accounts with Lender or Lender’s Affiliates (including accounts with Lender’s  corporate and institutional services group which, for the avoidance of doubt, may invest in non-Lender affiliated Cash  Equivalents) cash and Cash Equivalents in an amount not less than the lower of (i) $70,000,000, and (ii) 100% of the  

 

    16    aggregate amount of cash of Pulmonx and its Subsidiaries on a consolidated basis at such time, provided that this  Section 6.6(c) shall not apply to Pulmonx Switzerland on and after the date on which the Swiss Security Conditions  are satisfied and Pulmonx Switzerland is a Borrower.  6.7 Intellectual Property.  (a) Use commercially reasonable efforts to protect, defend and maintain the validity and  enforceability of its Intellectual Property material to its business; promptly advise Lender in writing of material  infringements by a third party of its Intellectual Property material to its business; and not allow any Intellectual  Property material to Loan Parties’ business to be abandoned, forfeited or dedicated to the public without Lender’s  written consent.    (b) If any Loan Party (i) obtains any Patent, registered Trademark, registered Copyright,  registered mask work, or any pending application for any of the foregoing, whether as owner or licensee, or (ii) applies  for any Patent or the registration of any Trademark, then Borrower Representative shall promptly provide written  notice thereof to Lender and shall execute such intellectual property security agreements and other documents and  take such other actions as Lender may request to perfect and maintain a first priority perfected security interest in  favor of Lender in such property; provided that with respect to Patents and Trademarks, Loan Parties shall only be  required to provide such information with the quarterly reports provided under Section 6.2(k).  If a Loan Party decides  to register any Copyrights or mask works in the United States Copyright Office, Borrower Representative shall: (x)  provide Lender with at least 15 days prior written notice of such Loan Party’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 Lender may request to perfect and maintain a first priority perfected security interest in favor of Lender in  the Copyrights or mask works intended to be registered with the United States Copyright Office; and (z) 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.  Borrower Representative shall  promptly provide to Lender copies of all applications that it files for Patents or for the registration of Trademarks,  Copyrights or mask works, together with evidence of the recording of the intellectual property security agreement  required for Lender to perfect and maintain a first priority perfected security interest in such property.  (c) Provide written notice to Lender at least 10 days prior to entering into or becoming bound  by any Restricted License (other than off the shelf software and services that are commercially available to the public).    6.8 Litigation Cooperation.  From the Closing Date and continuing through the termination of this  Agreement, make available to Lender (which, prior to the occurrence of an Event of Default, shall be at reasonable  times and upon reasonable notice from Lender), without expense to Lender, each Loan Party and its officers,  employees and agents and each Loan Party’s books and records, to the extent that Lender may deem them reasonably  necessary to prosecute or defend any third-party suit or proceeding instituted by or against Lender with respect to any  Collateral or relating to such Loan Party.  6.9 Access to Collateral; Books and Records; Quarterly Management Meetings.    (a) Allow Lender, or its agents, during regular business hours (unless an Event of Default has  occurred) to inspect the Collateral and audit (including pursuant to a field examination or an appraisal) and copy such  Loan Party’s Books, including accounts receivable (which, prior to the occurrence of an Event of Default, shall be  upon reasonable notice from Lender).  Such inspections or audits shall be conducted no more often than once every  12 months unless an Event of Default has occurred and is continuing in which case such inspections and audits shall  occur as often as Lender shall determine is necessary.  The foregoing inspections and audits shall be at Loan Parties’  expense.  (b) Hold, by phone or, at the option of Lender, at its principal place of business, meetings of  the management of Borrower Representative with Lender at least every calendar quarter, each such meeting to be on  a date and at a time mutually convenient to Borrower Representative and Lender.  

 

    17    6.10  Financial Covenants.    (a) At all times when the aggregate amount of cash and Cash Equivalents held by Pulmonx  and its Subsidiaries is less than $100,000,000 (or its equivalent in other currencies), have Revenue for each trailing  three-month period ending on the last day of each fiscal quarter of Pulmonx of not less than 80.00% of Revenue for  such trailing three-month period, as set forth in the Annual Projections delivered in accordance with Section 6.2(c),  which to avoid doubt, for each fiscal quarter ending in 2021 shall be the amount set out opposite such fiscal quarter in  the table below:  Fiscal quarter ending Revenue ($)    March 31, 2021 7,033,000  June 30, 2021 10,021,000  September 30, 2021 11,983,000  December 31, 2021 13,686,000    (b) On and at all times after the First Amendment Date, maintain Unrestricted Cash in an  aggregate amount equal to or greater than the Adjusted EBITDA loss for the four month period ending on any date of  determination.  6.11 Subsidiary Matters.  If any Loan Party forms any direct or indirect Subsidiary or acquires any  direct or indirect Subsidiary after the Closing Date, or at any time upon Lender’s request with respect to any Material  Subsidiary:  (a) promptly, and in any event within five days of such formation or acquisition, provide written notice  to Lender together with certified copies of the Operating Documents for such Subsidiary, and (b) promptly, and in any  event within 10 days of such formation or creation: take all such action as may be reasonably required by Lender to  cause such new Subsidiary to (i) either, at the option of Lender in its discretion, (A) provide to Lender a joinder to this  Agreement pursuant to which such Subsidiary becomes a Borrower or a Guarantor hereunder, or (B) guarantee the  Obligations under the Loan Documents pursuant to a separate Guaranty and (ii) grant a security interest in and to the  assets of such Subsidiary (substantially as described on Exhibit B), in each case together with such Account Control  Agreements and other documents, instruments and agreements reasonably requested by Lender, all in form and  substance satisfactory to Lender (including being sufficient to grant Lender a first priority Lien, subject to Permitted  Liens) in and to the assets of such newly formed or acquired Subsidiary and to pledge all of the direct or beneficial  Equity Interests in such new Subsidiary.  Any document, agreement, or instrument executed or issued pursuant to this  Section 6.11 shall be a Loan Document. Notwithstanding the foregoing, compliance with this Section 6.11 shall not  be deemed a cure or waiver of any breach of Section 7.3.  6.12 Property Locations.    (a) Provide to Lender at least 30 days’ prior written notice before adding any new offices or  business or Collateral locations, including warehouses (unless such new offices or business or Collateral locations (i)  qualify as Excluded Locations under clause (a) of the definition thereof or (ii) contain less than $500,000 (or its  equivalent in other currencies) in assets or property of any Loan Party).   (b) With respect to any property or assets of a Loan Party located with a third party, including  a bailee, datacenter or warehouse (other than Excluded Locations), Loan Parties shall cause such third party to execute  and deliver a Collateral Access Agreement for such location, including an acknowledgment from each of the third  parties that it is holding or will hold such property for Lender’s benefit.  Loan Parties shall deliver to Lender each  warehouse receipt, where negotiable, covering any such property.  (c) With respect to any property or assets of a Loan Party located on leased premises (other  than Excluded Locations), Loan Parties shall cause such third party to execute and deliver a Collateral Access  Agreement for such location.  6.13 Further Assurances.    

 

    18    (a) Execute any further instruments and take further action as Lender reasonably requests to  perfect or continue Lender’s Lien in the Collateral or to effect the purposes of this Agreement and the other Loan  Documents.  (b) Deliver to Lender, within five 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 any Loan Party’s  business or otherwise could reasonably be expected to have a Material Adverse Effect.  6.14 Use of Proceeds.  Use the proceeds of (a) a portion of the Term A Loan to repay the Indebtedness  and other obligations owed by Borrowers to Oxford Finance, LLC and to fund payment of the fees, costs and expenses  associated with the closing of the transactions contemplated hereunder and (b) the remaining portion of the Term A  Loan and the other Term Loans advanced after the Closing Date for general working capital purposes to the extent  consistent with the terms of the Loan Documents and applicable law, and, in each case, not for personal, family,  household or agricultural purposes.  6.15 Post-Closing Covenant.  On or before June 30, 2021, deliver to Lender the following documents  and other evidence, each in form and substance satisfactory to Lender:  (a) evidence of the dissolution of Pulmonx International Development, a Cayman Islands  company, and Pulmonx Global B.V., a limited company (besloten vennootschap) organized under the laws of the  Netherlands; and   (b) the Swiss Share Pledge Documents, duly executed by all parties thereto.  7. NEGATIVE COVENANTS  No Loan Party shall, or shall cause or permit any of its Subsidiaries to, do any of the following:  7.1 Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively,  “Transfer”) all or any part of its business or property, except for Permitted Transfers.  7.2 Changes in Business, Management, Ownership, or Organization.  (a) Engage in any business  other than the businesses currently engaged in by such Person, as applicable, or reasonably related thereto; (b) cease  doing business, or liquidate or dissolve (except as provided in Section 6.15(d) and that a Subsidiary may liquidate or  dissolve so long as such Subsidiary does not have any liabilities at the time of such liquidation or dissolution and,  simultaneously with such liquidation or dissolution, all of its assets are transferred to a Borrower or another Loan  Party that is a Domestic Subsidiary or, if such Subsidiary is a Foreign Subsidiary, another Loan Party that is a Foreign  Subsidiary); (c) fail to provide notice to Lender of any Key Person departing from or ceasing to be employed by  Borrower Representative within five days after departure from Borrower Representative; (d) permit or suffer a Change  in Control; or (e) without at least 30 days prior written notice to Lender (i) change its jurisdiction of organization, (ii)  change its organizational structure or type, (iii) change its legal name, or (iv) change its organizational number (if any)  assigned by its jurisdiction of organization.    7.3 Mergers or Acquisitions.  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 or property of another Person (including by the  creation or formation of any Subsidiary, except to the extent in compliance with Section 6.11) or enter into any  agreement to do any of the same, unless such transaction is a Permitted Investment, provided that, so long as no Event  of Default is occurring prior thereto or arises as a result therefrom, a Subsidiary may merge or consolidate into another  Subsidiary that is a Loan Party or into a Borrower.  7.4 Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, other than Permitted  Indebtedness.  7.5 Encumbrance.  (a) 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 (b) permit any Collateral not to be subject to the first priority security interest granted  

 

    19    herein, except for Permitted Liens that are permitted by the terms of this Agreement to have priority over the security  interest granted to Lender hereunder.  7.6 Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the  terms of Section 6.6.  7.7 Distributions; Investments.  (a) Pay any dividends (other than dividends payable solely in capital  stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock (other than (i)  repurchases (A) 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 $100,000 in the aggregate per fiscal year (which amount may be increased to an amount not to exceed $500,000  in any fiscal year by the amount of cash proceeds from the sale of capital stock of Borrower Representative to  employees, directors, officers, managers or consultants of Borrower Representative or any of its Subsidiaries that  occurs after the Closing Date)) or (B) after an initial public offering of Borrower Representative’s common stock the  conversion of any other convertible securities into other securities pursuant to the terms of such convertible securities  as long as the conversion does not involve any payment of cash, and (ii) the distribution of equity securities to former  or current employees, officers, consultants or directors pursuant to the exercise of employee stock options approved  by the Board) or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its  Subsidiaries to do so.    7.8 Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material  transaction with any Affiliate of a Loan Party, except for (a) transactions that are in the Ordinary Course of Business  and on fair and reasonable terms that are no less favorable to such Person than would be obtained in an arm’s length  transaction with a non-affiliated Person, (b) bona-fide rounds of Subordinated Debt or equity financing by investors  in Borrower Representative for capital raising purposes, (c) reasonable and customary director, officer and employee  compensation and other customary benefits including retirement, health, stock option and other benefit plans and  indemnification arrangements approved by Borrower Representative’s Board, and (d) transactions among Borrower  Representative and its Subsidiaries specifically permitted under the Agreement.  7.9 [Reserved]  7.10 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 Credit Extension 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 violation could  reasonably be expected to have a Material Adverse Effect, 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 a Loan Party or any of its Subsidiaries, including any  liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.  7.11 Compliance with Anti-Terrorism Laws. Lender hereby notifies each Loan Party and each of its  Subsidiaries that pursuant to the requirements of Anti-Terrorism Laws, and Lender’s policies and practices, Lender is  required to obtain, verify and record certain information and documentation that identifies each Loan Party and each  of its Subsidiaries and their principals, which information includes the name and address of each Loan Party and each  of its Subsidiaries and their principals and such other information that will allow Lender to identify such party in  accordance with Anti-Terrorism Laws. Neither any Loan Party nor any of their Subsidiaries shall, nor shall any Loan  Party or any of their 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. Each Loan Party and each of its  Subsidiaries shall immediately notify Lender if such Loan Party or such Subsidiary has knowledge that any Loan  Party, or any Subsidiary or Affiliate of such Loan Party, is listed on the OFAC Lists or (a) is convicted on, (b) pleads  nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or  predicate crimes to money laundering.  Neither any Loan Party nor any of their Subsidiaries shall, nor shall any Loan  Party or any of their 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  

 

    20    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.  7.12 Subsidiaries Cash.   (a) Permit the aggregate amount of cash and Cash Equivalents at Foreign Subsidiaries  (excluding, for purposes of this Section 7.12(a), Pulmonx Switzerland) of any Loan Party to exceed the lesser of (a)  Five Million Dollars ($5,000,000.00) (or its equivalent in other currencies), and (b) fifteen percent (15%) of the  aggregate amount of cash and Cash Equivalents maintained by the Loan Parties and their Subsidiaries.   (b) In no event shall any Loan Party (other than any Foreign Subsidiary) hold cash in any  jurisdiction other than the United States or Canada  7.13 Litigation Settlement.  With respect to any litigation, claim or other legal action for which any  Loan Party has provided Lender with an aggregate claim amount or expected liability amount on the Perfection  Certificate or pursuant to Section 6.2, such Loan Party shall not enter into a settlement agreement with respect to such  litigation, claim or other legal action in which such Loan Party’s payment liability exceeds (a) 30% above such  aggregate claim amount or expected liability amount or (b) such greater amount as may be disclosed by a Loan Party  to Lender and agreed upon in writing by Lender.  7.14 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except as  permitted pursuant to the terms of the applicable Subordination 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, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the  subordination thereof to the Obligations.  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.  Any Loan Party fails to (a) make any payment of principal or interest on any  Credit Extension when due, or (b) pay any other Obligations within three Business Days after such Obligations are  due and payable (which three Business Day cure period shall not apply to payments due on the Term Loan Maturity  Date or the date of acceleration pursuant to Section 9.1(a)).  During the cure period, the failure to make or pay any  payment specified under clause (b) above is not an Event of Default (but no Credit Extension will be made during the  cure period).  8.2 Covenant Default.    (a) A Loan Party fails or neglects to perform any obligation in Section 6.2, 6.4, 6.5, 6.6, 6.7,  6.9, 6.10, 6.11, 6.13, 6.14 or 6.15, or violates any covenant in Section 7; or  (b) A Loan Party 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 10 days after the occurrence thereof; provided, however, that if the default  cannot by its nature be cured within the 10-day period or cannot after diligent attempts by Borrowers be cured within  such 10-day period, and such default is likely to be cured within a reasonable time, then Borrowers shall have an  additional reasonable period (which shall not, in any case, exceed 30 days) to attempt to cure such default, and within  such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no  Credit Extensions will be made.  8.3 Material Adverse Effect.  The occurrence of a Material Adverse Effect.  

