Document:

Exhibit 10.1

 

Certain identified information
has been omitted from this exhibit because it is both (i) not material and (ii) would likely cause competitive harm to
the Registrant if publicly disclosed. Such omitted information is indicated by brackets ("[...***...]") in this exhibit.
***

 

AMENDMENT NO. 1 TO TERM LOAN AGREEMENT

 

This AMENDMENT NO.
1 TO TERM LOAN AGREEMENT, dated as of May 3, 2019 (this “Amendment”), is among SORRENTO THERAPEUTICS, INC.,
a Delaware corporation (the “Borrower”), certain subsidiaries of the Borrower, as guarantors (each, a “Guarantor”),
certain funds affiliated with Oaktree Capital Management, L.P. (“Oaktree” and such funds, the “Lenders”)
and Oaktree Fund Administration, LLC (the “Agent”).

 

RECITALS

 

WHEREAS, the
Borrower, certain subsidiaries of the Borrower, the Lenders and the Agent are parties to that certain Term Loan Agreement, dated
as of November 7, 2018, (as further modified and supplemented prior to the date hereof, the “Term Loan Agreement”),
pursuant to which the Lenders provided a senior secured first lien term loan facility to the Borrower consisting of (i) term loans
in the aggregate principal amount of $100,000,000 and (ii) delayed draw term loans in the aggregate principal amount of $50,000,000;
and

 

WHEREAS, the
Borrower has requested that the Lenders and Agent agree to amend the Term Loan Agreement in certain respects, as set forth in this
Amendment, so as to allow the Borrower to borrow $20,000,000 of the Delayed Draw Term Loans in a single drawing subject to the
terms and conditions set forth herein, notwithstanding that the Delayed Draw Eligibility Event has not yet occurred (the “Early
Delayed Draw Term Loan”).

 

NOW, THEREFORE,
in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

SECTION 1.          Definitions.
Except as otherwise defined in this Amendment, terms defined in the Term Loan Agreement are used herein as defined therein.

 

SECTION 2.          Amendments.
Each of the parties hereto agrees that, effective on the Effective Date (as defined below), the Term Loan Agreement shall be amended
to delete the stricken text (indicated textually in the same manner as the following example: stricken
text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined
text) as set forth in the pages of the Term Loan Agreement attached as Exhibit A hereto (the “Amended Term
Loan Agreement”).

 

SECTION 3.          Representations
and Warranties. Each of the Loan Parties represents and warrants as follows:

 

(a)          Both
before and after giving effect to the borrowing of the Early Delayed Draw Term Loan, the representations and warranties contained
in the Amended Term Loan Agreement and the other Loan Documents (each as amended hereby) are true and correct in all material respects
(unless such representations are already qualified by reference to materiality, Material Adverse Effect or similar language, in
which case such representations and warranties are true and correct in all respects) on and as of the Early Delayed Draw Funding
Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations
and warranties were true and correct in all material respects on and as of such earlier date; provided that Agent has not perfected
its lien and security interest in the deposit accounts of Scilex Holding Company and Semnur Pharmaceuticals, Inc.;

 

     

     

    

 

(b)          Both
before and after giving effect to the borrowing of the Early Delayed Draw Term Loan, no event has occurred and is continuing or
would result from the making of the Early Delayed Draw Term Loans that would constitute a Default or Event of Default under the
Amended Term Loan Agreement or the other Loan Documents; provided that Agent has not perfected its lien and security interest in
the deposit accounts of Scilex Holding Company and Semnur Pharmaceuticals, Inc.;

 

(c)          Since
December 31, 2018, no event, circumstance or change has occurred that has caused or would reasonably be expected to cause, in any
case or in the aggregate, a Material Adverse Effect; and

 

(d)          Each
Loan Party has duly executed and delivered this Amendment, this Amendment constitutes the valid and binding obligation of such
Loan Party, enforceable against such Loan Party in accordance with the respective terms of this Amendment, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’
rights generally, and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at
law, and the execution, delivery and performance of this Amendment do not violate any provision of (i) any law or any governmental
rule or regulation binding upon and applicable to such Loan Party, or (ii) any order, judgment or decree of any Governmental Authority
binding on such Loan Party; except for any such violations which will not result in a Material Adverse Effect.

 

SECTION 4.          Conditions
of Effectiveness. This Amendment shall not become effective until the date (the “Effective Date”) on which
each of the following conditions is satisfied (or waived), in each case, as determined by the Required Lenders:

 

(a)          Execution
and Consents. The Agent shall have received counterparts of this Amendment executed by the Borrower, each Guarantor, the Lenders
and the Agent.

 

(b)          Fee
Letter. The Agent shall have received counterparts of the fee letter dated as of the Effective Date executed by the Borrower,
the Agent and Oaktree (the “Amendment No. 1 Fee Letter”).

 

(c)          Sorrento
Side Letter. The Agent shall have received counterparts of the side letter dated as of the Effective Date executed by the Borrower,
the Agent and Oaktree.

 

(d)          Scilex
Holding Company Side Letter. The Agent shall have received counterparts of the side letter dated as of the Effective Date executed
by Scilex Holding Company, the Agent and Oaktree.

 

(e)          Opinion.
The Agent shall have received an executed copy of the favorable written opinion of counsel to the Borrower as to such matters as
the Agent may request, dated as of the Effective Date, and otherwise in form and substance reasonably satisfactory to the Agent.

 

    	 	2	 

     

    

 

(f)          Officer’s
Certificate. The Agent shall have received a certificate signed by an Authorized Officer of the Borrower certifying such matters
as the Agent may request, dated as of the Effective Date and in form and substance reasonably satisfactory to the Agent.

 

(g)          Fees
and Expenses. The Borrower shall have paid all amounts required to be paid on or prior to the date hereof under the Amendment
No. 1 Fee Letter and the actual expenses of the Lenders and the Agent (including the actual legal fees and out-of-pocket expenses
of Sullivan & Cromwell LLP, as outside counsel to Oaktree) for which invoices have been presented (and, to the extent not provided
prior to the date hereof, within two (2) Business Days after delivery thereof).

 

(h)          Representations
and Warranties. The representations and warranties set out in Section 3 hereof shall each be true and correct as of the Effective
Date.

 

(i)          No
Default. No event shall have occurred or be continuing or would result from the borrowing of the Early Delayed Draw Term Loan
that would constitute a Default or Event of Default.

 

SECTION 5.          Effect
on the Term Loan Agreement and Loan Documents.

 

(a)          Upon
the effectiveness of Section 2 hereof, on and after the date hereof each reference in the Term Loan Agreement to “this Term
Loan Agreement,” “this Agreement,” “hereunder,” “hereof,” “herein” or words
of like import, and each reference in the Loan Documents to the Term Loan Agreement, shall mean and be a reference to the Amended
Term Loan Agreement.

 

(b)          Except
as specifically amended above, the Term Loan Agreement and the other Loan Documents shall remain in full force and effect and are
hereby ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the “Collateral”
described therein do and shall continue to secure the payment of all of the “Obligations” described therein.

 

(c)          The
execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent
or any of the Lenders under the Term Loan Agreement or any of the Loan Documents (each as amended hereby), nor constitute a waiver
of any provision thereof.

 

(d)          The
entering into of this Amendment by the Agent and the Lenders and any consent to this Amendment by any Lender shall not be deemed
to limit or hinder any rights of any such party under the Term Loan Agreement or any Loan Document (each as amended hereby), nor
shall it be deemed to create or infer a course of dealing between any such party, on the one hand, and the Borrower or any Guarantors,
on the other hand, with regard to any provision thereof.

 

SECTION 6.          Costs
and Expenses. The Borrower agrees to pay on demand all actual costs and expenses of the Agent and the Lenders in connection
with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, the actual fees and out-of-pocket expenses of Sullivan & Cromwell LLP, as outside counsel to
Oaktree Capital Management, L.P., with respect thereto.

 

    	 	3	 

     

    

 

SECTION 7.          Execution
in Counterparts. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of
an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”)
format shall be effective as delivery of a manually executed counterpart of this Amendment.

 

SECTION 8.          Governing
Law. This Amendment and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Amendment or any other Loan Document (except, as to any other Loan Document, as expressly
set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with,
the law of the State of New York.

 

SECTION 9.          Jurisdiction.
Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind
or description, whether in law or equity, whether in contract or in tort or otherwise, against the Agent, any Lender or any Related
Party of the foregoing in any way relating to this Amendment or any other Loan Document or the transactions relating hereto or
thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District
Court of the Southern District of New York, and any appellate court from any thereof; and each of the parties hereto irrevocably
and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation
or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in
such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing
in this Amendment or in any other Loan Document shall affect any right that the Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Amendment or any other Loan Document against the Borrower or any other Loan Party or
its properties in the courts of any jurisdiction.

 

SECTION 10.         Waiver
of Venue. Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection
that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Amendment
or any other Loan Document in any court referred to in Section 9 above. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

SECTION 11.         Service
of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.1of
the Amended Term Loan Agreement.

 

    	 	4	 

     

    

 

SECTION 12.         Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.

 

SECTION 13.         Severability.
Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.

 

SECTION 14.         Reaffirmation.
Each Loan Party (a) consents to the amendments of the Term Loan Agreement as set forth herein; (b) acknowledges, ratifies and reaffirms
its obligations and other Indebtedness owing to the Secured Parties under any Loan Document to which it is a party, including the
Guaranty of the Term Loans (including the Early Delayed Draw Term Loan) by each Guarantor; (c) agrees that each of the provisions
of the Loan Documents to which it is a party (as amended by this Amendment), and each right and remedy of the Secured Parties thereunder,
is and shall remain in full force and effect; and (d) reaffirms, acknowledges, agrees and confirms that it has granted to the Agent
a validly created, enforceable and, to the extent required by the Loan Documents, perfected security interest in the Collateral
in which it has an interest in order to secure all of its present and future Indebtedness evidenced by the Loan Documents to which
it is a party, and acknowledges and agrees that such security interest, and all Collateral heretofore pledged as security for the
Obligations and for such Indebtedness, continue to be and remain in full force and effect on and after the date hereof. Without
limiting the generality of the foregoing, each of the undersigned hereby ratifies and reaffirms each and every provision set forth
in the Amended Term Loan Agreement and the other Loan Documents to which it is a party effective as of the date hereof. Subject
to the terms of the Amended Term Loan Agreement and other Loan Documents, all Indebtedness of any of the undersigned that is evidenced
by any of the Loan Documents are unconditionally owing by such Person to the Secured Parties, without offset, defense, withholding,
counterclaim or deduction of any kind, nature or description whatsoever, except to the extent provided to the contrary in the Loan
Documents.

 

SECTION 15.         Headings.
Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other
purpose or be given any substantive effect.

 

Signature Pages Follow

 

    	 	5	 

     

    

 

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

 

	 	SORRENTO THERAPEUTICS, INC.,
	 	as Borrower
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	President, Chief Executive Officer and Chairman of the Board
	 	 	 	 
	 	Scilex Holding Company,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Secretary and Treasurer
	 	 	 	 
	 	Semnur Pharmaceuticals, Inc.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:   	Henry Ji, Ph.D.
	 	 	Title:	Secretary and Treasurer

 

	 	ARK ANIMAL HEALTH, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:   	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer

 

	 	BIOSERV CORPORATION,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:   	Henry Ji, Ph.D.
	 	 	Title:	President

 

Signature Page to Amendment No. 1

 

     

     

    

 

	 	Coentre Technologies LLC,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	Concortis Biosystems, Corp.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	LA CELL, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	SCINTILLA PHARMACEUTICALS, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:   	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	SNAN HOLDCO LLC,
	 	as Guarantor
	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Manager
	 	 	 	 
	 	SORRENTO BIOLOGICS, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer

 

Signature Page to Amendment No. 1

 

     

     

    

 

	 	TNK THERAPEUTICS, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	BDL PRODUCTS, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	President
	 	 	 	 
	 	CARGENIX HOLDINGS LLC,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:   	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	CONCORTIS, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	President
	 	 	 	 
	 	LEVENA BIOPHARMA US, INC.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	SINIWEST HOLDING CORP.,
	 	as Guarantor
	 	 	 	 
	 	By:	/s/ Henry Ji, Ph.D.
	 	 	Name:	Henry Ji, Ph.D.
	 	 	Title:	President

 

Signature Page to Amendment No. 1

 

     

     

    

 

	 	
        OAKTREE FUND ADMINISTRATION, LLC,

        as Agent

	 
	 	 	 	 
	 	By:	Oaktree Capital Management, L.P.
	 	Its:	Managing Member
	 	 	 	 
	 	By:	/s/ Nicholas Basso
	 	 	Name:   	Nicholas Basso
	 	 	Title:	Managing Director
	 	 	 	 
	 	By:	/s/ Mary Gallegly
	 	 	Name:	Mary Gallegly
	 	 	Title:	Senior Vice President

 

Signature Page to Amendment No. 1

 

     

     

    

 

	 	SC Investments E Holdings, LLC,
	 	as a Lender
	 	 	 	 
	 	By:	Oaktree Fund GP IIA, LLC
	 	Its:	Manager
	 	 	 
	 	By:	Oaktree Fund GP II, L.P.
	 	Its:	Managing Member
	 	 	 	 
	 	By:	/s/ Nicholas Basso
	 	 	Name:   	Nicholas Basso
	 	 	Title:	Authorized Signatory
	 	 	 	 
	 	By:	/s/ Mary Gallegly
	 	 	Name:	Mary Gallegly
	 	 	Title:	Authorized Signatory
	 	 	 	 
	 	SC Investments NE Holdings, LLC,
	 	as a Lender
	 	 	 	 
	 	By:	Oaktree Fund GP IIA, LLC
	 	Its:	Manager
	 	 	 	 
	 	By:	Oaktree Fund GP II, L.P.
	 	Its:	Managing Member
	 	 	 	 
	 	By:	/s/ Nicholas Basso
	 	 	Name:	Nicholas Basso
	 	 	Title:	Authorized Signatory
	 	 	 	 
	 	By:	/s/ Mary Gallegly
	 	 	Name:   	Mary Gallegly
	 	 	Title:	Authorized Signatory

 

Signature Page to Amendment No. 1

 

     

     

    

 

	 	Oaktree Strategic Income II, Inc.,
	 	as a Lender
	 	 	 	 
	 	By:	Oaktree Capital Management, L.P.
	 	Its:	Investment Advisor
	 	 	 	 
	 	By:	/s/ Nicholas Basso
	 	 	Name:	Nicholas Basso
	 	 	Title:	Managing Director
	 	 	 	 
	 	By:	/s/ Mary Gallegly
	 	 	Name:   	Mary Gallegly
	 	 	Title:	Senior Vice President
	 	 	 	 
	 	OSCL SRNE, LLC,
	 	as a Lender
	 	 	 	 
	 	By:	Oaktree Specialty Lending Corporation
	 	Its:	Managing Member
	 	 	 	 
	 	By:	Oaktree Capital Management, L.P.
	 	Its:	Investment Advisor
	 	 	 	 
	 	By:	/s/ Nicholas Basso
	 	 	Name:	Nicholas Basso
	 	 	Title:	Managing Director
	 	 	 	 
	 	By:	/s/ Mary Gallegly
	 	 	Name:	Mary Gallegly
	 	 	Title:	Senior Vice President

 

Signature Page to Amendment No. 1

 

     

     

    

 

Exhibit A

 

Amendments to Term Loan Agreement

 

     

     

    

 

EXECUTION VERSION

EXHIBIT
A TO AMENDMENT NO. 1

 

TERM LOAN AGREEMENT

 

dated as of November 7, 2018

 

as
amended by Amendment No. 1, dated as of May 3, 2019

 

among

 

 

SORRENTO THERAPEUTICS, INC.,

as Borrower,

 

CERTAIN SUBSIDIARIES OF SORRENTO THERAPEUTICS,
INC.,

as Guarantors,

 

SC
INVESTMENTS NE HOLDINGS, LLC,

SC
INVESTMENTS E HOLDINGS, LLC,

OAKTREE STRATEGIC INCOME II, INC., and

OCSL SRNE, LLC,

as Lenders,

 

and

 

OAKTREE FUND ADMINISTRATION, LLC,

as Agent

 

 

 

$150,000,000 Senior Secured First Lien
Term Loan

  

 

 

     

     

    

 

TABLE OF CONTENTS

 

	ARTICLE I
	DEFINITIONS AND INTERPRETATION
	 	 	 
	Section 1.1	Definitions	1
	 	 	 
	Section 1.2	Accounting Terms	30
	 	 	 
	Section 1.3	Interpretation, etc.	30
	 	 	 
	Section 1.4	Currency Translation	32
	 	 	 
	ARTICLE II
	TERM LOANS
	 	 	 
	Section 2.1	Term Loans	32
	 	 	 
	Section 2.2	Use of Proceeds.	34
	 	 	 
	Section 2.3	Evidence of Debt	34
	 	 	 
	Section 2.4	Interest	35
	 	 	 
	Section 2.5	Repayment of Loans	35
	 	 	 
	Section 2.6	Optional Prepayment	35
	 	 	 
	Section 2.7	Mandatory Prepayments	36
	 	 	 
	Section 2.8	General Provisions Regarding Payments	37
	 	 	 
	Section 2.9	Right of Setoff	38
	 	 	 
	Section 2.10	Sharing of Payments by Lenders	39
	 	 	 
	Section 2.11	Taxes	39
	 	 	 
	Section 2.12	Increased Costs	43
	 	 	 
	Section 2.13	Mitigation Obligations; Replacement of Lenders	44
	 	 	 
	Section 2.14	Break Funding Payments	45
	 	 	 
	Section 2.15	Maintaining Loans Bearing Interest at the LIBOR Rate	46
	 	 	 
	Section 2.16	Agency and Administration Fees	47
	 	 	 
	Section 2.17	Prepayment Premium	47
	 	 	 
	Section 2.18	Unused Commitment Fee	48
	 	 	 
	ARTICLE III
	CONDITIONS PRECEDENT
	 	 	 
	Section 3.1	Closing Date	48
	 	 	 
	Section 3.2	Delayed Draw Term Loans	50

 

     

     

    

 

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES
	 	 	 
	Section 4.1	Organization; Requisite Power and Authority; Qualification	51
	 	 	 
	Section 4.2	Due Authorization	52
	 	 	 
	Section 4.3	Due Execution	52
	 	 	 
	Section 4.4	Enforceability	52
	 	 	 
	Section 4.5	No Conflict	52
	 	 	 
	Section 4.6	Governmental Approvals	52
	 	 	 
	Section 4.7	Compliance with Law	52
	 	 	 
	Section 4.8	Investment Company Act	53
	 	 	 
	Section 4.9	Financial Statements	53
	 	 	 
	Section 4.10	No Material Adverse Change	53
	 	 	 
	Section 4.11	Payment of Taxes	53
	 	 	 
	Section 4.12	Adverse Proceedings and Claims	54
	 	 	 
	Section 4.13	Employee and Pension Matters	54
	 	 	 
	Section 4.14	Solvency	54
	 	 	 
	Section 4.15	Material Agreements	54
	 	 	 
	Section 4.16	Ownership and Investment	55
	 	 	 
	Section 4.17	Intellectual Property	55
	 	 	 
	Section 4.18	Real Property	56
	 	 	 
	Section 4.19	Existing Debt	56
	 	 	 
	Section 4.20	Regulatory Approvals and Related Submissions and Materials	56
	 	 	 
	Section 4.21	Title to Property	57
	 	 	 
	Section 4.22	Insurance	57
	 	 	 
	Section 4.23	Labor Matters	57
	 	 	 
	Section 4.24	Environmental Matters	57
	 	 	 
	Section 4.25	Anti-Terrorism Laws	57
	 	 	 
	Section 4.26	Completeness of Disclosure	58
	 	 	 
	Section 4.27	No Default	58
	 	 	 
	Section 4.28	Broker Fees	58

 

    ii

     

    

 

	ARTICLE V
	AFFIRMATIVE COVENANTS
	 	 	 
	Section 5.1	Financial Statements and Other Reports	58
	 	 	 
	Section 5.2	Existence	62
	 	 	 
	Section 5.3	Payment of Taxes and Claims	62
	 	 	 
	Section 5.4	Maintenance of Properties	62
	 	 	 
	Section 5.5	Insurance	62
	 	 	 
	Section 5.6	Books and Records; Inspections	63
	 	 	 
	Section 5.7	Compliance with Laws	63
	 	 	 
	Section 5.8	Additional Guarantors	64
	 	 	 
	Section 5.9	Further Assurances	64
	 	 	 
	Section 5.10	Employee and Pension Matters	65
	 	 	 
	Section 5.11	Other Collateral	65
	 	 	 
	Section 5.12	Intellectual Property	65
	 	 	 
	Section 5.13	Debt Service Reserve Account	66
	 	 	 
	Section 5.14	Collateral Access	66
	 	 	 
	Section 5.16	Right of First Refusal	66
	 	 	 
	Section 5.17	Post-Closing Obligations	67
	 	 	 
	ARTICLE VI
	NEGATIVE COVENANTS
	 	 	 
	Section 6.1	Indebtedness	67
	 	 	 
	Section 6.2	Liens	69
	 	 	 
	Section 6.3	No Negative Pledges	72
	 	 	 
	Section 6.4	Restricted Payments	72
	 	 	 
	Section 6.5	Restrictions on Subsidiary Distributions	73
	 	 	 
	Section 6.6	Investments	73
	 	 	 
	Section 6.7	Fundamental Changes; Disposition of Assets	75
	 	 	 
	Section 6.8	Transactions with Affiliates	77
	 	 	 
	Section 6.9	Conduct of Business	77
	 	 	 
	Section 6.10	Fiscal Year	77
	 	 	 
	Section 6.11	Investment Company Act	77

 

    iii

     

    

 

	Section 6.12	Organizational Documents	77
	 	 	 
	Section 6.13	Anti-Terrorism Laws	77
	 	 	 
	Section 6.14	Hedging Agreements	78
	 	 	 
	Section 6.15	Minimum Liquidity	78
	 	 	 
	ARTICLE VII
	EVENTS OF DEFAULT
	 	 	 
	Section 7.1	Events of Default	78
	 	 	 
	ARTICLE VIII
	AGENCY
	 	 	 
	Section 8.1	Appointment and Authority	81
	 	 	 
	Section 8.2	Rights as a Lender	81
	 	 	 
	Section 8.3	Exculpatory Provisions	81
	 	 	 
	Section 8.4	Reliance by Agent	82
	 	 	 
	Section 8.5	Delegation of Duties	82
	 	 	 
	Section 8.6	Resignation of Agent	83
	 	 	 
	Section 8.7	Non-Reliance on Agent and Other Lenders	84
	 	 	 
	Section 8.8	Agent May File Proofs of Claim	84
	 	 	 
	Section 8.9	Collateral and Guarantee Matters	84
	 	 	 
	ARTICLE IX
	GUARANTY
	 	 	 
	Section 9.1	The Guaranty	85
	 	 	 
	Section 9.2	Guaranty Unconditional	85
	 	 	 
	Section 9.3	Discharge Only Upon Payment In Full	87
	 	 	 
	Section 9.4	Additional Waivers; General Waivers	87
	 	 	 
	Section 9.5	Stay of Acceleration	88
	 	 	 
	Section 9.6	Reinstatement	89
	 	 	 
	Section 9.7	Subrogation	89
	 	 	 
	Section 9.8	Subordination of Intercompany Indebtedness	89
	 	 	 
	Section 9.9	Contribution with Respect to Guaranteed Obligations	90

 

    iv

     

    

 

	ARTICLE X
	MISCELLANEOUS
	 	 	 
	Section 10.1	Notices; Effectiveness; Electronic Communication	90
	 	 	 
	Section 10.2	Waivers; Amendments	91
	 	 	 
	Section 10.3	Expenses; Indemnity; Damage Waiver	92
	 	 	 
	Section 10.4	Successors and Assigns	94
	 	 	 
	Section 10.5	Survival	97
	 	 	 
	Section 10.6	Counterparts; Integration; Effectiveness; Electronic Execution	97
	 	 	 
	Section 10.7	Severability	98
	 	 	 
	Section 10.8	Governing Law; Jurisdiction	98
	 	 	 
	Section 10.9	Waiver of Jury Trial	99
	 	 	 
	Section 10.10	Treatment of Certain Information; Confidentiality	99
	 	 	 
	Section 10.11	Interest Rate Limitation	100
	 	 	 
	Section 10.12	USA PATRIOT Act	100
	 	 	 
	Section 10.13	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	100

 

    v

     

    

 

APPENDICES:

 

Appendix A - Notice Addresses, Principal Offices and
Lending Offices

Appendix B - Commitments

 

SCHEDULES:

 

	 	Schedule 4.12	Adverse Proceedings
	 	Schedule 4.15	Material Agreements
	 	Schedule 4.16(a)	Jurisdiction of Organization and Equity Interests of the Loan Parties
	 	Schedule 4.16(b)	Equity Interests of the Loan Parties’ Subsidiaries
	 	Schedule 4.17(a)	Loan Party Intellectual Property 
	 	Schedule 4.18	Real Property
	 	Schedule 4.19	Indebtedness
	 	Schedule 4.20(a)	Regulatory Approvals
	 	Schedule 4.21	Insurance
	 	Schedule 6.1	Indebtedness
	 	Schedule 6.2	Liens
	 	Schedule 6.6	Investments

 

EXHIBITS:

 

	 	Exhibit A	-	Form of Funding Notice 
	 	Exhibit B	-	Form of Assignment and Assumption Agreement
	 	Exhibit C	-	Form of Closing Date Certificate
	 	Exhibit D	-	Form of Compliance Certificate
	 	Exhibit E	-	Form of Note
	 	Exhibit F	-	Form of Solvency Certificate
	 	Exhibit G	-	Form of Joinder Agreement
	 	Exhibit H	- 	Forms of U.S. Tax Compliance Certificates
	 	Exhibit I	-	Form of Minimum Liquidity Compliance Certificate
	 	Exhibit J	-	Form of Delayed Draw Notice

 

    vi

     

    

 

TERM LOAN AGREEMENT

 

This TERM LOAN AGREEMENT, dated as
of November 7, 2018, as amended by Amendment No. 1, dated as of May
3, 2019 is entered into among SORRENTO THERAPEUTICS, INC., a Delaware corporation (the “Borrower”),
the subsidiaries of the Borrower party hereto as Guarantors, the Lenders, and OAKTREE
FUND ADMINISTRATION, LLC, in its capacity as administrative agent and collateral agent for the Lenders (together with
its permitted successors in such capacity, the “Agent”).

 

PRELIMINARY STATEMENTS

 

WHEREAS, the Borrower has requested
that the Lenders extend a senior secured first lien term loan facility to the Borrower consisting of (i) term loans in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000) to be extended on the Closing Date and (ii) delayed draw term loans
in the aggregate principal amount of Fifty Million Dollars ($50,000,000) to be extended in accordance with the terms hereof;

 

WHEREAS, the proceeds of the Term Loans
shall be used by the Borrower for, among other things, working capital and general corporate purposes;

 

WHEREAS, each Guarantor will derive
substantial direct and indirect benefits from the transactions contemplated by this Agreement;

 

WHEREAS, the Borrower has agreed to
secure all of its Obligations by granting to the Agent, for the benefit of the Agent and the Lenders, a security interest in and
lien upon the Collateral of the Borrower;

 

WHEREAS, each Guarantor has agreed
to guarantee all of the Obligations and to secure its Obligations by granting to the Agent, for the benefit of the Secured Parties,
a security interest in and lien upon the Collateral of such Guarantor; and

 

WHEREAS, the Lenders are willing to
make such Term Loans to the Borrower upon the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration
of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

Section 1.1           Definitions.
The following terms used in this Agreement, including in the preamble, recitals, exhibits, appendices and schedules hereto, shall
have the following meanings:

 

“Additional Guarantor”
means any Domestic Subsidiary of the Borrower that becomes a party to this Agreement and the Guaranty pursuant to Section 5.8.

 

    1

     

    

 

“Administrative Questionnaire”
means an administrative questionnaire in a form supplied by the Agent.

 

“Adverse Proceeding” means
any action, suit, proceeding (whether administrative, judicial or otherwise), governmental audit, investigation or arbitration
(whether or not purportedly on behalf of any Loan Party or any of its Subsidiaries) at law or in equity, or before or by any Governmental
Authority (including any Environmental Claims) or by any Regulatory Authority with respect to any Regulatory Approval, whether
pending or, to the knowledge of any Loan Party or any of its Subsidiaries, threatened in writing against or affecting: (i) the
Loan Parties or any of its Subsidiaries, any property of the Loan Parties or any of its Subsidiaries, or (ii) this Agreement or
the transactions contemplated hereby.

 

“Affected Lender” has the
meaning assigned to such term in Section 2.15(b).

 

“Affected Loans” has the
meaning assigned to such term in Section 2.15(b).

 

“Affiliate” means, with
respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled
by or is under common Control with the Person specified.

 

“Agent” has the meaning
assigned to such term in the preamble to this Agreement.

 

“Agent’s Account”
means the account from time to time identified as such by the Agent in a written notice to the Borrower or any Lender, as applicable.

 

“Aggregate Asset Sale Consideration”
means, with respect to any Asset Sale, an amount equal to, without duplication (i) the fair market value of the aggregate consideration
received by the Borrower or any of its Subsidiaries, whether consisting of cash or other assets, in such Asset Sale minus
(ii) the sum of (A) any taxes payable as a result of any gain recognized directly as a result of such Asset Sale, (B) any direct
out-of-pocket selling costs, fees and expenses incurred as a result of such Asset Sale that are paid to unaffiliated third parties
and (C) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness (other than Obligations
under the Loan Documents) that is secured by a Lien (other than a Lien that ranks pari passu with or subordinated to the
Liens securing the Obligations) on the asset subject to such Asset Sale that is required to be repaid (and is timely repaid) in
connection with such Asset Sale.

 

“Agreement” means this
Term Loan Agreement.

 

“Allocable Amount” has
the meaning assigned to such term in Section 9.9(b).

 

“Alternate Base Rate” means,
for any date, a rate per annum equal to the greater of (i) the Prime Rate; (ii) the Federal Funds Effective Rate in effect on such
day plus 0.50% or (iii) the LIBOR Rate that would be applicable on such day (or if such day is not a Business Day, the immediately
preceding Business Day) for a one-month Interest Period plus 1.0%; provided that, notwithstanding the foregoing,
in no event shall the Alternate Base Rate be less than 1.00% per annum. Any change in the Alternate Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

 

    2

     

    

 

“Amendment
No. 1” means that certain Amendment No. 1 to Term Loan Agreement, dated as of May 3, 2019, among the Borrower, the Guarantors
party thereto, the Lenders and the Agent.

 

“Amendment
No. 1 Effective Date” means the “Effective Date” as defined in Amendment No. 1.

 

“Anti-Terrorism Laws” means
any laws relating to terrorism or money laundering, including, without limitation, (i) the Money Laundering Control Act of 1986
(e.g., 18 U.S.C. §§ 1956 and 1957), (ii) the Bank Secrecy Act of 1970 (e.g., 31 U.S.C. §§ 5311 – 5330),
as amended by the USA PATRIOT Act, (iii) the laws, regulations and Executive Orders administered by the United States Department
of the Treasury’s Office of Foreign Assets Control (“OFAC”), (iv) the Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010 and implementing regulations by the United States Department of the Treasury, (v) any law prohibiting
or directed against terrorist activities or the financing of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B),
or (vi) any similar laws enacted in the United States, United Kingdom, European Union or any other jurisdictions in which the parties
to this agreement operate, and all other present and future legal requirements of any Governmental Authority governing, addressing,
relating to, or attempting to eliminate, terrorist acts and acts of war.

 

“Applicable Asset Sale Prepayment
Amount” means, with respect to any Asset Sale, (i) to the extent the Aggregate Asset Sale Consideration is attributable
to Non-Core Assets, the lesser of (x) 100% of the Net Cash Proceeds received by the Borrower or its Subsidiaries in such Asset
Sale and (y) 50% of the Aggregate Asset Sale Consideration and (ii) to the extent the Aggregate Asset Sale Consideration is attributable
to the Specified Assets, 100% of the Net Cash Proceeds received by the Borrower or its Subsidiaries in such Asset Sale.

 

“Applicable Margin” means
(i) in the case of Loans bearing interest based on the LIBOR Rate, 7.00% per annum or (ii) in the case of Loans bearing interest
based on the Alternate Base Rate, 6.00%.

 

“Approved Assignee” means
(i) a Lender, (ii) an Affiliate of a Lender, (iii) an entity or an Affiliate of an entity that administers or manages a Lender,
(iv) a commercial bank, insurance company or other financial institution that is an “accredited investor” (as defined
in Regulation D of the Securities Act of 1933) that is principally in the business of managing debt investments, or (v) any Fund
administered or managed by any of the foregoing, , in each case, other than any Disqualified Person.

 

“Arm’s-Length Transaction”
means, with respect to any transaction, the terms of such transaction shall not be less favorable to the Borrower or any of its
Subsidiaries than commercially reasonable terms that would be obtained in a transaction with a Person that is an unrelated third
party.

 

    3

     

    

 

“Asset Sale” means a sale,
lease or sublease (as lessor or sub-lessor), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of the Borrower’s
or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible
or intangible, whether now owned or hereafter acquired, including, without limitation, the Equity Interests of any of the Borrower’s
Subsidiaries, other than (i) inventory sold in the Ordinary Course, (ii) equipment and other tangible property no longer used or
useful to any Loan Party’s business disposed of in the Ordinary Course in an Arm’s-Length Transaction, (iii) substantially
worn, damaged or obsolete property (other than Intellectual Property) disposed of in the Ordinary Course, (iv) returns of inventory
in the Ordinary Course, (v) the use of cash and Cash Equivalents in a manner not inconsistent with the provisions of this Agreement
and the other Loan Documents, (vi) leases or subleases of real property in the Ordinary Course (but not sale-leasebacks), (vii)
any Involuntary Disposition, (viii) the abandonment of any Intellectual Property (other than any Material Loan Party Intellectual
Property) of the Borrower or any of its Subsidiaries in the Ordinary Course, (ix) the sale of any Equity Interests issued by the
Borrower, and (x) any other sale, transfer or other disposition or a series of related sales, transfers or other dispositions of
assets (other than Specified Assets) having a fair market value not in excess of $5,000,000 in the aggregate.

 

“Assignment and Assumption Agreement”
means an assignment and assumption agreement entered into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.4(b)(iii)), and accepted by the Agent, in substantially the form of Exhibit B,
or any other form approved by the Agent.

 

“Authorized Officer” means,
as applied to any Person, any individual holding the position of chairman of the board, chief executive officer, president, vice
president, chief financial officer, principal financial officer, principal accounting officer or treasurer of such Person or other
individual with express authority to act on behalf of such Person as designated (i) by the board of directors or other managing
authority of such Person and (ii) in writing to the Agent.

 

“Beneficial Ownership Certification”
means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall
be substantially similar in form and substance to the form of “Certification Regarding Beneficial Owners of Legal Entity
Customers” published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial
Markets Association.

 

“Bail-In Action” means
the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of
an EEA Financial Institution.

 

“Bail-In Legislation” means,
with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In
Legislation Schedule.

 

“Beneficial Ownership Regulation”
means 31 C.F.R. § 1010.230.

 

“Borrower” has the meaning
assigned to such term in the preamble to this Agreement.

 

    4

     

    

 

“Business Day” means (i)
with respect to all matters except those addressed in clause (ii), any day, excluding Saturday, Sunday and any day which is a legal
holiday in the City of New York or San Diego, California or is a day on which banking institutions located in the City of New York
or San Diego, California are authorized or required by law or other governmental action to close and (ii) with respect to all notices,
determinations, fundings and payments in connection with a LIBOR Rate or Loans bearing interest at a LIBOR Rate, means any such
day that is a Business Day described in clause (i) and that is also a day on which banks in the City of London are generally open
for interbank or foreign exchange.

 

“Capitalized Lease Obligation”
means, as applied to any Person, any obligation incurred or arising out of or in connection with any lease of any property (whether
real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.

 

“Cash Equivalents” means,
as at any date of determination: (i) Canadian dollars, Hong Kong dollars, pounds sterling or euros, (ii) certificates of deposit,
bankers’ acceptances, time deposits, Eurodollar time deposits and money market deposit accounts issued, guaranteed by, placed
with or issued or offered by a commercial bank having capital and surplus in excess of $1 billion and whose long-term debt is rated
at least “A” or the equivalent thereof by Moody’s or S&P and maturing within three months after the relevant
date of calculation; (iii) (A) any investment in marketable debt obligations issued or guaranteed by the government of the United
States of America, Canada or the United Kingdom or by an instrumentality or agency thereof, in each case maturing within three
months after the relevant date of calculation and not convertible or exchangeable to any other security, and (B) readily marketable
direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another nationally
recognized statistical rating organization), in each case with maturities not exceeding two years from the date of acquisition;
(iv) commercial paper not convertible or exchangeable to any other security (A) for which a recognized trading market exists, (B)
issued by an issuer incorporated or formed in the United States of America, Canada or the United Kingdom; (C) which matures within
three months after the relevant date of calculation; and (D) which has a credit rating of either A-1 or higher by S&P or P-1
or higher by Moody’s, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect
of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; (v) any investment in money market funds
which (A) have a credit rating of either A-1 or higher by S&P or P-1 or higher by Moody’s, (B) which invest at least
95% of their assets in securities of the types described in paragraphs (i) to (iv) above and (C) can be turned into cash on not
more than thirty (30) days’ notice; or (v) any other debt security approved by the Required Lenders.

 

“CFC” means a “controlled
foreign corporation” within the meaning of Section 957 of the Code.

 

“Change in Law” means the
occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation
or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application
thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or
not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary,
(A) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder
or issued in connection therewith and (B) all requests, rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign
regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless
of the date enacted, adopted or issued.

 

    5

     

    

 

“Change of Control” means,
at any time, the occurrence of any of the following events or circumstances: (i) any “person” or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) shall (x) become the “beneficial owner” (within
the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of securities of the Borrower representing 35% or more
of the total voting power represented by the Borrower’s then outstanding voting securities, or (y) otherwise acquire, directly
or indirectly, the power to direct or cause the direction of the management or policies of the Borrower, whether through the ability
to exercise voting power, by contract or otherwise, (ii) persons who were (x) directors of the Borrower on the Closing Date or
(y) appointed by directors who were directors of the Borrower on the Closing Date or were nominated or approved by directors who
were directors of the Borrower on the Closing Date shall cease to occupy a majority of the seats (excluding vacant seats) on the
board of directors of the Borrower, (iii) the consummation of a merger or consolidation of the Borrower with or into any other
Person, other than a merger or consolidation which would result in the voting securities of the Borrower outstanding immediately
prior thereto continuing to represent at least 50% of the total voting power represented by the voting securities of the Borrower
or such surviving entity or its parent outstanding immediately after such merger or consolidation or (iv) any direct or indirect
sale, transfer or other disposition, in one transaction or a series of related transactions, of all or substantially all of the
assets of the Borrower and its Subsidiaries, taken as a whole (it being agreed that the sale, transfer or other disposition by
any Person of the Equity Interests of any Subsidiary constitutes an indirect sale, transfer or disposition of the assets of such
Subsidiary).

 

“Charges” has the meaning
assigned to such term in Section 10.11.

 

“Closing Date” means the
date on which all conditions precedent set forth in Section 3.1 are satisfied or waived in accordance with the terms of
this Agreement and the Loans have been funded.

 

“Closing Date Certificate”
means the Closing Date Certificate substantially in the form of Exhibit C.

 

“Closing Date Term Loan Commitment”
means, with respect to any Lender, such Lender’s commitment to make or otherwise fund a Loan on the Closing Date , and “Closing
Date Term Loan Commitments” means all such commitments of all Lenders in the aggregate. The amount of each Lender’s
Closing Date Term Loan Commitment, if any, is set forth on Appendix B or in the applicable Assignment and Assumption Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Closing Date Term
Loan Commitments as of the Closing Date, prior to giving effect to the funding of the Loans on the Closing Date, is $100,000,000.

 

“Closing Date Term Loans”
has the meaning assigned to such term in Section 2.1(a).

 

    6

     

    

 

“Code” means the U.S. Internal
Revenue Code of 1986.

 

“Collateral” means, collectively,
all of the real, personal and mixed property (including Equity Interests), whether tangible or intangible, in which Liens are granted
or purported to be granted to the Agent as security for the Obligations pursuant to any Collateral Document on or after the Closing
Date.

 

“Collateral Agreement”
means the Collateral Agreement, dated as of the date hereof, among the Borrower, each Guarantor and the Agent.

 

“Collateral Documents”
means the Collateral Agreement, and all other instruments, documents and agreements, including any notices or other documents to
be delivered thereunder, delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to
grant and/or confirm to the Agent, for the benefit of the Secured Parties, a Lien on any Collateral of that Loan Party as security
for the Obligations.

 

“Commitment” means, with
respect to any Lender, such Lender’s Closing Date Term Loan Commitment,
such Lender’s Delayed Draw Term Loan Commitment and such Lender’s Early
Delayed Draw Term Loan Commitment, and “Commitments” means all such commitments of all Lenders in the aggregate.

 

“Compliance Certificate”
means a Compliance Certificate substantially in the form of Exhibit D.

 

“Connection Income Taxes”
means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or
branch profits taxes.

 

“Contractual Obligation”
means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its assets or properties is subject.

 

“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

 

“Convertible Notes” has
the meaning assigned to such term in Section 6.1(g).

 

“Copyright” means all copyrights
arising under the laws of the United States of America or any other jurisdiction or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications
and renewals in connection therewith, including all registrations, recordings, applications and renewals in the United States Copyright
Office or in any foreign counterparts thereof.

 

    7

     

    

 

“Custodian” means any receiver,
trustee, assignee, liquidator, custodian or similar official under any Debtor Relief Law.

 

“Debtor Relief Law” means
Title 11, United States Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect.

 

“Debt Service Reserve Account”
has the meaning assigned to such term in Section 5.13(a).

 

“Debt Service Reserve Amount”
has the meaning assigned to such term in Section 5.13(a).

 

“Default” means a condition
or event that, after notice or expiry of an applicable grace period set forth in Article VII, or the making of any determination
under the Loan Documents, or any combination of any of the foregoing, would constitute an Event of Default.

 

“Delayed Draw Eligibility Event”
means the first date during the Delayed Draw Eligibility Period on which all of the following conditions have been satisfied (or
waived by the Required Lenders in their discretion):

 

(i)          the
market capitalization of the Borrower has exceeded $1 billion for at least five (5) of the ten (10) consecutive Business Days immediately
preceding such date;

 

(ii)         no
Default or Event of Default has occurred and is continuing; and

 

(iii)        the
Borrower shall have entered into a licensing agreement with a non-affiliated pharmaceutical company with a market capitalization
of at least $[...***...] that is [...***...], pursuant to which (x) the Borrower shall have licensed one or
more Products to such pharmaceutical company and (y) the Borrower shall have received from such company aggregate non-refundable
upfront consideration with a fair market value of $[...***...] or greater [...***...], such agreement shall
be in full force and effect, no party thereto shall be in material default thereunder and the terms of such agreement are otherwise
reasonably acceptable to the Required Lenders.

 

“Delayed Draw Eligibility Period”
means the period from and including August 7, 2019 to and including November 7, 2019.

 

“Delayed Draw Funding Date”
means the date that is 30 days after the Agent’s receipt of the Delayed Draw Notice following the Delayed Draw Eligibility
Event (or if such date is not a Business Day, the immediately succeeding Business Day).

 

“Delayed Draw Notice” has
the meaning assigned to such term in Section 2.1(e).

 

“Delayed Draw Term Loans”
has the meaning assigned to such term in Section 2.1(d).

