Document:

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TG THERAPEUTICS, INC.

4,100,000 Shares of Common Stock

(par value $0.001 per share)

 

Underwriting
Agreement

 

March
1, 2019

 

Cantor
Fitzgerald & Co.

499
Park Avenue

New
York, NY 10022

 

Ladies
and Gentlemen:

 

TG
Therapeutics, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to Cantor Fitzgerald & Co. (“Cantor” or the “Underwriter”) an aggregate of
4,100,000 shares of its common stock, par value $0.001 per share
(the “Shares”).
The 4,100,000 Shares to be sold by the Company are called the
“Firm Shares.”
In addition, the Company has granted to Cantor an option to
purchase up to an additional 615,000 Shares pursuant to such option
are collectively called the “Option Shares.” The Firm Shares
and, if and to the extent such option is exercised, the Option
Shares, are collectively called the “Offered Shares.”

 

The
Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) a shelf registration
statement on Form S-3, File No. 333-218293, including a
base prospectus (the “Base
Prospectus”) to be used in connection with the public
offering and sale of the Offered Shares. Such registration
statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it became effective
under the Securities Act of 1933, and the rules and regulations
promulgated thereunder (collectively, the “Securities Act”), including all
documents incorporated or deemed to be incorporated by reference
therein and any information deemed to be a part thereof at the time
of effectiveness pursuant to Rule 430A or 430B under the
Securities Act, is called the “Registration Statement.” Any
registration statement filed by the Company pursuant to Rule 462(b)
under the Securities Act in connection with the offer and sale of
the Offered Shares is called the “Rule 462(b) Registration
Statement,” and from and after the date and time of
filing of any such Rule 462(b) Registration Statement the term
“Registration Statement” shall include the Rule 462(b)
Registration Statement. The preliminary prospectus supplement dated
February 28, 2019 describing the Offered Shares and the offering
thereof (the “Preliminary
Prospectus Supplement”), together with the Base
Prospectus, is called the “Preliminary Prospectus,” and the
Preliminary Prospectus and any other prospectus supplement to the
Base Prospectus in preliminary form that describes the Offered
Shares and the offering thereof and is used prior to the filing of
the Prospectus (as defined below), together with the Base
Prospectus, is called a “preliminary prospectus.” As used
herein, the term “Prospectus” shall mean the final
prospectus supplement to the Base Prospectus that describes the
Offered Shares and the offering thereof (the “Final Prospectus Supplement”),
together with the Base Prospectus, in the form first used by the
Underwriter to confirm sales of the Offered Shares or in the form first made
available to the Underwriter by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities
Act.

 

As used
herein, “Applicable
Time” is 8:30 a.m. (New York time) on March 1, 2019.
As used herein, “free writing
prospectus” has the meaning set forth in Rule 405
under the Securities Act, and “Time of Sale Prospectus” means the
Preliminary Prospectus, as amended or supplemented immediately
prior to the Applicable Time, together with the free writing
prospectuses, if any, identified on Schedule A hereto and the
pricing information set forth on Schedule B hereto. As used
herein, “Road
Show” means a “road show” (as defined in
Rule 433 under the Securities Act) relating to the offering of the
Offered Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Securities
Act). As used herein, “Section 5(d) Written
Communication” means each written communication
(within the meaning of Rule 405 under the Securities Act) that is
made in reliance on Section 5(d) of the Securities Act by the
Company or any person authorized to act on behalf of the Company to
one or more potential investors that are qualified institutional
buyers (“QIBs”)
and/or institutions that are accredited investors
(“IAIs”), as
such terms are respectively defined in Rule 144A and Rule 501(a)
under the Securities Act, to determine whether such investors might
have an interest in the offering of the Offered Shares;
“Section 5(d) Oral
Communication” means each oral communication, if any,
made in reliance on Section 5(d) of the Securities Act by the
Company or any person authorized to act on behalf of the Company
made to one or more QIBs and/or one or more IAIs to determine
whether such investors might have an interest in the offering of
the Offered Shares; “Marketing Materials” means any
materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
offering of the Offered Shares, including any Road Show or investor
presentations made to investors by the Company (whether in person
or electronically); and “Permitted Section 5(d)
Communication” means the Section 5(d) Written
Communication(s) and Marketing Materials listed on Schedule C attached
hereto.