 

    21    8.4 Attachment; Levy; Restraint on Business.    (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of a  Loan Party or of any of its Subsidiaries, or (ii) a notice of Lien or levy is filed against the assets of any Loan Party or  any of its Subsidiaries by any Governmental Authority, and the same under clauses (i) and (ii) above are not, within  10 days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise);  provided, however, no Credit Extensions shall be made during any 10 day cure period; or   (b) (i) any material portion of the assets of a Loan Party or any of its Subsidiaries is attached,  seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents  a Loan Party or any of its Subsidiaries from conducting all or any material part of its business.   8.5 Insolvency.  (a) A Loan Party or any of its Subsidiaries, as a whole, is unable to pay its debts  (including trade debts) as they become due, the realizable value of Loan Parties’ assets is less than the aggregate sum  of its liabilities, or Loan Parties otherwise become insolvent; (b) a Loan Party or any of its Subsidiaries begins an  Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against a Loan Party or any of its Subsidiaries and  is not dismissed or stayed within 45 days (but no Credit Extensions shall be made while any of the conditions described  in clause (a) above exists and/or until any Insolvency Proceeding is dismissed).  8.6 Other Agreements.  There is, under any agreement to which a Loan Party or any of its Subsidiaries  is a party with a third party or parties, any default resulting in a right by such third party or parties, whether or not  exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of  $1,000,000 (or its equivalent in other currencies) or that could reasonably be expected to result in liability to a Loan  Party or any of its Subsidiaries in an aggregate amount in excess of $1,000,000 (or its equivalent in other currencies).  8.7 Judgments; Penalties.  One or more fines, penalties or final judgments, orders or decrees for the  payment of money in an amount, individually or in the aggregate, of at least $1,000,000 (or its equivalent in other  currencies) shall be rendered against a Loan Party or any of its Subsidiaries by any Governmental Authority (in each  of the foregoing circumstances not covered by independent third-party insurance as to which liability has been  accepted by such insurance carrier in writing), and the same are not, within 10 days after the entry, assessment or  issuance thereof, discharged, or after execution thereof, stayed or bonded pending appeal, or such judgments are not  discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the  discharge, stay, or bonding of such fine, penalty, judgment, order or decree).  8.8 Misrepresentations.  Any Loan Party or any Person acting for such Loan Party makes any  representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing  delivered to Lender or to induce Lender to enter this Agreement or any Loan Document, and such representation,  warranty, or other statement is incorrect in any material respect when made.  8.9 Guaranty. (a) Except for any Guaranty permitted to be and in fact released or terminated by Lender  pursuant to this Agreement or the other Loan Documents, 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 Sections 8.4, 8.5, 8.7 or 8.8 occurs with respect to any Guarantor; or (d) the liquidation,  winding up, or termination of existence of any Guarantor.  8.10 Governmental Approval.  Any Governmental Approval shall have been revoked, rescinded,  suspended, modified in an adverse manner or not renewed for a full term, and such revocation, rescission, suspension,  modification or non-renewal has, or could reasonably be expected to have, a Material Adverse Effect.  9. LENDER’S RIGHTS AND REMEDIES  9.1 Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default,  Lender may, without notice or demand, do any or all of the following:  (a) By notice to Borrower Representative, declare all Obligations immediately due and  payable (but if an Event of Default described in Section 8.5 occurs, all Obligations are immediately due and payable  without notice or any other action by Lender);  

 

    22    (b) By notice to Borrower Representative, stop advancing money or extending credit for any  Borrower’s benefit under this Agreement or under any other agreement between any Loan Party and Lender (but if an  Event of Default described in Section 8.5 occurs, all obligations, if any, of Lender to advance money or extend credit  for any Borrower’s benefit under this Agreement or under any other agreement among Borrowers and Lender shall be  immediately terminated without any action by Lender);  (c) verify the amount of, demand payment of and performance under, and collect any Accounts  and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and  in any order that Lender considers advisable, and notify any Person owing a Loan Party money of Lender’s security  interest in such funds;  (d) make any payments and do any acts it considers necessary or desirable to protect the  Collateral and/or its security interest in the Collateral.  Loan Parties shall assemble the Collateral if Lender requests  and make it available as Lender designates.  Lender 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.  Each Loan Party grants Lender a license  to enter and occupy any of its premises, without charge, to exercise any of Lender’s rights or remedies;  (e) apply to the Obligations any amount held by Lender owing to or for the credit or the  account of a Loan Party;  (f) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale,  and sell the Collateral.  Lender is hereby granted a non-exclusive, royalty-free license or other right to use, without  charge, a Loan Party’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names,  Trademarks, 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 Lender’s exercise of its rights under this  Section 9.1, a Loan Party’s rights under all licenses and all franchise agreements inure to Lender’s benefit;  (g) deliver a notice of exclusive control, any entitlement order, or other directions or  instructions pursuant to any Account Control Agreement or similar agreements providing control of any Collateral;  (h) demand and receive possession of any Loan Party’s Books; and  (i) exercise all rights and remedies available to 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).  9.2 Power of Attorney.  Each Loan Party hereby irrevocably appoints Lender (and any of Lender’s  partners, managers, officers, agents or employees) as its lawful attorney-in-fact, with full power of substitution,  exercisable upon the occurrence and during the continuance of an Event of Default, to:  (a) send requests for  verification of Accounts or notify Account Debtors of Lender’s security interest and Liens in the Collateral; (b)  endorse such Loan Party’s name on any checks or other forms of payment or security; (c) sign such Loan Party’s name  on any invoice or bill of lading for any Account or drafts against Account Debtors schedules and assignments of  Accounts, verifications of Accounts, and notices to Account Debtors; (d) settle and adjust disputes and claims about  the Accounts directly with Account Debtors, for amounts and on terms Lender determines reasonable; (e) make, settle,  and adjust all claims under such Loan Party’s insurance policies; (f) 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; (g) transfer the Collateral into the name of Lender or a third party  as the Code permits; and (h) dispose of the Collateral.  Each Loan Party further hereby appoints Lender (and any of  Lender’s partners, managers, officers, agents or employees) as its lawful attorney-in-fact, with full power of  substitution, regardless of whether or not an Event of Default has occurred or is continuing to: (x) sign such Loan  Party’s name on any documents and other Security Instruments necessary to perfect or continue the perfection of, or  maintain the priority of, Lender’s security interest in the Collateral; (y) execute and do all such assurances, acts and  things which such Loan Party is required, but fails to do under the covenants and provisions of the Loan Documents;  and (z) take any and all such actions as Lender may reasonably determine to be necessary or advisable for the purpose  of maintaining, preserving or protecting the Collateral or any of the rights, remedies, powers or privileges of Lender  under this Agreement or the other Loan Documents.  Lender’s foregoing appointment as each Loan Party’s attorney  

 

    23    in fact, and all of Lender’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than  contingent indemnification obligations as to which no claim has been asserted or is known to exist and any other  obligations which, by their terms, are to survive the termination of this Agreement or any other Loan Document) have  been fully repaid, in cash, and otherwise fully performed and Lender is under no further obligation to make Credit  Extensions hereunder.    9.3 Protective Payments.  If a Loan Party fails 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 such Loan Party is obligated to pay under this  Agreement or any other Loan Document or which may be required to preserve the Collateral, Lender may obtain such  insurance or make such payment, and all amounts so paid by Lender are Lender Expenses and immediately due and  payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Lender  will make reasonable efforts to provide Borrower Representative with notice of Lender obtaining such insurance at  the time it is obtained or within a reasonable time thereafter.  No payments by Lender are deemed an agreement to  make similar payments in the future or Lender’s waiver of any Event of Default.  9.4 Application of Payments and Proceeds Upon Default.  If an Event of Default has occurred and is  continuing, Lender shall have the right to apply in any order any funds in its possession, whether payments, proceeds  realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the  Obligations.  Lender shall pay any surplus to Loan Parties by credit to the Deposit Account designated by Loan Parties  or to other Persons legally entitled thereto.  Loan Parties shall remain liable to Lender for any deficiency.  If Lender,  directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of  Collateral, Lender shall have the option, exercisable at any time, of either reducing the Obligations by the principal  amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Lender of cash  therefor.  9.5 Lender’s Liability for Collateral.  So long as Lender complies with reasonable secured lender  practices regarding the safekeeping of the Collateral in the possession or under the control of Lender, Lender 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.  Loan Parties bear all risk of loss, damage or destruction of the Collateral.  9.6 No Waiver; Remedies Cumulative.  Lender’s failure, at any time or times, to require strict  performance by each Loan Party of any provision of this Agreement or any other Loan Document shall not waive,  affect, or diminish any right of Lender thereafter to demand strict performance and compliance herewith or therewith.   No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for  the specific instance and purpose for which it is given.  Lender’s rights and remedies under this Agreement and the  other Loan Documents are cumulative.  Lender has all rights and remedies provided under the Code, by law, or in  equity.  Lender’s exercise of one right or remedy is not an election and shall not preclude Lender from exercising any  other remedy under this Agreement or other remedy available at law or in equity, and Lender’s waiver of any Event  of Default is not a continuing waiver.  Lender’s delay in exercising any remedy is not a waiver, election, or  acquiescence.    9.7 Demand Waiver.  Each Loan Party waives 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 or chattel paper.  10. NOTICES  All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement  or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered:  (a) upon the earlier of actual receipt and three Business Days after deposit in the U.S. mail, first class, registered or  certified mail return receipt requested, with proper postage prepaid; (b) upon confirmation of receipt, when sent by  electronic mail transmission; (c) one 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, or email address indicated below.  Lender and Loan Parties may change their  respective mailing or electronic mail addresses by giving the other party written notice thereof in accordance with the  terms of this Section 10.  

 

    24    If to any Loan Party: Pulmonx Corporation  700 Chesapeake Drive  Redwood City, CA 94063  e-mail: dsung@pulmonx.com   Attention: Derrick Sung, Ph.D.  If to Lender, for any  borrowing request:  Canadian Imperial Bank of Commerce  Credit Processing Services  595 Bay Street, 5th floor  Toronto, Ontario M5G 2C2  e-mail: gregory.mcdonald@cibc.com  Attention: Gregory McDonald  For all other notices:    CIBC Innovation Banking  40 King S. West, Suite 5702  Toronto, Ontario  M5H 3Y2  e-mail: Mark.McQueen@cibc.com  Attention: Mark McQueen, President and  Executive Managing Director  With a copy, not  constituting notice, to:   Dentons US LLP  601 South Figueroa Street  Suite 2500  Los Angeles, CA90017-5704  e-mail:  richard.garvan@dentons.com  Attention:  Richard Garvan     11. CHOICE OF LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE  Except as otherwise expressly provided in any of the Loan Documents, this Agreement and the other Loan  Documents shall be governed by, and construed in accordance with, the laws of the State of New York.  Each Loan  Party hereby submits to the exclusive jurisdiction of the State and Federal courts in New York County, City of New  York, New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Lender  from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security  for the Obligations, or to enforce a judgment or other court order in favor of Lender.  Each Loan Party expressly  submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each  Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or  forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate  by such court.  Each Loan Party hereby waives personal service of the summons, complaints, and other process issued  in such action or suit and agrees that service of such summons, complaints, and other process may be made by  registered or certified mail addressed to such Loan Party at the address set forth in, or subsequently provided by such  Loan Party in accordance with, Section 10 and that service so made shall be deemed completed upon the earlier to  occur of Loan Parties’ actual receipt thereof and three days after deposit in the U.S. mails, proper postage prepaid.  Each Loan Party hereby expressly waives any claim to assert that the laws of any other jurisdiction govern this  Agreement.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH LOAN PARTY AND  LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY  CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL  OTHER CLAIMS.  THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER  INTO THIS AGREEMENT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN  THIS AGREEMENT OR ANYWHERE ELSE, EACH LOAN PARTY AGREES THAT IT SHALL NOT  SEEK FROM LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS),  ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.  EACH PARTY HAS  REVIEWED THIS WAIVER WITH ITS COUNSEL.  