 

    8

     

    

 

“Delayed Draw Term Loan Commitment”
means, with respect to any Lender, such Lender’s commitment to make or otherwise fund Delayed Draw Term Loans, and “Delayed
Draw Term Loan Commitments” means all such commitments of all Lenders in the aggregate. The amount of each Lender’s
Delayed Draw Term Loan Commitment, if any, is set forth on Appendix B or in the applicable Assignment and Assumption Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Delayed Draw Term
Loan Commitments as of the ClosingAmendment
No. 1 Effective Date, prior to giving effect to the funding of the Delayed Draw Term Loans,
is $50,000,000. and after giving effect to the funding
of the Early Delayed Draw Term Loans, is $30,000,000.

 

“Delayed Draw Termination Date”
means, solely to the extent the Delayed Draw Notice has not been duly submitted to the Agent in accordance with this Agreement
on or prior to such date, November 7, 2019.

 

“Disclosure Schedules”
means collectively, each of the Schedules to this Agreement.

 

“Dispute” means any pending,
decided or settled litigation, opposition, interference, reexamination, injunction, claim, lawsuit, proceeding, hearing, investigation,
complaint, arbitration, mediation, demand, Patent Office proceeding, decree or any other dispute, disagreement or claim.

 

“Disqualified Equity Interests”
means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible
or for which it is exchangeable), or upon the happening of any event or condition (i) matures or is mandatorily redeemable in whole
or in part (other than (A) solely for Qualified Equity Interests and cash in lieu of fractional shares or (B) solely at the direction
of the issuer), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so
long as any rights of the holders thereof upon the occurrence of a change of control, asset sale or similar event shall be subject
to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments),
(ii) is redeemable at the option of the holder thereof (other than (A) solely for Qualified Equity Interests and cash in lieu of
fractional shares or (B) as a result of a change of control, asset sale or similar event so long as any rights of the holders thereof
upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and
all other Obligations that are accrued and payable and the termination of the Commitments), (iii) provides for the scheduled payments
of dividends in cash, or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that
would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Scheduled
Maturity Date at the time of issuance of such Equity Interests.

 

    9

     

    

 

“Disqualified Person” means
any Person that is a pharmaceutical, biopharmaceutical or biotechnology company and is identified in writing by the Borrower to
the Agent (and any Affiliate of any such competitor readily identifiable by name) from time to time (which shall be provided by
the Agent to the Lenders); provided that (i) no Lender or Agent shall have any obligation to carry out due diligence in
order to identify any Affiliate of any Person but shall act in good faith and (ii) none of the following Persons shall constitute
a Disqualified Person: (A) an institutional investor that invests in pharmaceutical, biopharmaceutical or biotechnology companies
but does not actively participate, directly or indirectly, in the management and control of any such person, (B) any bona fide
debt fund or investment vehicle that is engaged primarily in making, purchasing, holding or otherwise investing in loans, commitments
and similar extensions of credit in the ordinary course of business, or (C) a Person that would otherwise constitute an Disqualified
Person by virtue of having foreclosed on or otherwise exercised any right or remedy resulting in the acquisition or ownership of
the Equity Interests or assets of a Disqualified Person and related activities, including directly or indirectly managing an Disqualified
Person; provided, further, that the identification of any Person as a Disqualified Person after the Closing Date shall not
apply to retroactively disqualify any Person that has previously acquired an assignment or participation interest in any Loan.
Notwithstanding anything to the contrary contained in this Agreement, (a) the Agent shall not be responsible or have any liability
for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified
Person and (b) the Loan Parties and the Lenders acknowledge and agree that the Agent shall have no responsibility or obligation
to determine whether any Lender or potential Lender is a Disqualified Person and that the Agent shall have no liability with respect
to any assignment or participation made to an Disqualified Person.

 

“Dollar Equivalent” means
(i) with respect to an amount denominated in any currency other than Dollars on any date, the equivalent in Dollars of such amount
determined pursuant to Section 1.4 using the Exchange Rate and (ii) with respect to an amount denominated in Dollars on
any date, the amount thereof.

 

“Dollars” and the sign
“$” mean the lawful money of the United States of America.

 

“Domestic Subsidiary” means
each Subsidiary of the Borrower organized under the laws of the United States of America, any state or subdivision thereof or the
District of Columbia, other than (i) a FSHCO, and (ii) any direct or indirect Subsidiary of a CFC or FSHCO.

 

“Early
Delayed Draw Funding Date” means the Amendment No. 1 Effective Date.

 

“Early
Delayed Draw Term Loans” has the meaning assigned to such term in Section 2.1(g). 

 

“Early
Delayed Draw Term Loan Commitment” means, with respect to any Lender, such Lender’s commitment to make or otherwise
fund Early Delayed Draw Term Loans, and “Early Delayed Draw Term Loan Commitments” means all such commitments
of all Lenders in the aggregate. The amount of each Lender’s Early Delayed Draw Term Loan Commitment, if any, is set forth
on Appendix B or in the applicable Assignment and Assumption Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Early Delayed Draw Term Loan Commitments as of the Amendment No. 1 Effective
Date, prior to giving effect to the funding of the Early Delayed Draw Term Loans, is $20,000,000. 

 

    10

     

    

 

“EEA Financial Institution”
means (i) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of
an EEA Resolution Authority, (ii) any entity established in an EEA Member Country which is a parent of an institution described
in clause (i) of this definition, or (iii) any financial institution established in an EEA Member Country which is a subsidiary
of an institution described in clause (i) or (ii) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means
any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority”
means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Assignee” means
any Person that meets the requirements to be an assignee under Section 10.4(b)(iii) and (v) (subject to such consents, if
any, as may be required under Section 10.4(b)(iii)).

 

“Employee Benefit Plan”
means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed
to by, or required to be contributed by, Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.

 

“Environmental Claims”
means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, information request, abatement order
or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant
to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material
or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat
or harm to health, safety, natural resources or the environment, arising out of a violation of Environmental Law or any Hazardous
Materials Activity.

 

“Environmental Laws” means
all laws (including common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices, requirements
or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (i) environmental
matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal
of Hazardous Materials; or (iii) to the extent related to Hazardous Materials Activity, occupational safety and health, industrial
hygiene, land use, natural resources or the protection of human, plant or animal health or welfare, in any manner applicable to
the Borrower or any of its Subsidiaries or any Facility.

 

“Environmental Liability”
means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties
or indemnities), of any Loan Party or any of its Subsidiaries directly or indirectly resulting from or based upon (i) obligations
under or the violation of any Environmental Law, (ii) the generation, use, handling, transportation, presence, storage, treatment
or disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials, (iv) the release or threatened release of any
Hazardous Materials into the environment or (v) any contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

    11

     

    

 

“Equity Interests” means
any and all shares, interests, participations or other equivalents (however designated) of equity interests of a corporation, any
and all equivalent ownership interests in a Person other than a corporation (including, without limitation, partnership interests,
membership interests and similar ownership interests), any and all warrants, rights or options to purchase or other arrangements
or rights to acquire any of the foregoing, and all other ownership or profit interests in a Person (including partnership, member
or trusts interests in such Person), in each case whether voting or non-voting and whether or not outstanding on any date of determination.

 

“ERISA” means the Employee
Retirement Income Security Act of 1974 and any successor thereto.

 

“ERISA Affiliate” means
as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section
414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member. Any former ERISA Affiliate of Borrower or any of its Subsidiaries shall continue
to be considered an ERISA Affiliate of Borrower or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Borrower or such Subsidiary and with respect to liabilities arising after such period
for which Borrower or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

 

“ERISA Event” means (i)
a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii)
any failure by a Pension Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section
302 of ERISA) applicable to such Pension Plan, in each case whether or not waived; (iii) the filing pursuant to Section 412(c)
of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to a Pension
Plan; (iv) a determination that a Pension Plan is in “at-risk” status (as defined in Section 303(i)(4) of ERISA or
Section 430(i)(4) of the Code); (v) a withdrawal by the Borrower or ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (vi) a complete or partial withdrawal by the Borrower
or ERISA Affiliate from a Multi-employer Plan; (vii) the filing of a notice of intent to terminate, the treatment of a Plan amendment
as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan
or Multi-employer Plan; (viii) the occurrence of an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multi-employer
Plan; (ix) the Borrower or any of its Subsidiaries engaging in a non-exempt “prohibited transaction” with respect to
which the Borrower or any of its Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the
Code), or with respect to which the Borrower or any such Subsidiary could otherwise be liable; or (x) the imposition of any material
liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or ERISA Affiliate.

 

    12

     

    

 

“EU Bail-In Legislation Schedule”
means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from
time to time.

 

“Event of Default” means
each of the conditions or events set forth in Section 7.1.

 

“Exchange Act” means the
Securities Exchange Act of 1934.

 

“Exchange Rate” means,
on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency
may be exchanged into Dollars, at the time of determination on such day on the applicable Bloomberg screen page for such currency.
In the event that such rate does not appear on any Bloomberg screen page, the Exchange Rate shall be determined by reference to
such other publicly available service for displaying exchange rates as may be agreed upon the Agent and the Borrower, or, in the
absence of such an agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of three
reputable bulge bracket investment banking firms selected by the Agent in the market where such banks’ foreign currency exchange
operations in respect of such currency are then being conducted, at or about such time as the Agent shall elect after determining
that such rates shall be the basis for determining the Exchange Rate, on such date for the purchase of Dollars for delivery two
(2) Business Days later; provided that, if at the time of any such determination, for any reason, no such spot rate is being quoted,
the Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive
absent manifest error.

 

“Excluded IPO Proceeds”
means the Net Cash Proceeds received by any Subsidiary of the Borrower from a primary offering of such Subsidiary’s Equity
Interests in connection with a broadly-distributed initial public offering of such Subsidiary’s Equity Interests consummated
pursuant to Section 6.7(f); provided that, for the avoidance of doubt, any Net Cash Proceeds received by the Borrower or
any of its Subsidiaries from a secondary offering of a Subsidiary’s Equity Interests shall not be Excluded IPO Proceeds.

 

“Excluded Taxes” means
any of the following Taxes imposed on or with respect to the Agent or any Lender or required to be withheld or deducted from a
payment to the Agent or such Lender, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and
branch profits Taxes, in each case, (A) imposed as a result of the Agent or such Lender being organized under the laws, or having
its principal office or, in the case of any Lender, its applicable lending office located in the jurisdiction imposing such Tax
(or any political subdivision thereof) or (B) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding
Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan pursuant
to a law in effect on the date on which (A) such Lender acquires such interest in the Loan (other than pursuant to an assignment
request by the Borrower under Section 2.13(b)) or (B) such Lender changes its lending office, except in each case to the
extent that, pursuant to Section 2.11, amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii)
Taxes attributable to the Agent or such Lender’s failure to comply with Section 2.11(f) and (iv) any withholding Taxes
imposed under FATCA.

 

    13

     

    

 

“Exclusively Licensed Material IP”
means the Intellectual Property licensed (or sublicensed) exclusively to any Loan Party and material to the business or operations
of the Loan Parties taken as a whole.

 

“Exit
Fee” has the meaning assigned to such term in Section 2.19. 

 

“Facility” means any real
property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased or
operated by any Loan Party or any of its Subsidiaries.

 

“FATCA” means Sections
1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements
entered into pursuant to Section 1471(b)(1) of the Code, 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 Code.

 

“Federal Funds Effective Rate”
means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/16th of 1%) of the rates on overnight Federal
funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards,
if necessary, to the next 1/16th of 1%) of the quotations for such day for such transactions received by the Agent from three national
banks of recognized standing selected by it.

 

“Fee Letter” means the
fee letter executed as of the date hereof among the Borrower, the Agent and Oaktree Capital Management, L.P. solely in its capacity
as manager of certain funds and accounts in its Strategic Credit strategy.

 

“Financial Officer Certification”
means, with respect to the annual audited financial statements and quarterly unaudited financial statements for which such certification
is required hereunder, the certification of the chief financial officer, principal financial officer or principal accounting officer
of the Borrower that the information contained in any such financial document fairly presents, in all material respects, the financial
condition of the Borrower and its Subsidiaries (including the Scilex Subsidiary) as of the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject, in the case of the quarterly unaudited financial statements,
to the absence of footnote disclosure and year-end audit adjustments.

 

“Fiscal Quarter” means
a fiscal quarter of any Fiscal Year.

 

    14

     

    

 

“Fiscal Year” means the
fiscal year of the Borrower and its Subsidiaries ending on December 31 of each calendar year or such other day as changed by the
Borrower or the applicable Subsidiary pursuant to Section 6.10.

 

“Foreign Lender” means
any Lender that is not a U.S. Lender.

 

“Foreign Subsidiary” means
any Subsidiary not organized under the laws of the United States of America, any state or subdivision thereof, or the District
of Columbia.

 

“Foreign Subsidiary Holding Company”
or “FSHCO” means any Subsidiary substantially all of the assets of which consist of Equity Interests and, if
applicable, Indebtedness, in Foreign Subsidiaries that are CFCs or other FSHCOs.

 

“Fund” means any Person
(other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial
loans, debt securities or similar extensions of credit in the ordinary course of its activities.

 

“Funding Notice” means
a notice substantially in the form of Exhibit A.

 

“GAAP” means, subject to
the provisions of Section 1.2, United States generally accepted accounting principles in effect as of the date of determination
thereof.

 

“Governmental Authority”
means any supra-national, national, federal, provincial, state, municipal or other government, or political subdivision thereof,
and any governmental department, commission, board, bureau, court, agency, authority, regulatory body, central bank, or instrumentality
or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

“Governmental Authorization”
means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

 

“Guarantee” means, as to
any Person, without duplication, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect
of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (ii) to purchase
or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation
of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee
in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include customary and
reasonable indemnity obligations or product warranties, including to the extent entered into in connection with any acquisition
or disposition of assets not otherwise prohibited under this Agreement. The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

 

    15

     

    

 

“Guaranteed Obligations”
has the meaning assigned to such term in Section 9.1.

 

“Guarantor” means the Borrower,
each Domestic Subsidiary of the Borrower that is a party hereto as a Guarantor as of the Closing Date and each Additional Guarantor,
in each case, until such person shall cease to be a Guarantor in compliance with the provisions of this Agreement.

 

“Guarantor Payment” has
the meaning assigned to such term in Section 9.9(a).

 

“Guaranty” means the Guaranty
made by the Guarantors under Article IX in favor of the Secured Parties.

 

“Hazardous Materials” means
any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which
may or would reasonably be expected to pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity
of any Facility or to the indoor or outdoor environment.

 

“Hazardous Materials Activity”
means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location, release, threatened release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, recycling, disposition
or handling of any Hazardous Materials, and any investigation, monitoring, corrective action or response action with respect to
any of the foregoing.

 

“Hedging Agreements” mean
(i) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements
and currency exchange, interest rate or commodity collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in currency exchange, interest rates, commodity prices or other obligations of or owed to such
Person in the conduct of its business.

 

    16

     

    

 

“Indebtedness” means, with
respect to any Person and without duplication, whether contingent or otherwise, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, notes, debentures or similar instruments, (iii) all obligations
of such Person upon which interest charges are customarily paid, (iv) all obligations of such Person under conditional sale or
other title retention agreement relating to property acquired by such Person, (v) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding accounts payable incurred in the Ordinary Course in an Arm’s-Length
Transaction having any initial due date of not more than sixty (60) days and not more than sixty (60) days past due), (vi) all
obligations of such Person under guaranteed minimum purchase, take or pay or similar performance requirement contracts, (vii) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right to be secured by) any Lien
on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; provided,
however, that the amount of such Indebtedness will be the lesser of: (A) the fair market value (as determined in good faith
by such Person) of such asset at such date of determination (to the extent such Indebtedness is solely recourse to such asset)
and (B) the amount of such Indebtedness of such other Person, (viii) all Guarantees by such Person of Indebtedness of others, (ix)
all Capitalized Lease Obligations of such Person, (x) net obligations of such Person under Hedging Agreements, (xi) all obligations
of such Person as an account party in respect of letters of credit and letters of guarantee, (xii) all obligations of such Person
in respect of bankers’ acceptances, (xiii) all obligations of such Person with respect to the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness
provide that such Person is not liable therefor, (xiv) all obligations of such Person for milestone payments, license payments
and similar payments pursuant to any license agreement, revenue interest agreement or royalty financing agreement, and (xv) all
obligations of such Person in respect of Disqualified Equity Interests. For purposes of the immediately preceding clause (v), (vi)
and (xiv), (A) any such obligations to the extent not required to be reflected as a liability on such Person’s balance sheet
in accordance with GAAP and (B) any obligations in respect of upfront, customary milestone, license and similar payments payable,
in each case, upon such Person’s achievement of sales or revenue targets for the relevant product (so long as such targets
were not agreed upon by such Person for the purpose of evading any provision of this Agreement) shall not be considered Indebtedness.
For purposes of the immediately preceding clause (xiv), any upfront payments or other payments that are not tied to the achievement
of sale or revenue targets shall be considered Indebtedness. Notwithstanding the foregoing, Indebtedness shall be deemed not to
include: (A) deferred or prepaid revenues in the Ordinary Course; (B) customary and reasonable purchase price holdbacks in respect
of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; or
(C) any obligations attributable to the exercise of appraisal rights in connection with mergers and acquisitions and the settlement
of any claims or actions (whether actual, contingent or potential) with respect thereto.

 

“Indemnified Taxes” means
(i) all Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (ii) to the extent not otherwise described in (i), Other Taxes.

 

“Indemnitee” has the meaning
assigned to such term in Section 10.3(b).

 

“Independent Financial Advisor”
means a non-affiliated accounting, appraisal or investment banking firm or consultant, in each case of recognized national standing
in the United States, that is, in the good faith determination of the Borrower, qualified to perform the task for which it has
been engaged.

 

“Intellectual Property”
means, collectively, all rights, priorities and privileges relating to intellectual property, whether arising under the laws of
the United States of America or any other jurisdiction or political subdivision thereof (including any multinational laws or otherwise),
including all inventions (whether patentable or unpatentable and whether or not reduced to practice) and discoveries, and all improvements
thereto, and all know-how, confidential or proprietary information, trade secrets, data, Copyrights, Patents, Trademarks, and internet
domain names, together with all common law rights and moral rights therein, and all goodwill associated therewith, and all rights
of the same or similar effect or nature in any jurisdiction corresponding to such Intellectual Property throughout the world.

 

    17

     

    

 

“Intercompany Indebtedness”
means any unsecured Indebtedness of the Borrower owed to any Subsidiary of the Borrower and any Indebtedness of any Subsidiary
of the Borrower owed to the Borrower or any other Subsidiary.

 

“Interest Period” means,
in connection with any Loan or any portion thereof bearing interest by reference to the LIBOR Rate, (i) initially, a period commencing
on the Closing Date and ending on December 31, 2018 and (ii) thereafter, a period of three (3) months, commencing on the day on
which the immediately preceding Interest Period expires; provided, (i) if an Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless such succeeding Business
Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii)
any Interest Period that commences on the last Business Day of a calendar month (or on which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period; and (iii) no Interest Period shall extend beyond the Scheduled Maturity Date.

 

“Investment” means (i)
any direct or indirect purchase or other acquisition by the Borrower or any of its Subsidiaries (including pursuant to any merger
with any other Person that was not a Subsidiary prior to such merger) of, or of a beneficial interest in, any of the Securities
of any other Person; (ii) any direct or indirect purchase or other acquisition for value, by any Subsidiary of the Borrower from
any Person, of any Equity Interests of such Person; (iii) any direct or indirect loan, advance, deposit or capital contribution
by the Borrower or any of its Subsidiaries to any other Person, excluding any such loan, advance or other extension of credit representing
the purchase price of inventory or supplies sold by the Borrower or such Subsidiary of the Borrower to such Person in the Ordinary
Course in an Arm’s-Length Transaction; and (iv) the purchase or other acquisition (in one transaction or a series of transactions)
of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, product
(or right to develop or commercialize a product), line of business, or division of such Person. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additional Investments made in connection therewith, without
any adjustments for increases or decreases in value, or write ups, write downs or write offs with respect to such Investment.

 

“Involuntary Disposition”
means any loss of, damage to or destruction of, or any condemnation, seizure, confiscation or other taking for public use of, any
property of a Loan Party or any of its Subsidiaries, or the requisition of the use of such property.

 

“IRS” means the United
States Internal Revenue Service.

 

“Joinder Agreement” means
the Joinder Agreement of each Additional Guarantor substantially in the form of Exhibit G.

 

“Joint Venture” means a
joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form to the extent not
a Subsidiary or the Scilex Subsidiary.

 

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“Lenders” means (i) the
Persons listed as Lenders on the signature pages hereto (other than any such Person that has ceased to be a party hereto pursuant
to an Assignment and Assumption Agreement), (ii) any Person that has become a party hereto pursuant to an Assignment and Assumption
Agreement, and (iii) any permitted successors of such Persons.

 

“LIBOR Rate” means, for
any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16th of 1%) equal to (i) the London
interbank offered rate administered by the ICE Benchmark Administration (or any Person that takes over the administration of such
rate) as published on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations of
interest rates applicable to Dollar deposits in the London interbank market comparable to those currently provided on such page,
as reasonably determined by the Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior
to the commencement of such Interest Period, as the rate for Dollar deposits for the applicable Interest Period, multiplied
by (ii) a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number
one minus the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) established by the Board of Governors of the Federal Reserve
System for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board of
Governors of the Federal Reserve System); provided, that if such rate in (i) above is no longer published or is not available,
then it shall be the rate per annum equal to the rate determined by the Agent to be the average of the rates per annum at which
deposits in Dollars for delivery on the first day of Interest Period in same day funds in the approximate amount of the Loan would
be offered by three major banks in the London interbank Eurodollar market at their request, determined as of approximately 11:00
a.m. London time, two (2) Business Days prior to such date; provided, further, that in no event shall the LIBOR Rate be
less than 1.00% per annum; provided further, that with respect to the initial Interest Period following the Closing Date
only, the LIBOR Rate shall be an interest rate per annum (rounded upwards, if necessary, to the next 1/16th of 1%) equal to the
London interbank offered rate administered by the ICE Benchmark Administration (or any Person that takes over the administration
of such rate) as published on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations
of interest rates applicable to Dollar deposits in the London interbank market comparable to those currently provided on such page,
as reasonably determined by the Agent) at approximately 11:00 a.m., London time, on the date that is two (2) Business Days prior
to the Closing Date, as the rate for Dollar deposits for one month, which rate shall apply for the entire initial Interest Period;
provided that in no event shall the LIBOR Rate for any initial interest period be less than 1.00% per annum.

 

“LIBOR Successor Rate”
has the meaning assigned to such term in Section 2.15.

 

“LIBOR Successor Rate Conforming
Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Alternate
Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative
matters as may be agreed by the Agent, the Borrower and the Required Lenders to reflect the adoption of such LIBOR Successor Rate
and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent
determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for
the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Agent, the Borrower and the
Required Lenders agree).

 

    19

     

    

 

“License Agreement” means
any agreement now or hereafter existing pursuant to which any Loan Party and/or one or more of its Subsidiaries grants or receives
any license, covenant not to assert or similar right under any Intellectual Property, where such license, covenant not to assert
or similar right is material to the business or operations of the Borrower or any of its Subsidiaries as a whole, in each case,
excluding any nonexclusive licenses granted to the Borrower or any of its Subsidiaries to use commercially available software or
information technology services on standardized terms.

 

“Lien” means, (i) any mortgage,
lien, pledge, hypothecation, charge, security interest or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof,
and any easement, right of way or other encumbrance on title to real property, any option or other agreement to sell, or give a
security interest in, such asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes of any jurisdiction)) and (ii) in the case of Securities, any purchase option, call or similar right of
a third party with respect to such Securities; provided that in no event shall a non-exclusive license or sub-license of
Intellectual Property be deemed to constitute a Lien if such licenses or sub-licenses are granted in the Ordinary Course and do
not materially impair the value of the Collateral or interfere in any material respect with the ordinary conduct of the business
of the Loan Parties.

“Loan” means (i) with respect
to the Lenders, the Term Loans made by the Lenders to the Borrower pursuant to Section 2.1 as adjusted by any Assignment
and Assumption Agreement to which any Lender is a party, and (ii) with respect to any other Lender, the portion of the Term Loans
assigned to and assumed by such other Lender pursuant to an Assignment and Assumption Agreement, as adjusted by any Assignment
and Assumption Agreement to which such other Lender is a party.

 

“Loan Documents” means
this Agreement, the Notes, the Guaranty, any Joinder Agreement, the Collateral Documents, the Fee Letters and any other documents,
instruments, certificates or agreements executed and delivered by a Loan Party for the benefit of the Agent or any Lender in connection
with this Agreement, the Loans or the Collateral, in each case from and after the effective date of such document, instrument,
certificate or agreement. For the avoidance of doubt, any warrants to purchase Equity Interests of the Borrower held by the Lenders
or their Affiliates from time to time and any registration rights agreement executed in connection therewith shall not be considered
“Loan Documents”.

 

“Loan Party” means each
of the Borrower and each Guarantor.

 

“Loan Party Intellectual Property”
means Intellectual Property owned by any Loan Party or any of its Subsidiaries.

 

    20

     

    

 

“Material Adverse Effect”
means any effect, event, matter or circumstance which has, or would reasonably be expected to have, a material adverse effect on:
(i) the business, assets, financial condition or operations of the Loan Parties on a consolidated basis; (ii) the ability of the
Loan Parties to comply with their payment obligations or any of their other material obligations under the Loan Documents; (iii)
the legality, validity or enforceability of any of the Loan Documents or the rights and remedies of the Agent or the Lenders thereunder;
or (iv) the effectiveness or ranking of any Lien on the Collateral.

 

“Material Agreements” means
(i) those agreements listed on Schedule 4.15 (regardless of amount) and (ii) all License Agreements, purchase agreements,
supply agreements, manufacturing agreements, distribution agreements, research agreements, customer agreements, right of way or
occupancy agreements, lease agreements, consulting agreements, management agreements and employment agreements, in each case, to
the extent the failure of which to maintain or remain in compliance with which would cause a Material Adverse Effect, and (iii)
other agreements to the extent the failure of which to maintain or remain in compliance with which would cause a Material Adverse
Effect and any such other agreement involves amounts payable by a Loan Party on an annual basis in excess of $1,000,000, but excluding
such other agreements that have a remaining term of one year or less involving amounts for the remaining term of such other agreements
on an aggregate basis not in excess of $3,000,000.

 

“Material Indebtedness”
means Indebtedness (other than the Loans) of any one or more of the Borrower and any Subsidiary in an aggregate amount exceeding
$5,000,000.

 

“Material Loan Party Intellectual
Property” means the Loan Party Intellectual Property that is material to the business or operations of the Loan Parties,
taken as a whole.

 

“Material Subsidiary” means,
at any time, any Subsidiary of the Borrower, or any group of Subsidiaries collectively, which, together with their respective consolidated
Subsidiaries, individually or in the aggregate (a) contributed at least five percent (5%) of consolidated net revenues of the Borrower
and its Subsidiaries for the four Fiscal Quarter period most recently ended or (b) represented at least five percent (5%) of consolidated
total assets of the Borrower and its Subsidiaries as of the last day of the most recently ended Fiscal Quarter, in each case as
determined on a consolidated basis in accordance with GAAP.

 

“Maturity Date” means the
Scheduled Maturity Date, or such earlier date on which all of the Loans become due and payable, whether by voluntary or mandatory
prepayment, acceleration following an Event of Default or otherwise pursuant to this Agreement.

 

“Maximum Rate” has the
meaning assigned to such term in Section 10.11.

 

“Minimum Liquidity Amount”
has the meaning assigned to such term in Section 6.15.

 

“Moody’s” means Moody’s
Investors Service, Inc.

 

“Multiemployer Plan” means
any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

 

    21

     

    

 

“Net Cash Proceeds” means
an amount equal to, without duplication (i) cash payments actually received (including any cash actually received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise (including by way of installment payment, but only when
actually received)), minus (ii) the sum of (A) any taxes payable as a result of any gain recognized directly as a result
of the event leading to the cash payment, (B) any direct out-of-pocket selling costs, fees and expenses (including, without limitation,
customary underwriting discounts, fees and commissions) incurred as a result of the event leading to the cash payment and paid
to unaffiliated third parties and (C) in the case of an Asset Sale or Involuntary Disposition, the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness (other than Obligations under the Loan Documents) that is secured
by a Lien (other than a Lien that ranks pari passu with or subordinated to the Liens securing the Obligations) on the asset
subject to such Asset Sale or Involuntary Disposition that is required to be repaid (and is timely repaid) in connection with such
Asset Sale or Involuntary Disposition.

 

“Non-Core Assets” means
assets of the Borrower or its Subsidiaries, excluding the Specified Assets.

 

“Non-Loan Party Cap” means
an amount equal to $5,000,000.

 

“Note” means, with respect
to any Lender, a promissory note of the Borrower payable to the order of such Lender in form attached as Exhibit E appropriately
completed.

 

“Obligations” means all
obligations of every nature of the Loan Parties from time to time owed to the Agent and the Lenders under any Loan Document, whether
for principal, interest (including interest which, but for the commencement of a proceeding under any Debtor Relief Law, would
have accrued on any Obligation, whether or not a claim is allowed for such interest in the related insolvency proceeding), Prepayment
Premium, Exit Fee, premiums, fees, expenses, indemnification
or otherwise. For the avoidance of doubt, any obligations of the Borrower with respect to warrants to purchase Equity Interests
of the Borrower held by the Lenders or their Affiliates from time to time or pursuant to any registration rights agreement executed
in connection therewith shall not be considered “Obligations”.

 

“OFAC” has the meaning
assigned to such term in the definition of “Anti-Terrorism Laws.”

 

“Ordinary Course” means
ordinary course of business or ordinary trade activities that are customary for similar businesses in the normal course of their
ordinary operations and not while in financial distress.

 

“Organizational Documents”
means (i) with respect to any corporation, its certificate or articles of incorporation, organization, amalgamation or continuance
and its bylaws, (ii) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement,
(iii) with respect to any general partnership, its partnership agreement, (iv) with respect to any limited liability company, its
articles of organization and its operating agreement, and (v) with respect to any other entity, its memorandum or articles of association
or other constitutional documents,. In the event any term or condition of this Agreement or any other Loan Document requires any
Organizational Document to be certified by Governmental Authority, the reference to any such “Organizational Document”
shall only be to a document of a type customarily certified by such Governmental Authority.

 

    22

     

    

 

“Other Connection Taxes”
means, with respect to the Agent or any Lender, Taxes imposed as a result of a present or former connection between the Agent or
such Lender and the jurisdiction imposing such Tax (other than connections arising from the Agent or such Lender 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 Loan
or 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 (other than an assignment made pursuant to Section 2.13(b)).

 

“Participant” has the meaning
assigned to such term in Section 10.4(d).

 

“Participant Register”
has the meaning assigned to such term in Section 10.4(d).

 

“Patent Office” means the
respective patent office (foreign or domestic) for any Patent.

 

“Patents” means all patents,
patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, divisions, revisions,
extensions, and reexaminations and reissues thereof in the United States of America or any other jurisdiction, and all rights to
obtain any of the foregoing throughout the world, including the equivalents thereof of any Governmental Authority other than the
United States of America.

 

“Payment Date” means (i)
in the case of Loans bearing interest at a rate calculated based on the LIBOR Rate, the last day of every Interest Period following
the Closing Date (i.e., quarterly) and the Maturity Date; and (ii) in the case of Loans bearing interest at the Alternate Base
Rate, the last Business Day of every third month following the Closing Date (i.e., quarterly) and the Maturity Date.

 

“PBGC” means the Pension
Benefit Guaranty Corporation or any successor thereto.

 

“Pension Plan” means any
Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.

 

“Permitted Acquisition”
means any acquisition by the Borrower or any Loan Party, whether by purchase, merger or otherwise, of all or substantially all
of the assets of, all or substantially all of the Equity Interests of, or a business line or unit or a division of, any Person;
provided:

 

(i)          immediately
prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result
therefrom;

 

    23

     

    

 

(ii)         all
transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws and
in conformity with all applicable Governmental Authorizations;

 

(iii)        the
Loan Parties and their respective Subsidiaries shall not incur any Indebtedness in connection with such acquisition, other than
to the extent the same would constitute Indebtedness permitted by Section 6.1;

 

(iv)        the
Loan Parties shall be in compliance with the Minimum Liquidity Amount set forth in Section 6.15 both before and after giving
effect to such acquisition;

 

(v)         the
Borrower shall have delivered to the Agent at least ten (10) Business Days prior to such proposed acquisition, notice of such proposed
acquisition together with a certification from an Authorized Officer of the Borrower as to compliance with clauses (iii) and (iv)
above, together with financial information readily available to the Borrower or its Subsidiaries with respect to such acquisition;
and

 

(vi)        if
such Permitted Acquisition involves a merger with or into any Loan Party, such Loan Party shall be the continuing or surviving
Person and the obligations of all Loan Parties under all of the Loan Documents shall remain in full force and effect.

 

“Person” means and includes
natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships,
joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and Governmental Authorities.

 

“Plan” means any of (i)
an “employee benefit plan” (including such plans as defined in Section 3(3) of ERISA) that is subject to Title I of
ERISA, (ii) a “plan” as defined in Section 4975 of the Code or (iii) any Person whose assets include (for purposes
of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee
benefit plan” or “plan”; in each case which a Loan Party sponsors or maintains or to which Loan Party or a Subsidiary
of a Loan Party makes, is making, or is obligated to make contributions and includes any Pension Plan.

 

“Prepayment Premium” means
in the case of (i) an optional prepayment under Section 2.6 or the termination of the Delayed Draw Term Loan Commitments
in connection with the repayment in full of the Loans, (ii) a mandatory prepayment under Sections 2.7(a), (b), (c) and (e),
(iii) an acceleration following an Event of Default, (iv) any payment to a Lender pursuant to Section 2.13(b)(x), or (v)
any other circumstance resulting in a payment on any Maturity Date occurring prior to the Scheduled Maturity Date, an amount equal
to (i) if the prepayment or termination is made on or prior to the third anniversary of the Closing Date, the amount of interest
that would have been paid on the principal amount of the Loans (assuming that any Delayed Draw Term Loan Commitments outstanding
on such payment date were funded in full and immediately prepaid on the date of determination) being so repaid or prepaid for the
period from and including the date of such repayment or prepayment to but excluding the date that is the three (3) year anniversary
of the Closing Date, based upon the interest rate in effect on the date of any such prepayment, plus three percent (3%)
of the principal amount of the Loans being so repaid or prepaid and the Commitments being so terminated, or (ii) if the prepayment
is made after the third anniversary of the Closing Date but on or prior to the fourth anniversary of the Closing Date, three percent
(3%) of the principal amount of the Loans being so repaid or prepaid, or (iii) if the prepayment is made after the fourth anniversary
of the Closing Date, 0%.

 

    24

     

    

 

“Prime Rate” means the
rate of interest quoted in the print edition of The Wall Street Journal Money Rates Section as the Prime Rate, as in effect
from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged
to any customer. The Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below
the Prime Rate.

 

“Principal Office” means,
for the Agent, such Person’s “Principal Office” as set forth on Appendix A, or such other office as such
Person may from time to time designate in writing to the Borrower and the Lenders.

 

“Pro Rata Share” means
with respect to all payments, computations and other matters relating to the Loans or Commitments of any Lender, the percentage
obtained by dividing (i) the sum of (x) the then outstanding principal amount of the Loans of that Lender plus (y) the amount of
such Lender’s Delayed Draw Term Loan Commitments then in effect by (ii) the sum of (x) the aggregate of the then outstanding
principal amount of the Loans of all Lenders plus (y) the aggregate amount of Delayed Draw Term Loan Commitments of all Lenders
then in effect.

 

“Products” means each existing
product or component of a product and each future product or component of a product developed, acquired, in-licensed, out-licensed,
manufactured or otherwise commercialized by any Loan Party or any of its Subsidiaries, and any improvement or modification thereto
and any follow-on and/or cannibalizing products with respect thereto.

 

“Qualified Equity Interests”
means any Equity Interests that are not Disqualified Equity Interests.

 

“Register” has the meaning
assigned to such term in Section 10.4(c).

 

“Regulatory Approval” means,
with respect to a Product, the approval of the applicable Regulatory Authority necessary for the testing, manufacturing, use, storage,
supply, promotion, marketing or sale of such Product for a particular indication in a particular jurisdiction.

 

“Regulatory Authority”
means any Governmental Authority with authority over the testing, manufacture, use, storage, supply, promotion, marketing or sale
of a Product in any jurisdiction.

 

“Related Parties” means,
with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Removal Effective Date”
has the meaning assigned to such term in Section 8.6(b).

 

    25

     

    

 

“Required Lenders” means
one or more Lenders having or holding Loans and Commitments representing more than 66 2/3% of the sum of the aggregate outstanding
principal amount of all Loans and Commitments.

 

“Resignation Effective Date”
has the meaning assigned to such term in Section 8.6(a).

 

“ROFR Provisions” shall
mean, with respect to any proposed Indebtedness which is subject to the ROFR Provisions pursuant to Section 5.16 (the “Subject
Indebtedness”), that, prior to the incurrence of any Subject Indebtedness, the Borrower shall (i) deliver to the Agent
and each Lender a written notice describing in reasonable detail the Subject Indebtedness transaction that it is seeking to consummate,
including information regarding the price and other terms and conditions of the Subject Indebtedness, the circumstances under which
such Subject Indebtedness is being sought, the proposed use of proceeds and updated projections of the Borrower and its Subsidiaries
and (ii) provide each Lender with a period of ten (10) Business Days after delivery of such notice and other information in which
to deliver a written proposal to the Borrower if the Lender would like to have the Borrower consider obtaining such Subject Indebtedness
from such Lender (an “Interested Notice”); provided that (A) no Lender shall be under any obligation
to provide any Subject Indebtedness or deliver any Interested Notice and any such decision whether to provide any Subject Indebtedness
shall be in such Lender’s sole and absolute discretion; provided, however, if such Lender has not provided an Interested
Notice within such ten (10) Business Day period, then such Lender shall be deemed to have decided not to offer to participate in
the provision of such Subject Indebtedness and (B) the Borrower shall not be required to incur the Subject Indebtedness from the
applicable Lender or Lenders; provided further that with respect to any transaction that is subject to the right of first
refusal set forth in the Convertible Notes issued by the Borrower on March 26, 2018, as in effect on the date hereof, the obligations
of the Loan Parties under Section 5.16 shall be deemed modified as necessary to permit the Borrower to comply with its obligations
under such provision of such Convertible Notes prior to complying with the ROFR Provisions.

 

“RTX” has the meaning assigned
to such term in the definition of Specified Assets.

 

“S&P” means Standard
& Poor’s Rating Services, a Standard & Poor’s Financial Services LLC business.

 

“San Diego GMP Facilities”
has the meaning assigned to such term in the definition of Specified Assets.

 

“Sanctioned Country” means,
at any time, a country, region or territory which is itself the subject or target of any comprehensive territorial Sanctions.

 

“Sanctioned Person” means,
at any time, (i) any Person listed in any Sanctions-related list of designated Persons maintained by any Sanctions Authority, (ii)
any Person operating, organized or resident in a Sanctioned Country or (iii) any Person owned or controlled by any such Person
or Persons described in the foregoing clauses (i) or (ii).

 

“Sanctions” means all economic
or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

 

    26

     

    

 

“Sanctions Authority” means
the U.S. government (including OFAC and the U.S. Department of State), the United Nations Security Council, Her Majesty’s
Treasury, the European Union, any European Union member state or any other relevant sanctions authority.

 

“Scheduled Maturity Date”
means

 

(i)          with
respect to the Early Delayed Draw Term Loans, 

 

(a)          in
the event that both (I) the Delayed Draw Eligibility Event has occurred on or prior to May 3, 2020 and (II) the conditions set
forth in Section 3.2 are satisfied on or before May 3, 2020, in each case as determined by the Agent, November 7, 2023 or

 

(b)          otherwise,
May 3, 2020 and 

 

(ii)         with
respect to the Loans other than the Early Delayed Draw Term Loans, November 7, 2023.

 

“Scilex Indenture” means
the Indenture, dated as of September 7, 2018, among the Scilex Subsidiary, as issuer, the Borrower, as parent guarantor, and U.S.
Bank National Association, as trustee and collateral agent, as in effect on the date hereof.

 

“Scilex Letter of Credit”
means the Irrevocable Standby Letter of Credit, dated September 7, 2018, with reference number 1, issued by the Borrower in favor
of the Scilex Subsidiary with a face amount of $35,000,000, as in effect on the date hereof.

 

“Scilex Notes” means the
Senior Secured Notes due 2026 issued by the Scilex Subsidiary pursuant to the Scilex Indenture on September 7, 2018 in an initial
aggregate principal amount of $224,000,000.

 

“Scilex Subordinated Loan”
means a loan, unsecured and by its terms subordinated in right of payment to the Scilex Notes, to be made by the Borrower to the
Scilex Subsidiary in the single lump-sum amount of $35,000,000 pursuant to the Scilex Letter of Credit following the Scilex Subsidiary’s
drawing on the Scilex Letter of Credit.

 

“Scilex Subsidiary” means
Scilex Pharmaceuticals Inc., a Delaware corporation (“Scilex Parent”), and each Subsidiary thereof; provided
the Loan Parties and any other Person which directly or indirectly owns any Equity Interest in Scilex Parent does not directly
own any Equity Interests in such Subsidiary.

 

“Secured Parties” means
the Agent and the Lenders.

 

“Securities” means any
Equity Interests, voting trust certificates, certificates of interest or participation in any profit sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares
or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.

 

    27

     

    

 

“Solvency Certificate”
means a Solvency Certificate signed on behalf of the Borrower by its chief financial officer, principal financial officer or principal
accounting officer, substantially in the form of Exhibit F.

 

“Solvent” means, with respect
to the Loan Parties on a consolidated basis, that as of the date of determination, the Loan Parties, on a consolidated basis, are
“solvent” or not “unable to pay its debts” within the meaning given to such terms and similar terms under
applicable laws relating to fraudulent transfers and conveyances or general insolvency law, including that (i) the present fair
saleable value of the assets of the Loan Parties on a consolidated basis is not less than the amount that will be required to pay
the probable liabilities of the Loan Parties on their debts (including contingent, unmatured and unliquidated liabilities) as they
become absolute and matured, (ii) the Loan Parties will not, on a consolidated basis, have unreasonably small capital in relation
to their business, (iii) the Loan Parties, on a consolidated basis, will have sufficient cash flow to enable them to pay their
debts as they mature, and (iv) the value of Loan Parties assets, on a consolidated basis, is less than the amount of their liabilities,
taking into account their contingent and prospective liabilities.

 

“Specified Assets” means
the following assets of the Borrower and its Subsidiaries, whether tangible or intangible, or real, personal or mixed:

 

(i)          assets
comprising the BioServ business;

 

(ii)         assets
comprising the Levena Biopharma business;

 

(iii)        assets
comprising the Virttu Biologics business;

 

(iv)        assets
comprising the Sofusa business;

 

(v)         assets
comprising the G-MAB antibody business;

 

(vi)        assets
comprising the resiniferatoxin (“RTX”) business;

 

(vii)       the
Borrower’s direct or indirect investments in Celularity, Inc.;

 

(viii)      the
Borrower’s direct or indirect investments in NantCell, Inc., NantBioScience, Inc., Immunotherapy NANTibody, LLC and NantCancerStemCell,
LLC;

 

(ix)         the
Borrower’s direct or indirect investments in ImmuneOncia Therapeutics, LLC;

 

(x)          the
Borrower’s direct or indirect investments in Virttu Biologics Limited;

 

(xi)         assets
relating to the GMP manufacturing facilities located at (i) 4955 Judicial Drive, San Diego, CA and (ii) 8395 Camino Santa Fe, San
Diego, CA, including the Borrower’s leasehold interest in such facilities and all owned or leased equipment, inventory and
other assets related to the Borrower’s and its Subsidiaries’ operations at such facilities or any other replacement
or other facility which holds assets now or in the future held or of the type held at any of such facilities (collectively, the
“San Diego GMP Facilities”);

 

    28

     

    

 

(xii)        any
assets acquired by any Loan Party after the Closing Date with a fair market value at the time of such acquisition equal to $25,000,000
or greater; and

 

(xiii)       any
other assets of the Borrower and its Subsidiaries (other than the Scilex Subsidiary and the Equity Interests of the Scilex Subsidiary)
designated in writing to the Borrower by the Agent from time to time.