 

All
references in this Agreement to financial statements and schedules
and other information which are “contained,”
“included” or “stated” in, or “part
of” the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus,
and all other references of like import, shall be deemed to mean
and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference
in the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus,
as the case may be.

 

 

 

 

All
references in this Agreement to amendments or supplements to the
Registration Statement, the Preliminary Prospectus, any preliminary
prospectus, the Base Prospectus, the Time of Sale Prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934, and the rules
and regulations promulgated thereunder (collectively, the
“Exchange Act”)
that is or is deemed to be incorporated by reference in the
Registration Statement, the Preliminary Prospectus, any preliminary
prospectus, the Base Prospectus, or the Prospectus, as the case may
be.

 

All
references in this Agreement to (i) the Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus or the Prospectus, any amendments or
supplements to any of the foregoing, or any free writing
prospectus, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“EDGAR”) and (ii) the
Prospectus shall be deemed to include any “electronic
Prospectus” provided for use in connection with the offering
of the Offered Shares as contemplated by Section 3(n).

 

In the
event that the Company has only one subsidiary, then all references
herein to “subsidiaries” of the Company shall be deemed
to refer to such single subsidiary, mutatis mutandis.

 

The
Company hereby confirms its agreements with the Underwriter as
follows:

 

1. Representations
and Warranties of the Company. The Company represents and
warrants to the Underwriter as of the date of this Agreement, the
Applicable Time, the First Closing Date (as hereinafter defined)
and each Option Closing Date (as hereinafter defined), if any, as
follows:

 

(a) Compliance with Registration
Requirements. The Registration Statement has become
effective under the Securities Act. The Company has complied, to
the Commission’s satisfaction, with all requests of the
Commission for additional or supplemental information, if any. No
stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the Commission. At the
time the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017 (the “Annual Report”) was filed with the
Commission, or, if later, at the time the Registration Statement
was originally filed with the Commission, the Company met the
then-applicable requirements for use of Form S-3 under the
Securities Act. The Company meets the requirements for use of Form
S-3 under the Securities Act specified in FINRA Conduct Rule
5110(B)(7)(C)(i). The documents incorporated or deemed to be
incorporated by reference in the Registration Statement, the Time
of Sale Prospectus and the Prospectus, at the time they were or
hereafter are filed with the Commission, or became effective under
the Exchange Act, as the case may be, complied and will comply in
all material respects with the requirements of the Exchange
Act.

 

(b) Disclosure.
Each preliminary prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR, was identical (except as
may be permitted by Regulation S-T under the Securities Act)
to the copy thereof delivered to the Underwriter for use in
connection with the offer and sale of the Offered Shares. Each of
the Registration Statement and any post-effective amendment
thereto, at the time it became or becomes effective and at all
subsequent times, complied and will comply in all material respects
with the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. As of the Applicable Time, the Time of Sale
Prospectus did not, and at the time of each sale of the Offered
Shares and at the First Closing Date (as defined in Section 2), the
Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The Prospectus, as of its
date and (as then amended or supplemented) at all subsequent times,
did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties set forth in the three immediately preceding sentences
do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the
Prospectus or the Time of Sale Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
written information relating to the Underwriter furnished to the
Company in writing by the Underwriter expressly for use therein, it
being understood and agreed that the only such information consists
of the information described in Section 9(b). There are no
contracts or other documents required to be described in the Time
of Sale Prospectus or the Prospectus or to be filed as an exhibit
to the Registration Statement which have not been described or
filed as required.