 

    25    12. GUARANTY  12.1 Guaranty.  Each Guarantor hereby unconditionally guarantees, as a primary obligor and not merely  as a surety, jointly and severally with each other Guarantor when and as due, whether at maturity, by acceleration, by  notice of prepayment or otherwise, the due and punctual performance of all Obligations.  Each payment made by each  Guarantor pursuant to this Section 12 shall be made as provided in Section 2.6.  12.2 Waivers.  Each Guarantor hereby absolutely, unconditionally and irrevocably waives (a)  promptness, diligence, notice of acceptance, notice of presentment of payment and any other notice hereunder, (b)  demand of payment, protest, notice of dishonor or nonpayment, notice of the present and future amount of the  Obligations and any other notice with respect to the Obligations, (c) any requirement that Lender protect, secure,  perfect or insure any security interest or Lien or any property subject thereto or exhaust any right or take any action  against any other Guarantor, or any Person or any Collateral, (d) any other action, event or precondition to the  enforcement hereof or the performance by each such Guarantor of the Obligations, (e) all suretyship defenses and (f)  any defense arising by any lack of capacity or authority or any other defense of any Borrower or any other Guarantor  or any notice, demand or defense by reason of cessation from any cause of Obligations other than payment and  performance in full of the Obligations and any defense that any other guarantee or security was or was to be obtained  by Lender.  12.3 No Defense.  No invalidity, irregularity, voidableness, voidness or unenforceability of this  Agreement or any other Loan Document or any other agreement or instrument relating thereto, or of all or any part of  the Obligations or of any collateral security therefor shall affect, impair or be a defense hereunder.  12.4 Guaranty of Payment.  The Guaranty hereunder is one of payment and performance, not collection,  and the obligations of each Guarantor hereunder are independent of the obligations of any Borrower, any other  Guarantor or any other Person, and a separate action or actions may be brought and prosecuted against any Guarantor  to enforce the terms and conditions of this Section 12, irrespective of whether any action is brought against any  Borrower or any other Guarantor or other Persons or whether any Borrower, any other Guarantor or other Persons are  joined in any such action or actions.  Each Guarantor waives any right to require that any resort be had by Lender to  any security held for payment of the any Obligations or to any balance of any Deposit Account or credit on the books  of Lender in favor of any Borrower, any other Guarantor or any other Person.  No election to proceed in one form of  action or proceedings, or against any Person, or on any Obligations, shall constitute a waiver of Lender’s right to  proceed in any other form of action or proceeding or against any other Person unless Lender has expressed any such  right in writing.  Without limiting the generality of the foregoing, no action or proceeding by Lender against any  Borrower, any other Guarantor or any other Person under any document evidencing or securing indebtedness of any  Borrower or any other Guarantor shall diminish the liability of any Guarantor hereunder, except to the extent Lender  receives actual payment on account of the Obligations by such action or proceeding, notwithstanding the effect of any  such election, action or proceeding upon the right of subrogation of any Guarantor in respect of any Borrower, any  other Guarantor or any other Person.  12.5 Indemnity.  As an original and independent obligation under this Agreement, each Guarantor shall  (a) indemnify Lender and keep Lender indemnified against all costs, losses, expenses and liabilities of whatever kind  resulting from the failure by any party to make due and punctual payment of any of the Obligations or resulting from  any of the Obligations being or becoming void, voidable, unenforceable or ineffective against any Borrower (including  all legal and other costs, charges and expenses incurred by Lender, or any of them in connection with preserving or  enforcing, or attempting to preserve or enforce, its rights under this Agreement and the other Loan Documents), and  (b) pay on demand the amount of such costs, losses, expenses and liabilities whether or not Lender have attempted to  enforce any rights against any Borrower or any other Person or otherwise.  12.6 Liabilities Absolute.  The liability of each Guarantor hereunder shall be absolute, unlimited and  unconditional and shall not be subject to any reduction, limitation, impairment, discharge or termination for any  reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any  claim, defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity or  unenforceability of the Obligations, any other Obligations or otherwise.  Without limiting the generality of the  foregoing, the obligations of each Guarantor shall not be discharged or impaired, released, limited or otherwise  affected by:  

 

    26    (a) any change in the manner, place or terms of payment or performance, and/or any change  or extension of the time of payment or performance of, release, renewal or alteration of, or any new agreements relating  to any Obligations, any security therefor, or any liability incurred directly or indirectly in respect thereof, or any  rescission of, or amendment, waiver or other modification of, or any consent to departure from, this Agreement or any  other Loan Document, including any increase in the Obligations resulting from the extension of additional credit to  any Borrower or otherwise;  (b) any sale, exchange, release, surrender, loss, abandonment, realization upon any property  by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, all or any of the Obligations, or  any offset there against, or failure to perfect, or continue the perfection of, any Lien in any such property, or delay in  the perfection of any such Lien, or any amendment or waiver of or consent to departure from any other guaranty for  all or any of the Obligations;  (c) the failure of Lender to assert any claim or demand or to enforce any right or remedy  against any Borrower or any Guarantor or any other Person under the provisions of this Agreement or any other Loan  Document or any other document or instrument executed and delivered in connection herewith or therewith;  (d) any settlement or compromise of any Obligation, any security therefor or any liability  (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and any subordination  of the payment of all or any part thereof to the payment of obligation (whether due or not) of any Borrower or any  Guarantor to creditors of any Borrower or any Guarantor other than any Borrower or any Guarantor;   (e)  manner of application of Collateral, or proceeds thereof, to all or any of the Obligations,  or any manner of sale or other disposition of any Collateral for all or any of the Obligations or any other assets of any  Borrower or any Guarantor; and  (f) any other agreements or circumstance of any nature whatsoever that may or might in any  manner or to any extent vary the risk of any Guarantor, or that might otherwise at law or in equity constitute a defense  available to, or a discharge of, the Guaranty hereunder and/or the obligations of any Guarantor, or a defense to, or  discharge of, any Borrower, any Guarantor or any other Person or party hereto or the Obligations or otherwise with  respect to the other financial accommodations to any Borrower pursuant to this Agreement or the other Loan  Documents.  12.7 Waiver of Notice.  Lender shall have the right to do any of the above without notice to or the consent  of any Guarantor and each Guarantor expressly waives any right to notice of, consent to, knowledge of and  participation in any agreements relating to any of the above or any other present or future event relating to the  Obligations whether under this Agreement or otherwise or any right to challenge or question any of the above and  waives any defenses of such Guarantor that might arise as a result of such actions.  12.8 Lender’s Discretion.  Lender may at any time and from time to time (whether prior to or after the  revocation or termination of this Agreement) without the consent of, or notice to, any Guarantor, and without incurring  responsibility to any Guarantor or impairing or releasing the Obligations, apply any sums by whomsoever paid or  howsoever realized to any Obligations regardless of what Obligations remain unpaid.  12.9 Reinstatement.  (a) The provisions of this Section 12 shall continue to be effective or be reinstated, as the case  may be, if claim is ever made upon Lender for repayment or recovery of any amount or amounts received by it in  payment or on account of any of the Obligations and it repays all or part of said amount for any reason whatsoever,  including by reason of any judgment, decree or order of any court or administrative body having jurisdiction over such  Person or the respective property of each, or any settlement or compromise of any claim effected by such Person with  any such claimant (including any Borrower or any other Loan Party); and in such event each Guarantor hereby agrees  that any such judgment, decree, order, settlement or compromise or other circumstances shall be binding upon such  Guarantor, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing any  Obligation, and such Guarantor shall be and remain liable to Lender for the amount so repaid or recovered to the same  extent as if such amount had never originally been received by such Person(s).  

 

    27    (b) Lender shall not be required to marshal any assets in favor of any Guarantor, or against or  in payment of any Obligations.  (c) No Guarantor shall be not entitled to claim against any present or future security held by  Lender from any Person for the Obligations in priority to or equally with any claim of Lender, or assert any claim for  any liability of any Borrower or any other Guarantor to such Guarantor, in priority to or equally with claims of Lender  for the Obligations, and each Guarantor shall not be entitled to compete with Lender with respect to, or to advance  any equal or prior claim to any security held by Lender for the Obligations.  (d) If any Borrower or any Guarantor makes any payment to Lender, which payment is wholly  or partly subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to any  Person under any federal or provincial statute or at common law or under equitable principles, then to the extent of  such payment, the Obligation intended to be paid shall be revived and continued in full force and effect as if the  payment had not been made, and the resulting revived Obligation shall continue to be guaranteed, uninterrupted, by  such Guarantor hereunder.  (e) All present and future monies payable by any Borrower to each Guarantor, whether arising  out of a right of subrogation or otherwise, are assigned to Lender for its benefit as security for such Guarantor’s  liability to Lender hereunder and are postponed and subordinated to Lender’s prior right to payment in full of  Obligations.  All such monies received by any Guarantor from any Borrower or any other Guarantor shall be held by  such Guarantor as agent and trustee for Lender.  This assignment, postponement and subordination shall only terminate  when the Obligations are paid in full in cash and this Agreement is irrevocably terminated.    (f) Each Borrower and each Guarantor acknowledges this assignment, postponement and  subordination and, except as otherwise set forth herein, agrees to make no payments to any Guarantor without the  prior written consent of Lender.  Each Borrower and each Guarantor agree to give full effect to the provisions hereof.  12.10 Action Upon Event of Default.  Upon the occurrence and during the continuance of any Event of  Default, Lender may, without notice to or demand upon any Borrower, any Guarantor or any other Person, declare  any obligations of any Guarantor under this Section 12 immediately due and payable, and shall be entitled to enforce  the obligations of such Guarantor under this Section 12.  Upon such declaration by Lender, Lender is hereby authorized  at any time and from time to time to set off and apply any and all deposits (general or special, time or demand,  provisions or final) at any time held and other indebtedness at any time owing by Lender to or for the credit or the  account of such Guarantor against any and all of the obligations of such Guarantor now or hereafter existing hereunder,  whether or not Lender shall have made any demand hereunder against any Borrower or any other Person and although  such obligations may be contingent and unmatured.  The rights of Lender hereunder are in addition to other rights and  remedies (including other rights of set-off) which Lender may have.  Upon such declaration by Lender, with respect  to any claims (other than those claims referred to in Section 12.9) of such Guarantor against any Borrower or any  other Guarantors (for purposes of this Section 12.10, the “Guarantor Claims”), Lender shall have the full right on  the part of Lender in its own name or in the name of such Guarantor to collect and enforce such Guarantor Claims by  legal action, proof of debt in bankruptcy or other liquidation proceedings, vote in any proceeding for the arrangement  of debts at any time proposed, or otherwise, Lender and each of its officers being hereby irrevocably constituted  attorneys-in-fact for such Guarantor for the purpose of such enforcement and for the purpose of endorsing in the name  of such Guarantor any instrument for the payment of money.  Each Guarantor will receive as trustee for Lender and  will pay to Lender forthwith upon receipt thereof any amounts which such Guarantor may receive from any Borrower  or any other Guarantor on account of the Guarantor Claims.  Each Guarantor agrees that at no time hereafter will any  of the Guarantor Claims be represented by any notes or other negotiable instruments or writings, except and in such  event they shall either be made payable to Lender, or if payable to such Guarantor, shall forthwith be endorsed by  such Guarantor to Lender.  Each Guarantor agrees that no payment on account of the Guarantor Claims or any security  interest therein shall be created, received, accepted or retained during the continuance of any Event of Default nor  shall any financing statement be filed with respect thereto by such Guarantor.  12.11 Statute of Limitations.  Any acknowledgment or new promise, whether by payment of principal  or interest or otherwise and whether by any Borrower or any other Loan Party or others (including Lender) with respect  to any of the Obligations shall, if the statute of limitations in favor of a Loan Party against Lender shall have  commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall  have expired, prevent the operation of such statute of limitations.  