 

“Subsidiary” means, with
respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other
Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof
is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person
or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another
Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.
Notwithstanding the foregoing, the Scilex Subsidiary shall be deemed not to be a Subsidiary except for purposes of Sections
4.7, 4.25, 5.7(b) and 6.13.

 

“Tax Distributions” means
distributions made directly or indirectly to the Borrower from any Subsidiary (including the Scilex Subsidiary) of Borrower to
enable Borrower to pay any income taxes due and owing by it in respect of the income of such Subsidiary for any taxable period,
provided that the amount of such distributions in the aggregate for any taxable period for this purpose shall not exceed the net
amount of the relevant income tax that Borrower actually owes for such taxable period to the relevant taxing authority.

 

“Taxes” means all present
or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges
in the nature of taxes and imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Term Loans” means each
of the Closing Date Term Loans, the Delayed Draw Term Loans
and the Early Delayed Draw Term Loans.

 

“Termination Conditions”
has the meaning assigned to such term in Section 9.3.

 

“Trademarks” means (i)
all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and, in each case, all goodwill associated therewith, whether now existing or hereafter
adopted or acquired, all registrations and recordings thereof and all applications in connection therewith, in each case whether
in the United States Patent and Trademark Office or in any similar office or agency of the United States of America or any other
jurisdiction or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (ii) the right
to obtain all renewals thereof.

 

“Unfunded Pension Liability”
means with respect to a Pension Plan, the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA
or other applicable law, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code or other applicable laws for the applicable plan year.

 

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“U.S. Lender” means any
Lender that is a United States person as defined in Section 7701(a)(30) of the Code.

 

“USA PATRIOT Act” means
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act
of 2001 (Title III of Pub. L. 107-56, Oct. 26, 2001).

 

“Write-Down and Conversion Powers”
means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from
time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described
in the EU Bail-In Legislation Schedule.

 

Section 1.2           Accounting
Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed
in conformity with, and shall have the meanings assigned to them in accordance with, GAAP applied on a consistent basis as in effect
from time to time, and all accounting determinations required to be made pursuant to any Loan Document shall, unless otherwise
expressly provided in such Loan Document, be made in accordance with GAAP. Financial statements and other information required
to be delivered to the Lenders pursuant to Sections 5.1(a) and 5.1(b) shall be prepared in accordance with GAAP as
in effect at the time of such preparation (except, in the case of unaudited statements, for the absence of footnote disclosure
and year-end audit adjustments). Notwithstanding anything in this Agreement to the contrary, the accounting for capital leases
and operating leases under GAAP as in effect on the date hereof (including, without limitation, Accounting Standards Codification
840) shall apply for the purposes of determining compliance with the provisions of this Agreement, including the definitions of
Capitalized Lease Obligations.

 

Section 1.3           Interpretation,
etc.

 

(a)          The
definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined.

 

(b)          Whenever
the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(c)          The
words “include”, “includes” and “including”, when following any general statement, term or
matter, shall be deemed to be followed by the phrase “without limitation”.

 

(d)          The
word “will” shall be construed to have the same meaning and effect as the word “shall”.

 

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(e)          Unless
the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as amended, restated, amended and restated, supplemented
or otherwise modified from time to time (subject to any restrictions on such amendments, restatements, supplements or modifications
set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns
(subject to any restrictions on such assignments set forth herein), (iii) the words “herein”, “hereof”,
“hereto” and “hereunder” and “this Agreement”, and words of similar import shall be construed
to refer to this Agreement in its entirety, including the appendices, exhibits and schedules hereto, and not to any particular
provision hereof, (iv) all references herein to Articles, Sections, Schedules and Exhibits shall be construed to refer to Articles
and Sections of, and Schedules and Exhibits to, this Agreement, (v) any reference to any law, statute or regulation herein shall,
unless otherwise specified, refer to such law or regulation as amended, modified or supplemented and in effect from time to time
and any successor legislation thereto and regulations promulgated thereunder, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

(f)          In
computing periods of time from a specified date to a later specified date, the word “from” means “from and including”,
the words “to” and “until” each means “to but excluding”, and the word “through”
means “to and including”.

 

(g)          Each
covenant in this Agreement shall be given independent effect, and the fact that any act or omission may be permitted by one covenant
and prohibited or restricted by any other covenant (whether or not dealing with the same or similar events) shall not be construed
as creating any ambiguity, conflict or other basis to consider any matter other than the express terms hereof in determining the
meaning or construction of such covenants and the enforcement thereof in accordance with their respective terms.

 

(h)          This
Agreement is being entered into by and between competent and sophisticated parties who are experienced in business matters and
represented by legal counsel and other advisors, and has been reviewed by the parties and their legal counsel and other advisors.
Therefore, any ambiguous language in this Agreement will not be construed against any particular party as the drafter of the language.

 

(i)          Section
headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.

 

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Section 1.4           Currency
Translation. For purposes of determining compliance with respect to baskets, thresholds and other provisions of the Loan Documents
delineated in Dollars, amounts in currencies other than Dollars shall be translated into Dollars at the Exchange Rates in effect
on the date of the transaction applicable thereto and shall not take into account the fluctuations in any Exchange Rates thereafter.
In furtherance of the foregoing and not in limitation thereof, for purposes of determining compliance with any Dollar-denominated
restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a non-U.S.
currency shall be calculated based on the relevant Exchange Rate in effect on the date such Indebtedness was incurred; provided
that if such Indebtedness is incurred to refinance other Indebtedness denominated in the same non-U.S. currency, and such refinancing
would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant Exchange Rate in effect
on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal
amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced plus
the aggregate amount of accrued but unpaid interest, dividends, premiums (including tender premiums), defeasance costs, underwriting
discounts, fees, costs and expenses (including upfront fees, original issue discount or similar fees) incurred in connection with
such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different
currency from the Indebtedness being refinanced, shall be calculated by the Loan Party based on the Exchange Rate applicable to
the currencies in which such new Indebtedness is denominated that is in effect on the date of such refinancing.

 

ARTICLE II

TERM LOANS

 

Section 2.1           Term
Loans.

 

(a)          Subject
to the terms and conditions of this Agreement, each Lender agrees to make term loans to the Borrower in an amount equal to such
Lender’s Closing Date Term Loan Commitment (the “Closing Date Term Loans”) on the Closing Date. Upon the
funding of the Term Loans on the Closing Date, the Lenders’ Closing Date Term Loan Commitments shall automatically terminate.

 

(b)          To
request the Term Loans on the Closing Date, the Borrower shall deliver to the Agent a Funding Notice not later than 12:00 p.m.,
New York City time, three (3) Business Days before the Closing Date (or such shorter period of time as may be approved by the Agent).
Upon receipt of such Funding Notice, Agent shall promptly notify the Lenders thereof. Such Funding Notice shall be signed by a
duly authorized representative of the Borrower and shall be in the form of Exhibit A. The written Funding Notice shall specify
the following information in compliance with Section 2.1:

 

(i)          the
aggregate amount of the requested Closing Date Term Loans;

 

(ii)         the
date of such borrowing; and

 

(iii)        the
location and number of an account designated by the Borrower to which funds are to be disbursed (which may be in the form of a
flow of funds memorandum, in form and substance reasonably satisfactory to the Agent and the Required Lenders attached to the Funding
Notice).

 

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(c)          Upon
all of the conditions set forth in Section 3.1 having been satisfied or waived, the Lenders shall make the Closing Date
Term Loans to be made by them available to the Borrower by wire transfer of immediately available funds at the account and/or accounts
specified therefor in the flow of funds agreement attached to the Funding Notice. The Borrower shall promptly notify the Agent
upon receipt of the Closing Date Term Loans.

 

(d)          Subject
to the terms and conditions of this Agreement, each Lender agrees to make term loans to the Borrower in an amount equal to such
Lender’s Delayed Draw Term Loan Commitment (the “Delayed Draw Term Loans”) in a single installment on
the Delayed Draw Funding Date. Upon the earlier of (i) the funding of the Delayed Draw Term Loans or (ii) the Delayed Draw Termination
Date, the Lenders’ Delayed Draw Term Loan Commitments shall automatically terminate.

 

(e)          Within
three (3) Business Days after the Delayed Draw Eligibility Event, the Borrower shall deliver to Agent a notice substantially in
the form of Exhibit J (the “Delayed Draw Notice”) signed by a duly authorized representative of the Borrower,
which notice shall (i) state that the Delayed Draw Eligibility Event has occurred and (ii) specify the location and number of an
account designated by Borrower to which funds are to be disbursed on the Delayed Draw Funding Date. Promptly following receipt
of the Delayed Draw Notice, the Agent shall forward the Delayed Draw Notice to each Lender with a Delayed Draw Term Loan Commitment.

 

(f)          Upon
all of the conditions set forth in Section 3.2 having been satisfied as determined by the Agent (or waived by the Agent
in its sole discretion), the Lenders shall make the Delayed Draw Term Loans to be made by them available to the Borrower on the
Delayed Draw Funding Date by wire transfer of immediately available funds at the account specified by the Borrower therefor. The
Borrower shall promptly notify the Agent upon receipt of the Delayed Draw Term Loans.

 

(g)          Subject
to the terms and conditions of this Agreement, each Lender agrees to make term loans to the Borrower in an amount equal to such
Lender’s Early Delayed Draw Term Loan Commitment (the “Early Delayed Draw Term Loans”) in a single installment
on the Early Delayed Draw Funding Date. Upon the funding of the Early Delayed Draw Term Loans, the Lenders’ Early Delayed
Draw Term Loan Commitments shall automatically terminate.

 

(h)          To
request the Early Delayed Draw Term Loans on the Early Delayed Draw Funding Date, the Borrower shall deliver to the Agent a Funding
Notice not later than 12:00 p.m., New York City time, one (1) Business Day before the Early Delayed Draw Funding Date (or such
shorter period of time as may be approved by the Agent). Upon receipt of such Funding Notice, Agent shall promptly notify the Lenders
thereof. Such Funding Notice shall be signed by a duly authorized representative of the Borrower and shall be in the form of Exhibit
A. The written Funding Notice shall specify the following information in compliance with Section 2.1:

 

(i)          the
aggregate amount of the requested Early Delayed Draw Term Loans; 

 

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(ii)         the
date of such borrowing; and

 

(iii)        the
location and number of an account designated by the Borrower to which funds are to be disbursed (which may be in the form of a
flow of funds memorandum, in form and substance reasonably satisfactory to the Agent and the Required Lenders attached to the Funding
Notice).

 

(i)          Upon
all of the conditions set forth in Section 3.3 and Section 4 of Amendment No. 1 having been satisfied as determined by the
Agent (or waived by the Agent in its sole discretion), the Lenders shall make the Early Delayed Draw Term Loans to be made by them
available to the Borrower on the Early Delayed Draw Funding Date by wire transfer of immediately available funds at the account
specified by the Borrower therefor. The Borrower shall promptly notify the Agent upon receipt of the Early Delayed Draw Term Loans.

 

(j)          (g)Any
principal amounts borrowed under this Section 2.1 which are repaid may not be reborrowed.

 

Section 2.2           Use
of Proceeds.

 

(a)          The
proceeds of the Term Loans shall be applied by the Borrower as follows: (i) to payment of fees and expenses incurred in connection
with the transactions contemplated in this Agreement and the Fee Letters and (ii) for product development and other working capital
and general company purposes not in violation of this Agreement.

 

(b)          No
portion of the proceeds of any Loan shall be used in any manner that causes or might cause such Loan or the application of such
proceeds to violate Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation
thereof.

 

Section 2.3           Evidence
of Debt.

 

(a)          The
Borrower agrees to execute and deliver to the Lenders (i) on the Closing Date a Note or Notes evidencing the Closing Date Term
Loans in the aggregate stated principal amount of up to One Hundred Million and No/Dollars ($100,000,000)and
(ii, (ii) on the Early Delayed Draw Funding Date, additional
Notes evidencing the Early Delayed Draw Term Loans in the aggregate principal amount of up to Twenty Million Dollars ($20,000,000)
and (iii) on the date on which the Delayed Draw Term Loans are funded, additional Notes evidencing the Delayed Draw
Term Loans in the aggregate principal amount of up to FiftyThirty
Million Dollars ($50,000,00030,000,000).
Any Lender may request that the Loans held by it be evidenced by a Note and in such event, the Borrower shall execute and deliver
to such Lender a Note, which shall evidence such Lender’s Term Loans. Each Lender may attach schedules to its Note and endorse
thereon the date, type, amount and maturity of its Loans and payments with respect thereto.

 

(b)          Each
Lender may maintain on its internal records an account or accounts evidencing the Obligations of the Borrower to such Lender, including
the amounts of the Loan made by it and each repayment and prepayment in respect of such Loan. Any such recordation shall be conclusive
and binding on the Borrower, absent manifest error; provided that in the event of any inconsistency between the Register
and any Lender’s records, the recordations in the Register shall govern absent manifest error.

 

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Section 2.4           Interest.

 

(a)          Except
as otherwise set forth in this Agreement, each Loan shall bear interest on the unpaid principal amount thereof from the date made
to repayment (whether by acceleration or otherwise) at the LIBOR Rate plus the Applicable Margin.

 

(b)          Upon
the occurrence and during the continuance of (i) an Event of Default or (ii) a Default and following written notice from the Agent,
the principal amount of all Loans outstanding and the outstanding amount of all other Obligations then owing under the Loan Documents
shall thereafter bear interest payable upon demand, at a rate that is 2.00% per annum in excess of the interest rate otherwise
payable for the Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.4(b) is not
a permitted alternative to timely payment and shall not constitute a waiver of any Default or Event of Default or otherwise prejudice
or limit any rights or remedies of the Agent or any Lender.

 

(c)          All
interest on the Loans shall be computed (i) in the case of Loans bearing interest at a rate based on the LIBOR Rate, on the basis
of a 360-day year or (ii) in the case of Loans bearing interest at the Alternate Base Rate, on the basis of a 365 or 366 day year,
as the case may be, in each case, on a day-to-day basis for the actual number of days elapsed.

 

(d)          Except
as otherwise set forth herein, interest on each Loan shall be payable in arrears to the Agent for the benefit of the Lenders on
and to (i) each Payment Date applicable to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or mandatory, to
the extent accrued on the amount being prepaid; and (iii) at maturity, whether by acceleration or on the Scheduled Maturity Date.

 

Section 2.5           Repayment
of Loans. On the Scheduled Maturity Date with respect to any Term
Loans, the Borrower shall pay in full all outstanding Obligations,
including the Exit Fee, in respect of such Term Loans. On any Maturity Date occurring prior to the Scheduled Maturity
Date, the Borrower shall pay in full all outstanding Obligations, which shall include the Prepayment Premium, if applicable,
and the Exit Fee.

 

Section 2.6           Optional
Prepayment.

 

(a)          The
Term Loans may be prepaid in whole or in part (and solely in minimum principal increments of $5,000,000 or all the remaining amounts
outstanding hereunder), on any Business Day upon not less than five (5) Business Days’ prior written notice from the Borrower
to the Agent, together with the payment of all accrued and unpaid interest thereon, the Prepayment Premium, if applicable, the
Exit Fee and other unpaid amounts then due and owing pursuant to this Agreement and the other Loan Documents. Upon any
prepayment in full of the Term Loans pursuant to this Section 2.6(a) or any prepayment in part to the extent the principal
amount of the Loans remaining outstanding after such prepayment is $25,000,000 or less, any outstanding Delayed Draw Term Loan
Commitments then in effect shall automatically terminate and the Borrower shall pay the Prepayment Premium with respect to such
Delayed Draw Term Loan Commitments.

 

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(b)          The
Borrower may not terminate the Delayed Draw Term Loan Commitments in whole or in part except upon the repayment in full in cash
of all outstanding Loans hereunder, in which event the Borrower agrees to pay the Prepayment Premium with respect to the Delayed
Draw Term Loan Commitments so terminated.

 

(c)          All
prepayments under this Section 2.6 shall be subject to Section 2.8 and Section 2.14.

 

Section 2.7           Mandatory
Prepayments.

 

(a)          Change
of Control. Immediately upon a Change of Control, the Borrower shall prepay all of the outstanding Loans and all other Obligations
in full plus the Prepayment Premium, if applicable, and the Exit
Fee.

 

(b)          Dispositions.
The Loans are subject to mandatory prepayment by the Loan Parties from time to time in an amount equal to the Applicable Asset
Sale Prepayment Amount of the Net Cash Proceeds (other than Excluded IPO Proceeds) received by any Loan Party or any of its Subsidiaries
as a result of any:

 

(i) Asset Sale (other than an Asset
Sale permitted pursuant to Sections 6.7(a), (b), (c), (d) or (e)); or

 

(ii) Involuntary Disposition;

 

and, in each case plus the Prepayment
Premium, if applicable, and the Exit Fee.

 

Each such mandatory prepayment pursuant to
this clause (b) shall be made within three (3) Business Days following receipt of such Net Cash Proceeds by such Loan Party or
such Subsidiary; provided, however, that if the Loan Party or its Subsidiary receives Net Cash Proceeds as a result
of any such Asset Sale or Involuntary Disposition (other than resulting from the disposition of Specified Assets) in an aggregate
amount less than $5,000,000 for all such Asset Sales or Involuntary Dispositions after the Closing Date, then the Loan Party or
its Subsidiary may apply such Net Cash Proceeds to the purchase price of replacement property or assets or other property or assets
used by such Loan Party or its Subsidiary within one hundred and eighty (180) days (or such later date as set forth below) after
the date of receipt of such Net Cash Proceeds in lieu of making such mandatory prepayment; provided that to the extent any
portion of such Net Cash Proceeds is not so applied and the Loan Parties or their Subsidiaries have not entered into any commitment
within such 180 day period to so purchase such property or assets, then the portion of such Net Cash Proceeds not so expended or
committed shall be applied as a mandatory prepayment pursuant to this Section 2.7(b) no later than the end of such one hundred
and eighty (180) day period; provided further that to the extent any portion of such Net Cash Proceeds is committed to purchase
such property or assets within such 180 day period, but such purchase is not consummated within 270 days of the date of receipt
of such Net Cash Proceeds, then the portion of such Net Cash Proceeds not so expended shall be applied as a mandatory prepayment
pursuant to this Section 2.7(b) no later than the end of such 270 day period.

 

(c)          Debt
Issuances. Immediately upon receipt by any Loan Party or any of its Subsidiaries of proceeds from any issuance, incurrence
or assumption of Indebtedness other than Indebtedness permitted by Section 6.1, on or after the Closing Date, the Borrower
shall prepay the Loans and other Obligations in an amount equal to 100% of the cash proceeds received, plus the Prepayment
Premium, if applicable, and upon prepayment in fullthe
Exit Fee.

 

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(d)          General.
All prepayments under this Section 2.7 shall be subject to Section 2.8 and Section 2.14. Borrower shall provide Agent
written notice not later than three (3) Business Days prior to any prepayment under this Section 2.7; provided, that
failure by Borrower to deliver such notice shall not affect Borrower’s obligation to make any such prepayment. Notwithstanding
anything in this Section 2.7 to the contrary, any Lender may elect, by written notice to the Agent no later than 12:00 pm
New York City Time, one (1) Business Day prior to the prepayment date (or such later time as the Agent may agree), to decline all
or any portion of any mandatory prepayment of its Loans pursuant to this Section 2.7. Any Lender that fails to deliver such
notice to the Agent in the time frame set forth above shall be deemed to have accepted its share of any mandatory prepayment. The
aggregate amount of the prepayment that would have been applied to prepay Loans but was so declined may be retained by the Borrower
and used for any general corporate purpose not prohibited by this Agreement.

 

(e)          Any
prepayments required pursuant to this Section 2.7 are in addition to any Default or Event of Default rights or remedies
the Secured Parties may have.

 

(f)          Notwithstanding
anything to the contrary contained herein, to the extent that any mandatory prepayments would otherwise be required to be made
pursuant to Section 2.7(b) out of the Net Cash Proceeds in respect of any Asset Sale or Involuntary Disposition attributable
to a Foreign Subsidiary of the Borrower, such prepayments shall not be required to be made to the extent that the Borrower determines
in good faith that such prepayment would (x) result in material adverse tax consequences or (y) be prohibited or restricted under
(i) local law (e.g., financial assistance, corporate benefit, restrictions on upstreaming of cash intra-group and the fiduciary
and statutory duties of the directors of the relevant Subsidiaries) and (ii) material constituent document restrictions (including
as a result of minority ownership) and other material agreements of such Foreign Subsidiaries not entered into in contemplation
of or in order to evade the restrictions in this Agreement or the other Loan Documents. The non-application of any prepayment amounts
as a result of this Section 2.7(f) will not, for the avoidance of doubt, constitute a Default or an Event of Default, and
such amounts shall be available for working capital and other general corporate purposes of the Borrower and its Subsidiaries.
The Borrower shall use, and shall cause its Subsidiaries to use, commercially reasonable efforts to overcome or eliminate any such
restrictions (other than restrictions pursuant to local law) to make the relevant prepayment. Notwithstanding the foregoing, any
prepayments required after application of the above provision shall be net of any costs, fees, expenses or taxes incurred by the
Borrower or any of its Affiliates or any of their equity owners and arising as a result of compliance with the preceding sentence
and the Borrower and its Subsidiaries shall be permitted to make directly or indirectly, a dividend or distribution to their Affiliates
in an amount sufficient to cover such tax liability.

 

Section 2.8           General
Provisions Regarding Payments.

 

(a)          All
payments by any Loan Party of principal, interest, fees and other Obligations shall be made in Dollars and in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and delivered to the Agent not later than 2:00 p.m. (New
York time) on the date due to the Agent’s Account; funds received by the Agent after that time on such due date may, at Agent’s
sole discretion, be deemed to have been paid by such Loan Party on such due date or the next succeeding Business Day.

 

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(b)          Subject
to the provisos set forth in the definition of “Interest Period”, whenever any payment to be made hereunder shall be
stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the payment of interest under this Agreement.

 

(c)          The
Agent shall promptly distribute to each Lender at such address as such Lender shall indicate in writing to the Agent from time
to time, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder
and all other Obligations.

 

(d)          If
an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 7.1, all payments or proceeds received by the Agent or any Lender in respect of any of the Obligations
(except as expressly provided elsewhere in a Loan Document), shall be forwarded to the Agent and applied in full or in part by
the Agent against the Obligations in the following order of priority: first, (i) to the payment of all reasonable
costs and expenses of any sale, collection or other realization, and all amounts for which the Agent is entitled to indemnification
hereunder (in its capacity as the Agent and not as a Lender) and all advances made by the Agent hereunder for the account of the
applicable Loan Party, (ii) to the payment of all reasonable costs and expenses paid or incurred by the Agent in connection with
the exercise of any right or remedy hereunder or under any Loan Document, all in accordance with the terms hereof or thereof, and
(iii) to the payment of any fees or other amounts then-owing to the Agent (in its capacity as such and not as a Lender) hereunder
or under any other Loan Document; second, to the extent of any excess of such proceeds, to the payment of all other
Obligations for the ratable benefit of the Lenders; and third, to the extent of any excess of such proceeds, to the
payment to or upon the order of the applicable Loan Party or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.

 

Section 2.9           Right
of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off, appropriate
and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held,
and other obligations (in whatever currency) at any time owing, by such Lender or any such Affiliate, to or for the credit or the
account of any Loan Party against any and all of the obligations of such Loan Party now or hereafter existing under this Agreement
or any other Loan Document to such Lender or its Affiliates, irrespective of whether or not such Lender or Affiliate shall have
made any demand under this Agreement or any other Loan Document and although such obligations of such Loan Party may be contingent
or unmatured or are owed to a branch, office or Affiliate of such Lender different from the branch, office or Affiliate holding
such deposit or obligated on such indebtedness. The rights of each Lender and its Affiliates under this Section 2.9 are
in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have. Each Lender
agrees to notify the Borrower and the Agent promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff, appropriation and application.

 

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Section 2.10         Sharing
of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving
payment of a proportion of the aggregate amount of its Loan and accrued interest thereon or other such obligations greater than
its Pro Rata Share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Agent in
writing of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other
amounts owing them; provided that:

 

(i)          if
any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)         the
provisions of this paragraph shall not be construed to apply to (x) any payment made by any Loan Party pursuant to and in accordance
with the express terms of this Agreement, or (y) any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in its Loan to any assignee or participant, other than to any Loan Party or any Subsidiary thereof (as to which
the provisions of this paragraph shall apply).

 

Section 2.11         Taxes.

 

(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
free and clear of and 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 the Agent or any Loan Party) requires the deduction or withholding of any Tax from
any such payment by the Agent or any Loan Party, then the Agent or relevant Loan Party 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 2.11) the Agent or applicable Lender 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 the Loan Parties. Without limiting the provisions of Section 2.11(a), each relevant Loan Party shall
timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse
it for the payment of, any Other Taxes.

 

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(c)          Indemnification
by the Loan Parties. The Loan Parties shall jointly and severally indemnify the Agent and each Lender, within ten (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 2.11) payable or paid by the Agent or such Lender or required to be withheld or deducted
from a payment to the Agent or such Lender 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 the Borrower by a Lender (with a copy to the Agent), or by the Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)          Indemnification
by the Lenders. Each Lender shall severally indemnify the Agent, within ten (10) days after demand therefor, for (i) any Indemnified
Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Agent for such Indemnified
Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure
to comply with the provisions of Section 10.4(d) relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Loan Document, and
any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any
Lender by the Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Agent to set off and apply any
and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any
other source against any amount due to the Agent under this paragraph (d).

 

(e)          Evidence
of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this
Section 2.11, such Loan Party shall deliver to the Agent 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 the Agent.

 

(f)          Status
of Lenders.

 

(i)          Any
Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document
shall deliver to the Borrower and the Agent, at the time or times reasonably requested by the Borrower or the Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the
Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Agent
as will enable the Borrower or the Agent to determine whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in paragraphs (f)(ii)(A), (ii)(B) and (ii)(D) of this
Section) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject
such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such
Lender. Each Lender 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 the Borrower and the Agent in writing of its legal
inability to do so.

 

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(ii)         Without
limiting the generality of the foregoing:

 

(A)         any
Lender that is a U.S. Lender shall deliver to the Borrower and the Agent on or about the date on which such Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), executed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)         any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Agent (in such number of copies
as shall be requested by the recipient) on or about the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Agent), whichever of the following is applicable:

 

(1)         
in the case of a Foreign Lender 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, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption
from, or reduction of, U.S. 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 establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

 

(2)         executed
copies of IRS Form W-8ECI;

 

(3)         in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x)
a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section
871(h)(3)(B) of the Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C)
of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W 8BEN-E;
or

 

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(4)         to
the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN, IRS Form W 8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS
Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is
a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption,
such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such
direct and indirect partner.

 

(C)         any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Agent (in such number of copies
as shall be requested by the recipient) on or about the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Agent), executed copies of any other form
prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Agent to determine
the withholding or deduction required to be made; and

 

(D)         if
a payment made to a Lender under any Loan Document would be subject to withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Lender shall deliver to the Borrower and the Agent at the time or times prescribed by law and at
such time or times reasonably requested by the Borrower or the Agent such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or
the Agent as may be necessary for the Borrower and the Agent to comply with their obligations under FATCA and to determine that
such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, 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.

 

(g)          Treatment
of Certain Refunds. If any party determines, in its reasonable 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 2.11 (including by the payment of additional amounts
pursuant to this Section 2.11), 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 2.11 with respect to the Taxes giving rise to such refund), net of all reasonable
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 (g) (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 paragraph (g), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) 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 has not been deducted, withheld or otherwise imposed and the indemnification payments
or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified
party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying
party or any other Person.

 

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(h)          Survival.
Each party’s obligations under this Section 2.11 shall survive the resignation or replacement of the Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the Loans and the repayment, satisfaction or discharge
of all obligations under any Loan Document, and the termination of this Agreement.

 

(i)          Defined
Terms. For purposes of this Section 2.11, the term “applicable law” includes FATCA.

 

Section 2.12         Increased
Costs.

 

(a)          Increased
Costs Generally. If any Change in Law shall:

 

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

 

(ii)         subject
the Agent or any Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (ii) through (iv) of the
definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or
other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)        impose
on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase
the cost to such Lender or the Agent of making, converting to, continuing or maintaining any Loan or of maintaining its obligation
to make any such Loan, or to reduce the amount of any sum received or receivable by such Lender with respect thereto (whether of
principal, interest or any other amount) then, upon request of such Lender or the Agent, the Borrower will pay to such Lender or
the Agent such additional amount or amounts as will compensate such Lender or the Agent, as applicable, for such additional costs
incurred or reduction suffered.

 

(b)          Capital
Requirements. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or
such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing
the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence
of this Agreement or the Loan maintained by such Lender to a level below that which such Lender or such Lender’s holding
company, if any, could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any
such reduction suffered.

 

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(c)          Certificates
for Reimbursement. A certificate of a Lender or the Agent setting forth the amount or amounts necessary to compensate such
Lender or its holding company or the Agent, as the case may be, as specified in Section 2.12(a) or Section 2.12(b)
and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay the Agent or such Lender, as applicable,
the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)          Delay
in Requests. Failure or delay on the part of the Agent or any Lender to demand compensation pursuant to this Section 2.12
shall not constitute a waiver of the Agent’s or such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate the Agent or any Lender pursuant to this Section 2.12 for any increased
costs incurred or reductions suffered more than one hundred eighty (180) days prior to the date that the Agent or such Lender notifies
the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Agent’s or such Lender’s
intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the one hundred eighty (180) day period referred to above shall be extended to include the period of retroactive
effect thereof).

 

Section 2.13         Mitigation
Obligations; Replacement of Lenders.

 

(a)          Designation
of a Different Lending Office. If any Lender requests compensation under Section 2.12, or requires the Borrower to pay
any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.11, then such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.11 or 2.12, as the case may be, in the future, and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)          Replacement
of Lenders. If any Lender (x) fails to agree to any amendment, consent or waiver requested by the Borrower or (y) requests
compensation under Section 2.12, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11 and, in each case under this
clause (y), such Lender has declined or is unable to designate a different lending office in accordance with Section 2.13(a),
then the Borrower may, at such Lender’s sole expense and effort, upon notice to such Lender and the Agent, require such Lender
to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required
by, Section 10.4 other than the Agent’s or any Lender’s consent), all of its interests, rights (other than its
existing rights to payments pursuant to Section 2.11 or Section 2.12) and obligations under this Agreement and the
related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that:

 

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(i)          the
Borrower shall have paid to the Agent the assignment fee and shall have provided all of the documentation and information in accordance
with Section 10.4;

 

(ii)         such
Lender shall have received payment of an amount equal to (A) the outstanding principal of its Loans, (B) accrued interest thereon,
(C) if such Lender is being replaced pursuant to clause (x) of Section 2.13(b) above, the Prepayment Premium and
Exit Fee with respect to such Lender’s Loans and Delayed Draw Term Loan Commitments that would have been payable
to such Lender in connection with a voluntary prepayment of such Lender’s Loans and, in the case of the Delayed Draw Term
Loan Commitments, assuming that such Delayed Draw Term Loan Commitments were funded in full and immediately prepaid in full on
the date of determination, (D) accrued fees and (E) all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.14) from the assignee (to the extent of such outstanding principal and accrued interest
and fees) or the Borrower (in the case of all other amounts);

 

(iii)        in
the case of any such assignment resulting from a claim for compensation under Section 2.12 or payments required to be made
pursuant to Section 2.11, such assignment will result in a reduction in such compensation or payments thereafter; and

 

(iv)        such
assignment does not conflict with applicable law.

 

A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.

 

Section 2.14         Break
Funding Payments. If (i) any payment of principal of any Loan is made other than on the last day of an Interest Period relating
to such Loan, as a result of (w) a prepayment pursuant to Sections 2.6 or 2.7(a), (b), (c) or (d), (x) an assignment
required by Section 2.13(b), (y) Section 2.15 or (z) acceleration of the maturity of the Loans and the outstanding
principal amount of the Loans pursuant to Section 7.1; or (ii) the Borrower fails to make a principal or interest payment
with respect to any Loan on the date such payment is due and payable, then the Borrower shall, upon demand by any Lender (with
a copy of such demand to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender
for any additional actual and documented losses, or reasonable costs or expenses which it actually incurs as a result of any such
payment, including any cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to maintain such Loan.

 

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Section 2.15         Maintaining
Loans Bearing Interest at the LIBOR Rate.

 

(a)          Market
Disruption Affecting LIBOR Rate. If on any date:

 

(i)          the
Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto) that by reasons
of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate
for Loans bearing interest at the LIBOR Rate; or

 

(ii)         the
Agent is advised by the Lenders holding at least 51% of the Loans outstanding that the LIBOR Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining their Loans at the LIBOR Rate (provided that this clause (ii) shall not
apply so long as the Lenders and their Affiliates are the sole Lenders);

 

then, the Agent shall on such date give notice (by electronic
communication) to the Borrower and each Lender of such determination or notification, whereupon (x) no Loans shall be maintained
at the LIBOR Rate; and (y) the interest rate applicable to such Loans shall be determined by substituting the Alternate Base Rate
(which shall be determined without reference to any portion thereof that is calculated based on the LIBOR Rate) for the LIBOR Rate
until such time as the Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist.

 

(b)          Illegality
of Loans Bearing Interest at the LIBOR Rate. In the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with the Agent) that
the maintaining or continuation of all or any of its Loans has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental
rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful),
then such Lender shall be an “Affected Lender” and it shall on that day give notice (by electronic communication)
to the Borrower and the Agent of such determination (which notice the Agent shall promptly transmit to each other Lender). Thereafter
the Affected Lender’s obligation to maintain its outstanding Loans bearing interest at the LIBOR Rate (the “Affected
Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect
to the Affected Loans or when required by law and the interest rate applicable to such Affected Loans shall be determined by substituting
the Alternate Base Rate (which shall be determined without reference to any portion thereof that is calculated based on the LIBOR
Rate) for the LIBOR Rate, provided that the Affected Lender shall make commercially reasonable efforts to assign the Affected
Loans according to Section 10.4.

 

(c)          LIBOR
Successor Rate. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Agent determines
(which determination shall be conclusive absent manifest error), or the Required Lenders notify the Agent (with, in the case of
the Required Lenders, a copy to the Borrower) that the Required Lenders (as applicable) have determined, that:

 

(i)          adequate
and reasonable means do not exist for ascertaining the LIBOR Rate for any requested Interest Period, including, without limitation,
because the LIBOR screen rate is not available or published on a current basis and such circumstances are unlikely to be temporary;
or

 

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(ii)         the
administrator of the LIBOR screen rate or a Governmental Authority having jurisdiction over the Agent has made a public statement
identifying a specific date after which the LIBOR screen rate shall no longer be made available, or used for determining the interest
rate of loans (such specific date, the “Scheduled Unavailability Date”);

 

then, reasonably promptly after such determination
by the Agent or receipt by the Agent of such notice, as applicable, the Agent (at the direction of the Required Lenders) shall
amend this Agreement to replace the LIBOR Rate with an alternate benchmark rate (including any mathematical or other adjustments
to the benchmark (if any) incorporated therein), giving due consideration to any then prevailing convention for similar credit
facilities in the United States for such alternative benchmarks (any such proposed rate, a “LIBOR Successor Rate”),
together with any proposed LIBOR Successor Rate Conforming Changes. If no LIBOR Successor Rate has been determined and the circumstances
under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Agent will promptly so notify
the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Loans accruing interest based on
the LIBOR Rate shall be suspended and (y) following the expiration of the Interest Period then in effect with respect to any Loans
outstanding at such time accruing interest at the LIBOR Rate, the interest rate applicable to such Loans shall be determined by
substituting the Alternate Base Rate (which shall be determined without reference to any portion thereof that is calculated based
on the LIBOR Rate) for the LIBOR Rate.

 

Section 2.16         Agency
and Administration Fees. The Borrower agrees to pay to the Agent and Oaktree Capital Management, L.P. the fees and expenses
in accordance with the applicable Fee Letter.

 

Section 2.17         Prepayment
Premium and Exit Fee; Acceleration. Notwithstanding anything
in this Agreement to the contrary, if the Obligations are accelerated in accordance herewith for any reason or otherwise become
due in accordance herewith prior to their original maturity date, including pursuant to Section 2.6, Section 2.7
or Article VII, and including because of default, sale or encumbrance (including that by operation of law or otherwise and
including as a result of the commencement of any proceeding under any Debtor Relief Law), the Prepayment Premium and
Exit Fee shall also automatically be due and payable as though such Indebtedness was voluntarily prepaid and shall constitute
part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement
of the parties as to a reasonable calculation of each Lender’s lost profits, losses and other damages as a result thereof.
Any Prepayment Premium or Exit Fee payable pursuant to this
Agreement shall be presumed to be the liquidated damages sustained by each Lender as the result of the early termination, acceleration
or prepayment and each Loan Party agrees that such Prepayment Premium or
Exit Fee is reasonable under the circumstances currently existing. The Prepayment Premium and
Exit Fee shall also be payable in the event the Obligations (and/or this Agreement) are satisfied or released by foreclosure
(whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means. THE LOAN PARTIES EXPRESSLY WAIVE
THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE PREPAYMENT PREMIUM
OR EXIT FEE IN CONNECTION WITH ANY ACCELERATION, IN EACH
CASE, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED UNDER APPLICABLE LAW. The Loan Parties expressly agree that (i) the Prepayment
Premium isand Exit
Fee are each reasonable and each is the product
of an arm’s-length transaction between sophisticated business people, ably represented by counsel, (ii) the Prepayment Premium
and Exit Fee shall be payable notwithstanding the then prevailing
market rates at the time payment is made, (iii) there has been a course of conduct between the Lenders and the Loan Parties giving
specific consideration in this transaction for such agreement to pay the Prepayment Premium and
Exit Fee, (iv) the Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this Section
2.17, (v) their agreement to pay the Prepayment Premium and Exit
Fee is a material inducement to the Lenders to make the Loans, and (vi) the Prepayment Premium representsand
Exit Fee represent a good faith, reasonable estimate and calculation of the lost profits, losses or other damages of
the Lenders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Lenders or
profits lost by the Lenders as a result of such event.

 

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Section 2.18         Unused
Commitment Fee. The Borrower agrees to pay to the Agent for the account of each Lender a commitment fee for the period from
and including (x) the Closing Date to (y) the earlier of (i) the Delayed Draw Funding Date or (ii) the Delayed Draw Termination
Date, in an amount equal to 0.75% per annum on the average daily amount of the Delayed Draw Term Loan Commitment of such Lender,
payable quarterly in arrears on the last Business Day of each quarter beginning with the quarter ending December 31, 2018.

 

Section
2.19         Exit Fee. Upon any payment or prepayment
of all or a portion of the Term Loans hereunder, whether voluntary or involuntary, prior to, on or after the Maturity Date or following
the acceleration of the Obligations hereunder, including as a result of the commencement of any proceeding under any Debtor Relief
Law, the Borrower shall pay to each of the Lenders for its own account a fee (the “Exit Fee”) equal to 1.25%
of the principal amount of such Lender’s Term Loans so paid or prepaid. Such Exit Fee shall be earned, due and payable immediately
upon any such payment or prepayment, and shall be in addition to any accrued and unpaid interest, reimbursement obligations, Prepayment
Premium or other amounts payable in connection therewith.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.1           Closing
Date. The obligation of the Lenders to make the Closing Date Term Loans on the Closing Date is subject to the satisfaction
(or waiver in accordance with Section 10.2) of the following conditions, as determined by the Agent and the Lenders:

 

(a)          Funding
Notice. The Agent shall have received a completed Funding Notice, duly executed by the Borrower.

 

(b)          Loan
Documents. The Agent shall have received each Loan Document required to be executed by the appropriate Loan Party on the Closing
Date and delivered by each applicable Loan Party in such number as reasonably requested by the Agent (which may be delivered by
facsimile or other electronic means for the purposes of satisfying this clause (b) on the Closing Date, with signed originals to
be delivered promptly thereafter) and such Loan Documents shall be in form and substance satisfactory to the Loan Parties, the
Agent and the Lenders and their respective counsels.

 

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(c)          Organizational
Documents; Incumbency. The Agent shall have received, in form and substance reasonably satisfactory to the Agent and the Lenders:
(i) a copy of each Organizational Document of each Loan Party (and, to the extent applicable, certified by the appropriate Governmental
Authority as of the Closing Date or a recent date prior thereto), certified as of the Closing Date by a representative of such
Loan Party as being in full force and effect without modification or amendment; (ii) signature and incumbency certificates of the
officers of such Loan Party executing the Loan Documents to which it is a party; (iii) resolutions of the board of directors or
similar governing body of each Loan Party approving and authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party or by which it or its assets may be bound as of the Closing Date, certified as
of the Closing Date by a representative of such Loan Party as being in full force and effect without modification or amendment;
(iv) to the extent applicable, a good standing or other certificate from the applicable Governmental Authority of each Loan Party’s
jurisdiction of incorporation, organization or formation, each dated a recent date prior to the Closing Date; and (v) a completed
IRS Form W-9, duly executed by an Authorized Officer of the Borrower.

 

(d)          Closing
Date Certificate. The Agent shall have received a Closing Date Certificate, dated as of the Closing Date, and signed by an
Authorized Officer of the Borrower.

 

(e)          Governmental
Authorizations and Consents. Each Loan Party shall have obtained all material necessary Governmental Authorizations and all
consents of other Persons, in each case that are necessary in connection with the transactions contemplated by this Agreement,
and each of the foregoing shall be in full force and effect, final and non-appealable and not subject to further review, and in
form and substance reasonably satisfactory to the Agent and the Lenders.

 

(f)          Fees
and Expenses. The Agent shall have received payment in full of (i) all fees required to be paid on the Closing Date under the
Fee Letters, and (ii) expenses invoiced and due to the Agent (including the reasonable fees and expenses due of their advisors
and legal counsel, including Sullivan & Cromwell LLP, as counsel to the Agent) in connection with this Agreement and the other
Loan Documents. For the avoidance of doubt, such fees and expenses may be paid and discharged with the proceeds of the Term Loans.

 

(g)          Representations
and Warranties. The representations and warranties contained in this Agreement and in the other Loan Documents delivered pursuant
to clause (b) shall be true and correct in all material respects (unless such representations are already qualified by reference
to materiality, Material Adverse Effect or similar language, in which case such representations and warranties shall be true and
correct in all respects) on and as of the Closing Date, except to the extent such representations and warranties specifically relate
to an earlier date, in which case such representations and warranties shall have been true and correct in all respects on and as
of such earlier date.

 

(h)          Solvency
Certificate. On the Closing Date, the Agent shall have received a Solvency Certificate from the Borrower dated as of the Closing
Date.

 

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(i)          Perfection
of Collateral. On the Closing Date, the Agent shall have received: (i) all documents (including share certificates, transfers
and stock transfer forms, notices or any other instruments) required to be delivered or filed under the Collateral Documents and
evidence reasonably satisfactory to it that arrangements have been made with respect to all registrations, notices or actions required
under the Collateral Documents to be effected, given or made in accordance with the terms of the Collateral Documents in order
to establish a valid and perfected first priority security interest in the Collateral and (ii) UCC lien searches (or foreign equivalent)
with respect to each Loan Party reasonably satisfactory to the Lenders.

 

(j)          Opinions
of Counsel to Loan Parties. The Agent and its counsel shall have received executed copies of the favorable written opinions
of counsel to the Loan Parties as to such matters as the Agent and the Lenders may request, including with respect to the creation
and perfection of the security interests, dated as of the Closing Date, and otherwise in form and substance reasonably satisfactory
to the Agent and the Lenders.

 

(k)          Due
Diligence. The Lenders shall have completed to their satisfaction all financial and legal due diligence with respect to the
Loan Parties.

 

(l)          Material
Adverse Effect. Since December 31, 2017, no event, circumstance or change shall have occurred that has caused or would reasonably
be expected to cause, either in any case or in the aggregate, a Material Adverse Effect, both before and after giving effect to
the Term Loans to be made on the Closing Date.

 

(m)          No
Default. No event shall have occurred or be continuing or would result from the making of the Term Loans that would constitute
a Default or Event of Default.

 

(n)          Beneficial
Ownership. To the extent requested by any Lender or the Agent, the Borrower shall have provided to such Lender and the Agent
all documentation and other information so requested, including a duly executed W-9 of the Borrower (or such other applicable tax
form), in connection with applicable “know your customer” and anti-money laundering rules and regulations, including
the USA PATRIOT Act, and if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation,
a Beneficial Ownership Certification, in each case prior to the Closing Date.

 

Section 3.2           Delayed
Draw Term Loans. The obligation of the Lenders to make the Delayed Draw Term Loans on the Delayed Draw Funding Date is subject
to the satisfaction (or waiver in accordance with Section 2.1(f)) of the following conditions, as determined by the Agent:

 

(a)          Representations
and Warranties. The representations and warranties contained in this Agreement and in the other Loan Documents shall be true
and correct in all material respects (unless such representations are already qualified by reference to materiality, Material Adverse
Effect or similar language, in which case such representations and warranties shall be true and correct in all respects) on and
as of the Delayed Draw Funding Date, except to the extent such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.

 

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(b)          No
Default. No event shall have occurred orand
be continuing or would result from the making of the Delayed Draw Term Loans that would constitute a Default or Event of Default.

 

(c)          Delayed
Draw Eligibility Event. The Delayed Draw Eligibility Event shall have occurred and the Borrower shall have delivered the Delayed
Draw Notice.

 

Section
3.3           Early Delayed Draw Term Loans.
The obligation of the Lenders to make the Early Delayed Draw Term Loans on the Early Delayed Draw Funding Date is subject to the
satisfaction (or waiver in accordance with Section 2.1(i)) of the following conditions, as determined by the Agent:

 

(a)          Representations
and Warranties. The representations and warranties contained in this Agreement and in the other Loan Documents shall be true
and correct in all material respects (unless such representations are already qualified by reference to materiality, Material Adverse
Effect or similar language, in which case such representations and warranties shall be true and correct in all respects) on and
as of the Early Delayed Draw Funding Date, except to the extent such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have been true and correct in all material respects on and as of
such earlier date.

 

(b)          No
Default. No event shall have occurred and be continuing or would result from the making of the Early Delayed Draw Term Loans
that would constitute a Default or Event of Default.

 

(c)          The
funding date of the Early Delayed Draw Term Loans shall be no later than May 3, 2019.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to make the
Loans to be made pursuant to this Agreement and to induce the Agent to enter into this Agreement, each of the Loan Parties represents
and warrants to each Lender and the Agent that the following statements are true and correct on and as of the Closing Date, the
date of delivery of the Delayed Draw Notice, the Delayed Draw Funding
Date and the Early Delayed Draw Funding Date:

 

Section 4.1           Organization;
Requisite Power and Authority; Qualification. Each Loan Party (i) is duly organized, validly existing and, if applicable in
the jurisdiction of organization, in good standing under the laws of its jurisdiction of organization, (ii) has all requisite organizational
power and authority to own and operate its properties, to carry on its business as now conducted and as currently proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby, and
(iii) except where the failure to do so, individually or in the aggregate, would not be reasonably expected to have a Material
Adverse Effect, is qualified to do business and, where applicable, is in good standing, in every jurisdiction where such qualification
is required.

 

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Section 4.2           Due
Authorization. The execution, delivery and performance of the Loan Documents to which such Loan Party is a party have been
duly authorized by all necessary organization action on the part of such Loan Party.

 

Section 4.3           Due
Execution. Each Loan Party has duly executed and delivered each Loan Document to which it is a party.

 

Section 4.4           Enforceability.
Each Loan Document to which such Loan Party is a party is the valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with the respective terms of such Loan Document, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally, and subject to general
principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

Section 4.5           No
Conflict. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and the consummation
of the transactions contemplated by the Loan Documents do not and will not (a) violate any provision of (i) any law or any governmental
rule or regulation binding upon and applicable to such Loan Party, (ii) any of the Organizational Documents of such Loan Party,
or (iii) any order, judgment or decree of any Governmental Authority binding on such Loan Party; (b) result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Contractual Obligation of such Loan Party; (c) result in or require
the creation or imposition of any Lien upon any of the properties or assets of such Loan Party, other than any Liens created under
any of the Loan Documents; or (d) require any approval of stockholders, members, partners or similar owners of any Equity Interests
of such Loan Party, or any approval or consent of any Person under any Contractual Obligation of such Loan Party, except for (x)
such approvals or consents that have been obtained on or before the Closing Date, (y) in the case of clause (d) above, any such
approvals or consents the failure of which to obtain will not result in a Material Adverse Effect, or (z) in the case of clauses
(a)(i), (a)(iii) or (b) above, any such violations or breaches which will not result in a Material Adverse Effect.

 

Section 4.6           Governmental
Approvals. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and the
consummation by each Loan Party of the transactions contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority, except for filings and
recordings in connection with the perfection of Liens in the Collateral that are to be made, or otherwise delivered to the Agent
for filing and/or recordation to the extent required by the Collateral Agreement, as of the Closing Date.

 

Section 4.7           Compliance
with Law. Each Loan Party and its Subsidiaries is in compliance with (i) all laws, regulations, guidelines binding upon it
and orders of any Governmental Authority applicable to it, its operations or its property and (ii) all Contractual Obligations
applicable to such Loan Party, in each case except for such failures to comply which would not, individually or in the aggregate,
reasonably be expected to cause a Material Adverse Effect.

 

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Section 4.8           Investment
Company Act. No Loan Party is subject to regulation under the Investment Company Act of 1940 or under any other federal, provincial
or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. No Loan Party is a “registered investment company” or a company “controlled”
by a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

Section 4.9           Financial
Statements.

 

(a)          The
audited consolidated balance sheet and statements of income, stockholders equity and cash flows of the Borrower and its Subsidiaries
(including the Scilex Subsidiary) previously delivered by the Borrower to the Agent (or otherwise made available on the EDGAR Website
maintained by the U.S. Securities and Exchange Commission) for the Fiscal Year ended December 31, 2017, have been prepared in conformity
with GAAP and fairly present in all material respects the financial position, on a consolidated basis, of the Persons described
in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated
basis, of the entities described therein for the periods then ended.

 

(b)          The
unaudited consolidated balance sheet and statements of income, stockholders equity and cash flows of the Borrower and its Subsidiaries
(including the Scilex Subsidiary) previously delivered by the Borrower to the Agent (or otherwise made available on the EDGAR Website
maintained by the U.S. Securities and Exchange Commission) for the fiscal quarters ended March 31, 2018 and June 30, 2018 have
been prepared in conformity with GAAP and fairly present in all material respects the financial position, on a consolidated basis,
of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash
flows, on a consolidated basis, of the entities described therein for each of the periods then ended (except for the absence of
footnote disclosure and year-end audit adjustments).

 

(c)          Since
December 31, 2017, the Loan Parties have not incurred any material contingent liability that would be required to be disclosed
on its financial statements in accordance with GAAP except to the extent disclosed in filings with the U.S. Securities and Exchange
Commission or incurred in the Ordinary Course.

 

Section 4.10         No
Material Adverse Change. Since December 31, 2017, no event, circumstance or change has occurred that has caused or would reasonably
be expected to cause, in any case or in the aggregate, a Material Adverse Effect.

 

Section 4.11         Payment
of Taxes. Except as otherwise permitted under Section 5.3, all material tax returns and reports of such Loan Party and
its Subsidiaries required to be filed by it have been timely filed (taking into account any permitted extensions), and all material
taxes shown on such tax returns to be due and payable, and all other material taxes, assessments, fees and other governmental charges
imposed upon such Loan Party and upon its properties, assets, income, businesses and franchises which are due and payable, have
been paid when due and payable (other than those being actively contested by such Loan Party in good faith and by appropriate proceedings
and with respect to which reserves or other appropriate provisions, if any, as required in conformity with GAAP have been made
or provided therefor) and, to the knowledge of such Loan Party, there is no proposed tax assessment or claim being assessed against
such Loan Party or its Subsidiaries with respect to any such taxes, assessments, fees and other governmental charges, except those
that in the aggregate would not reasonably be expected to have a Material Adverse Effect.

 

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Section 4.12         Adverse
Proceedings and Claims. Except as set forth on Schedule 4.12, there are no pending Adverse Proceedings and, to the knowledge
of such Loan Party, no Person has asserted against such Loan Party or any of its Subsidiaries any claim that would constitute an
Adverse Proceeding which would reasonably be expected to cause a Material Adverse Effect.

 

Section 4.13         Employee
and Pension Matters.

 

(a)          Except
as would not reasonably be expected to have a Material Adverse Effect, (i) each Plan is in compliance in all respects with the
applicable provisions of ERISA, the Code and other federal or state law or other applicable law, (ii) each Plan which is intended
to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and (iii) the Loan Parties
and each ERISA Affiliate, as applicable, has made all required contributions to any Plan subject to Section 412 or 430 of the Code
or Section 302 or 303 of ERISA or other applicable laws, and no application for a funding waiver or an extension of any amortization
period (pursuant to Section 412 of the Code, or otherwise) has been made with respect to any Plan.

 

(b)          
Except as could not reasonably be expected to have Material Adverse Effect, (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any material liability under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 of ERISA with respect to a Multi-employer Plan.

 

(c)          Provided
the proceeds used to fund the Loan do not constitute plan assets, the Borrower is not and will not be using “plan assets”
(within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Plans in connection with
the Term Loans.

 

Section 4.14         Solvency.
The Loan Parties, on a consolidated basis, are Solvent (as determined after taking into account this Agreement and any borrowings,
as applicable, made on the Closing Date, the Delayed Draw Funding Date
or the Early Delayed Draw Funding Date).

 

Section 4.15         Material
Agreements. Schedule 4.15 sets forth an accurate and complete list of all Material Agreements of such Loan Party and
its Subsidiaries as of the Closing Date, all of which are valid, binding, subsisting and in full force and effect. Except as set
forth on Schedule 4.15, (a) none of the Loan Parties, any of their Subsidiaries or any counterparty is in default of the
performance or observance of any of the material obligations, covenants or conditions contained in any Material Agreement, (b)
to the knowledge of such Loan Party, no event or circumstance exists that would prevent the counterparty to any Material Agreement
from performing any of its material obligations, covenants or conditions contained in any Material Agreement to which it is a party
and (c) such Loan Party has not received or provided any notice of intention to terminate any Material Agreement in whole or in
part.

 

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Section 4.16         Ownership
and Investment.

 

(a)          Loan
Parties. The outstanding Equity Interests of such Loan Party have been duly authorized and validly issued and, to the extent
applicable, are fully paid and non-assessable. Schedule 4.16(a) correctly sets forth the jurisdiction of organization of
such Loan Party and the ownership interests of the issued and outstanding Equity Interests of such Loan Party as of the Closing
Date. Except as set forth on Schedule 4.16(a), as of the Closing Date there is no existing option, warrant, call, right,
commitment or other agreement to which such Loan Party is a party requiring, and there is no membership interest or other Equity
Interests of such Loan Party outstanding which upon conversion or exchange would require, the issuance by such Loan Party of any
additional membership interests or other Equity Interests of such Loan Party or other Securities convertible into, exchangeable
for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of such Loan Party.

 

(b)          Subsidiaries.
Schedule 4.16(b) correctly sets forth the jurisdiction of organization of such Loan Party’s direct Subsidiaries and
the ownership interests of the issued and outstanding Equity Interests of such Subsidiaries as of the Closing Date.

 

(c)          Specified
Assets. One or more of the Loan Parties owns all right, title and interest in the Specified Assets (other than (i) the assets
comprising the Virttu Biologics business, which are owned by Virttu Biologics Limited, a wholly-owned Foreign Subsidiary of the
Loan Parties and (ii) certain assets comprising the Levena Biopharma business, which are owned directly or indirectly by Levena
(Suzhou) Biopharma Co. Ltd, a wholly-owned Foreign Subsidiary of the Loan Parties), subject to Liens expressly permitted by Agreement.

 

Section 4.17         Intellectual
Property.

 

(a)          Schedule
of Loan Party Intellectual Property. Schedule 4.17(a) sets forth a complete and accurate list, as of the Closing Date,
of all (i) Loan Party Intellectual Property consisting of Patents, Copyrights and Trademarks owned by any Loan Party and (ii) any
material Copyrights licensed exclusively to any Loan Party, in each case, that is issued, registered or subject to a pending application,
including, in each case, the owner, applicable registration or application number and jurisdiction. All Material Loan Party Intellectual
Property that is registered is subsisting and, to the knowledge of each Loan Party, valid and enforceable, and there is no pending
or, to such Loan Party’s knowledge, threatened Dispute challenging in writing the ownership, validity or enforceability of
such Material Loan Party Intellectual Property.

 

(b)          Title
to Loan Party Intellectual Property. Except as otherwise set forth in Schedule 4.17(a), the Loan Parties or one or more of
their Subsidiaries are the exclusive owners of all right, title and interest in and to the Material Loan Party Intellectual Property,
free and clear of any Liens except for Liens not prohibited by Section 6.2.

 

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(c)          Non-Infringement.
Except as has not resulted in and would not reasonably be expected to result in a Material Adverse Effect, the conduct of the businesses
of the Borrower and its Subsidiaries have not within the past three (3) years infringed, misappropriated or otherwise violated
any Intellectual Property rights of any other Person. To the knowledge of such Loan Party, no Person is infringing, misappropriating
or otherwise violating any Material Loan Party Intellectual Property in a manner that has resulted in, or is reasonably expected
to result in, a Material Adverse Effect.

 

(d)          IP
Sufficiency. Except as would not reasonably be expected to result in a Material Adverse Effect, the Borrower and its Subsidiaries
own or have a valid and enforceable license or other right to use all material Intellectual Property used in or necessary for the
conduct of their respective businesses as conducted as of the date hereof.

 

(e)          Employee
IP Assignments. All current and former employees and contractors of the Borrower and each of its Subsidiaries that are involved
in the development of material Intellectual Property on behalf of the Borrower or its Subsidiaries have executed written confidentiality
and invention assignment agreements pursuant to which such employee or contractor, to the extent permitted by applicable law, presently
assigns and agrees to assign to the Borrower or its Subsidiaries all right, title and interest in and to such material Intellectual
Property, and agrees to keep confidential information and trade secrets of the Borrower and its Subsidiaries confidential.

 

Section 4.18         Real
Property. Schedule 4.18 correctly sets forth all real property that is owned or leased by the Loan Parties as of the
Closing Date, indicating in each case whether the respective property is owned or leased, the identity of the owner or landlord
thereof and lessee or sublessee thereof (if applicable) and the address of the respective property.

 

Section 4.19         
Existing Debt. Schedule 4.19 correctly sets forth, as of the Closing Date (i) all Indebtedness for borrowed money of
each Loan Party and its Subsidiaries, including any commitment for the extension of such Indebtedness to such Loan Party or the
Guarantee by such Loan Party or any of its Subsidiaries of any such Indebtedness of any other Person, and (ii) the aggregate principal
or face amount outstanding or that may become outstanding under each such arrangement, excluding in the case of each of clause
(i) and (ii) this Agreement and the Loans.

 

Section 4.20         Regulatory
Approvals and Related Submissions and Materials.

 

(a)          Schedule
4.20(a) correctly sets forth all of the material Regulatory Approvals relating to the Products of any Loan Party as of the
Closing Date.

 

(b)          There
has been no statement in the written or oral communications received by such Loan Party , or to the knowledge of such Loan Party,
by any manufacturer or distributor of any Product or any licensee of any Loan Party under any License Agreement, from any Regulatory
Authority in their respective jurisdictions that would indicate that the Regulatory Authority (i) was not likely to approve any
Loan Party’s applications made to any Regulatory Authority with respect to any of the Products or any Material Agreement
or (ii) is likely to revise or revoke any current approval granted by any Regulatory Authority with respect to any of the Products
or any Material Agreement in connection with a Product.

 

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(c)          Each
Loan Party is compliant in all material respects with all Regulatory Approvals and all statutory and regulatory obligations applicable
under its currently held marketing authorizations and requirements with respect to each Product wherever such Product is now being
licensed, sold, investigated in clinical studies or in preclinical studies.

 

Section 4.21         Title
to Property. Each Loan Party and its Subsidiaries has good and marketable title to (or, in the case of leased real property,
valid leasehold interests in) all of its real and personal property, whether tangible or intangible, material to the Loan Parties
and their Subsidiaries business, taken as a whole, except for Liens not prohibited by Section 6.2.

 

Section 4.22         Insurance.
All policies of insurance maintained by or on behalf of such Loan Party are in full force and effect and are of a nature and provide
such coverage as is customarily carried by businesses of the size and character of such Loan Party. Schedule 4.21 correctly
sets forth a description of all policies of insurance maintained by the Loan Parties in the United States as of the Closing Date.

 

Section 4.23         Labor
Matters. As of the Closing Date, there are no collective bargaining agreements covering employees of such Loan Party or any
of its Subsidiaries.

 

Section 4.24         Environmental
Matters. Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect, no Loan Party nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject
to any Environmental Liability, (iii) has received any Environmental Claim, or has knowledge that any is threatened, (iv) has entered
into any agreement in which such Loan Party or any Subsidiary has assumed or undertaken responsibility or obligations of any other
person with respect to any Environmental Liability or (v) has knowledge of any basis for any other Environmental Liability.

 

Section 4.25         Anti-Terrorism
Laws.

 

(a)          None
of the Loan Parties or any of their Subsidiaries or, to the knowledge of such Loan Party, any Affiliates of such Loan Party, is
in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the Anti-Terrorism Laws.

 

(b)          (i)
None of the Loan Parties or their Subsidiaries nor (ii) to the knowledge of such Loan Party, any Affiliates of such Loan Party
or their respective agents acting or benefiting in any capacity in connection with the Loans or other transactions hereunder, is
a Sanctioned Person.

 

(c)          (i)
None of the Loan Parties or any of their Subsidiaries nor (ii) to the knowledge of such Loan Party, any of their agents acting
in any capacity in connection with the Loans or other transactions hereunder (A) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of any Sanctioned Person or in any Sanctioned Country,
or (B) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to
any Sanctions.

 

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Section 4.26         Completeness
of Disclosure. No document, certificate or other written information, including, information contained in the presentations
made to the Lenders, furnished to the Lenders by or on behalf of the Loan Parties and their Subsidiaries for use in connection
with the transactions contemplated by this Agreement, but excluding any financial projections that may be included therein or that
have been furnished to the Lenders, contains any untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates
and assumptions believed by the Loan Parties to be reasonable at the time made, it being recognized by the Lenders that such projections
as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections
may differ materially from the projected results. There are no facts known to any Loan Party that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect and that have not been disclosed in writing to the Lenders
for use in connection with the transactions contemplated by this Agreement or otherwise disclosed in filings with the U.S. Securities
and Exchange Commission prior to the date hereof.

 

Section 4.27         No
Default. No Event of Default or Default has occurred orand
is continuing.

 

Section 4.28         Broker
Fees. No Loan Party has engaged or dealt with any broker or arranger, other than Morgan Stanley & Co. LLC, in connection
with this Agreement and the Loans, and there are no brokerage commissions or fees payable in connection with the Loans to be provided
to the Borrower under this Agreement to any Person other than Morgan Stanley & Co. LLC and pursuant to the Fee Letters.

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

Each Loan Party covenants and agrees that
until the Commitments have terminated, the Obligations have been indefeasibly paid in full in cash, including the Prepayment Premium,
if applicable, and the Exit Fee but excluding contingent
indemnification obligations (other than those with respect to which the Agent or any Lender has then given notice to the Borrower)
and this Agreement has terminated in accordance with Section 10.5, each Loan Party shall perform, and shall cause each of
its Subsidiaries to perform, all covenants in this Article V:

 

Section 5.1           Financial
Statements and Other Reports. The Loan Parties shall deliver to the Agent:

 

(a)          Quarterly
Financial Statements. Within 45 days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter) of each Fiscal
Year (or if later, the end of any extension period granted to the Borrower pursuant to any extension in connection with its Quarterly
Report on Form 10-Q for such Fiscal Quarter made in compliance with Rule 12b-25 of the Exchange Act, which such extension shall
not in the aggregate exceed five (5) days):

 

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(i)          consolidated
balance sheets of the Borrower and its Subsidiaries (including the Scilex Subsidiary) as at the end of such Fiscal Quarter and
the related consolidated statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries (including
the Scilex Subsidiary) for the portion of the Borrower’s Fiscal Year then elapsed; and

 

(ii)         consolidated
balance sheets of the Scilex Subsidiary as at the end of such Fiscal Quarter and the related consolidated statements of income,
stockholders’ equity and cash flows of the Scilex Subsidiary for the portion of the Borrower’s Fiscal Year then elapsed;

 

in the case of each of clauses (i) and (ii), setting forth in
comparative form the corresponding figures for the corresponding Fiscal Quarter and period in the previous Fiscal Year, together
with a Financial Officer Certification with respect thereto.

 

(b)          Annual
Audited Financial Statements. Within 90 days after the end of each Fiscal Year (or if later, the end of any extension period
granted to the Borrower pursuant to any extension in connection with its Annual Report on Form 10-K for such Fiscal Year made in
compliance with Rule 12b-25 of the Exchange Act, which such extension shall not in the aggregate exceed fifteen (15) days):

 

(i)          
(x) the audited consolidated balance sheets of the Borrower and its Subsidiaries (including the Scilex Subsidiary) as at the end
of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of the Borrower
and its Subsidiaries (including the Scilex Subsidiary) for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year, together with a Financial Officer Certification and (y) with respect to such
consolidated financial statements a report thereon of Deloitte & Touche LLP or other independent registered public accounting
firm of recognized international standing selected by the Borrower, which report shall be unqualified, and shall state that such
consolidated financial statements fairly present the consolidated financial position of the Borrower and its Subsidiaries (including
the Scilex Subsidiary) as at the dates indicated and the results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance
with generally accepted auditing standards, together with a written statement by such independent registered public accounting
firm stating that nothing has come to their attention that causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance Certificate are not stated in accordance with the terms
hereof; provided, however, that any such report shall not be considered qualified due to the inclusion of an emphasis of
matter paragraph in the audit opinion based on recurring losses from operations and working capital deficiencies similar in type
disclosed in the Borrower’s audited financial statements for the 2017 Fiscal Year and if the Borrower delivers to the Agent
within three Business Days after the delivery of the applicable financial statements a Solvency Certificate attesting to the solvency
as of such date of the Borrower; and

 

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(ii)         (x)
the audited consolidated balance sheets of the Scilex Subsidiary as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders’ equity and cash flows of the Scilex Subsidiary for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the previous Fiscal Year, together with a Financial Officer Certification
and (y) with respect to such consolidated financial statements a report thereon of Deloitte & Touche LLP or other independent
registered public accounting firm of recognized international standing selected by the Borrower, which report shall be unqualified,
and shall state that such consolidated financial statements fairly present the consolidated financial position of the Scilex Subsidiary
as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination
by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted
auditing standards.

 

(c)          Liquidity
Information. Within five (5) Business Days after receipt of a written request from any Lender or the Agent, the Borrower shall
provide to such Lender or the Agent copies of bank statements and balance, together with any information reasonably requested by
such Lender or the Agent evidencing the Borrower’s maintenance of the Minimum Liquidity Amount.

 

(d)          Compliance
Certificate. Together with each delivery of financial information (and in any event no later than the delivery date required
thereby) pursuant to Sections 5.1(a) and 5.1(b), a duly executed and completed Compliance Certificate, attaching
such required financial information required pursuant to Sections 5.1(a) or 5.1(b) (as applicable).

 

(e)          Financial
Covenant. Together with each delivery of financial information pursuant to Sections 5.1(a) or 5.1(b) (as applicable),
the Borrower shall deliver to the Agent a compliance certificate substantially in the form of Exhibit I, executed by the chief
financial officer, principal financial officer or principal accounting officer of the Borrower, and such other evidence reasonably
requested by any Lender, confirming the Borrower’s compliance with the covenant set forth in Section 6.15.

 

(f)          Annual
Budget. As soon as available, and in any event within sixty (60) days after the end of each Fiscal Year, a detailed consolidated
budget for the following Fiscal Year (including a projected consolidated balance sheet of the Borrower and its Subsidiaries (including
the Scilex Subsidiary) as of the end of the following Fiscal Year and the related consolidated statements of projected cash flow
and projected income and a summary of the material underlying assumptions applicable thereto, and during the course of such Fiscal
Year any updates thereto prepared by the Borrower or any of its Subsidiaries if, and to the extent, delivered to the Borrower’s
board of directors). Such budget shall in each case be accompanied by a certificate of an Authorized Officer stating that such
budget has been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable
at the time of preparation of such budget, it being understood that actual results may vary from such budget and that such variations
may be material.

 

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(g)          Notice
of Default, Event of Default or Material Adverse Effect. Promptly upon (i) the occurrence of any Default or Event of Default
or receipt by any Loan Party or any of its Subsidiaries of notice with respect thereto or (ii) the occurrence of any event or change
that has caused (or would reasonably be expected to cause), in any case or in the aggregate, a Material Adverse Effect, a certificate
such Loan Party’s Authorized Officer specifying the nature and period of existence of such condition, event or change, or
specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, event
or condition, and what action such Loan Party has taken, is taking and proposes to take with respect thereto.

 

(h)          Notice
of Adverse Proceeding. Promptly upon any Loan Party obtaining knowledge of (i) the institution of, or threat in writing of,
any Adverse Proceeding not previously disclosed in writing by such Loan Party to the Lenders, or (ii) any material development
in any Adverse Proceeding that, in the case of either (i) or (ii), would be reasonably expected to have a Material Adverse Effect,
such Loan Party shall provide written notice thereof to the Agent.

 

(i)          Environmental
Notifications. Promptly following receipt or submission thereof, copies of all environmental reports, filings or notifications
submitted to a Governmental Authority or third party, whether prepared by personnel of any Loan Party or by independent consultants,
Governmental Authorities or any other Persons, with respect to environmental matters arising out of the operations of the Borrower
or any Subsidiary or at any Facility that would be reasonably expected to have a Material Adverse Effect or with respect to any
Environmental Claims that would be reasonably expected to have a Material Adverse Effect.

 

(j)          Information
Regarding Collateral. (i) At least 30 days prior to any such change, written notice of (A) any change in any Loan Party’s
name, (B) any change in the location of any Loan Party’s chief executive office or principal place of business, (C) any change
in any Loan Party’s jurisdiction of organization or “location” (determined as prescribed in New York UCC Section
9-307) or type of organizational structure, (D) any change in any Loan Party’s taxpayer identification number or company
registration number or similar identifying designation assigned by any applicable Governmental Authority or (E) any damage or destruction
of any material portion of the Collateral, and (ii) promptly (and in any case within two Business Days) after the effectiveness
thereof certified organizational documents reflecting any of the changes described in (i) above.

 

(k)          ERISA
Event. Promptly upon any Authorized Officer of a Loan Party obtaining knowledge of the occurrence of any ERISA Event that would
reasonably be likely to cause a Material Adverse Effect, such Loan Party shall provide written notice specifying the nature thereof,
what action such Loan Party or its ERISA Affiliate has taken, is taking or proposes to take with respect thereto and, when known,
any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto.

 

(l)          Other
Information. (i) Promptly upon their becoming available, copies of (A) all financial statements, reports, notices and proxy
statements sent or made available generally by the Borrower to its security holders and (B) all regular and periodic reports and
all registration statements and prospectuses, if any, filed by the Borrower with any securities exchange and (ii) such other information
and data with respect to the Borrower or any of its Subsidiaries (including the Collateral) as from time to time may be reasonably
requested by the Agent.

 

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Any material to be delivered pursuant to Sections
5.1(a), (b), (h), (k) or (l) shall be deemed delivered hereunder upon posting thereof on the EDGAR Website (or any successor system
thereto) maintained by the U.S. Securities and Exchange Commission.

 

Section 5.2           Existence.
Except pursuant to a transaction expressly permitted under Section 6.7, each Loan Party shall, and shall cause each of its
Subsidiaries to, at all times preserve and keep in full force and effect (i) its existence and (ii) all rights, franchises, licenses
and permits required by any Governmental Authority necessary to enable each Loan Party and each of its Subsidiaries to operate
their respective businesses as now conducted and as currently contemplated to be conducted by them and to own or lease their respective
properties other than, in the case of this clause (ii), where the failure to do so, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.3           Payment
of Taxes and Claims. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay all material Taxes imposed upon
it or any of its properties or assets or in respect of any of its profits, income, capital, capital gains, payroll businesses or
franchises before any penalty or fine accrues thereon, and all material Taxes or claims (including claims for labor, services,
materials and supplies) for sums that have become due and payable and that by law have (or in the case of Taxes may) become a Lien
upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided,
however, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings diligently
conducted so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP, shall have
been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim.

 

Section 5.4           Maintenance
of Properties. Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all material properties necessary in the business of such
Loan Party and its Subsidiaries, and from time to time shall make or cause to be made all appropriate repairs, renewals and replacements
thereof except where the failure in any individual case or in the aggregate to maintain such properties would not reasonably be
expected to result in a Material Adverse Effect.

 

Section 5.5           Insurance.
Each Loan Party (i) shall maintain, or cause to be maintained, with financially sound and reputable insurers, such insurance as
may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses
and (ii) shall maintain all insurance required under the terms of any lease to which such Loan Party is a tenant or lessee the
failure of which to maintain would reasonably be expected to cause a Material Adverse Effect. Within thirty (30) Business Days
after the Closing Date (or such longer period of time agreed to by the Agent), each such policy of insurance shall (i) name the
Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear, and (ii) in the case
of each casualty insurance policy (including business interruption, if any) contain a lender loss payable clause or endorsement
naming the Agent, on behalf of the Secured Parties, as loss payee thereunder and providing for at least thirty (30) days’
prior written notice to the Agent of any material modification or cancellation of such policy, and otherwise reasonably satisfactory
in form and substance to the Agent. Notwithstanding the foregoing, in the event any proceeds of any insurance are received by the
Agent or any Lender, except after the occurrence and during the continuance of an Event of Default, such Person shall, within one
(1) Business Day after receipt thereof, deliver such proceeds in the form received to the Borrower or the applicable Loan Party
to which such proceeds relate.

 

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Section 5.6           Books
and Records; Inspections. Each Loan Party shall, and shall cause each of its respective Subsidiaries to, keep books and records
which accurately reflect its business affairs in all material respects in accordance with GAAP and each Loan Party shall, and shall
cause each of its respective Subsidiaries to, permit any authorized representatives designated by the Agent to visit and inspect
any of the properties of the Loan Party and their Subsidiaries no more than once per year, to inspect, copy and take extracts from
their financial and accounting records, and to discuss their affairs, finances and accounts with their officers and independent
registered public accounting firm, in person or by telephone call at the request of the Agent or its authorized representative
during normal business hours upon at least ten (10) Business Days prior written notice; provided that no Loan Party shall
be obligated pursuant to this Section 5.6 to provide any information that it reasonably considers to be a trade secret or
subject to attorney-client privilege or similar confidential information; provided, further, that following the occurrence
and during the continuation of an Event of Default, the Agent will be entitled to conduct an unlimited number of such visitations
or inspections, at the Borrower’s expense, at reasonable times and upon reasonable notice.

 

Section 5.7           Compliance
with Laws.

 

(a)          Environmental
Compliance. Each Loan Party shall comply, and shall cause each of its Subsidiaries to comply with all Environmental Laws in
all material respects. If the Agent at any time has a reasonable basis to believe that there is any material violation by a Loan
Party of any Environmental Law or the presence or release of any Hazardous Material which could result in material liability, each
Loan Party shall, and shall cause each Subsidiary to, (i) cause the performance of such environmental audits and testing, and preparation
of such environmental reports, at the Borrower’s sole cost and expense, as the Agent may from time to time reasonably request
with respect to any parcel of real property subject to a Collateral Document that is a mortgage, deed of trust or similar instrument,
which shall be conducted by Persons reasonably acceptable to the Agent and shall be in form and substance reasonably acceptable
to the Agent, and (ii) permit the Agent or its representatives to have access to all such real property for the purpose of conducting,
at the Borrower’s sole cost and expense, such environmental audits and testing as the Agent shall reasonably deem appropriate.

 

(b)          General
Compliance. Each Loan Party shall comply, and shall cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations, guidelines binding upon it and orders of any Governmental Authority the failure of which to
comply with would reasonably be expected to cause a Material Adverse Effect. Within 60 days after the Closing Date, each Loan Party
shall institute (if not already in effect) and thereafter maintain in effect and enforce policies and procedures reasonably designed
to promote compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with
Anti-Terrorism Laws and Sanctions.

 

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Section 5.8           Additional
Guarantors. In the event that any Person becomes a Domestic Subsidiary of the Borrower or any other Loan Party (other than
the Scilex Subsidiary), the Borrower or such Loan Party shall within thirty (30) days after such Person becomes such a Domestic
Subsidiary (or such later date as agreed to by the Agent):

 

(a)          (i)
cause such Subsidiary to become an Additional Guarantor by executing and delivering to the Agent a Joinder Agreement and, where
applicable, all Collateral Documents necessary to grant a first priority Lien in favor of the Agent in all assets owned or held
by such Subsidiary of the type constituting Collateral, in each case in form and substance reasonably satisfactory to the Agent,
(ii) cause itself or any of its other Subsidiaries that holds the Equity Interests of such Subsidiary to take any additional actions
required by the Collateral Documents or hereunder necessary to grant a perfected first-priority Lien in such Equity Interests in
favor of the Agent, including by, where applicable, delivering to the Agent originals of the certificates representing such Equity
Interests, together with an original of an undated transfer power for each such certificates executed in blank by an Authorized
Officer (and, where applicable, a power of attorney authorizing the Agent to transfer such Equity Interests) and any other instruments
required by the Collateral Documents or hereunder necessary for the perfection of the Lien in such Equity Interests in favor of
the Agent, and (iii) take all such other actions and execute and deliver, or cause to be executed and delivered, all such documents,
instruments, agreements, opinions and certificates as are reasonably requested by the Agent to the extent similar to the ones described
in Section 3.1 clauses (c) and (j); and

 

(b)          send
to the Agent written notice setting forth (i) the date on which such Person became a Subsidiary, and (ii) all of the data regarding
such Person that was required to be set forth in the Disclosure Schedules with respect to the Loan Parties, and such written notice,
upon approval by the Agent, shall be deemed to supplement the Disclosure Schedules for all purposes under this Agreement and the
other Loan Documents.

 

Section 5.9           Further
Assurances. At any time or from time to time upon the request of the Agent, each Loan Party shall, at its sole expense, promptly
execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in
order to effect fully the purposes of the Loan Documents. In furtherance and not in limitation of the foregoing, each Loan Party
shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by
the Guarantors and are secured by the Collateral in accordance with the requirements of the Loan Documents. Notwithstanding any
provision of this Agreement or any other Loan Document to the contrary (including any provision that would otherwise apply notwithstanding
other provisions or that is the beneficiary of other overriding language), unless otherwise agreed to by the Borrower, (a) no more
than 65.0% of the voting Equity Interests of any CFC or FSHCO that is, in each case, owned directly by a Loan Party shall be directly
or indirectly pledged or similarly hypothecated to guarantee or support any obligation of the Borrower, (b) no Equity Interest
of any Subsidiary of a CFC or FSHCO shall be required to be directly or indirectly pledged or similarly hypothecated to guarantee
or support any obligation of the Borrower (aggregating all arrangements that result in a direct or indirect pledge of such Equity
Interests), (c) no CFC or FSHCO (or Subsidiary thereof) shall be required to guarantee or support any obligation of the Borrower,
and (d) no security or similar interest shall be granted in the assets of any CFC or FSHCO (or Subsidiary thereof), which security
or similar interest guarantees or supports any obligation of the Borrower.

 

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Section 5.10         Employee
and Pension Matters. The Loan Parties shall, and shall cause each of their Subsidiaries to: (i) maintain each Plan in compliance
in all material respects with the applicable provisions of ERISA, the Code and other applicable federal or state law; (ii) cause
each applicable Pension Plan intended to be qualified under Section 401 of the Code to be so qualified; (iii) make all required
contributions to any Plan when due; (iv) not engage in a prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan; (v) not engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, and (vi) ensure
that no Plan has an Unfunded Pension Liability, in each case of (i) through (vi), that would reasonably be expected to have a Material
Adverse Effect.

 

Section 5.11         Other
Collateral. Each Loan Party shall cause all of its owned real, personal and mixed property (including Equity Interests and
Intercompany Indebtedness), other than Excluded Assets (as defined in the Collateral Agreement), to be subject at all times to
a first priority perfected security interests in favor of the Agent for the benefit of the Secured Parties under the Collateral
Documents to the extent required by the Collateral Agreement, free and clear of all Liens except for Liens not prohibited by Section
6.2.

 

Section 5.12         Intellectual
Property.

 

(a)          Subject
to each Loan Party’s reasonable business judgment, each Loan Party shall maintain each registration and diligently prosecute
each application of any of its Material Loan Party Intellectual Property.

 

(b)          Subject
to each Loan Party’s reasonable business judgment, each Loan Party shall defend all of its Material Loan Party Intellectual
Property and Exclusively Licensed Material IP against infringement, misappropriation or other violation by any other Persons, and
against any claims of invalidity or unenforceability, in each case where the failure to do so would reasonably be expected to have
a Material Adverse Effect or otherwise result in the invalidity or unenforceability of any Material Loan Party Intellectual Property
or Exclusively Licensed Material IP.

 

(c)          Subject
to each Loan Party’s reasonable business judgment, the Borrower and each of its Subsidiaries shall protect the secrecy, confidentiality
and value of its Material Loan Party Intellectual Property consisting of know-how, confidential or proprietary information or trade
secrets.

 

(d)          The
Borrower and each of its Subsidiaries shall, to the extent permitted by applicable law, require all of their employees and consultants
who are involved in the development of material Intellectual Property on behalf of the Borrower or its Subsidiaries to enter into
written confidentiality and invention assignment agreements pursuant to which such employee or consultant presently assigns and
agrees to assign to the Borrower or its Subsidiaries all right, title and interest in and to such material Intellectual Property.

 

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Section 5.13         Debt
Service Reserve Account.

 

(a)          Subject
to clauses (b) and (c) below, the Borrower shall fund and maintain at all such times cash denominated in U.S. dollars in a debt
service reserve account (the “Debt Service Reserve Account”), in an amount equal to at least the amount required
to pay interest on the Loans for a period of twelve (12) months (the “Debt Service Reserve Amount”).

 

(b)          The
Debt Service Reserve Amount shall initially be equal to $9,592,380.00 as of the Closing Date, and after the Closing Date shall
be recalculated on the first day of each Fiscal Quarter based on the LIBOR Rate for the Interest Period commencing on such date
(assuming for purposes of such calculation that such rate shall remain in effect during the twelve (12) month period beginning
on such date). Within 30 days after each such recalculation date and notice thereof from Agent to the Borrower, the Borrower shall
deposit or cause to be deposited into the Debt Service Reserve Account such amounts in U.S. dollars as may be necessary to cause
the balance of the Debt Service Reserve Amount to be at least equal to the Debt Service Reserve Amount.

 

(c)          The
Borrower shall cause the Debt Service Reserve Account to become subject to a “blocked” account control agreement between
the Borrower, the Agent and the applicable depositary bank in favor of the Agent in form and substance satisfactory to the Agent
within the time period set forth in Schedule 5.17 hereto and thereafter to remain subject to such control agreement at all
times. Agent agrees not to exercise any rights under such control agreement unless an Event of Default has occurred and is continuing.

 

Section
5.14         Collateral Access Agreements. Each Loan Party that is a party
to the leases located at (i) 9380 Judicial Drive, San Diego, CA, (ii) 8395 Camino Santa Fe, San Diego, CA and (iii) 4955
Directors Place, San Diego, CA 92121 (or any replacement or other facility which holds assets now or in the future held or of
the type held at any of such facilities) shall use its commercially reasonable efforts to deliver to the Agent a collateral
access agreement and acknowledgment and waiver of liens from the applicable lessor or similar party with respect to such
location, in form and substance reasonably satisfactory to the Agent.

 

Section 5.15         Further
Assurances. Each Loan Party shall execute any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of financing statements and other documents and recordings
of Liens in stock registries), that may be required under any applicable law, or that the Agent may reasonably request, to establish
and maintain the valid and perfected first priority security interest in the Collateral to be granted to the Agent, for the benefit
of the Secured Parties, under the Collateral Documents, all at the expense of Borrower, and provide to the Agent, from time to
time upon reasonable request, evidence reasonably satisfactory to the Agent as to the perfection and priority of the Liens created
or intended to be created by the Collateral Documents.

 

Section 5.16         Right
of First Refusal. In the event the Borrower or any other Loan Party intends, at any time while any Loans or Commitments remain
outstanding, to obtain Indebtedness for borrowed money from one or more third-party financing sources in respect of which the Borrower
will be an obligor, the Borrower shall comply with the ROFR Provisions with respect to such Indebtedness.

 

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Section 5.17         Post-Closing
Obligations. The Loan Parties shall, or shall cause their applicable Subsidiaries to, take each action set forth on Schedule
5.17 within the time period set forth therein for the taking of such action (or such longer time period as the Agent may agree
in its sole discretion) (it being understood and agreed that all representations, warranties and covenants set forth in the Loan
Documents with respect to the taking of any such action are qualified by the non-completion of such action until such time as such
action is completed or required to be completed in accordance with this Section 5.17).