 

    28    12.12 Interest.  All amounts due, owing and unpaid from time to time by any Guarantor under this Section  12, to the extent such amounts do not otherwise include interest accruing on the outstanding Obligations to the date  all such amounts are actually paid by such Loan Party, shall bear interest at the interest rate per annum then chargeable  with respect to Term C Loan.  12.13 Guarantor’s Investigation.  Each Guarantor acknowledges receipt of a copy of each of this  Agreement and the other Loan Documents.  Each Guarantor has made an independent investigation of each Borrower  and each other Loan Party and of the financial condition of each Borrower and each other Loan Party.  Lender has not  made and Lender does not make any representations or warranties as to the income, expense, operation, finances or  any other matter or thing affecting any Borrower or any other Loan Party, nor has Lender made any representations  or warranties as to the amount or nature of the Obligations to which this Section 12 applies as specifically herein set  forth, nor has Lender or any officer, agent or employee of Lender or any representative thereof, made any other oral  representations, agreements or commitments of any kind or nature, and each Guarantor hereby expressly  acknowledges that no such representations or warranties have been made and each Loan Party expressly disclaims  reliance on any such representations or warranties.  12.14 Limitation of Liability.  Each Guarantor, and, by its acceptance of the Guaranty hereunder, Lender  hereby confirm that it is the intention of all such Persons that the Guaranty hereunder and the Obligations of such  Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the  UFTA, the UFCA or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law to the  extent applicable to the Guaranty hereunder and the Obligations of each Guarantor hereunder. To effectuate the  foregoing intention, Lender, by its acceptance of the Guaranty hereunder, and each Guarantor hereby irrevocably  agree that the Obligations of Guarantor under the Guaranty hereunder at any time shall be limited to the maximum  amount as will result in the Obligations of Guarantor under the Guaranty hereunder not constituting a fraudulent  transfer or conveyance.  12.15 Subrogation, Contribution, Etc.    (a) To the extent that any Guarantor shall, under the Guaranty hereunder, make a payment  (each, a “Guarantor’s Payment”) of a portion of the Obligations, then, without limiting its rights of subrogation  against any Borrower, such Guarantor shall be entitled to contribution and indemnification from, and be reimbursed  by, each of Borrowers and the other Guarantors (collectively, the “Contributing Parties”) in an amount, for each  such Contributing Party, equal to a fraction of such Guarantor’s Payment, the numerator of which fraction is such  Contributing Party’s Allocable Amount (as defined below) and the denominator of which is the sum of the Allocable  Amounts of all of the Contributing Parties.  (b) As of any date of determination, the “Allocable Amount” of each Contributing Party shall  be equal to the maximum amount of liability which could be asserted against such Contributing Party hereunder with  respect to the applicable Guarantor’s Payment without (i) rendering such Contributing Party “insolvent” within the  meaning of Section 101(31) of the Bankruptcy Code or Section 2 of either the Uniform Fraudulent Transfer Act (the  “UFTA”) or the Uniform Fraudulent Conveyance Act (the “UFCA”), (ii) leaving such Contributing Party with  unreasonably small capital, within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or  Section 5 of the UFCA, or (iii) leaving such Contributing Party unable to pay its debts as they become due within the  meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or Section 6 of the UFCA.  The provisions  of this Section 12.15 shall in no respect limit the obligations and liabilities of each Guarantor to Lender, and each  Guarantor shall remain liable to Lender for the full amount guaranteed by such Guarantor hereunder.  (c) Notwithstanding anything to the contrary in this Section 12.15 or otherwise, each  Guarantor expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of  any other claim which such Guarantor may now or hereafter have against Borrowers or the other Guarantors or any  other Person directly or contingently liable for the Obligations, or against or with respect to the property or any  Borrower or any other Guarantor (including any property which is Collateral for the Obligations), arising from the  existence or performance of this Agreement, until termination of this Agreement and repayment in full of the  Obligations.  12.16 Termination.   The provisions of this Section 12 shall remain in effect until the indefeasible  payment in full in cash of all Obligations and irrevocable termination of this Agreement.  

 

    29    13. GENERAL PROVISIONS  13.1 Termination Prior to Term Loan Maturity Date; Survival.  All covenants, representations and  warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and  all Obligations (other than contingent indemnification obligations as to which no claim has been asserted or is known  to exist and any other obligations which, by their terms, are to survive the termination of this Agreement or any other  Loan Document) have been satisfied in full, in cash and Lender no longer has any obligation to extend credit to a  Borrower.  So long as Loan Parties have satisfied the Obligations (other than contingent indemnification obligations  as to which no claim has been asserted or is known to exist and any other obligations which, by their terms, are to  survive the termination of this Agreement or any other Loan Document), this Agreement may be terminated prior to  the Term Loan Maturity Date by Borrowers, effective three Business Days after written notice of termination is given  to Lender.  Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination  shall continue to survive notwithstanding this Agreement’s termination.  13.2 Successors and Assigns.  This Agreement binds and is for the benefit of the successors and  permitted assigns of each party.  No Loan Party may assign this Agreement or any rights or obligations under it without  Lender’s prior written consent (which may be granted or withheld in Lender’s discretion).  Lender has the right,  without the consent of or notice to Loan Parties, to sell, transfer, assign, negotiate, or grant participation in all or any  part of, or any interest in, Lender’s obligations, rights, and benefits under this Agreement and the other Loan  Documents. If Lender sells or grants a participation, it shall maintain a register on which it enters the name and address  of each participant and the principal amounts (and stated interest) of each participant’s interest in the Term Loans or  other obligations under the Loan Documents (the “Participant Register”). Lender shall not have any obligation to  disclose all or any portion of the Participant Register (including the identity of any participant or any information  relating to a participant’s interest in any commitments, loans or its other obligations under any Loan Document) to  any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other  obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in  the Participant Register shall be conclusive absent manifest error, and Lender shall treat each Person whose name is  recorded in the Participant Register as the owner of such participation for all purposes of this Agreement  notwithstanding any notice to the contrary.  Notwithstanding the foregoing, so long as no Event of Default shall have  occurred and is continuing, Lender shall not assign its interest in the Loan Documents to any Person who is a  Disqualified Institution. Each Borrower agrees that each participant shall be entitled to the benefits of Section 2.7  (subject to the requirements and limitations therein, including the requirements under Sections 2.7(e) and 2.7(f) (it  being understood that the documentation required under Section 2.7(e) shall be delivered to the participating Lender  and the information and documentation required under Section 2.7(f) will be delivered to Borrower Representative))  to the same extent as if it were Lender and had acquired its interest by assignment; provided that such participant shall  not be entitled to receive any greater payment under Section 2.7 with respect to any participation than its participating  Lender would have been entitled to receive  13.3 Indemnification.  Each Loan Party agrees to indemnify, defend and hold Lender and its directors,  officers, employees, agents, attorneys, or any other Person affiliated with or representing Lender (each, an  “Indemnified Person”) harmless against:  (a) all obligations, demands, claims, and liabilities (including such claims,  costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort) (collectively,  “Claims”) claimed or asserted by any other party in connection with, relating to, following from or arising from, out  of or under the transactions contemplated by the Loan Documents; and (b) all losses, liabilities, costs or expenses  (including Lender Expenses) in any way suffered, incurred, or paid by such Indemnified Person in connection with,  relating to, following from, or arising from, out of or under the transactions among or between Lender and Loan  Parties, or any of them (including reasonable attorneys’ fees and expenses), except for Claims and/or losses to the  extent directly caused by such Indemnified Person’s gross negligence or willful misconduct.  Each Loan Party 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 reasonable 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 any Loan Party, 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 Lender) 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,  

 

    30    losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by  such Indemnified Person’s gross negligence or willful misconduct.  This Section 13.3 shall not apply with respect to  Taxes other than any taxes that represent Claims arising from any non-Tax Claim and shall survive until all statutes  of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.  13.4 Borrower Liability.  If any Person is named as, or joined to this Agreement as, a Borrower, the  following provisions shall apply: any Borrower may, acting singly, request Credit Extensions hereunder.  Each  Borrower hereby appoints the others 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 Lender to: (i) proceed against  any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.   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 all rights that it may  have at law or in equity (including any law subrogating such Borrower to the rights of Lender 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 such  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 such  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 13.4 shall be null and void.   If any payment is made to a Borrower in contravention of this Section 13.4, such Borrower shall hold such payment  in trust for Lender and such payment shall be promptly delivered to Lender for application to the Obligations, whether  matured or unmatured.   13.5 Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.  13.6 Severability of Provisions.  Each provision of this Agreement is severable from every other  provision in determining the enforceability of any provision.  13.7 Correction of Loan Documents.  Lender may correct patent errors and fill in any blanks in the  Loan Documents consistent with the agreement of the parties.  13.8 Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any  Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable  or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which  enforcement or admission is sought.  Without limiting the generality of the foregoing, no oral promise or statement,  nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an  amendment, supplement or waiver or have any other effect on any Loan Document.  Any waiver granted shall be  limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other  circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any  further waiver.  The Loan Documents represent the entire agreement about this subject matter and supersede prior  negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations  among the parties about the subject matter of the Loan Documents merge into the Loan Documents.  13.9 Counterparts; Electronic Execution of Documents.  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.  Delivery of an executed counterpart of a signature  page of any Loan Document by electronic means shall be effective as delivery of an original executed counterpart of  such Loan Document.  The words “execution,” “signed,” “signature” and words of like import in any Loan Document  shall be deemed to include electronic signatures (including in .pdf format) or the keeping of records in electronic form,  each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use  of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law,  including any state law based on the Uniform Electronic Transactions Act.  

 

    31    13.10 Confidentiality.  In handling any confidential information, Lender shall exercise the same degree  of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Lender’s  Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Lender, collectively, “Lender Entities”) or  in connection with Lender’s own financing or securitization transactions and upon the occurrence of a default, event  of default or similar occurrence with respect to such financing or securitization transaction, it being understood that  the Persons to whom such disclosure is made will be informed of the confidential nature of such information and  instructed to keep such information confidential; (b) to prospective transferees or purchasers of any interest in the  Credit Extensions (subject to an agreement containing provisions substantially the same as those of this Section 13.10);  (c) as required by law, regulation, subpoena, or other order and in connection with reporting obligations applicable to  Lender, including pursuant to the Securities Exchange Act of 1934, as amended; (d) to Lender’s regulators or as  otherwise required in connection with Lender’s examination or audit; (e) as Lender considers appropriate in exercising  remedies under the Loan Documents; and (f) to third-party service providers of Lender so long as such service  providers have executed a confidentiality agreement with Lender with terms no less restrictive than those contained  herein.  Confidential information does not include information that is either: (i) in the public domain or in Lender’s  possession when disclosed to Lender, or becomes part of the public domain (other than as a result of its disclosure by  Lender in violation of this Agreement) after disclosure to Lender; or (ii) disclosed to Lender by a third party, if Lender  does not know that the third party is prohibited from disclosing the information.  Lender Entities may use a Loan  Party’s name and logo, and include a brief description of the relationship among Loan Parties and Lender, in Lender’s  marketing materials.  Lender may use confidential information for the development of databases, reporting purposes,  and market analysis so long as such confidential information is aggregated and anonymized prior to distribution, and  Lender has ownership of the information and analysis so developed.  The provisions of this Section 13.10 shall survive  the termination of this Agreement.  13.11 Borrower Representative.  Each Borrower hereby appoints Borrower Representative to act as its  exclusive agent for all purposes under the Loan Documents (including with respect to all matters related to the  borrowing and repayment of any Credit Extension).  Each Borrower acknowledges and agrees that (a) Borrower  Representative may execute such documents on behalf of any Borrower as Borrower Representative deems  appropriate in its sole discretion and each Borrower shall be bound by and obligated by all of the terms of any such  document executed by Borrower Representative on its behalf, (b) any notice or other communication delivered by  Lender hereunder to Borrower Representative shall be deemed to have been delivered to each Borrower and (c) the  Lender shall accept (and shall be permitted to rely on) any document or agreement executed by Borrower  Representative on behalf of Borrowers (or any of them).  Each Borrower must act through the Borrower Representative  for all purposes under this Agreement and the other Loan Documents.  Notwithstanding anything contained herein to  the contrary, to the extent any provision in this Agreement requires any Borrower to interact in any manner with  Lender, such Borrower shall do so through Borrower Representative.  13.12 Captions.  The headings used in this Agreement are for convenience only and shall not affect the  interpretation of this Agreement.  13.13 Construction of Agreement.  The parties mutually acknowledge that they and their attorneys have  participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall be  construed without regard to which of the parties caused the uncertainty to exist.  13.14 Publicity; Press Releases.  Loan Parties agree that Lender may issue a press release announcing  the financing pursuant to this Agreement and may display any Loan Party’s logo on its website and other marketing  materials consistent with Lender’s practices with respect to its loan portfolio.  13.15 Relationship.  The relationship of the parties to this Agreement is determined solely by the  provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary  or other relationship with duties or incidents different from those of parties to an arm’s-length contract.  13.16 Third Parties.  Nothing in this Agreement, whether express or implied, is intended to: (a) confer  any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to  it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person  not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of  subrogation or action against any party to this Agreement.  

 

    32    14. AMENDMENT AND RESTATEMENT  14.1 On the Effective Date, the Original Agreement shall be amended and restated in its entirety by this  Agreement and (i) all references to the Original Agreement in any Subordination Agreement existing as of the date  hereof (including any amendment, waiver or consent) shall be deemed to refer to the Original Agreement as amended  and restated hereby, (ii) all references to any section (or subsection) of the Original Agreement in any Subordination  Agreement existing as of the date hereof shall be amended to be, mutatis mutandis, references to the corresponding  provisions of this Agreement, (iii) except as the context otherwise provides, all references to this Agreement herein  (including for purposes of indemnification and reimbursement of fees) shall be deemed to be references to the Original  Agreement as amended and restated hereby, (iv) the term “Lender” as defined in the other Loan Documents shall be  deemed to refer to the term “Lender” as amended and restated hereby and (v) Borrower hereby reaffirms all of its  obligations under each of the Loan Documents to which it is a party that are being amended and restated pursuant to  the Loan Documents executed or delivered on the Effective Date.  This Agreement is not intended to constitute, and  does not constitute, a novation of the obligations and liabilities under the Original Agreement (including the  Obligations) or to evidence payment of all or any portion of such obligations and liabilities except to the extent  expressly provided for herein.    14.2 On and after the Effective Date, (i) subject to clause (iii) below, the Original Agreement shall be of  no further force and effect except to evidence the incurrence by Borrowers of the “Obligations” under and as defined  therein (whether or not such “Obligations” are contingent as of the Effective Date), (ii) all “Obligations” under the  Original Agreement as of the Effective Date that are not repaid on the Effective Date shall be deemed to be Obligations  outstanding under this Agreement (whether or not such “Obligations” are contingent as of the Effective Date), and  (iii) all security interests and liens granted under the Loan Documents (as defined in the Original Agreement) that are  amended and restated pursuant to the Loan Documents (as defined herein) shall survive the execution and delivery of  this Agreement and shall continue to secure all Obligations.  [Remainder of page intentionally left blank.]       