 

ARTICLE VI

NEGATIVE COVENANTS

 

Each Loan Party covenants and agrees, until
the Commitments have terminated, the Obligations have been indefeasibly paid in full in cash, including the Prepayment Premium,
if applicable, and the Exit Fee but excluding contingent
indemnification obligations (other than those with respect to which the Agent or any Lender has then given notice to the Borrower)
and this Agreement has terminated in accordance with Section 10.5, each Loan Party shall perform, and shall cause each of
its Subsidiaries to perform, all covenants in this Article VI:

 

Section 6.1           Indebtedness.
Each Loan Party shall not, and shall not permit any of its Subsidiaries to directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

 

(a)          the
Obligations;

 

(b)          Intercompany
Indebtedness, provided that (i) any such Indebtedness owing by a Loan Party to a Person that is not a Loan Party shall be
subordinated in right of payment to the Obligations and (ii) the aggregate principal amount of Indebtedness owing by Subsidiaries
that are not Loan Parties to Loan Parties shall not exceed, together with the amount of Investment pursuant to Section 6.6(d)(i),
the Non-Loan Party Cap;

 

(c)          Indebtedness
in respect of cash management obligations, including netting services, automatic clearinghouse arrangements, overdraft protections,
employee credit card programs, other similar arrangements and otherwise in connection with deposit accounts, and any guarantee
obligations of any Loan Party and its Subsidiaries in connection therewith, in each case entered into in the Ordinary Course in
an Arm’s-Length Transaction;

 

(d)          Indebtedness
pursuant to Hedging Agreements not prohibited by Section 6.14;

 

(e)          Capitalized
Lease Obligations and purchase money Indebtedness in an aggregate principal amount not to exceed $10,000,000 at any time outstanding;

 

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(f)          other
unsecured Indebtedness in an aggregate principal amount not exceeding $375,000,000 at any time outstanding so long as (i) at the
time of incurrence of such Indebtedness, no Default or Event of Default has occurred and is continuing, (ii) there are no obligors
in respect of such Indebtedness other than the Loan Parties, (iii) neither the scheduled maturity date nor the weighted average
life to maturity of such Indebtedness is earlier than 90 days after the Scheduled Maturity Date, (iv) such Indebtedness shall be
subordinated in right of payment to the Obligations pursuant to a subordination agreement in form and substance acceptable to the
Agent (provided that such subordination agreement shall permit the Loan Parties to make regularly scheduled interest payments in
respect of such Indebtedness so long as no Default or Event of Default has occurred and is continuing), (v) the all-in-yield as
determined by the Agent in its sole discretion applicable to such Indebtedness (whether in the form of interest, margin, original
issue discount, upfront fees or otherwise) shall not exceed 15% per annum and (vi) the aggregate amount of interest and amortization
payable in cash by the Borrower and its Subsidiaries pursuant to all Indebtedness incurred under this clause (f) on a pro forma
basis shall not exceed $25,000,000 per annum;

 

(g)          unsecured
promissory notes convertible into common shares of the Borrower in an aggregate principal amount not to exceed $38,000,000 at any
time outstanding (the “Convertible Notes”);

 

(h)          Indebtedness
of any Person that becomes a Subsidiary of any Loan Party after the date hereof pursuant to a Permitted Acquisition; provided that
(i) such Indebtedness exists at the time such Person becomes a Subsidiary and was not incurred in contemplation of or in connection
with such Person becoming a Subsidiary, and (ii) no other Loan Party or Subsidiary guarantees such Indebtedness and such Indebtedness
is not otherwise recourse to any other Loan Party or Subsidiary, and (iii) the principal amount of Indebtedness permitted by this
Section 6.1(h) shall not exceed in the aggregate $15,000,000 at any time outstanding;

 

(i)          (x)
the Guarantee by any Loan Party of the Indebtedness or other obligations of any other Loan Party, to the extent such guarantor
could have otherwise incurred such Indebtedness or other obligations directly as the primary obligor in accordance with this Agreement,
and (y) the Guarantee by any Subsidiary that is not a Loan Party of the Indebtedness or other obligations of any other Subsidiary
that is not a Loan Party;

 

(j)          the
incurrence by the Loan Parties of Indebtedness under an unsecured revolving credit facility in the aggregate principal amount outstanding
at any one time not to exceed $25,000,000 on terms that have been consented to in writing by the Required Lenders;

 

(k)          Indebtedness
constituting reimbursement obligations with respect to letters of credit, bank guarantees or performance bonds issued in the Ordinary
Course in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees
or their families or property, casualty or liability insurance or self-insurance or in connection with the maintenance of, or pursuant
to the requirements of, environmental permits or licenses from Governmental Authorities;

 

(l)          Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient
funds in the Ordinary Course;

 

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(m)          Indebtedness
of the Borrower consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements,
in each case, in the Ordinary Course;

 

(n)          Indebtedness
of the Borrower or its Subsidiaries consisting of obligations to make upfront payments, milestone payments, license payments and
similar payments pursuant to any license agreement in an aggregate amount not to exceed $100,000,000 at any time; provided that
the amount of such Indebtedness incurred in connection with any single transaction or series of related transactions shall not
exceed $50,000,000;

 

(o)          Indebtedness
of the Borrower pursuant to the Scilex Letter of Credit and the Scilex Indenture;

 

(p)          Indebtedness
of Subsidiaries that are not Loan Parties in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; provided
that no Loan Party shall be an obligor with respect to any such Indebtedness; and

 

(q)          other
Indebtedness of the Loan Parties and its Subsidiaries outstanding on the Closing Date and set forth on Schedule 6.1, and
any refinancing, renewal or extension thereof provided that (i) the principal amount of such Indebtedness is not increased
at the time of such refinancing, renewal or replacement, except by the amount of any accrued but unpaid interest with respect to
such Indebtedness at the time of such refinancing, renewal or replacement and any expenses reasonably incurred in connection with
such refinancing, renewal or replacement, (ii) any refinancing, renewal or replacement of any subordinated Indebtedness shall be
(A) on subordination terms at least as favorable to the Lenders and (B) no more restrictive on the applicable Loan Party and its
Subsidiaries than the subordinated Indebtedness being refinanced, renewed or extended, and (iii) the final maturity date and weighted
average life to maturity of such refinancing, renewal or replacement shall not be prior to or shorter than that applicable to the
Indebtedness refinanced thereby.

 

Notwithstanding the foregoing, in no event
shall any Affiliate of any Loan Party (other than another Loan Party or wholly-owned Subsidiary thereof providing Indebtedness
permitted pursuant to Section 6.1(b)) be permitted to be a lender to, or otherwise provide any Indebtedness to, any Loan
Party or any of its Subsidiaries or directly, indirectly or beneficially hold any such Indebtedness.

 

Section 6.2           Liens.
Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods
or accounts receivable) of any such Loan Party or any of its Subsidiaries, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any filing, recording, registration or other similar notice of any Lien with respect
to any such property, asset, income or profits under any statute, except:

 

(a)          Liens
in favor of the Agent for the benefit of the Secured Parties granted pursuant to any Loan Document;

 

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(b)          Liens
for Taxes, assessments or other governmental charges (i) not yet overdue or subject to penalties for nonpayment and in respect
of which no enforcement proceedings have commenced or (ii) that are being contested in good faith by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

 

(c)          (i)
statutory Liens of landlords, banks (including rights of set off), carriers, warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the Ordinary Course for sums (1) not yet overdue for a period of more
than 60 days and in respect of which no enforcement proceedings have commenced or (2) being contested in good faith by appropriate
proceedings, so long as reserves or other appropriate provisions, if any, required by GAAP shall have been made for any such contested
amounts and (ii) customary encumbrances on deposit accounts of the Loan Parties or any of their Subsidiaries in favor of depositary
banks in connection with cash management services in the Ordinary Course and not securing Indebtedness;

 

(d)          Liens
incurred in each case in the Ordinary Course in an Arm’s-Length Transaction in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness) or deposits as security for contested
taxes or import duties or for the payment of rent, so long as such is incurred in the Ordinary Course, so long as no foreclosure,
sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof;

 

(e)          survey
exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other restrictions (including minor defects or irregularities
in title and similar encumbrances) as to the use of real properties that were not incurred in connection with Indebtedness and
that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation
of the business of such Person;

 

(f)          any
(i) interest or title of a lessor or sublessor under any lease of real estate, (ii) restriction or encumbrance that the interest
or title of such lessor or sublessor may be subject to, or (iii) subordination of the interest of the lessee or sublessee under
such lease to any restriction or encumbrance referred to in the preceding clause (ii), so long as the holder of such restriction
or encumbrance agrees to recognize the rights of such lessee or sublessee under such lease;

 

(g)          Liens
in favor of lessors or sublessors securing operating leases and Liens in connection with the licensing and sublicensing of assets
other than Intellectual Property, in each case, in the Ordinary Course and Liens permitted by Section 6.7(e);

 

(h)          purported
Liens evidenced by the filing of precautionary UCC financing statements or, for property located in foreign jurisdictions, the
preparation and/or filing of functionally similar documents, relating solely to operating leases of personal property entered into
in the Ordinary Course in an Arm’s-Length Transaction;

 

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(i)          Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the
importation of goods;

 

(j)          any
zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any
real property;

 

(k)          Liens
securing Indebtedness permitted pursuant to Section 6.1(e); provided that such Liens are created within 365 days
after the acquisition of the property subject to such Liens and such Liens do not at any time encumber property other than the
property financed by such Indebtedness;

 

(l)          
any Lien securing Indebtedness permitted pursuant to Section 6.1(h) existing on any property or asset prior to the acquisition
thereof by a Loan Party or any Subsidiary thereof or existing on any property or assets of a Person that becomes a Subsidiary of
any Loan Party pursuant to a Permitted Acquisition; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition, (ii) such Lien does not apply to any other property or assets of the Loan Parties or any of the
Subsidiaries and (iii) such Lien secures only those obligations which it secured immediately prior to the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be;

 

(m)         Liens
existing on the Closing Date and set forth on Schedule 6.2 and any renewals, extensions and replacements thereof; provided
that any renewal, extension or replacement of such Liens shall secure only those obligations secured by such Liens on the date
hereof;

 

(n)          Liens
in favor of the Loan Parties;

 

(o)          deposits
made or other security provided to secure liabilities to insurance carriers under insurance in the Ordinary Course;

 

(p)          leases
or subleases of real property granted to others in the Ordinary Course which do not materially interfere with the ordinary conduct
of the business of the Loan Parties and their Subsidiaries, as a whole, do not materially detract from the value of the property
subject thereto and do not secure any Indebtedness;

 

(q)          Liens
securing judgments not constituting an Event of Default under Section 7.1(j);

 

(r)          
Liens consisting of customary encumbrances on the Equity Interests in a Person which is not a Subsidiary of any Loan Party arising
under any joint venture or similar agreement to the extent not prohibited under Section 6.3 or Section 6.5, including
customary rights of first refusal, “tag-along” and “drag-along” rights, transfer restrictions and put and
call arrangements with respect to the Equity Interests of any such Person;

 

(s)          Liens
on motor vehicles of any of the Loan Parties or any of their Subsidiaries granted in the Ordinary Course;

 

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(t)          Liens
on assets of Subsidiaries that are not Loan Parties securing Indebtedness incurred pursuant to Section 6.1(p); and

 

(u)          Liens
not otherwise permitted under this Agreement and not securing Indebtedness in an aggregate amount not to exceed $500,000 at any
time outstanding.

 

Section 6.3           No
Negative Pledges. Except with respect to restrictions (a) in any agreement relating to a Joint Venture in which the Borrower
and its Subsidiaries collectively own 10% or less of the outstanding Equity Interests on a fully-diluted basis that prohibit the
holders of Equity Interests in such Joint Venture from granting a security interest in such Equity Interests or (b) by reason of
customary provisions restricting assignments, subletting or other transfers contained in (i) leases, licenses and other agreements
not in respect of Indebtedness entered into in the Ordinary Course in an Arm’s-Length Transaction, (ii) agreements evidencing
other Indebtedness permitted by Section 6.1(e), and (iii) agreements related to Asset Sales permitted under Section 6.7
(provided that, in the case of each of clauses (i), (ii) and (iii), such restrictions are limited to the property or assets
subject to such lease, license, Asset Sale or similar arrangement and, in the case of an Asset Sale or similar arrangement, solely
apply pending the consummation such Asset Sale), each Loan Party shall not, and shall not permit any of its Subsidiaries to, enter
into any agreement after the Closing Date prohibiting the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, to secure the Obligations.

 

Section 6.4           Restricted
Payments; Certain Payments of Indebtedness. Each Loan Party shall not, and shall not permit any of its Subsidiaries
through any manner or means or through any other Person to, directly or indirectly:

 

(a)          declare
or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests, return any
capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets,
obligations, Equity Interests, other Securities or other property to its stockholders, partners or members (or the equivalent Persons
thereof), or purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in such Loan Party, based on
their ownership interest in such Subsidiary, except (i) payments in the form of Equity Interests (other than Disqualified Equity
Interests) of the Borrower, (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their Equity
Interests ratably to their equityholders, (iii) in connection with the conversion of Securities of the Borrower into Equity Interests
(other than Disqualified Equity Interests) and the payment in cash in lieu of fractional shares in connection therewith, (iv) so
long as no Default or Event of Default has occurred and is continuing, payments made from the Net Cash Proceeds of the issuance
of Equity Interests (other than Disqualified Equity Interests) by the Borrower within 180 days of such issuance; (v) payments by
the Borrower to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants
or upon the conversion or exchange of its Equity Interests; provided such payments are not made for the purpose of evading
the restrictions of this Section 6.4; (vi) payments to satisfy dissenters’ rights pursuant to or in connection with
a merger, amalgamation, consolidation or transfer of assets not otherwise prohibited by this Agreement; (vii) payments to redeem
or retire any warrants held by any Lender or Affiliate thereof, (viii) payments pursuant to stock compensation or similar plans
in the Ordinary Course, or to repurchase, redeem or otherwise acquire Equity Interests of a Loan Party or its Subsidiaries held
by any former employees, officers, directors or consultants, not to exceed $1,000,000 in any Fiscal Year, with unused amounts in
any Fiscal Year being carried over to the next succeeding Fiscal Year (subject to a maximum of $2,500,000 of such payments in any
Fiscal Year), (ix) regularly scheduled interest payments with respect to the Convertible Notes, and (x) Tax Distributions; or

 

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(b)          make
any voluntary prepayment or other distribution (whether in cash, securities or other property) of or in respect of principal or
interest on, or redeem, repurchase, retire or otherwise acquire, any Indebtedness for borrowed money, except (i) payments to the
Agent or the Lenders in respect of the Obligations, (ii) regular scheduled payments of interest and principal as and when due (to
the extent not prohibited by applicable subordination provisions in favor of the Agent), and (iii) the conversion of any Indebtedness
into common Equity Interests.

 

Section 6.5           Restrictions
on Subsidiary Distributions. Except as provided herein and in the other Loan Documents, each Loan Party shall not, and shall
not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any Subsidiary of such Loan Party to (v) pay dividends or make any other distributions
on any of such Subsidiary’s Equity Interests owned by such Loan Party, (w) repay or prepay any Intercompany Indebtedness
owed to a Loan Party (other than in accordance with any subordination agreement applicable thereto), (x) make loans or advances
to any Loan Party, (y) transfer, lease or license any of its property or assets to any Loan Party other than restrictions by reason
of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements
and similar agreements entered into in the Ordinary Course in an Arm’s-Length Transaction or (z) in the case of a Domestic
Subsidiary, guarantee the Obligations and grant a first-priority security interest in substantially all of its assets of the type
constituting Collateral.

 

Section 6.6           Investments.
Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, except:

 

(a)          Investments
in cash and Cash Equivalents;

 

(b)          Investments
in or to any Loan Party by any other Loan Party;

 

(c)          Investments
by any Subsidiary of the Borrower that is not a Loan Party in or to another Subsidiary of the Borrower that is not a Loan Party;

 

(d)          (i)
Investments by any Loan Party in any Subsidiary or Joint Venture of the Borrower that is not a Loan Party (other than the Scilex
Subsidiary) in an aggregate amount, together with the principal amount of any Intercompany Indebtedness incurred by any Subsidiary
that is not a Loan Party pursuant to Section 6.1(b)(ii) and any amounts described in the proviso to Section 6.6(h),
not to exceed the Non-Loan Party Cap, (ii) Investments by any Loan Party in the Scilex Subsidiary in an aggregate amount not to
exceed $25,000,000 at any time outstanding and (iii) the Scilex Subordinated Loan;

 

(e)          Investments
in the Ordinary Course not otherwise prohibited by the terms of this Agreement and not in an aggregate amount at any time in excess
of $5,000,000;

 

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(f)          [reserved];

 

(g)          Equity
Interests in third parties received as consideration for dispositions permitted by Section 6.7(f) or as performance incentives
under agreements not otherwise prohibited by the terms of this Agreement pursuant to which no cash was paid for all or any portion
of such Investment;

 

(h)          Investments
acquired or made in connection with any Permitted Acquisitions provided, that the aggregate consideration paid by Loan Parties
for the acquisition of the capital stock of Persons that do not become Loan Parties (or assets that are not acquired by one or
more Loan Parties) shall not exceed an amount equal to (i) the Non-Loan Party Cap less the amount of any Investments pursuant to
Section 6.6(d)(i) plus (ii) an amount equal to 75% of the Net Cash Proceeds from the issuance of common stock of the Borrower
(excluding any such proceeds applied to make Restricted Payments pursuant to Section 6.4(a)(iv)) that are applied to fund
such Investments within 90 days of such issuance;

 

(i)          Loans
and advances in the Ordinary Course to employees, officers, directors or consultants or the Guarantee of any such loans or advances
made by a third party in an amount not to exceed $250,000 at any time outstanding;

 

(j)          any
Investment existing on, or made pursuant to binding commitments existing on, the Closing Date and set forth on Schedule 6.6;

 

(k)          any
Investment acquired by a Loan Party or any of its Subsidiaries (a) in exchange for any other Investment or accounts receivable
held by such Person in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer
of such other Investment or accounts receivable or (b) as a result of a foreclosure by such Person with respect to any secured
Investment or other transfer of title with respect to any secured Investment in default;

 

(l)          Investments
the payment for which consists of Equity Interests (other than Disqualified Equity Interests) of the Borrower;

 

(m)         Hedging
Obligations permitted under Section 6.14; and

 

(n)          Investments
in the Ordinary Course consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial
Code Article 4 customary trade arrangements with customers consistent with past practices.

 

Notwithstanding anything in this Agreement
to the contrary, (i) the Borrower shall not, and shall not permit any of its Subsidiaries to (x) directly or indirectly transfer,
by means of contribution, sale, assignment, lease or sublease, license or other disposition of any kind, any Specified Assets to
any Person other than a Loan Party or (y) permit any Person other than Loan Parties wholly-owned, directly or indirectly, by the
Borrower, to hold any interest in the Specified Assets, in each case, except (I) pursuant to Asset Sales to Persons that are not
Affiliates of the Borrower permitted pursuant to Section 6.7 so long as the Net Cash Proceeds thereof are applied in accordance
with Section 2.7(b) and (II) the assets comprising the Virttu Biologics business and the assets comprising the Levena Biopharma
business that are owned by wholly-owned Foreign Subsidiaries of the Loan Parties as of the Closing Date may continue to be owned
by such wholly-owned Subsidiaries, (ii) no Intellectual Property owned by any Loan Party that is material to the business or operations
of the Borrower and its Subsidiaries shall be contributed as an Investment by any Loan Party to any Person that is not a Loan Party
and (iii) none of the Loan Parties nor any of their Subsidiaries shall, directly or indirectly, make any Investment in the Scilex
Subsidiary other than in accordance with and pursuant to Sections 6.6(d)(ii) and (iii) above.

 

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Section 6.7           Fundamental
Changes; Disposition of Assets. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, (i) enter into
any merger, consolidation, amalgamation or division, (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution),
(iii) consummate an Asset Sale or (iv) sell, transfer, license or otherwise dispose of, in one transaction or a series of related
transactions, all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, in each case, except:

 

(a)          (i)
any Subsidiary of any Loan Party (other than the Borrower) may enter into any merger, consolidation, amalgamation or division with
or into such Loan Party or any other Subsidiary of such Loan Party, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased, transferred, licensed or otherwise disposed of, in one transaction
or a series of transactions, to a Loan Party; provided, however, in the case of such a merger, consolidation, amalgamation
or division involving a Loan Party and a Subsidiary of the Borrower that is not a Loan Party, such Loan Party shall be the continuing
or surviving Person; provided further that in no event shall the Borrower be party to any merger, consolidation, amalgamation
or division or be liquidated, wound up or dissolved, and (ii) any Subsidiary that is not a Loan Party may enter into any merger,
consolidation, amalgamation or division with or into any other Subsidiary that is not a Loan Party, or be liquidated, wound up
or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred, licensed or otherwise
disposed of, in one transaction or a series of transactions, to Subsidiary that is not a Loan Party;

 

(b)          (i)
any Asset Sale to a Loan Party by another Loan Party or (ii) any Asset Sale by a Subsidiary that is not a Loan Party to another
Subsidiary that is not a Loan Party;

 

(c)          Dispositions
of delinquent accounts receivable in connection with the collection or compromise thereof in the Ordinary Course in an Arm’s-Length
Transaction;

 

(d)          leases
or subleases (other than in respect of Intellectual Property) granted by any Loan Party or any of its Subsidiaries to third parties
in respect of surplus property which is not fundamental to the operation of the business in the Ordinary Course; provided
that such leases and subleases are on arms-length commercial terms;

 

(e)          so
long as no Default has occurred and is continuing on the date of grant, (i) non-exclusive licenses and sublicenses in respect of
Intellectual Property in the Ordinary Course and (ii) exclusive licenses and sublicenses in respect of the Intellectual Property
relating to CD38, RTX or carcinoembryonic antigen so long as (x) the Loan Party or Subsidiary licensing such Intellectual Property
receives aggregate non-refundable upfront consideration of at least $75,000,000 therefor (of which at least $50,000,000 shall consist
of cash), (y) such license or sublicense is not to an Affiliate of the Borrower and (z) to the extent a Loan Party is the licensor
or sublicensor, such proceeds and any rights to future payments pursuant to such license or sublicense shall not directly or indirectly
be contributed to or invested in a Person that is not a Loan Party;

 

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(f)          sales
or other dispositions of Equity Interests of a Subsidiary of the Borrower so long as (i) after giving effect to such transaction
and any related transactions, the Borrower or Subsidiary that owned the Equity Interests of such Subsidiary immediately prior to
such transactions continues to hold at least 70% of the Equity Interests of such Subsidiary measured by voting power and economic
rights and shall continue to hold such Equity Interests on a going forward basis and (ii) to the extent such Subsidiary was, or
was required to be, a Loan Party immediately prior to such transactions, such Subsidiary continues (x) to be a Loan Party following
such transactions and on a going forward basis, (y) to guarantee the Obligations pursuant to the Guaranty following such transactions
and on a going forward basis, and (z) to grant a valid first-priority security interest in its assets to secure the Obligations
following such transactions and on a going forward basis, in each case, to the same extent as would be required under this Agreement
and the other Loan Documents if such Subsidiary were a wholly-owned Subsidiary of the Borrower;

 

(g)          sales
of Non-Core Assets in any Arm’s-Length Transaction so long as (i) the consideration for such sale is at least equal to the
fair market value of the assets being sold, with at least 50% of such consideration consisting of cash, and (ii) the fair market
value of all assets sold pursuant to this paragraph (g) shall not exceed $75,000,000 in the aggregate;

 

(h)          other
Asset Sales so long as (i) the consideration for any such Asset Sale is at least equal to the fair market value of the assets being
sold, with at least 75% of such consideration consisting of cash, and (ii) the fair market value of all assets sold, transferred,
leased, licensed or otherwise disposed of pursuant to this paragraph (h) shall not exceed $50,000,000 in the aggregate;

 

(i)          so
long as no Default or Event of Default has occurred and is continuing or would result therefrom, any wholly-owned Subsidiary of
the Borrower may merge or consolidate with any Person other than another Subsidiary in order to effect a Permitted Acquisition;
provided that (i) in the case of any merger or consolidation involving a Loan Party, such Loan Party is the continuing or
surviving Person and remains a Loan Party and (ii) after giving effect to such merger or consolidation, such Subsidiary continues
to be a wholly-owned Subsidiary of the Borrower; and

 

(j)          any
sale, transfer or other disposition of the Equity Interests of the Scilex Subsidiary.

 

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Section 6.8           Transactions
with Affiliates. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of such Loan Party other than in an Arm’s-Length Transaction; provided, the foregoing
restriction shall not apply to (i) any transaction between the Loan Parties, (ii) the payment of reasonable and customary compensation,
benefits, fees and reimbursement of expenses paid to, and indemnity, contribution and insurance provided on behalf of, officers,
directors, employees or consultants of the Borrower and its Subsidiaries (including the Scilex Subsidiary), (iii) restricted payments
permitted under Section 6.4 and (iv) Intercompany Indebtedness permitted under Section 6.1 and Investments by Loan
Parties in Subsidiaries of the Borrower pursuant to Section 6.6(d); provided that (A) in the event any transaction
or series of related transactions with any Affiliate of any Loan Party not described in clauses (i) through (iv) above involves
aggregate consideration in excess of $5,000,000, the terms of such transaction have been approved by a majority of the members
of the board of directors of the Borrower having no personal stake in such transaction and such majority determines that such transaction
is an Arm’s-Length Transaction, (B) in the event any such transaction or series of related transactions not described in
clauses (i) through (iv) involves aggregate consideration in excess of $10,000,000, the Borrower shall have provided the Agent
with an opinion from an Independent Financial Advisor stating that such transaction is fair to the Loan Parties from a financial
point of view. Notwithstanding the foregoing, in no event shall any Affiliate of any Loan Party (other than another Loan Party
or wholly-owned Subsidiary thereof providing Indebtedness permitted pursuant to Section 6.1(b)) be permitted to be a lender
to, or otherwise provide any Indebtedness to, any Loan Party or any of its Subsidiaries or directly, indirectly or beneficially
hold any such Indebtedness.

 

Section 6.9           Conduct
of Business. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, engage in any business other than
the businesses engaged in by the Loan Parties on the Closing Date and similar or related businesses.

 

Section 6.10         Fiscal
Year. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, change its Fiscal Year from a Fiscal Year
ending December 31 without prior written consent of the Agent.

 

Section 6.11         Investment
Company Act. Each Loan Party shall not suffer or permit any event to occur that would cause the Borrower or any other Loan
Party to be an “investment company” within the meaning of the Investment Company Act of 1940.

 

Section 6.12         Organizational
Documents. No Loan Party shall enter into any amendment, supplement or other modification of its Organizational Documents or
shall cause or permit any of its Subsidiaries to permit any amendment, supplement or modification of their respective Organizational
Documents, in each case in any way that would reasonably be expected to materially adversely affect the interests of the Lenders
under this Agreement or the other Loan Documents.

 

Section 6.13         Anti-Terrorism
Laws. None of the Loan Parties, their Subsidiaries or any of their agents shall:

 

(a)          conduct
any business or engage in any transaction or dealing with any Sanctioned Person, including the making or receiving any contribution
of funds, goods or services to or for the benefit of any Sanctioned Person;

 

(b)          deal
in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to any Sanctions;
or

 

(c)          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 any Sanctions, the USA PATRIOT Act or any other Anti-Terrorism Law.

 

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Each Loan Party shall and shall cause its Subsidiaries to deliver
to the Agent and/or any Lender any certification or other evidence reasonably requested from time to time by any the Agent and/or
any Lender in its sole discretion, confirming the Loan Parties’ compliance with this Section 6.13.

 

Section 6.14         Hedging
Agreements. No Loan Party nor any of their Subsidiaries shall enter into Hedging Agreements for speculative purposes.

 

Section 6.15         Minimum
Liquidity. The Borrower shall maintain at all times $15,000,000 (the “Minimum Liquidity Amount”) of cash
subject to no liens (other than (i) Liens in favor of the Agent for the benefit of the Secured Parties and (ii) statutory Liens
in favor of the applicable depositary bank) in bank accounts over which the Agent has a perfected first-priority security interest
within the time period set forth on Schedule 5.17 hereto; provided that cash in the Debt Service Reserve Account
shall not count toward the Minimum Liquidity Amount. Agent agrees not to exercise any rights under any control agreement on any
such accounts unless an Event of Default has occurred and is continuing.

 

ARTICLE VII

EVENTS OF DEFAULT

 

Section 7.1           Events
of Default. If any of the following events (each, an “Event of Default”) shall occur:

 

(a)          the
Borrower or any other Loan Party shall fail to pay (i) any principal of any Loan when and as the same shall become due and payable,
whether at the Scheduled Maturity Date or otherwise or (ii) any amount of any prepayment under Section 2.7 at a date fixed
for prepayment thereof;

 

(b)          the
Borrower or any Loan Party shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred
to in Section 7.1(a)) payable under this Agreement, when and as the same shall become due and payable, and such failure,
in the case of interest on any Loan, shall continue unremedied for a period of five (5) Business Days and, in the case of any fee
or other amount, shall continue unremedied for a period of five (5) Business Days following the written demand by the Agent to
the applicable Loan Party for such payment;

 

(c)          any
representation or warranty made by the Borrower or any other Loan Party in writing in connection with this Agreement or any Loan
Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof
or waiver hereunder, shall prove to have been incorrect in any material respect when made;

 

(d)          the
Borrower or any other Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Sections
5.1 (Financial Statements and Other Reports), 5.2 (Existence, with respect to each Loan Party’s existence) 5.5
(Insurance), 5.6 (Books and Records; Inspections), 5.7(b) (Compliance with Laws), 5.8 (Additional Guarantors),
5.13 (Debt Service Reserve Account) or Article VI (Negative Covenants);

 

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(e)          the
Borrower or any other Loan Party shall fail to observe or perform any covenant, condition or agreement to be observed or performed
by such Person and contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other
Loan Document, and such failure shall continue unremedied for a period of thirty (30) days;

 

(f)          the
Borrower, any other Loan Party or any of their Subsidiaries shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (subject to any
applicable grace or cure period) unless such failure is waived or consented to by the holder(s) of such Material Indebtedness prior
to the acceleration of the Obligations;

 

(g)          any
event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity unless the holder(s) of such Material Indebtedness
consent thereto or waive their rights with respect thereto prior to the acceleration of the Obligations;

 

(h)          (i)
an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking
(A) relief in respect of a Loan Party or any Material Subsidiary, or of a substantial part of the property or assets of a Loan
Party or a Material Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (B) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for a Loan Party or any Material Subsidiary or for a substantial part of the property
or assets of a Loan Party or a Material Subsidiary or (C) the winding-up or liquidation of a Loan Party or any Material Subsidiary;
and such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any
of the foregoing shall be entered; or (ii) a Loan Party or any Material Subsidiary shall (A) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (B) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (h)(i) above, (C) apply
for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for a Loan Party
or any Material Subsidiary or for a substantial part of the property or assets of a Loan Party or any Material Subsidiary, (D)
file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment
for the benefit of creditors, or (F) take any action for the purpose of effecting any of the foregoing;

 

(i)          any
Loan Party is (i) not Solvent, (ii) unable or admits inability to pay its debts as they fall due, or (iii) is deemed to, or is
declared to, be unable to pay its debts under applicable law;

 

(j)          one
or more final judgments for the payment of money in an aggregate amount in excess of $5,000,000 (net of any amounts that are covered
by enforceable insurance policies issued by solvent carriers) shall be rendered against any other Loan Party or their respective
Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during
which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of any other Loan Party or any of their respective Subsidiaries to enforce any such judgment;

 

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(k)          any
Collateral Document shall for any reason fail to create, or shall be asserted in writing by any Loan Party to fail to create, a
valid and perfected first priority security interest in any material portion of the Collateral purported to be covered thereby,
except as permitted by the terms of any Loan Document or as a result of any action or inaction of the Agent so long as not resulting
from the breach of or non-compliance with any Loan Document by any Loan Party;

 

(l)          any
Loan Document shall for any reason be asserted in writing by any Loan Party or its Affiliates not to be a legal, valid and binding
obligation of such party thereto;

 

(i)         (A)
there shall occur one or more ERISA Events which individually or in the aggregate would reasonably be expected to result in a Material
Adverse Effect; or (B) there occurs any fact or circumstance that results in the imposition of a Lien or security interest on any
material portion of the Collateral pursuant to Section 430(k) of the Internal Revenue Code or ERISA; or

 

(m)         there
occurs any Change of Control;

 

then, in every such event, and at any time thereafter during
the continuance of such event, the Agent may, and at the written request of the Required Lenders shall, by notice to the Borrower,
(A) terminate the Commitments and declare the Loans then outstanding to be due and payable in whole, and thereupon the principal
of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the
Loan Parties accrued hereunder and under any other Loan Document, including any applicable Prepayment Premium and
the Exit Fee, shall become due and payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Loan Party and (B) exercise any and all rights and remedies granted to it under any
Loan Document and all of its rights under any other applicable law or in equity; provided that, in the case of any event
with respect to any Loan Party described in Section 7.1(h), the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations of the Loan Parties accrued
hereunder and any other Loan Documents, including any applicable Prepayment Premium and
the Exit Fee, shall automatically become due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Loan Party. For the avoidance of doubt, the Prepayment Premium and
the Exit Fee shall be due and payable by the Loan Parties immediately prior to, and notwithstanding, the automatic acceleration
of the outstanding principal of the Loans and all other accrued liabilities contemplated hereunder.

 

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ARTICLE VIII

AGENCY

 

Section 8.1           Appointment
and Authority. Each of the Lenders hereby irrevocably appoints Oaktree Fund Administration, LLC to act on its behalf as the
Agent hereunder and under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto and to hold the benefit of the Collateral upon trust for the Secured Parties. The provisions of this Article
are solely for the benefit of the Agent and the Lenders, and neither the Borrower nor any other Loan Party shall have rights as
a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein
or in any other Loan Documents (or any other similar term) with reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter
of market custom, and is intended to create or reflect only an administrative relationship between contracting parties. Any reference
to or use of the term “collateral agent” or “administrative agent” in any Loan Document is intended as
a reference to the Agent in both such capacities.

 

Section 8.2           Rights
as a Lender. The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent, and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder
in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the
financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, any Loan Party or any
Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to
the Lenders.

 

Section 8.3           Exculpatory
Provisions.

 

(a)          The
Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its
duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Agent:

 

(i)          shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(ii)         shall
not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan
Documents); provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance
of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law; and

 

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(iii)        shall
not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained
by the Person serving as the Agent or any of its Affiliates in any capacity.

 

(b)          The
Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Section 10.2 and Section 7.1), or (ii) in the absence of its own
gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.
The Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default and conspicuously
identified as a “notice of default” is given to the Agent in writing by any Loan Party or a Lender.

 

(c)          The
Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Agent.

 

Section 8.4           Reliance
by Agent. The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet
website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender the Agent may presume that
such condition is satisfactory to such Lender unless the Agent shall have received written notice to the contrary from such Lender
prior to the making of such Loan. The Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

 

Section 8.5           Delegation
of Duties. The Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any
and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions
of this Article shall apply to any such sub-agent and to the Related Parties of the Agent and any such sub-agent, and shall apply
to their respective activities in connection with the activities as Agent. The Agent shall not be responsible for the negligence
or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable
judgment that the Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

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Section 8.6           Resignation
of Agent.

 

(a)          The
Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be (i) a Lender
holding at least 30% outstanding principal amount of the Loans or any Affiliate thereof or (ii) any other financial institution
consented to by the Borrower (such consent not to be unreasonably withheld, conditioned or delayed); provided, that, the
consent of the Borrower shall not be required to the extent an Event of Default has occurred and is continuing. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the
retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders and in consultation
with the Borrower, appoint a successor Agent meeting the qualifications set forth above. Whether or not a successor has been appointed,
such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)          If
the Person serving as Agent has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under
any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, the Required Lenders
may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Agent
and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by the Required
Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance
with such notice on the Removal Effective Date.

 

(c)          With
effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Agent shall
be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral
security held by the Agent on behalf of the Lenders under any of the Loan Documents, the retiring or removed Agent shall continue
to hold such collateral security until such time as a successor Agent is appointed) and (2) except for any indemnity or expense
reimbursement payments owed to the retiring or removed Agent, all payments, communications and determinations provided to be made
by, to or through the Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders
appoint a successor Agent as provided for above. Upon the acceptance of a successor’s appointment as Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Agent
(other than any rights to indemnity and expense reimbursement payments owed to the retiring or removed Agent), and the retiring
or removed Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees
payable by the Borrower to a successor Agent after the date such successor becomes Agent shall be the same as those that would
have been payable to its predecessor after such date unless otherwise agreed between the Borrower and such successor. After the
retiring or removed Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article
and Section 10.3, shall continue in effect for the benefit of such retiring or removed Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Agent was acting
as Agent.

 

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Section 8.7           Non-Reliance
on Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any
other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

Section 8.8           Agent
May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Borrower or any
other Loan Party) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

 

(a)          to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other
Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims
of the Lenders and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the
Lenders and the Agent and their respective agents and counsel and all other amounts due the Lenders and the Agent under Section
10.3) allowed in such judicial proceeding; and

 

(b)          to
collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments
to the Agent and, in the event that the Agent shall consent to the making of such payments directly to the Lenders, to pay to the
Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its agents and counsel,
and any other amounts due the Agent under Section 10.3.

 

Section 8.9           Collateral
and Guarantee Matters. (a) The Secured Parties irrevocably authorize the Agent, at its option and in its discretion,

 

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(i)          to
release any Lien on any property granted to or held by the Agent under any Loan Document (x) upon termination of the Commitments
and payment in full of all Obligations (other than contingent indemnification obligations), (y) that is sold or otherwise disposed
of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan
Documents, or (z) subject to Section 10.2, if approved, authorized or ratified in writing by the Required Lenders; and

 

(ii)         to
release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary of the Borrower as a result
of a transaction permitted under the Loan Documents.

 

Upon request by the Agent at any time, the Required Lenders
will confirm in writing the Agent’s authority to release or subordinate its interest in particular types or items of property,
or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 8.9, and if so requested, the
Agent shall have no liability for failure to release or subordinate any such interest or for failure to release any Guarantor until
it shall have received confirmation from the Required Lenders.

 

(b)          The
Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence,
value or collectability of the Collateral, the existence, priority or perfection of the Agent’s Lien thereon, or any certificate
prepared by any Loan Party in connection therewith, nor shall the Agent be responsible or liable to the Lenders for any failure
to monitor or maintain any portion of the Collateral.

 

ARTICLE IX

GUARANTY

 

Section 9.1           The
Guaranty. Each of the Guarantors hereby unconditionally guarantees, jointly and severally with each other Guarantor, the full
and punctual payment and performance when due (whether at stated maturity, upon acceleration or otherwise) of the Obligations,
including, without limitation, (i) the principal of and interest on the extension of credit made to the Borrower pursuant to this
Agreement, (ii) all other amounts payable by the Borrower and the Guarantors under this Agreement and the other Loan Documents
and (iii) the punctual and faithful performance, keeping, observance, and fulfillment by the Borrower and the Guarantors of all
of the agreements, conditions, covenants, and obligations of the Borrower and the Guarantors contained in the Loan Documents (collectively,
the “Guaranteed Obligations”). Upon failure by the Borrower or any Guarantor to pay punctually any such amount
or perform such obligation, such that an Event of Default occurs and continues, each of the Guarantors agrees that it shall forthwith
on demand pay such amount or perform such obligation at the place and in the manner specified herein or in the relevant Loan Document,
as the case may be. All payments required to be made by each Guarantor hereunder shall be applied by the Agent in accordance with
Section 2.8. Each of the Guarantors hereby agrees that the guaranty hereunder is an absolute, irrevocable and unconditional
guaranty of payment and is not a guaranty of collection.

 

Section 9.2           Guaranty
Unconditional. The obligations of each Guarantor hereunder shall be unconditional and absolute and, without limiting the generality
of the foregoing, shall not be released, discharged or otherwise affected by:

 

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(a)          any
extension, renewal, settlement, indulgence, compromise, waiver or release of or with respect to the Guaranteed Obligations or any
part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed
Obligations, whether (in any such case) by operation of law or otherwise, or any failure or omission to enforce any right, power
or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or with respect to
any obligation of any other guarantor of any of the Guaranteed Obligations;

 

(b)          any
modification or amendment of or supplement to this Agreement or any other Loan Document, including, without limitation, any such
amendment which may increase the amount of, or the interest rates applicable to, any of the Guaranteed Obligations guaranteed hereby;

 

(c)          any
change in the corporate, partnership, limited liability company or other existence, structure or ownership of the Borrower, such
Guarantor or any other guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower, such Guarantor or any other guarantor of the Guaranteed Obligations, or any of their respective
assets or any resulting release or discharge of any obligation of the Borrower, such Guarantor or any other guarantor of any of
the Guaranteed Obligations;

 

(d)          the
existence of any claim, setoff or other rights which the Guarantors may have at any time against the Borrower, any other guarantor
of any of the Guaranteed Obligations, the Agent, any Secured Party or any other Person, whether in connection herewith or in connection
with any unrelated transactions; provided that, notwithstanding any other provisions in this Guaranty, nothing in this Guaranty
shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

 

(e)          the
unenforceability or invalidity of the Guaranteed Obligations or any part thereof or the lack of genuineness, enforceability or
validity of any agreement relating thereto or with respect to the collateral, if any, securing the Guaranteed Obligations or any
part thereof, or any other invalidity or unenforceability relating to or against the Borrower, such Guarantor or any other guarantor
of any of the Guaranteed Obligations, for any reason, related to this Agreement or any other Loan Document, or any provision of
applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment of any of the Guaranteed Obligations
by the Borrower, such Guarantor or any other guarantor of the Guaranteed Obligations;

 

(f)          the
failure of the Agent to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security
or collateral for the Guaranteed Obligations, if any;

 

(g)          the
disallowance, under any Debtor Relief Laws, of all or any portion of the claims of the Secured Parties or the Agent for repayment
of all or any part of the Guaranteed Obligations;

 

(h)          the
failure of any other guarantor to sign or become party to this Agreement or any amendment, change, or reaffirmation hereof;

 

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(i)          any
release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral
securing the Guaranteed Obligations or any part thereof, any other guaranties with respect to the Guaranteed Obligations or any
part thereof, or any other obligation of any person or entity with respect to the Guaranteed Obligations or any part thereof, or
any nonperfection or invalidity of any direct or indirect security for the Guaranteed Obligations; or

 

(j)          any
other act or omission to act or delay of any kind by the Borrower, such Guarantor, any other guarantor of the Guaranteed Obligations,
the Agent, any Secured Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this
Section 9.2, constitute a legal or equitable discharge of any Guarantor’s obligations hereunder.

 

Section 9.3           Discharge
Only Upon Payment In Full. Subject to any prior release herefrom of any Guarantor by the Agent in accordance with (and pursuant
to authority granted to the Agent under) the terms of this Agreement, each Guarantor’s obligations hereunder shall remain
in full force and effect until the Commitments have terminated and all of the Guaranteed Obligations shall have been indefeasibly
paid in full in cash and the Loans issued under this Agreement shall have terminated or expired, and all other financing arrangements
among the Borrower or any Guarantor and the Secured Parties under or in connection with this Agreement and each other Loan Document
shall have terminated (herein, the “Termination Conditions”), and until the prior and complete satisfaction
of the Termination Conditions all of the rights and remedies under this Guaranty and the other Loan Documents shall survive.

 

Section 9.4           Additional
Waivers; General Waivers.

 

(a)          Additional
Waivers. Notwithstanding anything herein to the contrary, each of the Guarantors hereby absolutely, unconditionally, knowingly,
and expressly waives:

 

(i)          any
right it may have to revoke this Guaranty as to future indebtedness or notice of acceptance hereof;

 

(ii)         (A)
notice of acceptance hereof; (B) notice of any other financial accommodations made or maintained under the Loan Documents or the
creation or existence of any Guaranteed Obligations; (C) notice of the amount of the Guaranteed Obligations, subject, however,
to each Guarantor’s right to make inquiry of the Agent and the Secured Parties to ascertain the amount of the Guaranteed
Obligations at any reasonable time; (D) notice of any adverse change in the financial condition of the Borrower or of any other
fact that might increase such Guarantor’s risk hereunder; (E) notice of presentment for payment, demand, protest, and notice
thereof as to any instruments among the Loan Documents; (F) notice of any Event of Default; and (G) all other notices (except if
such notice is specifically required to be given to such Guarantor under this Guaranty or under the other Loan Documents) and demands
to which each Guarantor might otherwise be entitled;

 

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(iii)        its
right, if any, to require the Agent and the Secured Parties to institute suit against, or to exhaust any rights and remedies which
the Agent and the Secured Parties now have or may hereafter have against, any other guarantor of the Guaranteed Obligations or
any third party, or against any collateral provided by such other guarantors or any third party; and each Guarantor further waives
any defense arising by reason of any disability or other defense (other than the defense that the Guaranteed Obligations shall
have been fully and finally performed and indefeasibly paid) of any other guarantor of the Guaranteed Obligations or by reason
of the cessation from any cause whatsoever of the liability of any other guarantor of the Guaranteed Obligations in respect thereof;

 

(iv)        (A)
any rights to assert against the Agent and the Secured Parties any defense (legal or equitable), set-off, counterclaim, or claim
which such Guarantor may now or at any time hereafter have against any other guarantor of the Guaranteed Obligations or any third
party liable to the Agent and the Secured Parties; (B) any defense, set-off, counterclaim or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection, sufficiency, validity or enforceability of the Guaranteed
Obligations or any security therefor; (C) any defense such Guarantor has to performance hereunder, and any right such Guarantor
has to be exonerated, arising by reason of: (1) the impairment or suspension of the Agent’s and the Secured Parties’
rights or remedies against any other guarantor of the Guaranteed Obligations; (2) the alteration by the Agent and the Secured Parties
of the Guaranteed Obligations; (3) any discharge of the obligations of any other guarantor of the Guaranteed Obligations to the
Agent and the Secured Parties by operation of law as a result of the Agent’s and the Secured Parties’ intervention
or omission; or (4) the acceptance by the Agent and the Secured Parties of anything in partial satisfaction of the Guaranteed Obligations;
and (D) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement thereof,
and any act which shall defer or delay the operation of any statute of limitations applicable to the Guaranteed Obligations shall
similarly operate to defer or delay the operation of such statute of limitations applicable to such Guarantor’s liability
hereunder; and

 

(v)         any
defense arising by reason of or deriving from (a) any claim or defense based upon an election of remedies by the Agent and the
other Secured Parties; or (b) any election by the Agent and the other Secured Parties under any provision of any Debtor Relief
Law to limit the amount of, or any collateral securing, its claim against the Guarantors.

 

(b)          General
Waivers. Each Guarantor irrevocably waives, to the fullest extent permitted by law, any notice not provided for herein, in
any Loan Document or any other agreement, document or instrument executed in connection herewith or therewith.

 

Section 9.5           Stay
of Acceleration. If acceleration of the time for payment of any amount payable by any Loan Party under this Agreement or any
other Loan Document is stayed upon the insolvency, bankruptcy or reorganization of such Loan Party at any time while this Guaranty
is in effect, all such amounts otherwise subject to acceleration under the terms of this Agreement or any other Loan Document shall
nonetheless be payable by each of the Guarantors hereunder forthwith on demand by the Agent.

 

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Section 9.6           Reinstatement.
Notwithstanding anything to the contrary contained in this Guaranty, each of the Guarantors agrees that (a) if at any time payment,
or any part thereof, of any Guaranteed Obligation is at any time annulled, avoided, set aside, rescinded, invalidated, declared
to be fraudulent or preferential or otherwise required to be refunded or repaid under any Debtor Relief Law or equitable cause,
then, to the extent of such payment or repayment, its guarantee hereunder shall remain in full force and effect, as fully as if
such payment had never been made or, shall be reinstated in full force and effect, as the case may be; and (b) the provisions of
this Section 9.6 shall survive termination of this Guaranty.

 

Section 9.7           Subrogation.
Until the prior and complete satisfaction of all Termination Conditions, each Guarantor, (i) shall have no right of subrogation
with respect to the Guaranteed Obligations and (ii) waives any right to enforce any remedy which the Secured Parties or the Agent
now have or may hereafter have against the Borrower, any endorser or any other guarantor of all or any part of the Guaranteed Obligations
or any other Person, and each Guarantor waives any benefit of, and any right to participate in, any security or collateral that
may from time to time be given to the Secured Parties and the Agent to secure the payment or performance of all or any part of
the Guaranteed Obligations or any other liability of the Borrower to the Secured Parties. Should any Guarantor have the right,
notwithstanding the foregoing, to exercise its subrogation rights prior to complete satisfaction of the Termination Conditions,
each Guarantor hereby expressly and irrevocably (A) subordinates any and all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set-off that such Guarantor may have to prior and complete satisfaction of the Termination
Conditions, and (B) waives any and all defenses available to a surety, guarantor or accommodation co-obligor until all Termination
Conditions are satisfied in full. Each Guarantor acknowledges and agrees that this subordination is intended to benefit the Agent
and the Secured Parties and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability
of this Guaranty, and that the Agent, the Secured Parties and their respective successors and assigns are intended third party
beneficiaries of the waivers and agreements set forth in this Section 9.7.

 

Section 9.8           Subordination
of Intercompany Indebtedness. Each Guarantor agrees that all Intercompany Indebtedness held by such Guarantor and owed by a
Loan Party shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Guaranteed Obligations
and the satisfaction of all other Termination Conditions; provided that, and not in contravention of the foregoing, so long
as no Event of Default has occurred and is continuing, such Guarantor may make loans to and receive payments not prohibited by
the terms of this Agreement or any other Loan Document with respect to such Intercompany Indebtedness from the related obligor.
Should any payment, distribution, security or instrument or proceeds thereof be received by such Guarantor upon or with respect
to the Intercompany Indebtedness in contravention of this Agreement, any other Loan Document or after the occurrence and continuance
of an Event of Default, including, without limitation, an event described in Section 7.1(g), Section 7.1(h) or Section
7.1(i), prior to the satisfaction of all of the Termination Conditions, such Guarantor shall receive and hold the same in trust,
as trustee, for the benefit of the Secured Parties and shall forthwith deliver the same to the Agent, for the benefit of the Secured
Parties, in precisely the form received (except for the endorsement or assignment of such Guarantor where necessary), for application
to any of the Guaranteed Obligations, due or not due, and, until so delivered, the same shall be held in trust by such Guarantor
as the property of the Secured Parties. If any Guarantor fails to make any such endorsement or assignment to the Agent, the Agent
or any of its officers or employees are irrevocably authorized to make the same.

 

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Section 9.9           Contribution
with Respect to Guaranteed Obligations.

 

(a)          To
the extent that any Guarantor shall make a payment under this Guaranty (a “Guarantor Payment”) which, taking
into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount which
otherwise would have been paid by or attributable to such Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations
satisfied by such Guarantor Payment in the same proportion as such Guarantor’s “Allocable Amount” (as defined
below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors
as determined immediately prior to the making of such Guarantor Payment, then, following the prior and complete satisfaction
of the Termination Conditions, such Guarantor shall be entitled to receive contribution and indemnification payments from, and
be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts
in effect immediately prior to such Guarantor Payment.

 

(b)          As
of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the maximum amount of
the claim which could then be recovered from such Guarantor under this Agreement without rendering such claim voidable or avoidable
under any Debtor Relief Law or other applicable law.

 

(c)          This
Section 9.9 is intended only to define the relative rights of the Guarantors, and nothing set forth in this Section 9.9
is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts as and when the same
shall become due and payable in accordance with the terms of this Agreement.

 

(d)          The
parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor
or Guarantors to which such contribution and indemnification is owing.

 

(e)          The
rights of the indemnifying Guarantors against other Guarantors under this Section 9.9 shall be exercisable upon the prior
and complete satisfaction of the Termination Conditions.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1         Notices;
Effectiveness; Electronic Communication.

 

(a)          Notices
Generally. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile (other than to the Borrower or any other Loan Party)
or email as follows:

 

(i)          if
to the Borrower or any other Loan Party, to it at its address (or e-mail) as set forth in Appendix A;

 

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(ii)         if
to the Agent, to the address (or facsimile number or e-mail) of its Principal Office as set forth in Appendix A;

 

(iii)        if
to the Lenders party hereto as of the Closing Date, to the address (or facsimile number or e-mail) as set forth in Appendix
A;

 

(iv)        if
to any other Lender, to it at its address (or facsimile number or e-mail) set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been
given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications,
to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)          Electronic
Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures approved by the Agent. The Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures
approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless
the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described
in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business
on the next business day for the recipient. Any such notices and other communications furnished by electronic communication shall
be in the form of attachments in .pdf format.

 

(c)          Change
of Address, etc. Any party hereto may change its address, email or facsimile number for notices and other communications hereunder
by notice to the other parties hereto.

 

Section 10.2         Waivers;
Amendments.

 

(a)          No
failure or delay by the Agent, or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies
of the Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision of this Agreement or consent to any departure by the Borrower or any other Loan Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 10.2, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Agent or any
Lender may have had notice or knowledge of such Default at the time.

 

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(b)          Neither
this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower or the applicable Loan Party, as the case may be, and the Required Lenders (with a copy thereof to
the Agent) or by the Borrower or such applicable Loan Party, and the Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any
fees or premiums payable hereunder, without the written consent of each Lender affected thereby, (ii) increase the Delayed Draw
Term Loan Commitment of any Lender or otherwise modify the conditions to the funding of the Delayed Draw Term Loans without the
written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan,
or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or extend the
Maturity Date, without the written consent of each Lender affected thereby, (iv) change Section 2.8(c) or Section 2.10
in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, or
(v) change any of the provisions of this Section 10.2 or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent, hereunder without the prior written consent of the Agent.

 

Section 10.3         Expenses;
Indemnity; Damage Waiver.

 

(a)          Costs
and Expenses. The Loan Parties shall, jointly and severally, pay (i) all reasonable out-of-pocket expenses incurred by the
Agent and the Lenders and their respective Affiliates (including the reasonable fees, charges and disbursements of one counsel
for the Agent and if necessary, a single local counsel for the Agent in each relevant material jurisdiction) in connection with
the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated) and (ii) all out-of-pocket expenses incurred by the Agent or any Lender (including the fees, charges and disbursements
of any counsel for the Agent or any Lender), in connection with the enforcement, exercise or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under this Section 10.3(a), or (B) in connection
with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations
in respect of such Loans.

 

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(b)          Indemnification
by the Loan Parties. Each Loan Party shall, jointly and severally, indemnify the Agent (and any sub-agent thereof) and each
Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related reasonable expenses
(including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against
any Indemnitee by any Person (including the Borrower or any other Loan Party, except to the extent set forth below) other than
such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby,
(ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Loan Party or any of its Subsidiaries, or any Environmental Liability
related in any way to any Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third
party or by any Loan Party (except to the extent set forth below), and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available (x) to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee, or (y) in connection with any dispute between or among
any one or more of the Agent and/or any Lender(s). This Section 10.3(b) shall not apply with respect to Taxes other than
any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)          Reimbursement
by Lenders. To the extent that any Loan Party for any reason fails to indefeasibly pay any amount required under paragraph
(a) or (b) of this Section to be paid by it to the Agent (or any sub-agent thereof) or any Related Party of the Agent (or any such
sub-agent), each Lender severally agrees to pay to the Agent (or any such sub-agent) or such Related Party of the Agent (or such
sub-agent), as the case may be, such Lender’s ratable share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought based on each Lender’s Pro Rata Share of the aggregate amount of the Loans outstanding at
such time, or if all Loans have been repaid, based on such Lender’s Pro Rata Share of the Loans as of the last day on which
any portion of the Loans remained outstanding) of such unpaid amount (including any such unpaid amount in respect of a claim asserted
by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense,
as the case may be, was incurred by or asserted against the Agent (or any such sub-agent) or against any Related Party acting for
the Agent (or any such sub-agent) in connection with such capacity.

 

(d)          Waiver
of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no party hereto shall assert, and each party
hereto hereby waives, any claim against any other party hereto or any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby
or thereby, any Loan or the use of the proceeds thereof; provided that nothing in the foregoing shall limit the indemnification
obligations of the Loan Parties pursuant to clause (b) above. No Indemnitee referred to in paragraph (b) above shall be liable
for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

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(e)          Payments.
All amounts due under this Section shall be payable promptly after demand therefor.

 

Section 10.4         Successors
and Assigns.

 

(a)          Successors
and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign
or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Agent and each Lender,
and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance
with the provisions of paragraph (b) of this Section 10.4, (ii) by way of participation in accordance with the provisions
of paragraph (d) of this Section 10.4, or (iii) by way of pledge or assignment of a security interest subject to the restrictions
of paragraph (e) of this Section 10.4 (and any other attempted assignment or transfer by any party hereto shall be null
and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this
Section 10.4 and, to the extent expressly contemplated hereby, the Related Parties of each of the Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)          Assignments
by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of the Loan at the time owing to it); provided, that any such assignment shall
be subject to the following conditions:

 

(i)          Minimum
Amounts.

 

(A)         in
the case of an assignment of the entire remaining amount of the assigning Lender’s Loan at the time owing to it or contemporaneous
assignments to related Approved Assignees that equal at least the amount specified in paragraph (b)(i)(B) of this Section 10.4
in the aggregate or in the case of an assignment to an Approved Assignee, no minimum amount need be assigned; and

 

(B)         in
any case not described in paragraph (b)(i)(A) of this Section 10.4, the aggregate amount of the principal outstanding balance
of the Loan of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption Agreement
with respect to such assignment is accepted and recorded by the Agent) shall not be less than $1,000,000, unless each of the Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld, conditioned or delayed).

 

(ii)         Proportionate
Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to the Loan assigned.

 

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(iii)        Required
Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section
10.4 and, in addition:

 

(A)         the
consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed) shall be required unless (x) a Default
or an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment is to an Approved
Assignee; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto
by written notice to the Agent within five (5) Business Days after having received written notice thereof; and

 

(B)         the
consent of the Agent (such consent not to be unreasonably withheld, conditioned or delayed) shall be required for assignments in
respect of any Loans to a Person who is not an Approved Assignee.

 

(iv)        Assignment
and Assumption. The parties to each assignment shall execute and deliver to the Agent an Assignment and Assumption Agreement,
together with a processing and recordation fee of $3,500 (to be paid by the assignor and assignee); provided that the Agent
may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Agent an Administrative Questionnaire and any other Know-Your-Customer or other documentation
or information reasonably requested by the Agent, including, without limitation, any such documentation or information required
under the USA PATRIOT Act or anti-money laundering rules and regulations.

 

(v)         No
Assignment to Certain Persons. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

(vi)        No
Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle
or trust for, or owned and operated for the primary benefit of, a natural Person).

 

Subject to acceptance and recording thereof by the Agent pursuant
to paragraph (c) of this Section 10.4, from and after the effective date specified in each Assignment and Assumption Agreement,
the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption
Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section
2.10 and Section 10.3 with respect to facts and circumstances occurring prior to the effective date of such assignment.
Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (d) of this Section 10.4.

 

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(c)          Register.
The Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the
Lenders and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower,
the Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior written notice.

 

(d)          Participations.
Any Lender may at any time, with the consent of the Borrower and the Agent (each such consent not to be unreasonably withheld,
conditioned or delayed), sell participations to any Person (other than a natural Person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iii) the Borrower, the Agent and Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance
of doubt, each Lender shall be responsible for the indemnity under Section 10.3(c) with respect to any payments made by
such Lender to its Participant(s).

 

Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with
respect to the amendments or modifications requiring unanimous consent of the Lenders described in Section 10.2(b) that
directly affect such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Section 2.12,
Section 2.14 and Section 2.11 (subject to the requirements and limitations therein, including the requirements under
Section 2.11(e) (it being understood that the documentation required under Section 2.11(e) shall be delivered to
the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section 10.4; provided that such Participant (x) agrees to be subject to the provisions of Section
2.13 as if it were an assignee under paragraph (b) of this Section 10.4; and (y) shall not be entitled to receive any
greater payment under Section 2.11 or Section 2.12, with respect to any participation, than its participating Lender
would have been entitled to receive. To the extent permitted by law, each Participant also shall be entitled to the benefits of
Section 2.9 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.10 as
though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower,
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 Loans or other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall 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, letters
of credit 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, letter of credit 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
such 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. For the avoidance of doubt, the Agent (in its capacity as
Agent) shall have no responsibility for maintaining a Participant Register.

 

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(e)          Certain
Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement
to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.

 

Section 10.5         Survival.
All covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto
and shall survive the execution and delivery of this Agreement and the making of the Loans, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that the Agent, or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force
and effect as long as any Commitment is outstanding or the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid. The provisions of Section 2.11, Section 2.12, Section 2.14, Section
10.3 and Article VIII shall survive and remain in full force and effect regardless of the repayment of the Loans or
the termination of this Agreement or any provision hereof. Except as expressly set forth in this Section 10.5, this Agreement
shall terminate when the Commitments have terminated and the Obligations have been indefeasibly paid in full in cash, including
the Prepayment Premium, if applicable, and the Exit Fee but
excluding contingent indemnification obligations (other than those with respect to which the Agent or any Lender has then given
notice to the Borrower); provided, however, that the Guaranty shall remain in full force and effect until the Termination
Conditions have been completely satisfied and the other Loan Documents and the Collateral Documents, shall remain in full force
and effect until terminated in accordance with their respective terms. Notwithstanding the termination of this Agreement or any
provision hereof, Section 10.2, Sections 10.4(a), (b), (c) and (d), and Section 10.6(b)
shall survive and remain in full force and effect until the Commitments are terminated and all Obligations are indefeasibly paid
in full.

 

Section 10.6         Counterparts;
Integration; Effectiveness; Electronic Execution.

 

(a)          Counterparts;
Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement
and the other Loan Documents, including the Fee Letters, constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 3.1, this Agreement shall become effective when it shall have been executed by the
Agent and when the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the
other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e.,
“pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

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(b)          Electronic
Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like
import in any Assignment and Assumption Agreement shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or
the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including
the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions Act.

 

Section 10.7         Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.

 

Section 10.8         Governing
Law; Jurisdiction.

 

(a)          Governing
Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract
or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other
Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed
in accordance with, the law of the State of New York.

 

(b)          Jurisdiction.
Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind
or description, whether in law or equity, whether in contract or in tort or otherwise, against the Agent, any Lender or any Related
Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or
thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District
Court of the Southern District of New York, and any appellate court from any thereof; and each of the parties hereto irrevocably
and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation
or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in
such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing
in this Agreement or in any other Loan Document shall affect any right that the Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any other Loan Party or
its properties in the courts of any jurisdiction.

 

(c)          Waiver
of Venue. Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection
that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section 10.8. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

 

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(d)          Service
of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.1.

 

Section 10.9         Waiver
of Jury Trial.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.9.

 

Section 10.10         Treatment
of Certain Information; Confidentiality.

 

(a)          The
Agent and each of the Lenders agree to maintain the confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and will agree to be bound by the provisions of this Section
10.10); (ii) to the extent required or requested by, or as part of normal reporting or review procedures to or examinations
by, any Governmental Authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory
authority, such as the National Association of Insurance Commissioners) or any securities exchange on which securities of the disclosing
party or any Affiliate thereof are listed or traded; (iii) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, including reporting requirements applicable to the disclosing party or its Affiliates; (iv) to any other
party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (vi) subject to an
agreement containing provisions substantially the same as those of this Section 10.10, to (A) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (B) any actual
or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made
by reference to the Loan Parties and their obligations, this Agreement or payments hereunder; (vii) on a confidential basis to
(A) any rating agency in connection with rating the Loan Parties or the Loans or (B) the CUSIP Service Bureau or any similar agency
in connection with the issuance and monitoring of CUSIP numbers with respect to the Loans; (viii) with the written consent of the
Borrower; (ix) to market data collectors, similar service providers to the lending industry and service providers to the Agent
and the Lenders in connection with the administration of this Agreement, or (x) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this Section 10.10, or (B) becomes available to the Agent or any Lender
or any of their respective Affiliates on a nonconfidential basis from a source other than the Loan Parties so long as the Agent
or such Lender does not have any notice that the disclosure thereof is a breach of a confidentiality agreement.

 

    99

     

    

 

(b)          For
purposes of this Section 10.10, “Information” means all information received from the Borrower or any
Subsidiary relating to the Borrower, any Subsidiary or the Scilex Subsidiary or any of their respective businesses, other than
any such information that is available to the Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower
or any other Loan Party. Any Person required to maintain the confidentiality of Information as provided in this Section 10.10
shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain
the confidentiality of such Information as such Person would accord to its own confidential information.

 

(c)          The
Loan Parties, the Agent and the Lenders agree not to publish any press release with respect to the Loan or other transactions contemplated
by this Agreement without the prior consent of each other party to this Agreement.

 

Section 10.11         Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively
the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable
as a result of the operation of this Section 10.11 shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

Section 10.12         USA
PATRIOT Act. The Agent and each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Loan
Parties that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that
identifies the Loan Parties, which information includes the name and address of the each Loan Party and other information that
will allow the Agent and each such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

 

Section 10.13         Acknowledgement
and Consent to Bail-In of EEA Financial Institutions. Solely to the extent an EEA Financial Institution is a party to this
Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding
among any such parties hereto, each such party hereto acknowledges that any liability of any Lender or Agent that is an EEA Financial
Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion
Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

    100

     

    

 

(a)          the
application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any Lender or Agent that is an EEA Financial Institution; and

 

(b)          the
effects of any Bail-in Action on any such liability, including, if applicable:

 

(i)          a
reduction in full or in part or cancellation of any such liability;

 

(ii)         a
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or
other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement
or any other Loan Document; or

 

(iii)        the
variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

 

[Remainder of Page Intentionally Left
Blank; Signature Pages Follow]

 

    101

     

    

 

IN WITNESS WHEREOF, each party hereto
has duly executed this Agreement as of the date first above written.

 

	Borrower:	SORRENTO THERAPEUTICS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji. Ph.D.
	 	 	Title: Chairman of the Board, President and Chief Executive Officer

 

	Guarantors:	ARK ANIMAL HEALTH, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	BIOSERV CORPORATION
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: President
	 	 	 
	 	Coentre Technologies LLC
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	Concortis Biosystems, Corp.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer

 

[Signature Page to Term Loan Agreement]

 

     

     

    

 

	 	LA CELL, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	SCINTILLA PHARMACEUTICALS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	SNAN HOLDCO LLC
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Manager
	 	 	 
	 	SORRENTO BIOLOGICS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	TNK THERAPEUTICS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer

 

[Signature Page to Term Loan Agreement]

 

     

     

    

 

	 	BDL PRODUCTS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: President
	 	 	 
	 	CARGENIX HOLDINGS LLC
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	CONCORTIS, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: President
	 	 	 
	 	LEVENA BIOPHARMA US, INC.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: Chief Executive Officer
	 	 	 
	 	SINIWEST HOLDING CORP.
	 	 	 
	 	By:	 
	 	 	Name: Henry Ji, Ph.D.
	 	 	Title: President

 

[Signature Page to Term Loan Agreement]

 

     

     

    

 

	Agent:	OAKTREE FUND ADMINISTRATION, LLC
	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:    

 

[Signature Page to Term Loan Agreement]

 

     

     

    

 

	Lenders:	[●]
	 	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:    

 

[Signature Page to Term Loan Agreement]

 

     

     

    

  

APPENDIX A

 

(Notice Addresses, Principal Offices and
Lending Offices)

 

Loan Parties:

 

c/o SORRENTO THERAPEUTICS, INC.

Address: 4955 Directors Place, San Diego, CA 92121

Email: hji@sorrentotherapeutics.com

Attention: Chief Executive Officer

 

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

 

Paul Hastings LLP

1117 S. California Avenue

Palo Alto, CA 94304

Attention: Jeff Hartlin, Esq.

Facsimile: (650) 320-1904

Email: jeffhartlin@paulhastings.com

 

Agent and Initial Lenders:

 

c/o OAKTREE CAPITAL
MANAGEMENT (UK) LLP

Address: Verde, 10 Bressenden Place

London, SW1E 5DH

United Kingdom

Email: amkumar@oaktreecapital.com; oaktreeagency@cortlandglobal.com

Attention: Aman Kumar

 

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

 

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

Facsimile: (213) 830-6293

Email: mgallegly@oaktreecapital.com

Attention: Mary Gallegly and Legal Department

 

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

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Ari B. Blaut, Esq.

Facsimile: (212) 291 9219

Email: blauta@sullcrom.com

 

     

     

    

 

APPENDIX B

 

Closing Date Term Loan Commitments

 

	Name of Lender	Commitment	Pro Rata Share
	SC Investments NE Holdings, LLC	$26,972,210.30	26.972%
	SC Investments E Holdings, LLC	$40,027,789.70	40.028%
	Oaktree Strategic Income II, Inc.	$8,000,000.00	8.000%
	OCSL SRNE, LLC	$25,000,000.00	25.000%
	Total	$100,000,000.00	100.000%

 

Delayed Draw Term Loan Commitments

 

	Name of Lender	Commitment	Pro Rata Share
	SC Investments NE Holdings, LLC	$8,091,663.09	26.9722%
	SC Investments E Holdings, LLC	$12,008,336.91	40.0278%
	Oaktree Strategic Income II, Inc.	$2,400,000.00	8.0000%
	OCSL SRNE, LLC	$7,500,000.00	25.0000%
	Total	$30,000,000.00	100.000%

 

Early
Delayed Draw Term Loan Commitments

 

	Name of Lender	Commitment	Pro Rata Share
	SC Investments NE Holdings, LLC	$13,486,105.155,394,442.06	26.97226.9722%
	SC Investments E Holdings, LLC	$20,013,894.858,005,557.94	40.02840.0278%
	Oaktree Strategic Income II, Inc.	$4,000,000.001,600,000.00	8.0008.0000%
	OCSL SRNE, LLC	$12,500,000.005,000,000.00	25.00025.0000%
	Total	$50,000,000.0020,000,000.00	100.000%EX-10.11

Table of Contents

 Exhibit 10.11 

 

					
		  	 Facility Number:
 Name of
Hotel:
 Address:
 City, State Zip Code

Date Sent:
	  	

 FRANCHISE AGREEMENT 

BETWEEN 
 [NAME OF
FRANCHISEE] 
 AND 

BWI LICENSING, INC. 

Table of Contents

 TABLE OF CONTENTS 

 

									
	 1.0
	 	DEFINITIONS	  	 	1	 
			
	 2.0
	 	GRANT OF LICENSE	  	 	6	 
				
		 	2.1	  	Non-Exclusive License	  	 	6	 
				
		 	2.2	  	Reserved Rights	  	 	6	 
				
		 	2.3	  	Area of Protection Provision	  	 	7	 
				
		 	2.4	  	Impact Rights	  	 	7	 
			
	 3.0
	 	TERM AND RENEWAL TERM	  	 	7	 
				
		 	3.1	  	Term	  	 	7	 
				
		 	3.2	  	Renewal Term	  	 	7	 
				
		 	3.3	  	Termination Rights	  	 	7	 
			
	 4.0
	 	OUR RESPONSIBILITIES	  	 	7	 
				
		 	4.1	  	Training	  	 	7	 
				
		 	4.2	  	Reservation Service	  	 	7	 
				
		 	4.3	  	Consultation	  	 	7	 
				
		 	4.4	  	Marketing	  	 	8	 
				
		 	4.5	  	Inspections/Compliance Assistance	  	 	8	 
				
		 	4.6	  	Manual	  	 	9	 
				
		 	4.7	  	Equipment and Supplies	  	 	9	 
			
	 5.0
	 	YOUR RESPONSIBILITIES	  	 	9	 
				
		 	5.1	  	Operational and Other Requirements	  	 	9	 
				
		 	5.2	  	Relocating the Hotel 	  	 	12	 
				
		 	5.3	  	Changes to Standards	  	 	13	 
			
	 6.0
	 	RENOVATION WORK	  	 	13	 
				
		 	6.1	  	Necessary Consents	  	 	13	 
				
		 	6.2	  	Performance of Agreement	  	 	13	 
				
		 	6.3	  	Hotel Refurbishment and Room Addition	  	 	14	 
			
	 7.0
	 	MANAGEMENT OF THE HOTEL	  	 	14	 
			
	 8.0
	 	PAYMENT OF FEES	  	 	14	 
				
		 	8.1	  	Annual Dues	  	 	14	 
				
		 	8.2	  	Monthly Fees	  	 	14	 
				
		 	8.3	  	Advertising Assessment	  	 	14	 
				
		 	8.4	  	Marketing and Technology Fees	  	 	14	 
				
		 	8.5	  	Calculation and Payment of Fees	  	 	14	 

  
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Table of Contents

									
				
		 	8.6	  	Other Fees, Charges and Expenses	  	 	15	 
				
		 	8.7	  	Taxes	  	 	15	 
				
		 	8.8	  	Application of Fees	  	 	15	 
			
	 9.0
	 	PROPRIETARY RIGHTS	  	 	15	 
				
		 	9.1	  	Our Proprietary Rights	  	 	15	 
				
		 	9.2	  	Trade Name, Use of the Marks	  	 	16	 
				
		 	9.3	  	Use of Trade Name and Marks	  	 	16	 
				
		 	9.4	  	Trademark Disputes	  	 	16	 
				
		 	9.5	  	Web Sites	  	 	16	 
				
		 	9.6	  	Covenant	  	 	17	 
			
	 10.0
	 	AUDIT, OWNERSHIP OF INFORMATION AND PRIVACY AND DATA PROTECTION	  	 	17	 
				
		 	10.1	  	Audit.	  	 	17	 
				
		 	10.2	  	Ownership of Information	  	 	17	 
				
		 	10.3	  	Privacy and Data Protection	  	 	17	 
			
	 11.0
	 	CONDEMNATION AND CASUALTY	  	 	18	 
				
		 	11.1	  	Condemnation	  	 	18	 
				
		 	11.2	  	Casualty	  	 	18	 
				
		 	11.3	  	No Extensions of Term	  	 	18	 
			
	 12.0
	 	NOTICE OF INTENT TO MARKET	  	 	18	 
			
	 13.0
	 	TRANSFERS	  	 	18	 
				
		 	13.1	  	Our Transfer	  	 	18	 
				
		 	13.2	  	Your Transfer	  	 	18	 
			
	 14.0
	 	TERMINATION 	  	 	21	 
				
		 	14.1	  	Termination with Opportunity to Cure	  	 	21	 
				
		 	14.2	  	Immediate Termination by Us	  	 	22	 
				
		 	14.3	  	Suspension Interim Remedies	  	 	23	 
				
		 	14.4	  	Liquidated Damages on Termination	  	 	23	 
				
		 	14.5	  	Your Obligations on Termination or Expiration	  	 	23	 
			
	 15.0
	 	INDEMNITY 	  	 	24	 
				
		 	15.1	  	Your Indemnification Obligation	  	 	24	 
				
		 	15.2	  	“Claims” Defined	  	 	24	 
				
		 	15.3	  	Recovery Rights of Indemnified Parties	  	 	24	 
				
		 	15.4	  	Survival of Obligations 	  	 	25	 
			
	 16.0
	 	RELATIONSHIP OF THE PARTIES 	  	 	25	 

  
 ii 

Table of Contents

									
				
		 	16.1	  	No Agency or Joint Employer Relationship	  	 	25	 
				
		 	16.2	  	Notices to Public Concerning Your Independent Status	  	 	25	 
			
	 17.0
	 	MISCELLANEOUS 	  	 	25	 
				
		 	17.1	  	Severability and Interpretation	  	 	25	 
				
		 	17.2	  	Governing Law, Jurisdiction and Venue	  	 	26	 
				
		 	17.3	  	Waiver of Jury Trial and Punitive Damages	  	 	26	 
				
		 	17.4	  	Exclusive Benefit	  	 	26	 
				
		 	17.5	  	Entire Agreement	  	 	27	 
				
		 	17.6	  	Amendment and Waiver	  	 	27	 
				
		 	17.7	  	Consent; Business Judgment	  	 	27	 
				
		 	17.8	  	Notices	  	 	27	 
				
		 	17.9	  	General Release	  	 	27	 
				
		 	17.10	  	Remedies Cumulative	  	 	28	 
				
		 	17.11	  	Limitations of Damages	  	 	28	 
				
		 	17.12	  	Economic Conditions Not a Defense	  	 	28	 
				
		 	17.13	  	Representations and Warranties	  	 	28	 
				
		 	17.14	  	Counterparts	  	 	29	 
				
		 	17.15	  	Sanctioned Persons and Anti-bribery Representations and Warranties	  	 	29	 
				
		 	17.16	  	Attorneys’ Fees and Costs	  	 	30	 
				
		 	17.17	  	Interest	  	 	30	 
				
		 	17.18	  	Successors and Assigns	  	 	30	 
				
		 	17.19	  	Our Delegation of Rights and Responsibility	  	 	30	 
		
	 ADDENDUM TO FRANCHISE AGREEMENT 
	  	 	31	 

  
 iii 

Table of Contents

 FRANCHISE AGREEMENT 

This Franchise Agreement, entered into between BWI Licensing, Inc. (“we,” “us,” “our” or
“Franchisor”) and                          (“you,” “your” or
“Franchisee”) to include as set forth in the Addendum attached to this Agreement, is dated as of December 1, 2019. We and you may collectively be referred to as the “Parties.” 

INTRODUCTION 
 We and our Affiliates own,
license, lease, operate, manage and provide various services for the Best Western System. We grant licenses for selected, independently owned or leased hotel properties, to operate under a Brand as provided for under this Agreement. You have
expressed a desire to enter into this Agreement with us to obtain a license to use the designated Brand in the operation of the Hotel at the address or location described in the Addendum. 

NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each Party to the other Party in this Agreement, the Parties agree as
follows: 
 1.0 DEFINITIONS 

The following capitalized terms will have the meanings set forth after each term: 

“Advertising Assessments” means the Advertising Assessments we require from you which are set forth in the Addendum. 

“Affiliate” means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which,
directly or indirectly, controls, is controlled by, or is under common Control with, the subject entity. 
 “Agreement” means this
Franchise Agreement, including any exhibits, attachments and addenda. 
 “Annual Dues” means the Annual Dues we require from you that are
set forth in the Addendum. 
 “Anti-Corruption Laws” means all applicable anti-corruption, anti-bribery, anti-money laundering, books and
records, and internal controls laws of the United States and the United Kingdom, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010. 

“Area of Protection” has the meaning set forth in Exhibit 1. 

“Area of Protection Provision” has the meaning set forth in the Addendum and Exhibit 1. 

“Best Western Member” means a hotel that was a Best Western member on November 30, 2019, that is converting to a Best Western franchisee
effective December 1, 2019. 
 “Board of Directors” or “Board” mean the Best Western International, Inc. Board
of Directors as elected by its shareholders. 
 “Brand” means the brand name you are licensed to use for your Hotel as set forth in the
Addendum (i.e., “Best Western®”, “Best Western Plus®”, “Best Western Premier®”, “Vīb®”, “GLō®”, “AidenSM”, “SadieSM” or “Executive Residency by Best Western®”). 

“BWI” means Best Western International, Inc. 

  
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Table of Contents

 “Change of Ownership Application” means the application that is submitted to us by you or
the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer. 
 “Change of Ownership Transfer” means any
proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 13.2.3. 

“Competing Brand” means a hotel brand or trade name that, in our sole business judgment, competes with the System, or any System Hotel. 

“Competitor” means any individual or entity that, at any time during the Term, whether directly or through an Affiliate, owns in whole or in
part, or is the licensor or franchisor of a Competing Brand, irrespective of the number of hotels owned, licensed or franchised under such Competing Brand name. A Competitor does not include an individual or entity that, directly or indirectly
through an Affiliate: (i) is a franchisee of a Competing Brand; or (ii) owns or operates one or more hotels that are not operated as a part of a licensed or franchised brand (e.g., one or more independent hotels). 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an
entity, or of the power to veto major policy decisions of an entity, whether through the ownership of voting securities, by contract, or otherwise. 

“Controlling Affiliate” means an Affiliate that directly or indirectly Controls the Hotel and/or Controls the entity that Controls the Hotel.

 “Designs and/or Plans” means your plans, layouts, specifications, drawings and designs for proposed furnishings, fixtures, equipment,
signs and decor of the Hotel that use and incorporate the Standards. 
 “Effective Date” means December 1, 2019. 

“Entities” means our present or future Affiliates and direct or indirect owners. 

“Equity Interest” means any direct or indirect legal or beneficial interest in the Franchisee, the Hotel and/or the Hotel Site. 

“Equity Owner” means the direct or indirect owner of an Equity Interest. 

“Expiration Date” has the meaning set forth in Section 3.1. 

“Fees” includes but is not limited to fees, dues and assessments we require from you (e.g., Annual Dues, Monthly Fees, Advertising
Assessments, and Marketing and Technology Fees). 
 “Financial and Operational Information” means all information concerning the Monthly
Fees, other revenues generated at the Hotel, room occupancy rates, reservation data and other financial and non-financial information we require. 

“Force Majeure” means an event causing a delay in our or your performance that is not the fault of or within the reasonable control of the
Party claiming Force Majeure. Force Majeure includes fire, floods, natural disasters, Acts of God, war, civil commotion, terrorist acts, and any governmental act or regulation beyond such Party’s reasonable control. Force Majeure does not
include the Franchisee’s financial inability to perform, inability to obtain financing, inability to obtain permits or any other similar events unique to the Franchisee or the Hotel, or to general economic downturn or conditions. 

“Government or Government Entity” means: (i) any agency, instrumentality, subdivision or other body of any national, regional, local or
other government; (ii) any commercial or similar entities owned or controlled by such government, including any state-owned and state-operated companies; (iii) any political party; and (iv) any public international organization. 

  
 2 

Table of Contents

 “Government Official” means the following: (i) officers and employees of any national,
regional, local or other Government; (ii) officers and employees of companies in which a Government owns an interest; (iii) any private person acting in an official capacity for or on behalf of any Government or Governmental Entity (such
as a consultant retained by a government agency); (iv) candidates for political office at any level; (v) political parties and their officials; (vi) officers, employees, or official representatives of public (quasi-governmental)
international organizations (such as the United Nations, World Bank, or International Monetary Fund). 
 “Gross Receipts Tax” means any
gross receipts, sales, use, excise, value added or any similar tax. 
 “Guarantor” means your Voting Representative, who must sign the Form
of Guaranty guaranteeing your obligations under this Agreement or any of Your Agreements. 
 “Guest Rooms” means each rentable unit in the
Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key, provided that adjacent rooms with connecting doors that can be locked and rented as separate units are considered separate Guest Rooms. The
initial number of approved Guest Rooms is set forth in the Addendum. 
 “Hotel” means the property you will operate under this Agreement
and includes all structures, facilities, appurtenances, furniture, fixtures, equipment, and entry, exit, parking and other areas located on the Hotel Site we have approved for your business or located on any land we approve in the future for
additions, signs, parking or other facilities. 
 “Hotel Site” means the real property on which the Hotel is located or to be located, as
approved by us. 
 “Impact Rights” has the meaning set forth in the Addendum and Exhibit 2. 

“Improper Payment” means: (a) any payment, offer, gift or promise to pay or authorization of the payment or transfer of other things of
value, including without limitation any portion of the compensation, fees or reimbursements received hereunder or the provision of any service, gift or entertainment, directly or indirectly to (i) a Government Official; (ii) any director,
officer, employee or commercial partner of a Party or its Affiliates; or, (iii) any other person at the suggestion, request or direction or for the benefit of any of the above-described persons and entities, for purposes of obtaining or
influencing official actions or decisions or securing any improper advantage in order to obtain, retain or direct business; (b) payments made and expenses incurred in connection with performance of obligations under this Agreement that are not
made and recorded with sufficient accuracy, detail, and control to meet the standards in applicable Anti-Corruption Laws; or, (c) any other transaction in violation of applicable Anti-Corruption Laws. 

“Indemnified Parties” means us and the Entities and our and their respective predecessors, successors and assigns, and the associated
officers, directors, employees, managers, insurers, and agents. 
 “Information” means all information we obtain from you or about the
Hotel or its guests or prospective guests under this Agreement or under any agreement ancillary to this Agreement, including agreements relating to the computerized reservation, revenue management, property management, and other systems we provide
or require, or otherwise related to the Hotel. Information includes, but is not limited to, Financial and Operational Information, Proprietary Information, and Personal Information. 

“Laws” means all public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, certificates, authorizations, directions
and requirements of all Governments and Government Entities having jurisdiction over the Hotel, Hotel Site or over Franchisee to operate the Hotel, which, now or hereafter, may apply to the construction, renovation, completion, equipping, opening
and operation of the Hotel, including Title III of the Americans with Disabilities Act, 42 U.S.C. § 12181, et seq., and 28 C.F.R. Part 36. 

“Liquidated Damages” has the meaning set forth in Subsection 14.4. 

  
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 “Manual” means all written compilations of the Standards (in any form, including without
limitation, written or electronic) as determined by us in our sole business judgment. 
 “Marketing and Technology Fees” means the
Marketing and Technology Fees we require from you which are set forth in the Addendum. 
 “Marks” means the Brand and all other service
marks, copyrights, trademarks, trade dress, logos, insignia, emblems, symbols and designs (whether registered or unregistered), slogans, distinguishing characteristics, and trade names used in the System. 

“Monthly Fees” means the Monthly Fees we require from you which are set forth in the Addendum. 

“Open” means representing to the public that the Hotel is actually accommodating guests as a System Hotel. 

“Opening Date” means the day on which we authorize you to Open – December 1, 2019 unless otherwise agreed upon. 

“Other Business(es)” means any business activity we or the Entities engage in now or in the future, other than the licensing of the Hotel.

 “Other Hotels” means any hotel, motel, inn, lodging facility, conference center or other similar business, other than a System Hotel.

 “Permitted Transfer” means any Transfer by you or your Equity Owners as specified in Section 13.2 of this Agreement. 

“Person(s)” means a natural person or entity. 

“Personal Information” means any information that: (i) can be used (alone or when used in combination with other information within your
control) to identify, locate or contact an individual; or (ii) pertains in any way to an identified or identifiable individual. Personal Information can be in any media or format, including computerized or electronic records as well as
paper-based files. 
 “PIP” means property improvement plan. 

“Privacy Laws” means any international, national, federal, provincial, state, or local law, code, rule or regulation that regulates the
processing of Personal Information in any way, including data protection laws, laws regulating marketing communications and/or electronic communications, information security regulations and security breach notification rules. 

“Property Room Revenue” means all revenues derived from the sale or rental of Guest Rooms (both transient and permanent) of the Hotel,
including revenue derived from the redemption of points or rewards under the loyalty programs in which the Hotel participates, amounts attributable to breakfast (where the guest room rate includes breakfast), and guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any Guest Room rebates and overcharges, and will not include taxes collected directly from patrons
or guests. Group booking rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included in, and not deducted from, the calculation of Property Room Revenue. 

“Proprietary Information” means all information or materials concerning the methods, techniques, plans, specifications, procedures, data,
systems and knowledge of and experience in the development, operation, marketing and licensing of the System, including the Standards and the Manual, whether developed by us, you, or a third party. 

  
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 “Publicly Traded Equity Interest” means any Equity Interest that is traded on any
securities exchange or is quoted in any publication or electronic reporting service maintained by the National Association of Securities Dealers, Inc., or any of its successors. 

“Quality Re-Assessment Fee” has the meaning set forth in Subsection 4.5. 

“Renewal Term” has the meaning set forth in Section 3.2. 

“Renovation Work” means the renovation and/or construction work, if any, including purchasing and/or leasing and installation of all
fixtures, equipment, furnishings, furniture, signs, computer terminals and related equipment, supplies and other items that would be required of a new System Hotel under the Manual. 

“Reports” mean daily, monthly, quarterly and annual operating statements, profit and loss statements, balance sheets, and other financial and
non-financial reports we require. 
 “Reservation Service” means the reservation service we
designate in the Standards for use by System Hotels. 
 “RevPAR Index” is a measurement produced by Smith Travel Research, Inc., an
independent market research firm serving the travel industry, or to the extent Smith Travel Research, Inc. is no longer in operation, a comparable independent market research firm serving the travel industry, that calculates the fair share of the
amount of available revenue a hotel (or hotel brand) receives relative to its competitive set within a given market. 
 “Room Addition Fee”
means $200 multiplied by the number of additional Guest Rooms you request to add to the Hotel in accordance with Subsection 6.3.3. 
 “Sanctioned
Person” means any person or entity (including financial institutions): (a) who is, or is owned or controlled by, or acting on behalf of the Government of any country subject to comprehensive U.S. sanctions in force and which currently
include the Government of Cuba, Iran, North Korea, Sudan, and Syria (“Sanctioned Countries”); (b) located in, organized under the laws of or ordinarily resident in Sanctioned Countries; (c) identified by any government or legal
authority under applicable Trade Restrictions as a person with whom dealings and transactions by Franchisee and/or its Affiliates are prohibited or restricted, including but not limited to persons designated under United Nations Security Council
Resolutions, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) List of Specially Designated Nationals and Other Blocked Persons; the U.S. Department of State’s lists of persons subject to non-proliferation sanctions; the European Union Financial Sanctions List; and persons and entities subject to Special Measures regulations under Section 311 of the USA PATRIOT Act and the Bank Secrecy Act. 