 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective  Date.    LENDER:    CANADIAN IMPERIAL BANK OF COMMERCE        By:__/s/ Mark Usher___________________  Name:   Mark Usher  Title:     Authorized Signatory       By:__/s/ Imran Premji__________________  Name: Imran Premji  Title:    Authorized Signatory     BORROWER:    PULMONX CORPORATION        By:__/s/ Derrick Sung, Ph.D.____________  Name:  Derrick Sung, Ph.D.  Title:    Chief Financial Officer  

 

      A-1    EXHIBIT A  DEFINITIONS  As used in this Agreement, the following capitalized terms have the following meanings:  “Account” means any “account” as defined in the Code with such additions to such term as may hereafter  be made, and includes all accounts receivable and other sums owing to a Loan Party.  “Account Control Agreement” means any control agreement entered into among the depository institution  at which a Loan Party maintains a Deposit Account or the securities intermediary or commodity intermediary at which  a Borrower or any other Loan Party maintains a Securities Account or a Commodity Account, a Loan Party, and  Lender pursuant to which Lender obtains control (within the meaning of the Code) over such Deposit Account,  Securities Account, or Commodity Account.  “Account Debtor” means any “account debtor” as defined in the Code with such additions to such term as  may hereafter be made.  “Adjusted EBITDA” means, for any period, (a) Net Income, plus (b) Interest Expense, plus (c) to the extent  deducted in the calculation of Net Income, depreciation expense and amortization expense of Borrowers and their  Subsidiaries, plus (d) income tax expense of Borrowers and their Subsidiaries, plus (e) stock base compensation  expense of Borrowers and their Subsidiaries, minus (f) software and research and development expenses capitalized  by Borrowers and their Subsidiaries, minus (g) lease payments that would otherwise have been an operating expense  pursuant to International Financial Reporting Standard 16 (as in effect on the Closing Date), in each case, as  determined in accordance with GAAP.  “Affiliate” means, with respect to any Person, each other Person that owns or controls, directly or indirectly  the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that  Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that  Person’s managers and members.  “Agreement” has the meaning set forth in the preamble.  “Amortization Date” means February 20, 2022; provided that such date shall be extended to February 20,  2023, at the option of Borrowers, upon Borrower Representative’s written notification to Lender received on or before  February 20, 2022 of Borrowers’ election to extend such date, so long as (i) no Event of Default has occurred and is  continuing and (ii) on and as of February 20, 2022, Borrowers shall have achieved $20,000,000 of Revenue for the  trailing three month period as of February 20, 2022.  “Amortization Schedule” means an amortization schedule of 36 months, unless the Amortization Date has  been extended to February 20, 2023, in which case, the Amortization Schedule shall mean an amortization schedule  of 24 months.  “Annual Projections” has the meaning set forth in Section 6.2(c).  “Anti-Terrorism Laws” are any laws relating to terrorism or money laundering, including the Anti- Terrorism Order, the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws  administered by OFAC.  “Anti-Terrorism Order” means Executive Order No. 13,224 as of September 24, 2001, Blocking Property  and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed.  Reg. 49,079 (2001), as amended.   “Blocked Person” is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, the  Anti-Terrorism Order, (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, the Anti-Terrorism Order, (c) a Person with which Lender is  prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that  

 

      A-2    commits, threatens or conspires to commit or supports “terrorism” as defined in the Anti-Terrorism Order, 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.  “Board” means, with respect to any Person, the board of directors, board of managers, managers or other  similar bodies or authorities performing similar governing functions for such Person.   “Borrower” and “Borrowers” have the meaning set forth in the preamble.  “Borrower Representative” means Pulmonx.  “Business Day” means any day that is not a Saturday, Sunday or a day on which commercial banks in the  State of New York or the Province of Ontario are required or permitted to be closed.  “Cash Equivalents” means (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 year from the date of  acquisition; (b) commercial paper maturing no more than one 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 issued by any  bank with assets of at least $500,000,000 maturing no more than one year from the date of investment therein; and (d)  money market funds at least 95.00% of the assets of which constitute Cash Equivalents of the kinds described in  clauses (a) through (c) of this definition.  “Change in Control” means any of the following (or any combination of the following) whether arising  from any single transaction event or series of related transactions or events that, individually or in the aggregate, result  in: (a) the holders of Borrower Representative’s Equity Interests who were holders of Equity Interest as of the Closing  Date, ceasing to own at least 51.00% of the Voting Stock of Borrower Representative, except as a result of an initial  public offering or a bona fide equity financing or series of financings from investors reasonably acceptable to Lender;  (b) any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of  1934) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly  or indirectly, of a sufficient number of Equity Interests of Borrower Representative ordinarily entitled to vote in the  election of directors, empowering such “person” or “group” to elect a majority of the members of the Board of  Borrower Representative, who did not have such power before such transaction, except as a result of an initial public  offering or a bona fide equity financing or series of financings from investors reasonably acceptable to Lender; or (c)  the Transfer of all or substantially all assets of Loan Parties or of a material business line of Loan Parties; or (d)  Borrower Representative ceasing to own and control, free and clear of any Liens (other than Permitted Liens), directly  or indirectly, all of the Equity Interests in each of its Subsidiaries or failing to have the power to direct or cause the  direction of the management and policies of each such Subsidiary.  “Claims” has the meaning set forth in Section 13.3.  “Closing Date” has the meaning set forth in the preamble.  “Code” means 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, Lender’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” means any and all properties, rights and assets of any Loan Party described on Exhibit B, and  any collateral securing the Obligations pursuant to any guaranty or pursuant to any other Loan Document.  “Collateral Access Agreement” means an agreement with respect to a Loan Party’s leased location or bailee  location, in each case in form and substance reasonably satisfactory to Lender.  

 

      A-3    “Collateral Account” means any Deposit Account, Securities Account, or Commodity Account of a Loan  Party.  “Commodity Account” means any “commodity account” as defined in the Code with such additions to such  term as may hereafter be made.  “Competitor” means any Person that is direct competitor of any Borrower or any of its Subsidiaries, as  determined by the Board of Borrower Representative in its reasonable discretion.  “Compliance Certificate” means that certain certificate in the form attached hereto as Exhibit D.  “Contingent Obligation” means, for any Person, any direct or indirect liability, contingent or not, of that  Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation,  in each case, 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.  “Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like  protections of a Person 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” means the Term Loans or any other extension of credit by Lender for Borrowers’ benefit.  “Default” means any circumstance, event or condition that constitutes an Event of Default or that, with the  giving of any notice, the passage of time, or both, would be an Event of Default.  “Default Rate” has the meaning set forth in Section 2.4(b).   “Deposit Account” means any “deposit account” as defined in the Code with such additions to such term as  may hereafter be made, and includes any checking account, savings account or certificate of deposit.  “Disqualified Institution” means, on any date, any Person that is a Competitor, which Person has been  designated by Borrowers as a “Disqualified Institution” by written notice to Lender not less than five Business Days  prior to such date, including those Persons listed on Schedule 1; provided that the term “Disqualified Institutions”  shall exclude any Person that Borrowers have designated as no longer being a “Disqualified Institution” by written  notice delivered to Lender from time to time; and provided, further, that no Person shall be or constitute, or may be  designated by Borrowers as, a “Disqualified Institution” if an Event of Default has occurred and is continuing.  “Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other  currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into  lawful money of the United States.  “Domestic Subsidiary” means any Subsidiary organized under the laws of any political subdivision of the  United States.    “Effective Date” means the date on which Lender has received, in form and substance satisfactory to it:     (a) this Agreement, signed by Borrower;  

 

      A-4    (b) a certificate of Borrower, duly executed by a Responsible Officer of Borrower, certifying and  attaching (i) resolutions duly approved by the Board of Borrower, and (ii) any resolutions, consent  or waiver duly approved by the requisite holders of Borrower’s Equity Interests, if applicable; and  (c) payment of all fees and Lender Expenses.  “Equipment” means all “equipment” as defined in the Code with such additions to such term as may  hereafter be made, and includes all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and  any interest in any of the foregoing.  “Equity Interests” means, with respect to any Person, any of the shares of capital stock of (or other  ownership, membership or profit interests in) such Person, any of the warrants, options or other rights for the purchase  or acquisition from such Person of shares of capital stock of (or other ownership, membership or profit interests in)  such Person, any of the securities convertible into or exchangeable for shares of capital stock of (or other ownership,  membership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such  Person of such shares (or such other interests), and any of the other ownership, membership or profit interests in such  Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not  such shares, warrants, options, rights or other interests are outstanding on any date of determination.  “ERISA” means the Employee Retirement Income Security Act of 1974, and its regulations.  “Event of Default” has the meaning set forth in Section 8.  “Exchange Act” means the Securities Exchange Act of 1934, as amended.  “Excluded Locations” means the following locations where Collateral may be located from time to time:  (a) locations where only mobile office equipment (e.g. laptops, mobile phones and the like) may be located with  employees in the Ordinary Course of Business, and (b) any other location where Collateral with an aggregate value  of less than $250,000 (or its equivalent in other currencies) is located.  “Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required  to be withheld or deducted from a payment to a Recipient:  (a) Taxes imposed on or measured by net income (however  denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being  organized under the laws of, or having its principal office or, in the case of any Recipient, its applicable lending office  located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection  Taxes, (b) United States federal withholding Taxes imposed on amounts payable to or for the account of such Recipient  with respect to an applicable interest in a Credit Extension pursuant to a law in effect on the date on which (i) such  Recipient acquires such interest in any Credit Extension or (ii) such Recipient changes its lending office, except in  each case to the extent that, pursuant to Section 2.7, amounts with respect to such Taxes were payable either to such  Recipient’s assignor immediately before such Recipient acquired the applicable interest in a Credit Extension or to  such Recipient immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to  comply with Section 2.7(e) and (d) any withholding Taxes imposed under FATCA.  “FATCA” means Sections 1471 through 1474 of the IRC 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), any current  or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1)  of the IRC and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental  agreement, treaty or convention among Governmental Authorities and implementing such Sections of the IRC.  “Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any successor  thereto.   “First Amendment” means that certain First Amendment to Loan and Security Agreement dated as of the  First Amendment Date among Borrowers and Lender.  “First Amendment Date” means April 17, 2020.  

 

      A-5    “Foreign Recipient” means a Lender that is not a U.S. Person.  “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.  “Funding Date” means any date on which a Credit Extension is made to or for the account of a Borrower  which shall be a Business Day.  “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, which are applicable to the circumstances as  of the date of determination, provided, however, that if there occurs after the Closing Date any change in GAAP that  affects in any respect the calculation of any covenant or threshold in this Agreement, Lender and Borrowers shall  negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant  or threshold with the intent of having the respective positions of Lender and Borrowers after such change in GAAP  conform as nearly as possible to their respective positions as of the Closing Date, and, until any such amendments  have been agreed upon, such covenants and thresholds shall be calculated as if no such change in GAAP has occurred,  provided, further, that no effect shall be given to Accounting Standards Codification 842, Leases (or any other  Accounting Standards Codification having similar result or effect) (and related interpretations) to the extent any lease  (or similar arrangement) would be required to be treated as a capital lease thereunder where such lease (or  arrangement) would have been treated as an operating lease under GAAP as in effect immediately prior to the  effectiveness of such Accounting Standards Codification.  “General Intangibles” means all “general intangibles” as defined in the Code in effect on the Closing Date  with such additions to such term as may hereafter be made, and includes all Intellectual Property, claims, income and  other tax refunds, security and other deposits, payment intangibles, contract rights, 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 key man, property damage, and business interruption insurance), payments of insurance  and rights to payment of any kind.  “Governmental Approval” means 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” means any nation or government, any state or other political subdivision  thereof, any agency, authority, instrumentality, regulatory body, court, central Lender 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” means any Person providing a Guaranty in favor of Lender or providing collateral, security or  other credit support for all or any portion of the Obligations.  “Guaranty” means 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” means (a) indebtedness for borrowed money or the deferred price of property or services,  (b) any reimbursement and other obligations for surety bonds and letters of credit, (c) obligations evidenced by notes,  bonds, debentures or similar instruments, (d) capital lease obligations, and (e) Contingent Obligations.  “Indemnified Person” has the meaning set forth in Section 13.3.  “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any  payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent  not otherwise described in the foregoing clause (a), Other Taxes.  “Insolvency Proceeding” means 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,  