“Securities” means any public offering, private placement or other sale of securities in the Franchisee, the Hotel or the Hotel Site. 

“Site” means domain names, the World Wide Web, the Internet, computer network/distribution systems, or other electronic communications sites.

 “Standards” means all standards, specifications, requirements, criteria, and policies that have been and are in the future developed and
compiled in accordance with this Agreement for use by you in connection with the design, construction, renovation, refurbishment, appearance, equipping, furnishing, supplying, opening, operating, maintaining, marketing, services, service levels,
quality, and quality assurance of System Hotels, including the Hotel, and for hotel advertising and accounting, whether contained in the Manual or set out in this Agreement or other written communication. 

“Successor Franchise Agreement” has the meaning set forth in Section 3.2. 

  
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 “System” or “Best Western System” means the elements, including know-how, that we designate in our sole business judgment to distinguish hotels operating worldwide under the Brand that provide to the consuming public a similar, distinctive, high-quality hotel service. The System
currently includes: the Brand, the Marks, the Trade Name, and the Standards; access to the Reservation Service; advertising, publicity and other marketing programs and materials; training programs and materials; and programs for our inspection of
the Hotel and consulting with you. 
 “System Hotels” means hotels operating under the System using the Brand name. 

“Term” has the meaning set forth in Section 3.1. 

“Trade Name” means the name of the Hotel set forth in the Addendum. 

“Trade Restrictions” means trade, economic or investment sanctions, export controls, anti-terrorism,
non-proliferation, anti-money laundering and similar restrictions in force pursuant to laws, rules and regulations imposed under Laws to which the Parties are subject. 

“Transfer” means in all its forms, any sale, lease, assignment, spin-off, transfer, or other
conveyance of a direct or indirect legal or beneficial interest. 
 “Transferee” means the proposed new franchisee resulting from a
Transfer. 
 “Transferor” means you as a Change of Ownership Transfer occurs. 

“Your Agreements” means any other agreement between you and us or any of the Entities related to this Agreement, the Hotel and/or the Hotel
Site. 
 “Voting Representative” means the “Equity Owner”, designated by you and approved by us, who is authorized to vote on
behalf of the Hotel. 
 2.0 GRANT OF LICENSE 

2.1 Non-Exclusive License. We grant to you and you accept
a limited, non-exclusive license to use the Marks and the System during the Term at, and in connection with, the operation of the Hotel in accordance with the terms of this Agreement. The Brand that you may
use with regard to the operation and marketing of the Hotel as a System Hotel is designated in the Addendum. 
 2.2 
Reserved Rights. 
 2.2.1 Except as detailed in the Addendum, this Agreement does not limit our right, or the right of the
Entities, to engage in any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a Competing Brand, or otherwise, even if they compete with the Hotel, the System, or the Brand, and whether
we or the Entities start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, or associate with, such Other Businesses. 

2.2.2 We may also (i) use or license to others all or part of the System; (ii) use the facilities, programs, services and/or
personnel used in connection with the System in Other Businesses; (iii) use the System, the Brand and the Marks in the Other Businesses; and, (iv) add, alter, delete or otherwise modify elements of the System. 

2.2.3 You acknowledge and agree that you have no rights to, and will not make any claims or demands for, damages or other relief
arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including liability for claims for unfair competition, breach of contract, breach of any
applicable implied covenant of good faith and fair dealing, or divided loyalty. 

  
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 2.3 Area of Protection Provision. The Area of
Protection Provision that applies to your Hotel is set forth in the Addendum and Exhibit 1. 
 2.4
Impact Rights. Your Impact Rights are set forth in the Addendum and Exhibit 2. 
 3.0 
TERM AND RENEWAL TERM 
 3.1 Term. The Term of the Agreement shall begin on the
Effective Date and shall be twelve (12) years, with an Expiration Date of November 30, 2031, unless terminated earlier under the terms of this Agreement. 

3.2 Renewal Term. If you comply with the conditions set forth in this Section 3.2, you will
have the right, but not the obligation, to enter into the form of franchise agreement we then use to grant franchises for System Hotels (modified as necessary to reflect the fact that it is for a successor franchise) (a “Successor Franchise
Agreement”) for one (1) additional franchise term of ten (10) years following the Term (a “Renewal Term”). The Successor Franchise Agreement will contain provisions consistent with those contained in this Agreement except
for (i) our right to charge an additional royalty fee of no more than one and one-half percent (1.5%) of Property Room Revenue; and (ii) you and we will negotiate the Area of Protection for the Hotel
for the Renewal Term to reflect then-current competitive market conditions. In order to enter into the Successor Franchise Agreement, you (and each of your owners) must: 
  

	 	1.	 be in good standing (e.g., payment of Fees); 

 

	 	2.	 be current as to the Standards (e.g., guest service, breakfast, high speed internet access, design, etc.); and,

  

	 	3.	 meet our then-current requirements for relevance and guest satisfaction in the Hotel’s market, which
requirements may differ in each market, considering the Hotel’s RevPAR Index, sentiment scores or other guest satisfaction ratings, social media ratings, and other factors then utilized by the hotel industry to determine relevance and guest
satisfaction. 

 3.3 Termination Rights. If you are not in default under
this Agreement, you shall have the right to terminate the Agreement, without the payment of any Liquidated Damages, on November 30, 2020 and November 30, 2021, upon providing at least three (3) months written notice to us prior to
such date. 
 4.0 OUR RESPONSIBILITIES 

We have the following responsibilities to you under this Agreement. We reserve the right to fulfill some or all of these responsibilities through one of the
Entities or through unrelated third parties, in our sole business judgment. We may require you to make payment for any resulting services or products directly to the provider. 

4.1 Training. We may specify certain required and optional training programs on providing
accommodations and related services and provide these programs at various locations. We may charge you for required training services and materials and for optional training services and materials we provide to you. You are responsible for all costs
incurred in attending these programs. 
 4.2 Reservation Service. We will furnish you with
the Reservation Service. The Reservation Service will be furnished to you on the same basis as it is furnished to other System Hotels and shall be the exclusive Reservation Service used at the Hotel at all times unless otherwise approved by us in
writing in our sole discretion. You will be required to participate in performance based marketing as determined by us from time to time. 

4.3 Consultation. We may offer consultation services and advice in areas such as operations and
marketing. We may establish fees in advance, or on a project-by-project basis, for any consultation service or advice you

  
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request, such as revenue management and sales support. You will be entitled to such services upon request and payment of any applicable fees. You acknowledge that, although we provide
consultation services and advice, you have exclusive day-to-day control of the business and operation of the Hotel and we do not in any way possess or exercise such
control. 
 4.4 Marketing. 

4.4.1 We will use commercially reasonable efforts to market the Hotel on our Reservation Service and any loyalty programs (e.g., Best
Western Rewards® (“BWR®”)) associated with the Best Western System. 

4.4.2 We will include the Hotel in advertising of System Hotels and in marketing programs in accordance with our general practice for
System Hotels. 
 4.4.3 We will use the Advertising Assessment and Marketing and Technology Fees paid to us to pay for various
programs to benefit the System, including: (i) advertising, promotions, publicity, public relations, market research, loyalty programs and other marketing programs; (ii) developing and maintaining the reservation service systems and
support, to include but not limited to detailing rates, availability, taxes, fees, hotel and room information, cancellation and no-show policies and other such related information; and
(iii) administrative costs and overhead related to the administration or direction of these projects and programs and other such services as we may determine from time to time. 

4.4.4 We will have the sole right to determine how and when we spend these funds, including sole control over the creative concepts,
materials and media used in the programs, the placement and allocation of advertising, and the selection of promotional programs. 

4.4.5 We may enter into, modify or terminate arrangements for development, marketing, operations, administrative, technical and support
functions, facilities, programs, services and/or personnel with any other entity, including any of the Entities or a third party. 

4.4.6 You acknowledge that the Advertising Assessment and Marketing and Technology Fees are intended for the benefit of the System and
will not simply be used to promote or benefit any one System Hotel or market. We will have no obligation in administering any activities paid for with the Advertising Assessment and Marketing and Technology Fees to make expenditures for you that are
equivalent or proportionate to your payments or to ensure that the Hotel benefits directly or proportionately from such expenditures. 

4.4.7 We may create any programs and allocate monies derived from the Advertising Assessment and Marketing and Technology Fees to any
regions or localities, as we consider appropriate in our sole business judgment. The aggregate of the Advertising Assessment and Marketing and Technology Fees paid to us by System Hotels does not constitute a trust or “advertising fund”
and we are not a fiduciary with respect to the Advertising Assessment and Marketing and Technology Fees paid by you and other System Hotels. 

4.4.8 We are not obligated to expend funds in excess of the amounts received from System Hotels. If any interest is earned on unused
Advertising Assessment and Marketing or Technology Fees, we will use the interest before using the principal. The Advertising Assessment and Marketing and Technology Fees do not cover your costs of participating in any optional marketing programs
and promotions offered by us in which you voluntarily choose to participate. The Advertising Assessment and Marketing and Technology Fees also do not cover the cost of operating the Hotel in accordance with the Standards. There are no reimbursements
or other funds to which you are entitled from the unused Advertising Assessment and Marketing and Technology Fees. 
 4.5 
Inspections/Compliance Assistance. We will administer a quality assurance program for the System that will include periodic inspections—at least once every twelve (12) months upon at least twenty-four (24) hours’
notice—of the Hotel to ensure compliance with the Standards. You will permit us to inspect the Hotel and all associated facilities to determine if the Hotel is in compliance with the Standards. You will cooperate with our

  
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representatives during these inspections. You will then take all steps necessary to correct any deficiencies within the times we establish from time to time, including any re-inspection or re-assessment with an associated Quality Re-Assessment Fee. You will provide complimentary accommodations for the
quality assurance auditor each time we conduct an inspection, to include visits to verify that deficiencies noted in a quality assurance evaluation report have been corrected or completed by the required dates of to verify completion of a design
requirement. 
 4.6 Manual. We will issue to you or make available the Manual and any
revisions and updates we may make to the Manual during the Term (either in writing or electronic form as may be determined from time to time). You agree to ensure that your copy of the Manual is, at all times, current and up to date. If there is any
dispute as to your compliance with the provisions of the Manual, the master copy of the Manual maintained at our principal office will control. There will be no charge for the Manual unless printed duplicates or copies are requested by you. 

4.7 Equipment and Supplies. We will make available to you for use in the Hotel various purchase
arrangements for exterior signs, operating equipment, operating supplies, and furnishings, which we make available to other System Hotels. 
 5.0 
YOUR RESPONSIBILITIES 
 5.1 Operational and Other Requirements. You must: 

5.1.1 after the Effective Date, operate the Hotel twenty-four (24) hours a day; 

5.1.2 operate the Hotel using the System, in compliance with this Agreement and the Standards, and in such a manner to provide
efficient, courteous, uniform, respectable and high-quality lodging and other services and conveniences to the public, consistent with our concept of providing quality accommodations at fair and reasonable prices. You acknowledge that, although we
provide the Standards, you have exclusive day-to-day control of the business and operation of the Hotel and we do not in any way possess or exercise such control and
shall maintain those requirements which may change from time to time. You will successfully complete all quality assurance assessments as may be required by us from time to time; 

5.1.3 maintain the premises, including coffee shops, restaurants, lounges, meeting/banquet rooms and other public areas, in a clean,
safe and orderly condition; 
 5.1.4 permit and participate in inspection of the Hotel and all associated facilities to determine if
the Hotel is in compliance with the Standards; 
 5.1.5 comply with the Standards, including our specifications for all amenities,
supplies, products and services as may be applicable. We may require you to purchase a particular brand of product or service to maintain the common identity and reputation of the Brand, and you will comply with such requirements. Unless we specify
otherwise, you may purchase products from any authorized source of distribution; however, we reserve the right, in our business judgment, to enter into exclusive purchasing arrangements for particular products or services and to require that you
purchase products or services from approved suppliers or distributors; 
 5.1.6 comply with all design requirements as detailed in
the Standards and associated references (e.g., Design Guidelines); 
 5.1.7 install, display, and maintain signage displaying or
containing the Brand name and other distinguishing and identifying characteristics in accordance with Standards we establish for System Hotels; 

5.1.8 participate in and pay all charges in connection with all required loyalty or frequency programs (e.g., BWR®); 

  
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 5.1.9 use the Reservation Service as the sole means of offering reservations to the
public and to third parties for booking (e.g., you may not use an individual Hotel website, booking engine, extranets, or channel manager); 

5.1.10 provide to us all Hotel inventory at the best available rate and with last room availability; 

5.1.11 if the Hotel does not have an on-site, full-service restaurant, provide a complimentary
(free of charge) breakfast as detailed in the Standards; 
 5.1.12 comply with Standards for the training of persons involved in the
operation of the Hotel, including completion by the general manager and other key personnel of the Hotel of a training program for operation of the Hotel under the System at sites we designate. You will pay us all fees and charges, if any, we
require for your personnel to attend these training programs. You are responsible for all travel, lodging and other expenses you or your employees incur in attending these programs; 

5.1.13 purchase and maintain property management, revenue management, in-room entertainment
(e.g., televisions and programs/channels), telecommunications, high-speed internet access, and other computer and technology systems that we designate for the System or any portion of the System based on our assessment of the long-term best
interests of System Hotels, considering the interest of the System as a whole; 
 5.1.14 advertise and promote the Hotel and related
facilities and services on a local and regional basis in a first-class, dignified manner, using our identity and graphics Standards for all System Hotels, at your cost and expense. You must submit to us for our approval samples of all advertising
and promotional materials that we have not previously approved (including any materials in digital, electronic or computerized form or in any form of media that exists now or is developed in the future) before you produce or distribute them. You
will not begin using the materials until we approve them. You must immediately discontinue your use of any advertising or promotional material we disapprove, even if we previously approved the materials; 

5.1.15 participate in and pay all charges in connection with all required System guest complaint resolution programs, which programs
may include chargebacks to the Hotel for guest refunds or credits and all required System quality assurance programs, such as guest comment cards, customer surveys and mystery shopper programs. You must maintain minimum performance Standards and
scores for quality assurance programs we establish; 
 5.1.16 honor all nationally recognized credit cards and credit vouchers issued
for general credit purposes that we require and enter into all necessary credit card and voucher agreements with the issuers of such cards or vouchers; 

5.1.17 participate in and use the Reservation Service, including any additions, enhancements, supplements or variants we develop or
adopt, and honor and give first priority on available rooms to all confirmed reservations referred to the Hotel through the Reservation Service. The only reservation service or system you may use for outgoing reservations referred by or from the
Hotel to other properties will be the Reservation Service or other reservation services we designate; 
 5.1.18 furnish accurate and
current Hotel information in a timely manner for publication and use in the Reservation Service; 
 5.1.19 comply with all Laws and,
on request, give evidence to us of compliance; 
 5.1.20 participate in, and promptly pay all fees, commissions and charges
associated with, all travel agent commission programs and third-party reservation and distribution services (e.g., online travel agencies), all as required by the Standards and in accordance with the terms of these programs, all of which may be
modified; 

  
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 5.1.21 not engage, directly or indirectly, in any cross-marketing or cross-promotion
of the Hotel with any Other Hotel or related business, without our prior written consent. You agree to refer guests and customers, wherever reasonably possible, only to System Hotels. We may require you to participate in programs designed to refer
prospective customers to Other Hotels. You must display all material, including brochures and promotional material we provide for System Hotels, and allow advertising and promotion only of System Hotels on the Hotel Site, unless we specifically
direct you to include advertising or promotion of Other Hotels; 
 5.1.22 treat as confidential the Standards, the Manual and all
other Proprietary Information. You acknowledge and agree that you do not acquire any interest in the Proprietary Information other than the right to utilize the same in the development and operation of the Hotel under the terms of this Agreement.
You agree that you will not use the Proprietary Information in any business or for any purpose other than in the development and operation of the Hotel under the System and will maintain the absolute confidentiality of the Proprietary Information
during and after the Term. You will not make unauthorized copies of any portion of the Proprietary Information; and will adopt and implement all procedures we may periodically establish in our business judgment to prevent unauthorized use or
disclosure of the Proprietary Information, including restrictions on disclosure to employees and the use of non-disclosure and non-competition clauses in agreements with
employees, agents and independent contractors who have access to the Proprietary Information; 
 5.1.23 not become a Competitor, or
permit your Affiliate to become a Competitor, in the hotel market segment applicable to your Brand, or any substantially equivalent market segment, as determined by Smith Travel Research, Inc. (“STR”) (or, if STR is no longer in
existence, STR’s successor or other such industry resource that is as equally as reputable as STR); 
 5.1.24 own fee simple
title (or long-term ground leasehold interest for a term at least equal to the Term) to the real property and improvements that comprise the Hotel and the Hotel Site, or alternatively, at our request, cause the fee simple owner, or other third party
acceptable to us, to provide its guaranty covering all of your obligations under this Agreement in form and substance acceptable to us; 

5.1.25 ensure that the Hotel and its personnel display a courteous and professional attitude toward directors, officers and employees
of BWI; 
 5.1.26 maintain legal possession and control of the Hotel and Hotel Site for the Term and promptly deliver to us a copy of
any notice of default you receive from any mortgagee, trustee under any deed of trust, or ground lessor for the Hotel, and on our request, provide any additional information we may request related to any alleged default; 

5.1.27 not directly or indirectly conduct or permit the marketing or sale of timeshares, vacation ownership, fractional ownership,
condominiums or like schemes at, or adjacent to, the Hotel; 
 5.1.28 participate in and pay all charges related to our marketing
programs (in addition to programs covered by the Monthly Fees, Advertising Assessment, and Marketing and Technology Fees), all guest frequency programs we require, and any optional programs that you opt into; 

5.1.29 honor the terms of any discount or promotional programs (including any frequent guest or loyalty program (e.g., BWR®)) that
we offer to the public on your behalf, any room rate quoted to any guest at the time the guest makes an advance reservation, and any award certificates issued to Hotel guests participating in these programs. Further, while each System Hotel is
responsible for establishing rates at its Hotel, the Board may, in its sole discretion, establish discount or promotional programs providing for room discounts in an amount equal to or less than ten percent (10%) off of the Hotel’s published
rates and you must honor such program. Any discount or promotional program providing for room discounts in an amount in excess of ten percent (10%) off of the Hotel’s published rates may only be implemented following an affirmative vote of a
majority of System Hotels, and if approved, you must honor such program. With regard to any such System Hotel vote, an affirmative vote of a majority of the votes cast shall result in passage, provided at least 33 1/3% of all System Hotels vote in
favor of the discount or promotional program. 

  
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 5.1.30 if an overbooking occurs, be financially responsible for the cost of an
alternative accommodation at a comparable hotel for at least one (1) night, and arrange and pay for transportation to the alternative accommodation; 

5.1.31 maintain, at your expense, insurance of the types and in the minimum amounts we specify in the Standards. As of the Effective
Date, required types of insurance include, without limitation: commercial general liability insurance, automobile liability insurance (for owned, non-owned, and hired automobiles), cyber security insurance,
and statutory workers’ compensation insurance, each in the amount set forth in the Standards. All such insurance must be with insurers having the minimum ratings we specify, name as additional insureds the parties we specify in the Standards
(to include but not limited to Best Western International, Inc. and BWI Licensing, Inc.), and carry the endorsements and notice requirements we specify in the Standards. Upon request, you shall provide us with certificates and such other documents
that we request evidencing that you have obtained insurance policies that comply with the then-current insurance requirements set forth in the Standards; 

5.1.32 not share the business operations of the Hotel; 

5.1.33 promptly provide to us all information we reasonably request about you and your Affiliates (including your respective beneficial
owners, officers, directors, shareholders, partners or members) and/or the Hotel, title to the property on which the Hotel is constructed and any other property used by the Hotel; 

5.1.34 treat all employees and guests professionally, and with dignity and respect in order to protect the integrity and goodwill of
the Brand; 
 5.1.35 comply with the Best Western International, Inc. Human Rights Policy; and 

5.1.36 upon termination of the Agreement, consent to our contacting all guests with future reservations, to our notifying them that the
Hotel is no longer affiliated with the Brand, and to our offering alternative accommodations at a different System Hotel. 
 5.2 
Relocating the Hotel. You must operate the Hotel at the Hotel Site. You may, however, request to relocate the Hotel from the Hotel Site to another designated property you own an interest in (the “Designated Property”) if ownership
does not change more than 50%. The criteria that we will use to decide any such request include: 
  

	 	1.	 The Designated Property shall be within the same Area of Protection as the Hotel Site, and the distance between
the Hotel Site and the Designated Property shall not exceed: 

  

													
	 Property Type
	  	Primary Market	 	  	Secondary Market	 	  	Tertiary Market	 
	 Distance
	  	 	2 Miles	 	  	 	3 Miles	 	  	 	5 Miles	 

  

	 	2.	 The Designated Property shall not be in an Area of Protection of any franchisee (see Exhibit 1) nor where any
franchisee has the right to request an Impact Analysis (see Exhibit 2), unless any such franchisee waives any such right. 

  

	 	3.	 The Designated Property shall have an Area of Protection consistent with the criteria as described herein or as
determined by the Board of Directors. 

  

	 	4.	 The Brand of the relocated Hotel at the Designated Property shall be the same as or higher than the Brand of
the Hotel at the Hotel Site. 

  

	 	5.	 The Designated Property must, in the opinion of the Board of Directors, provide improved representation in the
same relevant market. In evaluating this requirement, the Board of Directors in its sole discretion may consider the Designated Property’s attributes, such as, but not limited to: superior facilities, improved location, stronger access to
demand generators and increased visibility. 

  
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	 	6.	 The Hotel at the Designated Property shall meet or exceed BWI’s standards prior to relocating and
commencing operations as a System Hotel. 

  

	 	7.	 Pay a relocation fee and a fee for any increase in room count that must be submitted upon submission of your
request to relocate. A portion of the relocation fee is non-refundable immediately upon payment. The remainder is non-refundable upon execution of the new Franchise
Agreement you must sign for the Designated Property. 

  

	 	8.	 The Designated Property will be reviewed according to established policies and procedures.

  

	 	9.	 The request will be presented to the Board of Directors for approval or denial and reviewed in conjunction with
other relocation requests for the surrounding area or prospect property applications for the same area. 

  

	 	10.	 The Hotel must remain operating as a System Hotel in good standing at the Hotel Site, and continue to pay full
fees and dues, until the relocation is completed. At that time, the Hotel at the Hotel Site must discontinue operating as a System Hotel. 

  

	 	11.	 The transition from the Hotel Site to the Designated Property must be seamless (e.g., installation of new
signage and removal of old signage being done as close to simultaneous as possible to eliminate the perception that Best Western is not being represented in a given area). 

 

	 	12.	 You must consistently adhere to the BWI policy of always referring guests to the nearest Best Western.

 5.3 Changes to Standards. We may, from time to time, change, add to or
remove certain Standards; provided, however, any amendment of the Standards will include a vetting process, such as consultation with advisory committees and governors. Further, the following Standards may only be amended by vote of System Hotels:
building exterior, public area and guest room design Standards, brand logo and signage Standards, and breakfast Standards. With regard to any such System Hotel vote, an affirmative vote of a majority of the votes cast shall result in passage of the
matter proposed, provided at least 33 1/3% of all System Hotels vote in favor of the proposal. Notwithstanding the right of System Hotels to vote to amend these Standards, the Board may amend any such Standard without a System Hotel vote if the cost
is less than or equal to $150 dollars per year per room and does not require the hiring of a “trade person” for implementation of the Standard. 

6.0 RENOVATION WORK 

6.1 Necessary Consents. 

6.1.1 You must comply with all design and brand standards as detailed in the Manual throughout the Term in accordance with agreed-to timelines. Before we approve your Designs and Plans, your architect or other certified professional must certify to us that the Designs and Plans comply with all Laws related to
accessibility/accommodations/facilities for those with disabilities. You shall not commence any Renovation Work unless and until we have issued our written consent in respect of the Designs and Plans, which consent will not be unreasonably withheld.
Once we have issued our approval, no changes to the Designs and Plans shall be made without our consent. 
 6.1.2 You are solely
responsible for ensuring that the Designs and Plans (including Designs and Plans for Renovation Work) comply with our then-current Standards, the Manual, and all Laws. 

6.2 Performance of Agreement. You must satisfy all of the terms and conditions of this
Agreement, and equip, supply, staff and otherwise ensure the Hotel is operational and in compliance with our Standards. As a result of your efforts to comply with the terms and conditions of this Agreement, you will incur significant expense and
expend substantial time and effort. You acknowledge and agree that we will have no liability or obligation to you for any losses, obligations, liabilities or expenses you incur if we do not authorize the Hotel to represent itself as a Hotel with our
Brand on our Reservations Systems or if we terminate this Agreement because you have not complied with the terms and conditions of this Agreement. 

  
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 6.3 Hotel Refurbishment and Room Addition.

 6.3.1 We may periodically require you to modernize, rehabilitate and/or upgrade the Hotel’s fixtures, equipment, furnishings,
furniture, signs, computer hardware and software and related equipment, supplies and other items to meet the then-current Standards. You will make these changes at your sole cost and expense and in the time frame we require. 

6.3.2 You may not make any significant changes (including major changes in structure, design or decor) in the Hotel. Minor redecoration
and minor structural changes that comply with our Standards will not be considered significant. 
 6.3.3 You may not make any change
in the number of approved Guest Rooms in the Addendum. If you wish to add additional Guest Rooms to the Hotel after the Effective Date, you must submit an application to obtain our consent. If we consent to the addition of Guest Rooms at the Hotel,
you must pay us our then-current Room Addition Fee. As a condition to our granting approval of your application, we may require you to modernize, rehabilitate or upgrade the Hotel in accordance with this Subsection 6.3 of the Agreement. We may also
require you to execute an amendment to this Agreement covering the terms and conditions of our consent to the addition of Guest Rooms. 
 7.0 
MANAGEMENT OF THE HOTEL 
 7.1 You must at all times retain and exercise direct management control over the Hotel’s
business. If you enter into a management agreement or other similar arrangement for the operation of the Hotel or any part thereof (including without limitation, retail or food and/or beverage service facilities) with any natural person or entity,
you are required to provide prior written notice to us. Any such management agreement or other similar arrangement for operation of the Hotel or any part thereof shall in no way relieve, reduce, mitigate or waive any of the responsibilities you have
under this Agreement, it being understood that all such responsibilities and obligations shall remain yours at all times. You must provide us with all information we request from time to time regarding ownership, control and management of the Hotel.

 8.0 PAYMENT OF FEES 

8.1 Annual Dues. Upon execution of this Agreement, you shall pay the first year’s
(i.e., the time period from December 1, 2019 to December 1, 2020) Annual Dues to us in the amount set forth in the Addendum. On September 15, 2020 and on each subsequent September 15 during the Term, you shall pay us the Annual
Dues due for the following year of the Term. The Annual Dues are not refundable under any circumstances. 
 8.2 
Monthly Fees. Beginning on the Effective Date, you will pay to us for each month (or part of a month, including the final month you operate under this Agreement) the Monthly Fees, each of which is set forth in the Addendum. 

8.3 Advertising Assessment. Beginning on the Effective Date, you will pay to us for each month
(or part of a month, including the final month you operate under this Agreement) the Advertising Assessment, each of which is set forth in the Addendum. 

8.4 Marketing and Technology Fees. Beginning on the Effective Date, you will pay to us for each
month (or part of a month, including the final month you operate under this Agreement) the Marketing and Technology Fees, which is set forth in the Addendum. 

8.5 Calculation and Payment of Fees. 

8.5.1 Fees will be calculated in accordance with the accounting methods of the then-current GAAP or such other accounting methods
specified by us in the Manual. 

  
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 8.5.2 Fees will be invoiced by us monthly and paid to us upon statement receipt at
the place and in the manner we designate and will be accompanied by our standard schedule setting forth in reasonable detail the computation Fees for such month. 

8.5.3 If there is a fire or other insured casualty that results in a reduction of Property Room Revenue, you will determine and pay us,
from the proceeds of any business interruption or other insurance applicable to loss of revenues, an amount equal to the forecasted Monthly Fees, Advertising Assessment, and Marketing and Technology Fees, based on the Property Room Revenue amounts
agreed on between you and your insurance company that would have been paid to us in the absence of the insured casualty. 
 8.5.4 In
the event that you owe us any funds, we have the right to offset any amounts we may owe you against the amount you owe. 
 8.6 
Other Fees, Charges and Expenses. You will timely pay all other amounts due us or any of the Entities under this Agreement. 

8.7 Taxes. If a Gross Receipts Tax is imposed on us or the Entities based on payments made by
you related to this Agreement, then you must reimburse us or the Entity for such Gross Receipts Tax to ensure that the amount we or the Entity retains, after paying the Gross Receipts Tax, equals the net amount of the payments you are required to
pay us or the Entity had such Gross Receipts Tax not been imposed. You are not required to pay income taxes payable by us or any Entity as a result of our net income relating to fees collected under this Agreement. 

8.8 Application of Fees. We may apply any amounts received from you to any amounts due under
this Agreement. 
 9.0 PROPRIETARY RIGHTS 

9.1 Our Proprietary Rights. 

9.1.1 You will not contest, either directly or indirectly during or after the Term: 

9.1.1.1 our (and/or any Entities’) ownership of, rights to and interest in the System, Brand, Marks and any of their elements or
components, including present and future distinguishing characteristics and agree that neither you nor any design or construction professional engaged by you may use our Standards, our Manual or your approved Designs and Plans for any hotel or
lodging project other than the Hotel; 
 9.1.1.2 our sole right to grant licenses to use all or any elements or components of the
System; 
 9.1.1.3 that we (and/or the Entities) are the owner of (or the licensee of, with the right to sub-license) all right, title and interest in and to the Brand and the Marks used in any form and in any design, alone or in any combination, together with the goodwill they symbolize; or 

9.1.1.4 the validity or ownership of the Marks. 

9.1.2 You acknowledge that these Marks have acquired a secondary meaning which indicates that the Hotel, Brand and System are operated
by or with our approval. All improvements and additions to, or associated with, the System, all Marks, and all goodwill arising from your use of the System and the Marks, will inure to our benefit and become our property (or that of the applicable
Entities), even if you develop them. 
 9.1.3 You will not apply for or obtain any trademark or service mark registration of any of
the Marks or any confusingly similar marks in your name or on behalf of or for the benefit of anyone else. You acknowledge that you are not entitled to receive any payment or other value from us or from any of the Entities for any goodwill
associated with your use of the System or the Marks, or any elements or components of the System. 

  
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 9.2 Trade Name, Use of the Marks. 

9.2.1 Trade Name. 

9.2.1.1 The Hotel will be initially known by the Trade Name set forth in the Addendum. You may not change the Trade Name without our
specific prior written consent. 
 9.2.1.2 You acknowledge and agree that you are not acquiring the right to use any service marks,
copyrights, trademarks, trade dress, logos, designs, insignia, emblems, symbols, slogans, distinguishing characteristics, trade names, domain names or other marks or characteristics owned by us or licensed to us that we do not specifically designate
to be used in the System. 
 9.3 Use of Trade Name and Marks. You will operate under the
Marks, using the Trade Name, at the Hotel. You will not adopt any other names or marks in operating the Hotel without our approval. You will not, without our prior written consent, use any of the Marks (including the words “Best Western”),
trademarks, trade names or service marks, or any similar words or acronyms, in: 
 9.3.1 your corporate, partnership, business or
trade name; 
 9.3.2 any Internet-related name (including a domain name); or 

9.3.3 any business operated separately from the Hotel, including the name or identity of developments adjacent to or associated with
the Hotel. 
 9.4 Trademark Disputes. 

9.4.1 You will immediately notify us of any infringement or dilution of or challenge to your use of any of the Marks and will not,
absent a court order or our prior written consent, communicate with any other person regarding any such infringement, dilution, challenge or claim. We will take the action we deem appropriate with respect to such challenges and claims and have the
sole right to handle disputes concerning use of all or any part of the Marks or the System. You will fully cooperate with us and any applicable Entity in these matters. We will reimburse you for expenses incurred by you as the direct result of
activities undertaken by you at our prior written request and specifically relating to the trademark dispute at issue. We will not reimburse you for any other expenses incurred by you for cooperating with us or the Entities. 

9.4.2 You appoint us as your exclusive attorney-in-fact,
to prosecute, defend and/or settle all disputes of this type at our sole option. You will sign any documents we or the applicable Entity believe are necessary to prosecute, defend or settle any dispute or obtain protection for the Marks and the
System and will assign to us any claims you may have related to these matters. Our decisions as to the prosecution, defense or settlement of the dispute will be final. All recoveries made as a result of disputes regarding use of all or part of the
System or the Marks will be for our account. 
 9.5 Web Sites. 

9.5.1 You may not register, own, maintain or use any Sites that relate to the Best Western System or the Hotel, that include the Marks,
or have an independent booking engine. The only domain names, Sites, or Site contractors that you may use relating to the Hotel or this Agreement are those we assign or otherwise approve in writing. You acknowledge that you may not, without a legal
license or other legal right, post on your Sites any material in which any third party has any direct or indirect ownership interest. You must incorporate on your Sites any information we require in the manner we deem necessary to protect our Marks.

 9.5.2 Any use of the Marks on any Site must conform to our requirements, including the identity and graphics Standards for all
System Hotels. Given the changing nature of this technology, we have the right to withhold our approval, and to withdraw any prior approval, and to modify our requirements. 

  
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 9.6 Covenant. 

9.6.1 You agree, as a direct covenant with us and the Entities, that you will comply with all of the provisions of this Agreement
related to the manner, terms and conditions of the use of the Marks and the termination of any right on your part to use any of the Marks. Any non-compliance by you with this covenant or the terms of this
Agreement related to the Marks, or any unauthorized or improper use of the System or the Marks, will cause irreparable damage to us and/or to the Entities and is a material breach of this Agreement. 

9.6.2 If you engage in such non-compliance or unauthorized and/or improper use of the System or
the Marks during or after the Term, we and any of the applicable Entities, along with the successors and assigns of each, will be entitled to both temporary and permanent injunctive relief against you from any court of competent jurisdiction, in
addition to all other remedies we or the Entities may have at law. You consent to the entry of such temporary and permanent injunctions. You must pay all costs and expenses, including reasonable attorneys’ fees, expert fees, costs and other
expenses of litigation that we and/or the Entities may incur in connection with your non-compliance with this covenant. 

10.0 AUDIT, OWNERSHIP OF INFORMATION AND PRIVACY AND DATA PROTECTION 

10.1 Audit. 

10.1.1 We may require you to have Fees or other monies due to us computed and certified as accurate by a certified public accountant.
We may at any time during your business hours, and without prior notice to you, examine your Financial and Operational Information and other records. You agree to cooperate fully with our representatives and independent accountants in any audit. If
any audit discloses that you understated or underpaid any payment due to us, you agree to immediately pay us the amount of the understatement, plus our service charges and interest (to be calculated as set forth in Section 17.17 below) on the
understated amounts from the date originally due until the date of payment. Furthermore, if an examination is necessary due to your failure to furnish reports, supporting records, or other information as required, or to furnish these items on a
timely basis, or if our audit reveals an underpayment to us in an amount greater than two percent (2%) of the amount that you actually reported to us for the period examined, you agree to reimburse us for the costs of the examination, including,
without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board, and compensation of our employees. These remedies are in addition to our other remedies and rights under this Agreement and Laws. 

10.1.2 If the audit discloses an overpayment, we will credit this overpayment against your future payments due under this Agreement,
without interest, or, if no future payments are due under this Agreement, we will promptly pay you the amount of the overpayment without interest. 

10.2 Ownership of Information. All Information we obtain from you and all revenues we derive
from such Information will be our property and Proprietary Information that we may use for any reason, including making a financial performance representation in our franchise disclosure documents. At your sole risk and responsibility, you may use
Information that you acquire from third parties in connection with operating the Hotel, such as Personal Information, at any time during or after the Term, to the extent that your use is permitted by Law. 

10.3 Privacy and Data Protection. You will: (i) comply with all applicable Privacy Laws;
(ii) comply with all Standards that relate to Privacy Laws and the privacy and security of Personal Information; (iii) refrain from any action or inaction that could cause us or the Entities to breach any Privacy Laws; (iv) take any
reasonable action we deem necessary in our business judgment to keep us and the Entities in compliance with the Privacy Laws; (v) ensure that your customer data collection practices, and the use and marketing of such data, and measures adopted
for the privacy and security thereof are consistent with BWI’s Privacy Policy as posted on its website at http://www.bestwestern.com, as amended from time to time by BWI; and (vi) immediately report to us the theft or loss of Personal
Information (other than the Personal Information of your own officers, directors, shareholders, employees or service providers). 

  
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 11.0 CONDEMNATION AND CASUALTY 

11.1 Condemnation. You must immediately inform us of any proposed taking of any portion of the
Hotel by eminent domain. If, in our business judgment, the taking is significant enough to render the continued operation of the Hotel in accordance with the Standards and guest expectations impractical, then we may terminate this Agreement on
written notice to you and you will not pay us Liquidated Damages. If such taking, in our business judgment, does not require the termination of this Agreement, then you will make all necessary modifications to make the Hotel conform to its
condition, character and appearance immediately before such taking, according to Designs and Plans approved by us. You will take all measures to ensure that the resumption of normal operations at the Hotel is not unreasonably delayed. 

11.2 Casualty. 

11.2.1 You must immediately inform us if the Hotel is damaged by fire or other casualty. If the damage or repair requires closing the
Hotel, you may choose to repair or rebuild the Hotel according to the Standards, provided you: begin reconstruction within six (6) months after closing and reopen the Hotel for continuous business operations as soon as practicable (but in any
event no later than eighteen (18) months after the closing of the Hotel) and give us at least thirty (30) days’ notice of the projected date of reopening. Once the Hotel is closed, you will not promote the Hotel as a System Hotel or
otherwise identify the Hotel using any of the Marks without our prior written consent. 
 11.2.2 You and we each have the right to
terminate this Agreement if you elect not to repair or rebuild the Hotel as set forth above in Subsection 11.2.1, provided the terminating Party gives the other Party sixty (60) days written notice. We will not require you to pay Liquidated
Damages unless you or one of your Affiliates own and/or operate a hotel at the Hotel Site under a lease, license or franchise from a Competitor within three (3) years of the termination date in which case Liquidated Damages are owed as
applicable for a cancellation not associated with a termination at a permissible window. 
 11.3
No Extensions of Term. Nothing in this Section 
11 will extend the Term. 
 12.0 NOTICE OF INTENT TO MARKET 

Except in the case of a Transfer governed by Subsection 13.2.1 or 13.2.2 of this Agreement, if you or a Controlling Affiliate want to Transfer any Equity
Interest, you must give us written notice, concurrently with beginning your marketing efforts. 
 13.0 TRANSFERS

 13.1 Our Transfer. 

You acknowledge that we maintain a staff to manage and operate the System and that staff members can change as employees come and go. You represent that you
have not signed this Agreement in reliance on any particular shareholder, director, officer, member or employee remaining with us in that capacity. We may change our ownership or form and/or assign this Agreement or any interest therein and any
other agreement to a third party without restriction or notice to you. After our assignment of this Agreement to a third party who expressly assumes the obligations under this Agreement, we no longer will have any performance or other obligations
under this Agreement. 
 13.2 Your Transfer. You understand and acknowledge that the rights
and duties in this Agreement are personal to you and that we are entering into this Agreement in reliance on your business skill, financial capacity, and the personal character of you, your officers, directors, partners, members, shareholders or
trustees. A Transfer by you of any Equity Interest, or this Agreement, or any of your rights or obligations under this Agreement, or a Transfer by an Equity Owner is prohibited other than as expressly permitted herein. 

  
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 13.2.1 Transfers that Are Exempt from Transfer Limitations. The following
Transfers are exempt from transfer limitations if the Transferee, within thirty (30) days following the effective date of the change in equitable or lessee interest, completes and signs all forms then required by us, and pays to us all unpaid
dues, fees, assessments, and charges owed to us by the Transferor which are not then paid by the Transferor; and within such thirty (30) days, or under such more liberal schedules as we may determine, brings the Hotel to a condition which meets
all of our Standards, policies and requirements which would have been applicable to the Transferor. We may establish reasonable fees to cover our reasonable costs of any such transfer. 

13.2.1.1 Bona fide financing transactions not involving changes in actual control, such as mortgages, pledges and sale and leasebacks.

 13.2.1.2 Changes in the legal form of ownership, without an actual change in control, such as a transfer from individual owners
to a corporation where the sole owners of the stock of the corporation are the former individual owners. 
 13.2.1.3 A transfer of
equitable ownership or lessee interest (including interests transferred in trust) to a parent, spouse, brother, sister, child, stepchild or grandchild of the Transferor. 

13.2.1.4 On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased
Equity Owner may Transfer in accordance with such person’s will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person’s estate, provided that: (i) the transfer on death is to
an immediate family member or to a legal entity formed by such family member(s); and (ii) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee. 

13.2.1.5 A Transfer to a bona fide lender secured by the Hotel occasioned by a bona fide default, such as a mortgage foreclosure,
trustee’s sale, transfer in lieu of foreclosure or termination of the lease under a sale and leaseback. 
 13.2.1.6 Changes in
stock ownership of a corporation whose stock is publicly traded. 
 13.2.1.7 Issuance of new stock in a corporation or new limited
partnership interest in a limited partnership occurring prior to commencement of operation as a Hotel. 
 13.2.2 Permitted
Transfers of a Partial Interest that Require Notice. The following Transfer is permitted with prior written notice to us if the Permitted Transfer does not result in a change in Control of the Franchisee, the Hotel or the Hotel Site provided
that after the transaction: 
 13.2.2.1 Less than 50% of all Equity Interests in the Hotel or Franchisee will have changed hands
within a 12-month period. 
 13.2.3 Change of Ownership Transfer. Any proposed
Transfer that is not described in Subsection 13.2.1 or 13.2.2 is a Change of Ownership Transfer (formerly known as an “automatic transfer” under the membership program). You are required to provide sixty (60) days’ notice, unless
we agree otherwise, of any Change of Ownership Transfer. You consent to (i) our communication with any third party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer, and (ii) our
providing documents regarding the historical performance and condition of the hotel to the Transferee. 
 13.2.3.1 To be eligible
for a Change of Ownership Transfer, the following are required: 
 a) the Hotel must have received two (2) passing scores for the past
two (2) regular inspections; 

  
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 b) the Transferee must certify that the Transferor has provided the Transferee copies of
the last three (3) regular inspections, any and all BWI notices of probation or delinquency for the past twenty-four (24) months, and the then current design report; 

c) the Hotel is in compliance with the current design program; 

d) the Hotel is not past due of any conditions which would constitute a ground for default or cancellation; and 

e) the Transferor is not past due with regard to any and all financial obligations (e.g., dues, fees and assessments) to us. 