 

      A-6    compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other  relief.  “Intellectual Property” means, with respect to any Loan Party (or, as applicable, any of its Subsidiaries),  all of such Loan Party’s or Subsidiary’s 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 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 such Person;   (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.  “Interest Expense” means for any period, interest expense (whether cash or non-cash) determined in  accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with  respect to any Credit Extension and other Indebtedness of Borrowers and their Subsidiaries, including or duplication,  all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and  bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and  the interest portion of any deferred payment obligation (including leases of all types).  “Inventory” means all “inventory” as defined in the Code in effect on the Closing Date with such additions  to such term as may hereafter be made.  “Investment” means any beneficial ownership interest in any Person (including stock, partnership interest  or other securities or Equity Interests), and any loan, advance or capital contribution to any Person, or the acquisition  of all or substantially all of the assets or properties of another Person.  “IP Security Agreement” means that certain intellectual property security agreement entered into by each  Loan Party which is the owner of Intellectual Property registered with the United States Patent and Trademark Office  or United States Copyright Office and Lender as of the Closing Date, as amended, restated, supplemented or otherwise  modified, from time to time.  “IRC” means the U.S. Internal Revenue Code of 1986, as amended.  “IRS” means the U.S. Internal Revenue Service.  “Key Person” means the Chief Executive Officer and Chief Financial Officer of Borrower Representative.   “Lead Investor” means an investor in Pulmonx specified to Lender by Borrower Representative in writing  from time to time, which Lead Investor shall be reasonably satisfactory to Lender.  “Lender” has the meaning set forth in the preamble.  “Lender Entities” has the meaning set forth in Section 13.10.  “Lender Expenses” means all audit fees and expenses, costs, and expenses (including reasonable and  documented 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  

 

      A-7    Documents (including those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred  with respect to a Loan Party or the Loan Documents.  “Lien” means a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance  of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.  “Loan Documents” means, collectively, this Agreement, any schedules, exhibits, certificates, notices and  any other documents related to this Agreement, the Swiss Share Pledge Documents, the Account Control Agreements,  the Collateral Access Agreements, any Subordination Agreement, any note, or notes or guaranties executed by a Loan  Party, and any other present or future agreement by a Loan Party with or for the benefit of Lender in connection with  this Agreement, all as amended, modified, supplemented, extended or restated from time to time  “Loan Parties’ Books” are all of each Loan Party’s books and records including ledgers, federal and state  tax returns, records regarding such Loan Party’s assets or liabilities, the Collateral, business operations or financial  condition, and all computer programs or storage or any equipment containing such information.  “Loan Party” or “Loan Parties” means, each Borrower and each Guarantor, if any, from time to time party  hereto.  “Loan Request” means a request for a Credit Extension pursuant to this Agreement in substantially the form  attached hereto as Exhibit C.  “Margin Stock” has the meaning set forth in Section 5.10(b).   “Material Adverse Effect” means (a) a material impairment in the perfection or priority of Lender’s Lien in  the Collateral or in the value of the Collateral or (b) a material adverse effect upon: (i) the business, operations, or  condition (financial or otherwise) of a Loan Party; or (ii) the prospect of repayment of any part of the Obligations.  “Material Subsidiary” means any Foreign Subsidiary (other than Pulmonx Switzerland) that is not a Loan  Party that (a) maintains (i) cash and other assets with an aggregate value in excess of 5.00% of the aggregate value of  the assets of Borrower and its Subsidiaries, (ii) any Intellectual Property which is material to the business of Loan  Parties as a whole or (iii) any contracts which are material to the business of Loan Parties as a whole or (b) generates  revenue in excess of 5.00% of the aggregate revenue generated by Borrower and its Subsidiaries for any 12-month  period then ended.   “Maximum Rate” has the meaning set forth in Section 2.4(e).   “Net Income” means, for any period as at any date of determination, the net profit (or loss), after provision  for taxes, of Borrowers and their Subsidiaries for such period taken as a single accounting period.  “Obligations” means all of each Borrower’s and each other Loan Party’s obligations to pay the Term Loans  and the amounts when due, any debts, principal, interest, fees, Lender Expenses and other amounts any Borrower or  any Loan Party owes to Lender or an Affiliate thereof now or later, whether under this Agreement, the other Loan  Documents, or otherwise, including interest accruing after Insolvency Proceedings begin (whether or not allowed) and  debts, liabilities, or obligations of any Borrower or any other Loan Party assigned to Lender, and to perform such  Borrower’s or such Loan Party’s duties under the Loan Documents.  “OFAC” has the meaning set forth in Section 5.10(c).   “OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by  OFAC pursuant to the Anti-Terrorism Order 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” means, for any Person, such Person’s formation documents, as certified by the  Secretary of State (or equivalent agency) of such Person’s jurisdiction of formation, organization or incorporation on  a date that is no earlier than 30 days prior to the Closing 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 operating  

 

      A-8    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, restatements and modifications thereto.  “Ordinary Course of Business” means, in respect of any transaction involving any Person, the ordinary  course of such Person’s business as conducted by any such Person in accordance with (a) the usual and customary  customs and practices in the kind of business in which such Person is engaged, and (b) the past practice and operations  of such Person, and in each case, undertaken by such Person in good faith and not for purposes of evading any covenant  or restriction in any Loan Document.  “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or  former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising  from such Recipient having executed, delivered, become a party to, performed its obligations under, received  payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or  enforced, any Loan Document, or sold or assigned an interest in any Credit Extension or any Loan Document).  “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or  similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or  registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan  Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.  “Participant Register” has the meaning set forth in Section 13.2.  “Patents” means all patents, patent applications and like protections of a Person including improvements,  divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same and all rights therein  provided by international treaties or conventions.  “Perfection Certificate” has the meaning set forth in Section 5.1(a).  “Permitted Indebtedness” means:  (a) each Loan Party’s Indebtedness to Lender under this Agreement and the other Loan  Documents including with respect to letters of credit, banker’s acceptances and bank guaranties;  (b) Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness,  in each case incurred by any Loan Party or any of their 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 $1,000,000 (or its equivalent in other currencies) 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);  (c) unsecured Indebtedness to trade creditors incurred in the Ordinary Course of Business;  (d) Indebtedness incurred as a result of endorsing negotiable instruments received in the  Ordinary Course of Business;  (e) excluding Indebtedness described in clauses (b) or (c) above and listed in the Perfection  Certificate, Indebtedness existing on the Closing Date as shown on the Perfection Certificate;  (f) Subordinated Debt;   (g) Indebtedness in an aggregate amount not to exceed $1,000,000 (or its equivalent in other  currencies) in respect of any cash management services, netting services, automatic clearinghouse arrangements,  overdraft protections, employee credit card programs and other cash management and similar arrangements in the  Ordinary Course of Business and any guarantees thereof;  

 

      A-9    (h) guarantees by a Loan Party or any of their Subsidiaries in respect of (i) Indebtedness of  such Loan Party or any of its Subsidiaries permitted hereunder and (ii) obligations that do not constitute Indebtedness;   (i) Indebtedness in an aggregate amount not to exceed $1,000,000 (or its equivalent in other  currencies) incurred by a Loan Party in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse  receipts or similar instruments issued or created in the Ordinary Course of Business;   (j) Indebtedness incurred in connection with the financing of insurance premiums in the  Ordinary Course of Business;  (k) Indebtedness incurred from receipt of Permitted Investments; and  (l) extensions, refinancings, modifications, amendments and restatements of any items of  Permitted Indebtedness described in clauses (b) through (k) above, provided that the principal amount thereof is not  increased or the terms thereof are not modified to impose materially more burdensome terms upon a Borrower or any  of its Subsidiaries, as the case may be.  “Permitted Investments” means:  (a) Investments (including Subsidiaries) existing on the Closing Date and shown on the  Perfection Certificate;  (b) (i) Investments consisting of Cash Equivalents, and (ii) any Investments permitted by  Borrower Representative’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 Lender;  (c) Investments consisting of the endorsement of negotiable instruments for deposit or  collection or similar transactions in the Ordinary Course of Business of a Loan Party;  (d) subject to Section 6.15, Investments consisting of Deposit Accounts in which Lender has,  to the extent required by Section 6.6(b), a perfected security interest;  (e) Investments in connection with Permitted Transfers;  (f) (i) Investments of cash and Cash Equivalents by Loan Parties in an aggregate amount not  to exceed (A) if Pulmonx Switzerland is not a Loan Party, $5,000,000 (or its equivalent in other currencies) in any  fiscal year in Pulmonx Switzerland (B) if Pulmonx Switzerland is a Loan Party, the higher of $5,000,000 (or its  equivalent in other currencies) in any fiscal year in Pulmonx Switzerland and such amount as the Lender (acting  reasonably) is satisfied meets the security conditions (defined below), and (C) $5,000,000 (or its equivalent in other  currencies) in any fiscal year in all Subsidiaries of Pulmonx that are not Loan Parties other than Pulmonx Switzerland;  (ii) Investments by any of Borrower Representative’s Subsidiaries that are not Loan Parties in any of Borrower  Representative’s Subsidiaries; (iii) Investments by Subsidiaries in any Loan Party provided that if the Person making  the Investment (the “Disposing Party”) is a Loan Party the recipient of that Investment must be a Loan Party which  has provided (A) guarantees and security at all times in an amount not less than that guaranteed and secured by the  Disposing Party, and (B) Liens over its cash and bank accounts which are (in the reasonable opinion of the Lender) at  least equivalent to that provided by the Disposing Party (the conditions at (iii)(A) and (B), the “security conditions”);  and (iv) non-cash Investments by Borrower Representative in its Subsidiaries, provided that in the case of (A) clauses  (i) and (ii), all such cash and Cash Equivalents are applied in full by the relevant Subsidiary of Pulmonx towards its  general corporate purposes reasonably promptly after receipt and shall not be applied to accumulate or maintain cash  or Cash equivalents without a specific business purpose, and (B) clauses (ii) and (iii), any Investment by a Subsidiary  which is not a Loan Party to any Loan Party shall be on terms (including as to subordination) reasonably satisfactory  to the Lender;  (g) Investments not to exceed $250,000 (or its equivalent in other currencies) outstanding in  the aggregate at any time consisting of (i) travel advances and employee relocation loans and other employee loans  and advances in the Ordinary Course of Business, and (ii) non-cash loans to employees, officers or directors relating  

 

      A-10    to the purchase of Equity Interests of Borrower Representative pursuant to employee stock purchase plans or other  similar agreements approved by Borrower Representative’s Board;  (h) 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;  (i) 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  clause (i) shall not apply to Investments of a Loan Party in any Subsidiary;   (j) Investments consisting of the creation of a Subsidiary for the purpose of consummating a  merger transaction permitted by Section 7.3 of this Agreement, which is otherwise a Permitted Investment;  (k) Investments of any Person that becomes a Subsidiary after the date hereof, provided that  such Investments exist at the time such Person becomes a Subsidiary and were not made in anticipation of such Person  becoming a Subsidiary;  (l) non-cash Investments in joint ventures or strategic alliances in the Ordinary Course of  Business of Borrower Representative consisting of the non-exclusive licensing of technology, the development of  technology or the providing of technical support; and  (m) Investments consisting of Cash Equivalents at Foreign Subsidiaries to the extent permitted  by Section 7.12(a).  “Permitted Licenses” are (a) licenses of over-the-counter software that is commercially available to the  public, and (b) non-exclusive and exclusive licenses for the use of the Intellectual Property of any Loan Party or any  of its Subsidiaries entered into in the Ordinary Course of Business, provided, that, with respect to each such license  described in clause (b), (i) no Event of Default has occurred or is continuing at the time of such license; (ii) 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 such Loan Party 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; (iii) in the case  of any exclusive license, (A) such Loan Party delivers 10 days’ prior written notice and a brief summary of the terms  of the proposed license to Lender and delivers to Lender copies of the final executed licensing documents in  connection with the exclusive license promptly upon consummation thereof, and (B) 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 the licensing agreement that are payable to  such Loan Party or any of its Subsidiaries are paid to a Collateral Account.  “Permitted Liens” means:  (a) Liens arising under this Agreement and the other Loan Documents;  (b) 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 a Loan Party other than the property  (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness;  (c) Liens for taxes, fees, assessments or other government charges or levies, either (i) not yet  delinquent or (ii) being contested in good faith and for which such Loan Party or Subsidiary maintains adequate  reserves on its books;  (d) leases or subleases of real property granted in the Ordinary Course of Business of such  Person, and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual  

 

      A-11    Property) granted in the Ordinary Course of Business of such Person, if the leases, subleases, licenses and sublicenses  do not prohibit granting Lender a security interest therein;  (e) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature  arising in the Ordinary Course of Business so long as such Liens attach only to Inventory, securing liabilities in the  aggregate amount not to exceed $1,000,000 (or its equivalent in other currencies) and which are not delinquent or  remain payable without penalty or which are being contested in good faith and by appropriate proceedings which  proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;  (f) Liens to secure payment of workers’ compensation, employment insurance, old-age  pensions, social security and other like obligations incurred in the Ordinary Course of Business (other than Liens  imposed by ERISA);  (g) deposits or pledges of cash to secure bids, tenders, contracts, leases (other than contracts  or leases for the payment of money), surety and appeal bonds and other obligations of a like nature arising, in each  case, in the Ordinary Course of Business;  (h) Liens arising from attachments or judgments, orders, or decrees in circumstances not  constituting an Event of Default;   (i) Liens in favor of other financial institutions arising in connection with a Deposit Account  or Securities Account of a Loan Party or Subsidiary thereof held at such institutions solely to secure payment of fees  and similar costs and expenses, provided that Lender has a perfected security interest in each such Deposit Account  or Securities Account of a Loan Party, and Lender has received an Account Control Agreement with respect thereto  to the extent required pursuant to Section 6.6;  (j) Liens consisting of Permitted Licenses;   (k) excluding Liens described in clause (b) above and listed in the Perfection Certificate, Liens  existing on the Closing Date as shown on the Perfection Certificate;   (l) Liens on cash and Cash Equivalents securing reimbursement obligations in respect of letter  of credit permitted under clause (i) of the definition of Permitted Indebtedness;   (m) Liens on property of a Person existing at the time such Person is acquired by, merged into  or consolidated with Borrower or any Subsidiary or becomes a Subsidiary, provided that (i) such Liens were not  created in contemplation of such acquisition, merger, consolidation or Investment, (ii) such Liens do not extend to any  assets other than those of such Person and (iii) any Indebtedness secured by such Liens constitutes Permitted  Indebtedness; and  (n) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by  Liens described in clauses (b) and (k) above, 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.  “Permitted Transfers” means (a) sales of Inventory by a Loan Party or any of its Subsidiaries in the Ordinary  Course of Business, (b) Permitted Licenses, (c) Transfers consisting of the granting of Permitted Liens and the making  of Permitted Investments, (d) Transfers of worn out, surplus or obsolete Equipment, (e) the use or transfer of money  or Cash Equivalents in the Ordinary Course of Business for the payment of ordinary course business expenses in a  manner that is not prohibited by the Loan Documents, (f) the sale or issuance of any stock of Borrower Representative  to the extent not prohibited by the definition of Change in Control or Section 7.2, (g) Transfers of property to the  extent that such property is exchanged for credit against the purchase price of similar replacement property or the  proceeds of such Transfer are promptly applied to the purchase price of such replacement property and (h) the payment  to Oxford Finance LLC of the Success Fee, so long as such payment is funded solely from the proceeds of an initial  public offering of Borrower Representative’s common stock.  

 

      A-12    “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.  “Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The  Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate  of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable  for any reason as determined by Lender, the “Prime Rate” shall mean the rate of interest per annum announced by  Lender as its prime rate in effect at its principal office in the State of New York (such Lender announced Prime Rate  not being intended to be the lowest rate of interest charged by Lender in connection with extensions of credit to  debtors).  “Pulmonx” has the meaning set forth in the preamble.  “Pulmonx Switzerland” means PulmonX International Sàrl, a limited liability company (société à  responsabilité limitée) formed under the laws of Switzerland.   “Recipient” means, as applicable, (a) Lender, (b) any successor thereof and (c) any assignee thereof as  provided in Section 13.2, or any combination thereof (as the context requires).  “Register” has the meaning set forth in Section 2.7(g).  “Registered Organization” means any “registered organization” as defined in the Code with such additions  to such term as may hereafter be made.  “Requirement of Law” means 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” means with respect to any Person, any of the Chief Executive Officer, President or  Chief Financial Officer of such Person.  Unless the context otherwise requires, each reference to a Responsible Officer  herein shall be a reference to a Responsible Officer of Borrower Representative.  “Restricted License” means any material license or other material agreement (other than ordinary course  customer contracts, off the shelf software licenses, licenses that are commercially available to the public, and open  source licenses) with respect to which a Loan Party or any of its Subsidiaries is the licensee (a) that prohibits or  otherwise restricts such Loan Party or Subsidiary from granting a security interest in such Loan Party or Subsidiary’s  interest in such license or agreement or any other property, or (b) for which a default under, or termination of which,  could reasonably be expected to interfere with the Lender’s right to sell any Collateral.  “Revenue” means, with respect to any period, the consolidated revenue generated by Borrowers and their  Subsidiaries during such period, as determined in accordance with GAAP.  “Securities Account” means any “securities account” as defined in the Code with such additions to such  term as may hereafter be made.  “Security Instrument” means any security agreement, assignment, pledge agreement, financing or other  similar statement or notice, continuation statement, other agreement or instrument, or any amendment or supplement  to any thereof, creating, governing or providing for, evidencing or perfecting any security interest or Lien.  “Shares” means one hundred percent (100%) of the issued and outstanding Equity Interests owned or held  of record by a Loan Party in any other Loan Party or any Subsidiary.  “Subordinated Debt” means Indebtedness incurred by a Loan Party that is subordinated in writing to all of  the Obligations pursuant to a Subordination Agreement.  

 

      A-13    “Subordination Agreement” means any subordination, intercreditor or other similar agreement in form and  substance satisfactory to Lender entered into between Lender and the other creditor(s), on terms acceptable to Lender,  including lien and payment subordination.  “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company or  joint venture in which (a) any general partnership interest or (b) more than 50.00% of the stock, limited liability  company interest, joint venture interest or other Equity Interest of which by the terms thereof has the ordinary voting  power to elect the Board of that Person, at the time as of which any determination is being made, is owned or controlled  by such Person, either directly or through an Affiliate.  Unless the context otherwise requires, each reference to a  Subsidiary herein shall be a reference to a Subsidiary of a Borrower.  “Success Fee” means the “Success Fee” as defined and described in that certain Success Fee Agreement  dated as of August 28, 2014, between Borrower and Oxford Finance LLC, a true and correct copy of which was  delivered by Borrower to Lender prior to the Closing Date.  “Swiss Security Conditions” means Lender shall have received from Borrower (a) certified copies of the  articles of association and a certified excerpt of the Commercial Register for Pulmonx Switzerland and (b) a joinder  to this Agreement pursuant to which Pulmonx Switzerland becomes a Borrower or Guarantor hereunder and grants a  security interest in and to the assets of Pulmonx Switzerland (substantially as described on Exhibit B), together with  such other documents, instruments and agreements reasonably requested by Lender, all in form and substance  satisfactory to Lender (including being sufficient to grant Lender a first priority Lien, subject to Permitted Liens that  are permitted pursuant to the terms of this Agreement to have superior priority to Lender’s Lien under this Agreement,  in and to the assets of Pulmonx Switzerland).  Any document, agreement, or instrument executed or issued pursuant  to the Swiss Security Conditions shall be a Loan Document.  “Swiss Share Pledge Documents” means a Pledge Agreement, in form and substance reasonably satisfactory  to Lender, entered into by Borrower in favor of Lender with respect to the Equity Interests of Pulmonx Switzerland,  together with all other documents, instruments and other agreements entered into in connection therewith as  reasonably required by Lender.  “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings  (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments,  fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties  applicable thereto.  “Term A Loan” has the meaning set forth in Section 2.3(a)(i).  “Term A Loan Amount” means $17,000,000.  “Term B Loan” and “Term B Loans” have the meaning set forth in Section 2.3(a)(ii).  “Term B Loan Amount” means $8,000,000.  “Term C Loan” and “Term C Loans” have the meaning set forth in Section 2.3(a)(iii).  “Term C Loan Amount” means $7,000,000.  “Term Loan” and “Term Loans” have the meaning set forth in Section 2.3(a)(iii).   “Term Loan Maturity Date” means February 20, 2025.   “Trademarks” means any trademark and servicemark rights of a Person, whether registered or not,  applications to register and registrations of the same and like protections, and the entire goodwill of the business  connected with and symbolized by such trademarks.  “Transfer” means defined in Section 7.1.   

 

      A-14    “UFCA” has the meaning set forth in Section 12.15(b).  “UFTA” has the meaning set forth in Section 12.15(b).  “United States” means United States of America.  “Unrestricted Cash” means the result of (i) all unrestricted cash of Borrowers maintained with Lender or an  Affiliate of Lender, minus (ii) all outstanding checks written by Borrowers that have not been cashed or otherwise  processed.   “U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the  IRC.   “U.S. Tax Compliance Certificate” has the meaning set forth in Section 2.7(e)(ii)(B)(3).  “Voting Stock” means, with respect to any Person, all classes of Equity Interests issued by such Person the  holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors or  managers (or Persons performing similar functions) of such Person, even though the right so to vote has been  suspended by the happening of such a contingency.    

 

            EXHIBIT B  COLLATERAL DESCRIPTION  The Collateral consists of all of each Loan Party’s right, title and interest in and to all of its personal property  wherever located, whether now owned or existing or hereafter acquired, created or arising, including the following:  All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to  payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims,  documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit  accounts, 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 such Loan Party’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 (both cash and non-cash) and insurance proceeds of any or all of the foregoing.  Notwithstanding the foregoing, the “Collateral” does not include any of the following, whether now owned  or hereafter acquired: (a) any intent-to-use US trademark application for which an amendment to allege use or  statement of use has not been filed and accepted by the US Patent and Trademark Office and that would otherwise be  deemed invalidated, cancelled or abandoned due to the grant of a security interest thereon (provided that each intent- to-use application shall be considered Collateral immediately and automatically upon such filing and acceptance); and  (b) any lease, license, contract, permit, letter of credit, purchase money arrangement, instrument or agreement to which  any Loan Party is a party (including any of its rights or interests thereunder) if and to the extent that the grant of such  security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or  interest of such Loan Party therein or (ii) result in a breach or termination pursuant to the terms of, or default under,  any such lease, license, contract, permit, letter of credit, purchase money agreement, instrument or agreement;  provided that the foregoing exclusion shall in no way be construed (x) to apply if any such restriction or prohibition  is unenforceable or rendered ineffective under Sections 9-406, 9-407 or 9-408 of the UCC or under other applicable  law, (y) so as to limit, impair or otherwise affect Lender’s continuing security interests in and liens upon any rights or  interests of any Loan Party in or to (i) monies due or to become due under any such lease, license, contract, permit,  letter of credit, purchase money arrangement, instrument or agreement (including any Accounts) or (ii) any proceeds  from disposition of any such lease, license, contract, permit, letter of credit, purchase money arrangement, instrument  or agreement, or (z) to apply to the extent that any consent or waiver has been obtained that would permit the security  interest of lien notwithstanding the applicable restriction or prohibition.  

 

            EXHIBIT C  LOAN REQUEST  Canadian Imperial Bank of Commerce  Credit Processing Services  595 Bay Street, 5th floor  Toronto, Ontario  M5G 2C2  e-mail: gregory.mcdonald@cibc.com  Attention: Gregory McDonald    Date:    Ladies and Gentleman:  The undersigned, a Responsible Officer of Pulmonx Corporation, a Delaware corporation (“Borrower  Representative”), refers to that certain Loan and Security Agreement, dated as of February 20, 2020 (as amended,  restated, supplemented or otherwise modified, from time to time, the “Agreement”), among CANADIAN IMPERIAL  BANK OF COMMERCE (“Lender”), Borrower Representative, each other Person party thereto as a borrower from  time to time (collectively, “Borrowers”, and each, a “Borrower”) and each Person party thereto as a guarantor from  time to time, and hereby gives you notice, irrevocably, pursuant to and as required by Section 3.2(a) of the Agreement,  that Loan Parties hereby request a Term [B][C] Loan under the Agreement, and in that connection set forth below the  information relating to such Term [B][C] Loan:  1. The requested Funding Date of such Credit Extension is [__________, 20___];   2. The requested principal amount of such Credit Extension is [____________]; and  3. The Deposit Account maintained at CIBC Bank USA to which funds are to be disbursed is as follows:  [__________].  Lender is hereby authorized to deduct amounts from the foregoing Credit Extension to be applied to Lender Expenses  and outstanding fees then due as set forth on the attached Schedule 1.  Borrower Representative represents that each of the conditions precedent to the Credit Extension set forth in the  Agreement are satisfied and shall be satisfied on the Funding Date, including:  (i) the representations and warranties  set forth in the Agreement and in the other Loan Documents are true and correct in all material respects (other than  such representations and warranties that are already qualified by materiality, Material Adverse Effect or similar  language, in which case such representations and warranties shall be true and correct in all respects) on the date hereof  and on the Funding Date; provided, however, that those representations and warranties expressly referring to a specific  date shall be true and correct in all material respects (other than such representations and warranties that are already  qualified by materiality, Material Adverse Effect or similar language, in which case such representations and  warranties shall be true and correct in all respects) as of such date, (ii) no Default or Event of Default has occurred  and is continuing or would result from the Credit Extension, and (iii) no event that has had or could reasonably be  expected to have a Material Adverse Effect has occurred.   Borrower Representative agrees to notify Lender promptly before the Funding Date if any of the matters which have  been represented above shall not be true and correct in all material respects on the Funding Date and if Lender has  received no such notice before the Funding Date then the statements set forth above shall be deemed to have been  made and shall be deemed to be true and correct in all material respects as of the Funding Date.  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]   

 

            [SIGNATURE PAGE TO LOAN REQUEST]  This Loan Request is hereby executed as of the date first written above.  BORROWER REPRESENTATIVE:  PULMONX CORPORATION  By:  _____________________________________   Name:  ___________________________________   Title:  ____________________________________        

 