13.2.3.2 The Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date
of closing the Change of Ownership Transfer (“Closing”): 
 a) the Transferee submits a Change of Ownership Application,
pays our then current Change of Ownership Transfer Fee, executes our then-current form of new franchise agreement and all ancillary forms, including a guaranty from a third party acceptable to us, if required; 

b) you as Transferor are not in default of the Agreement or any other agreements with us or our Affiliates; 

c) you or the Transferee pay all amounts due to us and the Entities through the date of the Closing; 

d) you execute our then-current form of voluntary termination agreement, which may include a general release, covering termination of this
Agreement; 
 e) you conclude to our satisfaction, or provide adequate security for, any suit, action, or proceeding pending or threatened
against you, us or any Entity with respect to the Hotel, which may result in liability on the part of us or any Entity; 
 f) you, the
Transferee and/or Transferee Equity Owner(s) submit to us all information related to the Transfer that we require, including applications; 

g) the Transferee executes a new franchise agreement with us, noting the new franchise agreement will generally have the same terms and
conditions as the transferor’s franchise agreement, with the exception of discounted fees in certain circumstances (such fees being either: (A) with respect to the first transferee, as applicable, the lesser of (i) three and one-half percent (3.5%) of Property Room Revenue (“PRR”) for a transferee with former Best Western Members as of July 1, 2016 having a minimum fifty percent (50%) financial interest in the transferee
property; or (ii) a percentage of PRR equal to the fees paid by the transferor expressed as a percentage of the hotel’s PRR for the twelve (12) months prior to such transfer plus one percent (1%); and (B) with respect to any
subsequent transferee, the lesser of (i) three and one-half percent (3.5%) of PRR for a transferee with former Best Western Members as of July 1, 2016 having a minimum fifty percent (50%) financial
ownership interest in the transferee property; or (ii) then-current fees for new franchisees); 
 h) the Transferee is neither a
Sanctioned Person nor a Competitor; and, 
 i) you and your owners must sign our current form of general release. 

13.2.4 Public Offering or Private Placement. 

Any offering by you of Securities requires our review if you use the Marks, or refer to us or this Agreement in your offering. All materials
required by any Law for the offer or sale of those Securities must be submitted to 

  
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us for review at least sixty (60) days before the date you distribute those materials or file them with any governmental agency, including any materials to be used in any offering exempt
from registration under any securities laws. Any review will be subject to fees then charged at such time in the System. You must indemnify, defend and hold the Indemnified Parties free and harmless of and from any and all liabilities, costs,
damages, claims or expenses arising out of or related to the sale or offer of any of your Securities to the same extent as provided in Subsection 15 of this Agreement. 

13.2.5 Mortgages and Pledges to Lending Institutions. 

13.2.5.1 You or an equity owner may mortgage or pledge the Hotel or an equity interest to a lender that finances the acquisition,
development or operation of the hotel, without notifying us or obtaining our consent, if (i) you or the applicable equity owner are the sole borrower, and (ii) the loan is not secured by any other hotels or other collateral. You must
notify us of any other proposed mortgage or pledge. This Agreement may not be pledged as collateral. 
 13.2.5.2 We will evaluate
requests for “lender comfort letters” and issue any such document in a form satisfactory to us (e.g., which may include an estoppel and general release of claims). We charge a fee for the processing of a lender comfort letter. 

13.2.6 Commercial Leases. You may lease or sublease commercial space in the Hotel, or enter into concession arrangements for
operations in connection with the Hotel, in the ordinary course of business, subject to our right to review and approve the nature of the proposed business and the proposed brand and concept, all in keeping with our Standards for System Hotels. 

14.0 TERMINATION 

14.1 Termination with Opportunity to Cure. We may terminate this Agreement at any time before
its expiration under one (1) or more of the following conditions by providing written notice to you and affording you a hearing before the Board such that you can show cause why this Agreement should not be terminated: 

14.1.1 failure to pay dues or other Fees, rentals, charges or assessments within the time set by this Agreement. 

14.1.2 failure to comply with the terms and conditions or to meet the standards as set forth in this Agreement or the Manual, to
include but not limited to: 
 14.1.2.1 receipt of two (2) consecutive inspection scores or Guest Rooms/Public Areas Condition
Report scores which are below 800 points; or 
 14.1.2.2 receipt of two (2) inspection scores or Guest Rooms/Public Areas
Condition Report scores less than 800 points during any eighteen (18) month period; or 
 14.1.2.3 receipt of three
(3) inspection scores or Guest Rooms/Public Areas Condition Report scores less than 800 points during any twenty-four (24) month period; or 

14.1.2.4 receipt of a single inspection score or Guest Rooms/Public Areas Condition Report scores less than 600 points. 

14.1.3 failure to operate, manage or maintain the System Hotel in such a way as to effect credit to us, BWI, and the System Hotels.

 When grounds exist to terminate the Agreement, the Board or its designee may in its sole discretion afford a cure period or “conditional
extension.” During any such cure period we may delay termination but suspend the Hotel 

  
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from the reservation service and any reservation and/or website services provided through or by us, and divert reservations for your Hotel to other System Hotels; remove the listing of the Hotel
from any advertising we publish; disable all or any part of the software provided to you and/or may suspend any one (1) or more of the information technology and/or network services that we provide or support; and charge you for costs related
to suspending or disabling your right to use any software systems or technology we provided to you, together with intervention or administration fees. During any such restriction, full Fees continue to be due and payable. 

14.2 Immediate Termination by Us. This Agreement may be terminated by us immediately (or at the
earliest time permitted by applicable law) if: 
 14.2.1 the Hotel is leased or subleased; 

14.2.2 a lease of the Hotel terminates; 

14.2.3 if the Hotel is not leased, a change occurs of fifty percent (50%) or more of the equitable ownership of the System Hotel within
a 12-month period; 
 14.2.4 a change occurs of fifty percent (50%) or more of the equitable
ownership of a leasehold interest within a 12-month period; 
 14.2.5 if the Hotel is not
leased, a change occurs of fifty percent (50%) or more of the equitable ownership of the entity or entities owning the Hotel within a 12-month period; 

14.2.6 a change occurs of fifty percent (50%) or more of the equitable ownership of the entity or entities leasing the Hotel within a 12-month period; 
 14.2.7 a term or condition is not met, after the Board, having provided you
with an opportunity for a hearing, has found grounds exist for termination of this Agreement and you have not cured the default within the specified time period; 

14.2.8 you fail to maintain and provide proof of insurance coverage as required by the Manual; 

14.2.9 you do not meet a term or condition whose application was approved by the Board with specific requirements and time frames for
compliance and you have been advised that failure to meet any of these requirements will be grounds for automatic termination. 

14.2.10 you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the
Marks; 
 14.2.11 you or any Equity Owner with a controlling Equity Interest are or have been convicted of a felony or any other
offense or conduct, if we determine in our business judgment it is likely to adversely reflect on or affect the Hotel, the System, us and/or any Entity; 

14.2.12 you conceal revenues, maintain false books and records of accounts, submit false reports or information to us or otherwise
attempt to defraud us; 
 14.2.13 you, your Affiliate or Guarantor become a Competitor; 

14.2.14 you Transfer any interest in yourself, this Agreement, the Hotel or the Hotel Site, other than in compliance with this
Agreement; 
 14.2.15 you, your Affiliate or Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person
or fail to comply with the provisions of Subsection 17.15; 

  
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 14.2.16 your Guarantor breaches its guaranty to us; or 

14.2.17 a threat or danger to public health, welfare or safety results from the construction, maintenance, or operation of the Hotel.

 14.3 Suspension Interim Remedies. If you are in default of this Agreement, we may elect to
impose an interim remedy, including the suspension of our obligations under this Agreement and/or our or the Entities’ obligations under any other of Your Agreements. 

14.4 Liquidated Damages on Termination. 

14.4.1 Liquidated Damages. You acknowledge and agree that the premature termination of this Agreement will cause substantial damage to
us. You agree that Liquidated Damages are not a penalty, but represent a reasonable estimate of the minimum just and fair compensation for the damages we will suffer as the result of your failure to operate the Hotel for the Term. 

14.4.2 Calculation of Liquidated Damages. If this Agreement terminates before the Expiration Date, other than by you as permitted on
November 30, 2020 or November 30, 2021, having provided required written notice to us by August 31, 2020 and August 31, 2021 respectively, you will pay Liquidated Damages to us as follows: 

The sum of the prior twelve (12) months: (i) Per Room Monthly Fees or Room Revenue Monthly Fees (as applicable); (ii) Advertising
Assessments; and (iii) Marketing and Technology Fees, divided by twelve (12) and then multiplied by twenty-four (24). Additionally, if a development incentive was received, repayment to us of a pro rata amount of the development incentive
based upon the number of months remaining in the Agreement’s term. 
 14.4.3 Payment of Liquidated Damages. Payment of Liquidated
Damages is due on the date of the termination of this Agreement. 
 14.5 Your Obligations on
Termination or Expiration. On termination or expiration of this Agreement, you will: 
 14.5.1 immediately upon termination or
expiration of this Agreement, and on any later date that we determine the amounts due to us, you shall pay us all amounts owed to us (and our affiliates) which then are unpaid; 

14.5.2 immediately cease operating the Hotel as a System Hotel and cease using the System; 

14.5.3 immediately cease using the Marks, the Trade Name, and any confusingly similar names, marks, trade dress systems, insignia,
symbols, or other rights, procedures, and methods. You will deliver all goods and materials containing the Marks to us and we will have the sole and exclusive use of any items containing the Marks. You will immediately make any specified changes to
the location as we may reasonably require for this purpose, which will include removal of the signs, custom decorations, and promotional materials. You agree, at your expense, to take the action required to cancel all fictitious or assumed name or
equivalent registrations relating to your use of any Marks; 
 14.5.4 immediately cease representing yourself as then or formerly a
System Hotel or affiliated with the Brand; 
 14.5.5 immediately return all copies of the Manual and any other Proprietary
Information to us; 
 14.5.6 immediately cancel all assumed name or equivalent registrations relating to your use of any Mark, notify
the telephone company and all listing agencies and directory publishers including Internet domain 

  
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name granting authorities, Internet service providers, global distribution systems, and web search engines of the termination or expiration of your right to use the Marks, the Trade Name, and any
telephone number, any classified or other telephone directory listings, Internet domain names, uniform resource locators, website names, electronic mail addresses and search engine metatags and keywords associated with the Hotel, and authorize their
transfer to us; 
 14.5.7 irrevocably assign and transfer to us (or to our designee) all of your right, title and interest in any
domain name listings and registrations that contain any reference to our Marks, System, or Brand; notify the applicable domain name registrars of the termination of your right to use any domain name or Sites associated with the Marks or the Brand;
and authorize and instruct the cancellation of the domain name, or transfer of the domain name to us (or our designee), as we specify. You will also delete all references to our Marks, System, or Brand from any Sites you own, maintain or operate
beyond the expiration or termination of this Agreement; and 
 14.5.8 you agree to give us, within thirty (30) days after the
expiration or termination of this Agreement, evidence satisfactory to us of your compliance with these obligations. 
 15.0
INDEMNITY 
 15.1 Your Indemnification Obligation.
Beginning on the Effective Date, you agree to indemnify, defend, and hold harmless us, our Affiliates, and our and their respective shareholders, members, directors, officers, employees, agents, successors, assignees and insurers (the
“Indemnified Parties”) against, and to reimburse any one (1) or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly (i) arising out of any breach by you or any third parties of
this Agreement, Laws, the Manual or the Standards, (ii) the Hotel’s operation, employment matters and the business you conduct under this Agreement (including, without limitation, any claimed occurrence at the Hotel including personal
injury, death or property damage), (iii) your alleged or actual infringement or violation of any patent, Mark or copyright or other proprietary right owned or controlled by third parties, or (iv) your breach of this Agreement, including,
without limitation, those alleged to be or found to have been caused by the Indemnified Party’s negligence, unless (and then only to the extent that) the claims, obligations, or damages are determined to be caused solely by our gross negligence
or willful misconduct in a final, unappealable ruling issued by a court or arbitrator with competent jurisdiction. You agree to give us and the Indemnified Parties written notice of any action, suit, proceeding, claim, demand, inquiry or
investigation that could be the basis for a claim for indemnification by any of the Indemnified Parties within three (3) days of your actual or constructive knowledge of it. The Indemnified Parties shall have the right, in their sole discretion
to: (a) retain counsel of their own choosing to represent them with respect to any claim; and (b) control the response thereto and the defense thereof, including the right to enter into settlements or take any other remedial, corrective,
or other actions. You agree to give your full cooperation to the Indemnified Parties in assisting the Indemnified Parties with the defense of any such claim, and to reimburse the Indemnified Parties for all of their costs and expenses in defending
any such claim, including court costs and reasonable attorneys’ fees, within ten (10) days of the date of each invoice delivered by the Indemnified Parties to you enumerating such costs, expenses and attorneys’ fees. 

15.2 “Claims” Defined. For purposes of this indemnification,
“claims” include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including, without limitation, reasonable accountants’,
arbitrators’, attorneys’, and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation, arbitration, or alternative dispute resolution, regardless of whether
litigation, arbitration, or alternative dispute resolution is commenced. 
 15.3 Recovery Rights
of Indemnified Parties. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement’s expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third party,
or otherwise mitigate its or their losses and 

  
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expenses, in order to maintain and recover from third parties fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or mitigate a loss will not reduce
or alter the amounts that an Indemnified Party may recover from you under this subparagraph. Your or any of the other Indemnified Parties’ undertaking of defense and/or settlement will in no way diminish your obligation to indemnify us and the
other Indemnified Parties and to hold us and any of the Indemnified Parties harmless. 
 15.4
Survival of Obligations. Your obligations under this Section 15 will survive expiration or termination of this Agreement. 

16.0 RELATIONSHIP OF THE PARTIES 

16.1 No Agency or Joint Employer Relationship. You are an independent contractor and this
Agreement does not create a fiduciary, agency, partnership, joint venture, joint employer, employment or similar relationship. Neither party is the legal representative nor agent of, or has the power to obligate (or has the right to direct or
supervise the daily affairs of) the other for any purpose whatsoever. You acknowledge and agree, and will never contend otherwise, that you alone will exercise
day-to-day control over all operations, activities and elements of the Hotel and that under no circumstance shall we do so or be deemed to do so. You further acknowledge
and agree, and will never contend otherwise, that the various requirements, restrictions, prohibitions, specifications and procedures of the System which you are required to comply with under this Agreement, whether set forth in the Standards or
otherwise, do not directly or indirectly constitute, suggest, infer or imply that we control any aspect or element of the day-to-day operations of you or the Hotel,
which you alone control, but only constitute standards you must adhere to when you are exercising control of the day-to-day operations of the Hotel. 

You acknowledge and agree that we have no control (direct or indirect) over, or responsibility for, any decision related to or affecting the
employment or supervision of any person employed at or providing services in connection with the Hotel, including but not limited to recruitment, hiring, termination, discipline, supervision, performance evaluation, payroll, setting of wages,
schedules, workflow, qualifications, or productivity; the maintenance of personnel records; the provision of employment benefits; employee taxes; or the assignment of responsibilities. 

16.2 Notices to Public Concerning Your Independent Status. All contracts for the Hotel’s
operations and services at the Hotel will be in your name or in the name of your management company. You will not enter into or sign any contracts in our name or any Entity’s name or using the Marks or any acronyms or variations of the Marks.
You will disclose in all dealings with the public, suppliers and third parties that you are an independent entity and that we have no liability for your debts. 

17.0 MISCELLANEOUS 

17.1 Severability and Interpretation. 

17.1.1 Except as expressly provided to the contrary in this Agreement, each section, paragraph, term, and provision of this Agreement
is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency, or tribunal with competent
jurisdiction, that ruling will not impair the operation of, or otherwise affect, any other portions of this Agreement, which will continue to have full force and effect and bind the parties. 

17.1.2 If any covenant which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of area, business
activity prohibited, and/or length of time, but would be enforceable if modified, you and we agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law
determines the covenant’s validity. 

  
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 17.1.3 If any applicable and binding law or rule of any jurisdiction requires more
notice than this Agreement requires, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any Standard is invalid, unenforceable, or unlawful, the notice and/or other action required by the law
or rule will be substituted for the comparable provisions of this Agreement, and we may modify the invalid or unenforceable provision or Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety.
You agree to be bound by any promise or covenant imposing the maximum duty the law permits which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement. 

17.1.4 This Agreement will be interpreted without interpreting any provision in favor of or against either Party by reason of the
drafting of the provision, or either of our positions relative to the other. 
 17.1.5 Any covenant, term or provision of this
Agreement that provides for continuing obligations after the expiration or termination of this Agreement will survive any expiration or termination. 

17.2 Governing Law, Jurisdiction and Venue. 

17.2.1 The Parties agree that, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C. 11 1050
et seq.), as amended, this Agreement will be governed by the laws of the State of Arizona without recourse to Arizona choice of law or conflicts of law principles. Nothing in this Section is intended to invoke the application of any franchise,
business opportunity, antitrust, “implied covenant,” unfair competition, fiduciary or any other doctrine of law of the State of Arizona or any other state that would not otherwise apply absent this Subsection 17.2.1. 

17.2.2 UNLESS WAIVED BY US IN WHOLE OR IN PART, THE COURTS LOCATED IN PHOENIX, ARIZONA, STATE OR FEDERAL, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ALL CLAIMS, DISPUTES AND ACTIONS ARISING FROM OR RELATED TO THIS AGREEMENT, ANY APPLICATION OR TO ANY RELATIONSHIP BETWEEN THE PARTIES HERETO AND VENUE SHALL BE IN THE COURTS LOCATED IN PHOENIX, ARIZONA. EACH PARTY
HERETO EXPRESSLY CONSENTS AND SUBMITS TO THE JURISDICTION OF SAID COURTS AND TO VENUE BEING IN PHOENIX, ARIZONA. 
 17.3 
Waiver of Jury Trial and Punitive Damages 
 EXCEPT FOR YOUR OBLIGATION TO INDEMNIFY US FOR THIRD PARTY CLAIMS UNDER THIS AGREEMENT AND EXCEPT
FOR PUNITIVE DAMAGES AVAILABLE TO EITHER PARTY UNDER FEDERAL LAW, WE AND YOU (AND YOUR OWNERS) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES AGAINST THE OTHER AND AGREE THAT,
IN THE EVENT OF A DISPUTE BETWEEN US AND YOU, THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS. WE AND YOU IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM,
WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER OF US. 
 17.4 Exclusive Benefit. 

This Agreement is exclusively for our and your benefit, and none of the obligations of you or us in this Agreement will run to, or be
enforceable by, any other party (except for any rights we assign or delegate to one of the Entities or covenants in favor of the Entities, which rights and covenants will run to and be enforceable by the Entities or their successors and assigns) or
give rise to liability to a third party, except as otherwise specifically set forth in this Agreement. 

  
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 17.5 Entire Agreement. This Agreement and all
of its attachments, documents, schedules, exhibits, and any other information specifically incorporated into this Agreement by reference (including any representations in any franchise disclosure document that we provided to you for the Brand in
connection with the offer of this Agreement) will be construed together as the entire agreement between you and us with respect to the Hotel and any other aspect of our relationship and will supersede and cancel any prior and/or contemporaneous
discussions or writings between you and us. 
 17.6 Amendment and Waiver. 

17.6.1 No change, termination, or attempted waiver or cancellation of any provision of this Agreement will bind us unless it is in
writing, specifically designated as an amendment or waiver, and signed by one (1) of our officers. We may condition our agreement to any amendment or waiver on receiving from you, in a form satisfactory to us, an estoppel and general release of
claims that you may have against us, the Entities, and related parties. 
 17.6.2 Any waiver by us of a breach of any provision of
this Agreement, or of any breach of any other requirement or policy of ours, shall not operate or be construed as a waiver of any subsequent breach thereof. Any delay by us of enforcement of obligations shall not be deemed to be a waiver of the
Entities’ right to enforce the obligation. 
 17.7 Consent; Business Judgment. 

17.7.1 Wherever our consent or approval is required in this Agreement, unless the provision specifically indicates otherwise, we have
the right to withhold our approval at our option, in our business judgment, taking into consideration our assessment of the long-term interests of the System overall. We may withhold any and all consents or approvals required by this Agreement if
you are in default or breach of this Agreement. Our approvals and consents will not be effective unless given in writing and signed by one of our duly authorized representatives. 

17.7.2 You agree not to make a claim for money damages based on any allegation that we have unreasonably withheld or delayed any
consent or approval to a proposed act by you under the terms of this Agreement. You also may not claim damages by way of set-off, counterclaim or defense for our withholding of consent. Your sole remedy for
the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory judgment. 

17.8 Notices. All notices provided for under this Agreement must be in writing and must be
delivered in person, by prepaid overnight commercial delivery service, or by prepaid overnight mail, registered or certified, with return-receipt requested. Any notice given to us under this Agreement shall be given in writing to BWI Licensing,
Inc., 6201 North 24th Parkway, Phoenix, Arizona 85016-2023, Attention: Legal Department, or such other location as may be specified by us. We will send notices to your address set forth in the
Addendum. If you want to change the name or address for notice to you, you must do so in writing, signed by you or your duly authorized representative, designating a single address for notice. Notice will be deemed effective on the earlier of: 1)
receipt or first refusal of delivery; 2) one (1) day after posting if sent via overnight commercial delivery service or overnight United States Mail; or 3) three (3) days after placement in the United States mail if overnight delivery is
not available to the notice address. Email correspondence shall not constitute a notice, consent, approval or other communication under this Agreement. Notwithstanding the foregoing, we may provide you with routine information, invoices, the Manual
and information regarding any other System requirements and/or programs and any changes to them, by regular mail, email, fax or by making them available to you on the internet, an extranet or other forms of digital media. 

17.9 General Release. With the exception of claims related to representations contained in the
franchise disclosure document for the Brand, you, on your own behalf and on behalf of, as applicable, your officers, 

  
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directors, managers, employees, heirs, administrators, insurers, executors, agents and representatives and their respective successors and assigns hereby release, remise, acquit and forever
discharge us and the Entities and our and their respective officers, directors, employees, managers, agents, representatives and their respective successors and assigns from any and all actions, claims, causes of action, suits, rights, debts,
liabilities, accounts, agreements, covenants, contracts, promises, warranties, judgments, executions, demands, damages, costs and expenses, whether known or unknown at this time, of any kind or nature, absolute or contingent, existing at law or in
equity, on account of any matter, cause or thing whatsoever that has happened, developed or occurred relating to this Agreement or the relationship between you and us. This release will survive the termination of this Agreement. 

17.10 Remedies Cumulative. The remedies provided in this Agreement are cumulative. These
remedies are not exclusive of any other remedies that you or we may be entitled to in case of any breach or threatened breach of the terms and provisions of this Agreement. 

17.11 Limitations of Damages. 

17.11.1 You, on your own behalf and on behalf of, as applicable, your officers, directors, managers, employees, heirs, administrators,
insurers, executors, agents and representatives and their respective successors and assigns hereby agree that you shall have no recourse of any kind against us and the Entities and our and their respective officers, directors, employees, managers,
agents, insurers, representatives and their respective successors and assigns for failure to activate the Hotel in our System unless you have strictly, absolutely, and timely complied with each and every requirement imposed upon you by us, to
include but not limited to those contained in this Agreement to our satisfaction. You agree that your sole remedy shall be limited to actual damages, which shall in no event exceed the Annual Dues for the most recent year. 

17.11.2 You agree that if information related to the Hotel is omitted from the System or a material error occurs in any Hotel listing
on the System through our fault, your sole remedy shall be the refund, without interest, of the Annual Dues you paid for that single fiscal year during which such omission or error occurred. We shall have no other liability in connection with or
related to our providing reservation services or listings. 
 17.11.3 You agree that you shall be limited to recovery of actual
damages for any breach or default by us of any obligation or duty owed to you, and you further agree that our liability for any damages shall be limited to the amount of Monthly Fees actually paid by you in connection with the Hotel and this
Agreement during the single fiscal year in which the breach or default occurred. 
 17.12
Economic Conditions Not a Defense. Neither general economic downturn or conditions nor your own financial inability to perform the terms of this Agreement will be a defense to an action by us or one of the
Entities for your breach of this Agreement. 
 17.13 Representations and Warranties. You
warrant, represent and agree that all statements in your franchise application in anticipation of the execution of this Agreement, and all other documents and information submitted to us by you or on your behalf are true, correct and complete as of
the date of this Agreement. You further represent and warrant to us that: 
 17.13.1 you have independently investigated the risks of
operating the Hotel under the Brand, including current and potential market conditions and competitive factors and risks, and have made an independent evaluation of all such matters and reviewed our franchise disclosure document, if applicable; 

17.13.2 neither we nor our representatives have made any promises, representations or agreements other than those provided in this
Agreement or in our franchise disclosure document provided to you in connection with the offer of this Agreement, if applicable, and you acknowledge that you are not relying on any promises, representations or agreements about us or the franchise
not expressly contained in this Agreement in making your decision to sign this Agreement; 

  
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 17.13.3 you have the full legal power authority and legal right to enter into this
Agreement; 
 17.13.4 this Agreement constitutes a legal, valid and binding obligation and your entry into, performance and
observation of this Agreement will not constitute a breach or default of any agreement to which you are a party or of any Law; 

17.13.5 if you are a corporation, limited liability company, or other entity, you are, and throughout the Term will be, duly formed and
validly existing, in good standing in the state in which you are organized, and are and will be authorized to do business in the state in which the Hotel is located; and 

You hereby indemnify and hold us harmless from any breach of these representations and warranties. These warranties and representations will survive the
termination of this Agreement. 
 17.14 Counterparts. This Agreement may be signed in
counterparts, each of which will be considered an original. 
 17.15 Sanctioned Persons and
Anti-bribery Representations and Warranties. 
 17.15.1 You represent, warrant and covenant to us and the Entities, on a
continuing basis, that: 
 17.15.1.1 you (including your directors and officers, senior management and shareholders (or other
Persons) having a controlling interest in you), and any Controlling Affiliate of the Hotel or the Hotel Site are not, and are not owned or controlled by, or acting on behalf of, a Sanctioned Person or, to your actual knowledge, otherwise the target
of Trade Restrictions; 
 17.15.1.2 you have not and will not obtain, receive, transfer or provide any funds, property, debt,
equity, or other financing related to this Agreement and the Hotel or Hotel Site to/from a Person that qualifies as a Sanctioned Person or, to your actual or constructive knowledge, is otherwise the target of any applicable Trade Restrictions; 

17.15.1.3 you are familiar with the provisions of applicable Anti-Corruption Laws and shall comply with applicable Anti-Corruption
Laws in performance of your respective obligations under or in connection with this Agreement; 
 17.15.1.4 any funds received or
paid in connection with entry into or performance of this Agreement have not been and will not be derived from or commingled with the proceeds of any activities that are proscribed and punishable under the criminal laws of the United States, and
that you are not engaging in this transaction in furtherance of a criminal act, including acts in violation of applicable Anti-Corruption Laws; 

17.15.1.5 in preparation for and in entering into this Agreement, you have not made any Improper Payment or engaged in any acts or
transactions otherwise in violation of any applicable Anti-Corruption Laws, and, in connection with this Agreement or the performance of your obligations under this Agreement, you will not directly or indirectly make, offer to make, or authorize any
Improper Payment or engage in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws; 
 17.15.1.6
except as otherwise disclosed in writing to us, neither you, nor any of your direct or indirect shareholders (including legal or beneficial shareholders), officers, directors, employees, agents or other Persons designated by you to act on your
behalf or receive any benefit under this Agreement, is a Government Official. Furthermore, no Government Official has or will have any existing or inchoate legal or beneficial interest in this Agreement or any payments to be made under this
Agreement. You will notify us immediately in writing in the event of a change in the Government Official status of any such Persons; 

  
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 17.15.1.7 any statements, oral, written, electronic or otherwise, that you submit to
us or to any third party in connection with the representations, warranties, and covenants described in this Subsection 17.15 are truthful and accurate and do not contain any materially false or inaccurate statements; 

17.15.1.8 you will make reasonable efforts to assure that your respective appointed agents in relation to this Agreement comply in all
material respects with the representations, warranties, and covenants described in this Subsection 17.15; and 
 17.15.2 You will
notify us in writing immediately on the occurrence of any event which would render the foregoing representations and warranties of this Subsection 17.15 incorrect. 

17.16 Attorneys’ Fees and Costs. If we incur costs and expenses due to your
failure to pay when due amounts owed to us, to submit when due any reports, information, or supporting records, or otherwise to comply with this Agreement, you agree, whether or not we initiate a formal legal proceeding, to reimburse us for all of
the costs and expenses that we incur, including, without limitation, reasonable accounting, attorneys’, arbitrators’, and related fees. 

17.17 Interest. Any sum owed to us or the Entities by you or paid by us or the Entities on your
behalf will bear interest from the date due until paid by you at the rate of eighteen percent (18%) per annum or, if lower, the maximum lawful rate. 

17.18 Successors and Assigns. The terms and provisions of this Agreement will inure to the
benefit of and be binding on the permitted successors and assigns of the Parties. 
 17.19 Our
Delegation of Rights and Responsibility. You agree that we have the right to delegate the performance of any portion or all of our obligations under this Agreement to third-party designees, whether these
designees are our agents or independent contractors with whom we have contracted to perform these obligations. If we do so, such third-party designees will be obligated to perform the delegated functions for you in compliance with this Agreement.

  
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 ADDENDUM TO FRANCHISE AGREEMENT 

 

					
	Date:	  	  

			
	Effective Date:	  	December 1, 2019	  	
		
	Facility Number:	  	  

			
	Franchisor Name:	  	BWI Licensing, Inc., an Arizona Corporation	  	
		
	Brand:	  	  

		
	Initial Approved Hotel Name (Trade Name):	  	  

		
	Franchisee Name and Address (Attn:	  	  

	Voting Representative):	  	  

		
	Address of Hotel:	  	  

	Initial Number of Approved Guest Rooms:	  	  

			
		
	Required Opening Date:	  	December 1, 2019
		
	Expiration Date:	  	The Later of November 30, 2031 or the Expiration Date of the prior Membership Agreement
		
	 Application Fee
  

Initial Franchise Fee:
  

Annual Dues:
	  	 None
  

None
  

$1,888 for 20 rooms plus:
 $63.47 per room for 21 to 50
rooms;
 $24.68 per room for 51 to 400 rooms; and

$2.47 per room for rooms over 401 rooms.
  

*  The Board may increase Annual Dues no more than once per fiscal year. No such annual increase shall
exceed the lesser of (i) five percent (5%), or (ii) the rate of inflation of the previous year as measured by the U.S. Bureau of Labor Statistics Consumer Price Index (all items for all urban areas), unless a majority of all franchisees
vote to approve a greater increase.

		
	Monthly Fees (either the “Per Room Monthly Fee” or the “Room Revenue Monthly Fee” depending on the prior Membership Agreement between the parties):	  	 Per Room Monthly Fee consists of (i) the Fixed Fee, and (ii) the Reservation
Fee.
  
 Fixed Fee

 
 $1.66 per room per day for first 25 rooms plus:

$1.52 per room per day for 26 to 50 rooms;
 $1.39 per
room per day for 51 to 100 rooms;
 $1.36 per room per day for 101 to 150 rooms;

$1.32 per room per day for 151 to 400 rooms; and
 $1.32
per room per day for ten percent (10%) of rooms over 400.

  
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 Reservation Fee

 
 If Franchisee was a Best Western member from December 1, 2017 through
November 30, 2018, the Reservation Fee will be based on the number of room nights sold through the reservation system for that twelve (12) month period as a percentage of all Best Western net room nights sold times the Best Western total
reservation fees.
  
 If the Franchisee was not a Best Western member
December 1, 2017 through November 30, 2018, the Reservation Fee will be $0.16 per room per day up to and including 400 rooms and $0.16 per room per day for ten percent (10%) of the rooms over 400 rooms.

 
 *  The Board may increase Per Room
Monthly Fees no more than once per fiscal year. No such annual increase shall exceed the lesser of (i) five percent (5%), or (ii) the rate of inflation of the previous year as measured by the U.S. Bureau of Labor Statistics Consumer Price
Index (all items for all urban areas), unless a majority of all System Hotels vote to approve a greater increase.
  

Or,
  

		  	 Room Revenue Monthly Fee
  

If as a Best Western member you did not qualify for the Per Room Monthly Fee, the Room Revenue Monthly Fee is the same percent of Property Room Revenue
(PRR) as stated in your prior Membership Agreement.

		
	Advertising Assessment:	  	 $13.07 per room per month
  

*  The Board has the authority to increase the Advertising Assessment once each fiscal year, with no such
increase exceeding the greater of (i) two percent (2%) of the prior year’s assessment, or (ii) the rate of inflation for the previous year as measured by the U.S. Bureau of Labor Statistics Consumer Price Index (all items for all
urban areas).
  

	Marketing and Technology Fees:	  	 December 1, 2018: 1.23% of Property Room Revenue (comprised of the sum of the Sales and Marketing Assessment of 0.4% of Property Room
Revenue, the Technology Assessment of 0.5% of Property Room Revenue and the Technology and Marketing Assessment of 0.33% of Property Room Revenue).
  

December 1, 2019: 1.56% of Property Room Revenue (comprised of the sum of the Sales and Marketing Assessment of 0.4% of Property Room Revenue, the
Technology Assessment of 0.5% of Property Room Revenue and the Technology and Marketing Assessment of 0.66% of Property Room Revenue).

  
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 January 1, 2020: 1.66% of Property Room Revenue (comprised of
the sum of the Sales and Marketing Assessment of 0.5% of Property Room Revenue, the Technology Assessment of 0.5% of Property Room Revenue and the Technology and Marketing Assessment of 0.66% of Property Room Revenue).

		
		  	December 1, 2020: 2.00% of Property Room Revenue (comprised of the sum of the Sales and Marketing Assessment of 0.5% of Property Room Revenue, the Technology Assessment of 0.5% of Property Room Revenue and the Technology and
Marketing Assessment of 1.00% of Property Room Revenue).
		  	  
 January 1, 2022: 2.10% of Property Room Revenue (comprised of
the sum of the Sales and Marketing Assessment of 0.6% of Property Room Revenue, the Technology Assessment of 0.5% of Property Room Revenue, and the Marketing and Technology Assessment of 1.00% of Property Room Revenue).

 Additional Requirements/Special Provisions:
                                         
                                    

Your Property Type:
                                         
                            

Your Property Market:
                                         
                         
  

			
	Area of Protection Provision:	  	See Exhibit 1, unless otherwise agreed to by the Parties in the prior Membership Agreement
		
	Impact Rights:	  	See Exhibit 2, unless otherwise agreed to by the Parties in the prior Membership Agreement

 OTHER APPLICABLE TERMS: 

  
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 IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date. 

 

									
	FRANCHISEE:	 		 	FRANCHISOR:
			
	 [INSERT FRANCHISEE ENTITY], a

[INSERT TYPE OF ENTITY]
	 		 	BWI Licensing, Inc., an Arizona Corporation
					
	By:	 	  
	 		 	By:	 	  

	Name:	 	  
	 		 	Name:	 	  

	Title:	 	  
	 		 	Title:	 	  

	Executed On:	 	  
	 		 	Executed On:	 	  

  
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Table of Contents

 SCHEDULE 1 

Your Ownership Structure: 
  

					
	 Name (Shareholder, Partner, Member and
Manager)
	 	 Nature of Ownership Interest
	 	 % Interest

	                        	 	                            	 	                        
	  
	 	  
	 	  

		 		 	
	  
	 	  
	 	  

  
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 SCHEDULE 2 

Ownership Structure of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: 

 

					
	 Name (Shareholder, Partner, Member and
Manager)
	 	 Nature of Ownership Interest
	 	 % Interest

	                        	 	                        	 	                        
	  
	 	  
	 	  

		 		 	
	  
	 	  
	 	  

  
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Table of Contents

 Exhibit 1 

Area of Protection Provision 
 Area
of Protection Provision 
 If you are a “Qualified Hotel” as defined below, neither we nor any of our affiliates will open,
or allow to open, a System Hotel of the Brand(s) designated under the heading “Area of Protection Radius Rules 1 through 7,” below, within a circular area around your Hotel, whose radius is measured from the center of the main entrance of
the lobby and is of a length determined by the (i) Area of Protection Radius Chart below and (ii) Area of Protection Radius Rules 1 through 7 below (the “Area of Protection”). 

 

	 	A	 “Qualified Hotel” is a System Hotel that: 

 

	 	2.	 Is current on all dues, fees and assessments and has not been sixty (60) days past due on any of its dues,
fees, or assessments twice within the last twelve (12) months; 

  

	 	3.	 Its most recent three (3) quality assurance scores, or such lesser number of scores if the Hotel has not
yet received three (3) quality assurance scores, average at least fifty (50) points higher than the passing level as defined in the Manual; 

  

	 	4.	 Is not past due in meeting any conditions or requirements which would constitute grounds for cancelling the
Franchise Agreement; an 

  

	 	5.	 Is not a BW Signature Collection® hotel or a BW
Premier Collection® hotel. 

 Area of Protection Radius Chart 

Subject to Rule 1 through 7 below, Area of Protection radius protections are as follows: 

 

							
	 Property Type
	  	Primary
Market	  	Secondary
Market	  	Tertiary
Market
	 Airport
	  	1 Mile	  	2 Miles	  	4 Miles
	 Intown, Downtown, Urban
	  	0.25 Miles	  	1.25 Miles	  	3 Miles
	 Highway
	  	1.5 Miles	  	3 Miles	  	5 Miles
	 Resort
	  	1 Mile	  	2 Miles	  	4 Miles
	 Suburban
	  	1.5 Miles	  	2.5 Miles	  	4 Miles

 If a System Hotel applicant would be within the Area of Protection radius protection of an existing System Hotel, the Board
may alter the Area of Protection radius protection to equitably account for obstacles or barriers (e.g., mountains, lakes and major airports) that materially affect travel time or travel distance between a System Hotel and a System Hotel applicant,
although the existing System Hotel could request an Impact Analysis as described in Exhibit 2. 

  
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Table of Contents

 Area of Protection Radius Rules 1 through 7 

With regard to applying the above Area of Protection radius protections to a Qualified Hotel, System Hotels shall be divided into the following color-coded
categories (“Category” or “Categories”) for purposes of applying Rules 1 through 7: 
  

 
 Midscale Best Western SureStay Brands Upper Midscale Best Western Plus BW Signature Collection Executive
Residency by Best Western GLo Aiden Upscale Boutique Vib Sadie Upscale Best Western Premier BW Premier Collection 
 Rule 1:
System Hotels of the Brands in the same Category will have full Area of Protection radius protection with respect to System Hotels in the same Category. For example, a Best Western System Hotel will have full Area of Protection radius protection
from a Best Western or SureStay System Hotel as both Brands are in the same “blue” Category. Accordingly, if an existing Best Western System Hotel is in a suburban, primary market, a Best Western or SureStay System Hotel could not open
within 1.5 miles (see Area of Protection Radius Chart above). 
 Rule 2: System Hotels of the Brands in the blue and green
Categories will have one-half (1/2) of the Area of Protection radius protection with respect to System Hotels of the Brands in the other color Category (i.e., blue or green, respectively). For example, a Best
Western Plus System Hotel (green Category) will have one half (1/2) the Area of Protection radius protection from a Best Western System Hotel (blue Category) and vice versa. Accordingly, if a Best Western Plus System Hotel is in a resort, secondary
market, a Best Western could not open within 1 mile (see Area of Protection Radius Chart above). 
 Rule 3: System Hotels of
the Brands in the blue and green Categories will not have any Area of Protection radius protection from System Hotels of the Brands in the orange and red Categories. For example, a Vīb could be placed next to a Best Western System Hotel,
although the Best Western System Hotel may request an Impact Analysis as described in the section below. 
 Rule 4: System
Hotels of the Brands in the orange and red Categories do not have Area of Protection radius protection against any System Hotel in a different color Category, although they may request an Impact Analysis as described in the section below. 

Rule 5: Despite Rules 1, 2 and 3 above, if you operate a System Hotel under the Best Western Brand: (i) in a tertiary
market; (ii) with a city population of less than 15,000; and (iii) fewer than five (5) hotels that are listed in Smith Travel Research in the city, you will have full Area of Protection radius protection from all System Hotels in
every color Category. 
 Rule 6: If a Best Western branded hotel converts to a SureStay branded hotel, the Area of Protection
radius protection will not apply to the SureStay branded hotel, which will instead have any protections granted to it as a SureStay branded hotel. 

  
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 Rule 7: BW Signature
Collection®, BW Premier Collection® and SureStay® Brand System Hotels do not
have Area of Protection radius protection or the right to request an Impact Analysis; but, Best Western System Hotels have the protection as noted above (same color categories) and have full Impact Analysis rights. 

If we develop a new hotel brand after the Effective Date, such new hotel brand shall be added to the Category containing hotels of the most
similar chain segment as determined by STR and the Area of Protection radius protection and Impact Analysis rights for such Category shall apply with respect to such new hotel brand. 

Except for our restrictions within your Hotel’s Area of Protection and your right to request an Impact Analysis as described in Exhibit 2
below, we and our affiliates have the right to engage in any other businesses of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a competing brand, or otherwise, even if they compete with your Hotel,
the System, or the Brand, and whether we or our affiliates start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, or associate with, such other businesses. We may also use or license to others
all or part of the System; use the facilities, programs, services and/or personnel used in connection with the System in other businesses; use the System, the Brand and the Marks in other businesses; and add, alter, delete or otherwise modify
elements of the System. 
 We are not restricted from soliciting or accepting reservations from customers located inside your Area of
Protection. We and our affiliates may use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to accept reservations under your Hotel’s Brand and under other trademarks from
customers located in your Area of Protection. We do not need to pay you any compensation for soliciting or accepting reservations from customers located inside your Area of Protection. You are not restricted from soliciting reservations from
customers located outside of your Area of Protection, except that all of your advertising is subject to our advance written approval. While you may accept reservations from customers located outside of your Area of Protection, you may only do so
through the approved reservation service we furnish to you. You may not use an individual hotel website, booking engine, extranet, channel manager or any other channel of distribution to accept reservations. 

  
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 Exhibit 2 

Impact Rights 
 Impact Analysis
Rights 
 At least thirty (30) days before our consideration of a franchise application for a new System Hotel, we will give
written notice of the application to existing System Hotels within the following radius of the applicant property, taking into account the existing System Hotel’s property type and applicable mid-sized
hotel market category as set forth in the chart below: 
  

							
	Property Type	 	Primary Market	 	Secondary Market	 	Tertiary Market
	
Airport
	 	3 Miles	 	10 Miles	 	25 Miles
	
Downtown, Urban
	 	0.75 Miles	 	10 Miles	 	25 Miles
	
Highway
	 	4.5 Miles	 	10 Miles Metropolitan;
 25 Miles Rural
	 	25 Miles
	
Resort
	 	3 Miles	 	10 Miles Metropolitan;
 25 Miles Rural
	 	25 Miles
	
Suburban
	 	4.5 Miles	 	10 Miles Metropolitan;
 25 Miles Rural
	 	25 Miles

 If your Hotel is within the applicable radius, you will have the right, within fifteen (15) days of the
mailing of the notice of the application, to request that an impact analysis be made concerning the effect of the applicant’s operations on the relevant market (“Impact Analysis”). 

The Impact Analysis will be conducted by an independent nationally recognized consulting firm familiar with and knowledgeable about the
hospitality business, which shall not be affiliated with, in any respect, us or any of our franchisees. The Impact Analysis will analyze the applicant’s prospect for success, the demand for the applicant’s services in the relevant market
and the incremental impact on existing franchisees within the relevant market, and provide such other information as we may request it include. For this purpose, incremental impact means the occupancy and revenue losses (expressed as a percentage)
projected to result from the operation of the applicant’s proposed System Hotel, less any occupancy and revenue losses projected to result to existing System Hotels in the relevant market from operation of the property covered by the
application as a non-System Hotel. 
 To the extent an Impact Analysis is requested, we will
consider the application upon the completion of the Impact Analysis. We may not approve any application unless we have: 
 (a) Reviewed and
analyzed any requested Impact Analysis; and 
 (b) Determined that granting the application will not materially impair the ability of
existing franchisees to compete with properties or other hospitality services operated by non-franchisees in the relevant market. 

New franchisee applications may only be approved upon the favorable vote of at least five (5) Directors of the Board. In the event that
ambiguity, conflict, or inadequate data exists in the application of the rules set forth above regarding a Area of Protection radius protection and/or an Impact Analysis, the Board shall have the right in its sole discretion to resolve the conflict
or ambiguity or select appropriate data on which to rely.  

  
 40

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