        EXHIBIT D  COMPLIANCE CERTIFICATE  TO: CANADIAN IMPERIAL BANK OF COMMERCE Date:     FROM:  PULMONX CORPORATION  Reference is made to that certain Loan and Security Agreement, dated as of February 20, 2020 (as amended,  restated, supplemented or otherwise modified, from time to time, the “Agreement”), among CANADIAN IMPERIAL  BANK OF COMMERCE (“Lender”), PULMONX CORPORATION, a Delaware corporation, each other Person  party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”) and each Person  party thereto as a guarantor from time to time.  Capitalized terms have meanings as defined in the Agreement.  The undersigned authorized officer of Borrower Representative, hereby certifies in accordance with the terms  of the Agreement as follows:  (1) Each Loan Party is in compliance for the period ending     with all covenants set  forth in the Agreement; (2) no Event of Default has occurred and is continuing; and (3) the representations and  warranties in the Agreement are true and correct in all material respects on this date; 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 and correct in all material respects as of such date.  Schedule 1 sets forth true and correct calculations with respect to the financial covenants in Section 6.10 of  the Agreement.  The undersigned certifies that all financial statements delivered herewith are prepared in accordance with  GAAP (other than, with respect to unaudited financials for the absence of footnotes and being subject to normal year- end adjustments), consistently applied from one period to the next.  Capitalized terms used but not otherwise defined  herein shall have the meanings given them in the Agreement.  Please indicate compliance status by circling Yes/No/N/A under “Complies” column.    Reporting Covenants Required Complies  Quarterly financial statements and  Compliance Certificate  Quarterly, within 45 days (60 days in the  case of Q4)  Yes No N/A  Annual Projections and Budget Annually, within 60 days of fiscal year  end  Yes No N/A  Annual audited financial statements  and  Compliance Certificate  Annually, within 180 days of fiscal year  end  Yes No N/A  SEC filings Within five days after filing with SEC Yes No N/A  Legal action notices Promptly Yes No N/A  IP reports Together with the Compliance  Certificate delivered for the end of each  calendar month constituting the end of a  fiscal quarter  Yes No N/A  Evidence of bank balances Together with each Compliance  Certificate  Yes No N/A  Insurance reductions 30 days prior to any proposed revocation Yes No N/A  Material amendments to Operating  Documents  Promptly (and prior to an initial public  offering)  Yes No N/A  Defaults Within 3 Business Days upon a Loan  Party becoming aware of the existence  Yes No N/A  Financial Covenants Required Complies  Minimum Revenue See Schedule 1 hereto Yes  No   

 

        Unrestricted cash See Schedule 1 hereto Yes  No   Unrestricted cash Monthly requirement N/A  Other Covenants Required Actual Complies  Purchase money Indebtedness (including  capital leases)  Not to exceed  $1,000,000 (or its  equivalent)  outstanding at any  time  $ Yes  No  Indebtedness in respect of cash  management services and credit cards  Not to exceed  $1,000,000 (or its  equivalent)  outstanding at any  time  $ Yes  No  Indebtedness in respect of letters of credit,  bank guarantees, bankers’ acceptances,  warehouse receipts or similar instruments  Not to exceed  $1,000,000 (or its  equivalent)  outstanding at any  time  $ Yes  No  Repurchases of stock pursuant to Section  7.7(a)  Not to exceed  $100,000 per fiscal  year (or $500,000  per fiscal year per  Section 7.7)  $ Yes  No  Investments of cash and Cash Equivalents  in Subsidiaries  Not to exceed (a)  $5,000,000 (or its  equivalent) in any  fiscal year in  Pulmonx  Switzerland, and (b)  $5,000,000 (or its  equivalent) in any  fiscal year in all  Subsidiaries of  Pulmonx other than  Pulmonx  Switzerland  (a) $      (b) $  Yes  No  Investments for travel advances and  employee loans  Not to exceed  $250,000 (or its  equivalent)  outstanding  $ Yes  No  Liens of carriers, warehousemen,  suppliers  Securing obligations  not to exceed  $1,000,000 (or its  equivalent) at any  time  $ Yes  No    Other Matters  Has any Loan Party changed its legal name, jurisdiction of organization or chief executive  office?  If yes, please complete details below:     _______________________________________________________________________    Yes No  

 

        Has there been any change of Chief Executive Officer, President or Chief Financial Officer  of Borrower Representative?  If so, please describe appointment of any interim  replacement or full-time replacement by a candidate with equivalent qualifications:     _______________________________________________________________________    Yes No  Have any new Subsidiaries been formed?  If yes, please provide complete schedule below.       Yes No  Legal Name of  Subsidiary  Jurisdiction of  Organization  Holder of  Subsidiary Equity  Interests  Equity Interests  Certificated? (Y/N)  Jurisdiction                   Have any new Deposit Accounts or Securities Accounts been opened?  If yes, please  complete schedule below.    Yes No  Accountholder Deposit Account /  Intermediary  Address Account Number Account Control  Agreement in  place?  (Y/N)                  The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No  exceptions to note.”)  ---------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------  BORROWER REPRESENTATIVE:    PULMONX CORPORATION      By:    Name:    Title:           

 

        SCHEDULE 1  FINANCIAL COVENANT CALCULATIONS  [Attached.]     

 

          EXHIBIT E  REQUIREMENTS FOR INSURANCE DOCUMENTATION  Contact Information for Insurance Documentation:  CANADIAN IMPERIAL BANK OF COMMERCE  595 Bay Street, 5th Floor  Toronto ON  M5G 2C2      Document Requirements:  DOCUMENT REQUIREMENT  1. Certificate of Liability Insurance • Canadian Imperial Bank of Commerce and its  successors and assigns to be designated as  “Additional Insured”.  • Canadian Imperial Bank of Commerce name and  address to be listed as Certificate Holder.  2. General Liability Endorsement (Additional  Insured Endorsement)    • Canadian Imperial Bank of Commerce and its  successors and assigns to be named in additional  insured endorsement.  3. Evidence of Commercial Property  Insurance  • All-risk commercial property insurance incurring  all of each Loan Party’s property  • Canadian Imperial Bank of Commerce and its  successors and assigns to be designated as  “Lender’s Loss Payee,” with Lender’s Loss  Payable provision designated.  • Canadian Imperial Bank of Commerce name and  address to be designated in Name and Address of  Additional Interest.  • Insured locations to include all locations of Loan  Parties listed in the Perfection Certificate  4. Commercial Property Endorsement  (Lender’s Loss Payable Endorsement)    • Canadian Imperial Bank of Commerce and its  successors and assigns to be scheduled and  designated as “Lender Loss Payee” by  endorsement  • Lender loss payable clause with stipulation that  coverage will not be cancelled or diminished  without a minimum of 10 days’ prior written  notice for non-payment of premium, or 30 days for  any other cancellation.       

 

          SCHEDULE 1    DISQUALIFIED INSTITUTIONS    None.Document

Exhibit 10.3

Pulmonx Corporation
Amended and Restated
Non-Employee Director Compensation Policy
			
	

Approved by the Board of Directors
March 23, 2021

Eligibility
Each member of the board of directors (the “Board”) of Pulmonx Corporation (the “Company”) who is not a full- or part- time officer or employee of the Company or any of its subsidiaries (a “Non-Employee Director”) is eligible to receive compensation under this Non-Employee Director Compensation Policy (this “Policy”) during the period of the Non-Employee Director’s service as a member of the Board.  A Non-Employee Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be.
Equity Compensation
Equity awards will be granted under the Company’s 2020 Equity Incentive Plan, as amended from time to time, or any successor equity incentive plan (the “Plan”). Unless otherwise defined herein, capitalized terms used in this Policy have the meaning given to such terms in the Plan.  All stock options granted under this Policy will be Non-statutory Stock Options, with a term of ten years from the date of grant (subject to earlier termination upon a termination of the Non-Employee Director’s Continuous Service) and an exercise price per share equal to the closing price of a share of the Company’s Common Stock on the date of grant.  Grants of equity hereunder will be made on the applicable Quarterly Granting Date.  
•Certain Definitions.  As used in this Policy:
 
◦“Calculation Stock Price” means the average closing price of the Company’s Common Stock over the thirty business days ended on the business day immediately prior to the Company Quarterly Granting Date when such Initial Equity Grant or an Annual Equity Grant (as defined below) is to be made.  

◦“Fair Market Value:” 
▪For stock options granted hereunder will be based on the Black-Scholes pricing method and will use the Calculation Stock Price.
▪For Restricted Stock Units (“RSUs”) granted hereunder will be based on the value of such RSU grant divided by the Calculation Stock Price.

◦“Quarterly Granting Date” means the four annual dates on which the Company grants equity awards.

•Initial Equity Grant.  Each Non-Employee Director who is elected or appointed to the Board for the first time after the effective date of this Policy will be granted, at the discretion of the Board of Directors, either or a combination of (a) an option to purchase shares of Common Stock (the “Initial Stock Option Grant”) or (b) Company RSUs (the “Initial RSU Grant”) with an aggregate Fair Market Value of $180,000 on the Company Quarterly Granting Date immediately following the date of his or her initial election or appointment to the Board (the Initial Stock 
1

Amended and Restated Pulmonx Corporation Non-Employee Director Compensation Policy
Approved by the Board of Directors - March 23, 2021

Option Grant and the Initial RSU Grant shall be referred to alternatively or collectively herein as the “Initial Equity Grant”).

◦Initial Stock Option Grant. One-thirty-sixth (1/36th) of the shares subject to the Initial Stock Option Grant will vest on the one-month anniversary of the date of grant and each month thereafter on the same day of the month as the grant date, subject to the Non-Employee Director’s Continuous Service through each vesting date.
  
◦Initial RSU Grant. One-third (1/3rd) of the RSUs subject to the Initial RSU Grant will vest on each of the three succeeding one-year anniversaries of the date of grant on the same day of the month as the grant date, or if such date is not a business day, then on the next business day, subject to the Non-Employee Director’s Continuous Service through each vesting date.  

•Annual Equity Grant. With respect to each annual meeting following the applicable Non-Employee Director’s Initial Equity Grant, each person who continues to serve as a Non-Employee Director following such annual meeting, and who has been in Continuous Service as a Non-Employee Director for at least six months as of such date, will be granted, at the discretion of the Board of Directors, either or a combination of (a) an option to purchase shares of Common Stock (the “Annual Stock Option Grant”) or (b) Company RSUs (the “Annual RSU Grant”) with an aggregate Fair Market Value of $120,000 on the Company Quarterly Granting Date immediately following the date of the Company’s Annual Meeting of Stockholders (the Annual Stock Option Grant and the Annual RSU Grant shall be referred to alternatively or collectively herein as the “Annual Equity Grant”).

◦Annual Stock Option Grant. One-twelfth (1/12th) of the shares subject to each Annual Stock Option Grant will vest on the one-month anniversary of the date of grant and each month thereafter on the same day of the month as the grant date, provided that the twelfth vesting date of each such grant will occur no later than the date of the Annual Meeting for the year subsequent to the date such Annual Stock Option Grant is made, subject to the Non-Employee Director’s Continuous Service through each vesting date.  

◦Annual RSU Grant. In the case of the Annual RSU Grant, all of the RSUs subject to the Annual RSU Grant will vest on the earlier of (i) the one-year anniversary of the date of grant on the same day of the month as the grant date, or if such date is not a business day, then on the next business day, or (ii) the date of the Annual Meeting for the year subsequent to the date such Annual RSU Grant is made, subject to the Non-Employee Director’s Continuous Service through such vesting date.  

•Change in Control. Notwithstanding the above, for each Non-Employee Director who remains in Continuous Service with the Company until immediately prior to the closing of a Change in Control, any unvested shares subject to his or her then-outstanding equity awards that were granted pursuant to this Policy will become fully vested and exercisable immediately prior to the closing of such Change in Control.

2

Amended and Restated Pulmonx Corporation Non-Employee Director Compensation Policy
Approved by the Board of Directors - March 23, 2021

Cash Compensation
Each Non-Employee Director will receive an annual Board service retainer of $40,000 in cash for serving on the Board.  A Non-Employee Director who serves as a non-executive chairperson of the Board will receive an additional annual cash service retainer of $35,000 for serving in that role. 
The chairperson and other members of the three standing committees of the Board will be entitled to the following additional annual cash retainers:
																								
	 
	

	

	

	

	

	

	

	Board Committee	  
	Chairperson
	 
	  
	Other Member

	Audit Committee
	  
	$
	20,000
	  
	  
	$
	10,000

	Compensation Committee
	  
	$
	15,000
	  
	  
	$
	7,500

	Nominating and Corporate Governance Committee	  
	$
	10,000
	  
	  
	$
	5,000

All annual cash retainers will be payable in equal quarterly installments, in arrears, no later than 30 days following the end of each quarter in which the Board service occurs, prorated for any partial quarter of service (based on the number of days served in the applicable position divided by the total number of days in the quarter). All annual cash retainers will be vested upon payment. 
The Company will also reimburse each Non-Employee Director for all ordinary, necessary and reasonable out-of-pocket travel expenses incurred by the Non-Employee Director in attending in person and participating in meetings of the Board or any committee thereof and any meetings of the stockholders of the Company, provided the Non-Employee Director timely submits to the Company appropriate documentation substantiating such expenses in accordance with the Company’s travel and expense policy, as in effect from time to time.

Amendments

This Policy may be amended by the Board or the Compensation Committee of the Board at any time.

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3

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