 

(c) Free
Writing Prospectuses; Road Show. As of the determination
date referenced in Rule 164(h) under the Securities Act, the
Company was not, is not or will not be (as applicable) an
“ineligible issuer” in connection with the offering of
the Offered Shares pursuant to Rules 164, 405 and 433 under the
Securities Act. Each free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act. Each free writing
prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of Rule 433 under the Securities Act, including timely
filing with the Commission or retention where required and
legending, and each such free writing prospectus, as of its issue
date and at all subsequent times through the completion of the
public offer and sale of the Offered Shares did not, does not and
will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration
Statement, the Prospectus or any preliminary prospectus and not
superseded or modified. Except for the free writing prospectuses,
if any, identified in Schedule A, and electronic road
shows, if any, furnished to the Underwriter before first use, the
Company has not prepared, used or referred to, and will not,
without the Underwriter’s prior written consent, prepare, use
or refer to, any free writing prospectus. Each Road Show, when
considered together with the Time of Sale Prospectus, does not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.

 

 

 

 

(d) Testing-the-Waters
Materials. The Company (i) has not alone engaged in any
Section 5(d) Written Communication or Section 5(d) Oral
Communication and (ii) has not authorized anyone other than the
Underwriter to engage in such Permitted Section 5(d)
Communications. The Company reconfirms that the Underwriter has
been authorized to act on its behalf in undertaking Marketing
Materials, Section 5(d) Oral Communications and Section 5(d)
Written Communications. The Company has not distributed or approved
for distribution any Section 5(d) Written Communications other than
those listed on Schedule
C hereto. Any individual Permitted Section 5(d)
Communication does not conflict with the information contained in
the Registration Statement or the Time of Sale Prospectus, complied
in all material respects with the Securities Act, and when taken
together with the Time of Sale Prospectus as of the Applicable
Time, did not, and as of the First Closing Date and as of each
Option Closing Date, as the case may be, will not, contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.

 

(e) Distribution
of Offering Material By the Company. Prior to the later of
(i) the expiration or termination of the option granted to the
Underwriter in ‎Section 2 and (ii) the completion of the
Underwriter’s distribution of the Offered Shares, the Company
has not distributed and will not distribute any offering material
in connection with the offering and sale of the Offered Shares
other than the Registration Statement, the Time of Sale Prospectus,
the Prospectus or any free writing prospectus reviewed and
consented to by the Underwriter, and the free writing prospectuses,
if any, identified on Schedule A hereto and any
Permitted Section 5(d) Communications.

 

(f) Financial
Information. The consolidated financial statements of the
Company included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, together
with the related notes and schedules, present fairly, in all
material respects, the consolidated financial position of the
Company and the Subsidiaries (as defined below) as of the dates
indicated and the consolidated results of operations, cash flows
and changes in stockholders’ equity of the Company for the
periods specified and have been prepared in compliance with the
requirements of the Securities Act and Exchange Act, as applicable,
and in conformity with generally accepted accounting principles in
the United States (“GAAP”) applied on a consistent
basis (except for such adjustments to accounting standards and
practices as are noted therein) during the periods involved; the
other financial and statistical data with respect to the Company
and the Subsidiaries contained or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and
records of the Company; there are no financial statements
(historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement, the Time
of Sale Prospectus or the Prospectus that are not included or
incorporated by reference as required; the Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off balance sheet obligations),
not described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus which are required to be described in
the Registration Statement, the Time of Sale Prospectus and the
Prospectus; and all disclosures contained or incorporated by
reference in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, if any, regarding “non-GAAP
financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Securities
Act, to the extent applicable. The financial data set forth in each
of the Registration Statement, the Time of Sale Prospectus and the
Prospectus under the captions “Prospectus Supplement Summary
– Recent Developments” and “Prospectus Supplement
Summary – Additional Business Updates” fairly present
the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration
Statement, the Time of Sale Prospectus and the Prospectus. The
interactive data in eXtensible Business Reporting Language included
or incorporated by reference in the Registration Statement and the
Prospectus fairly presents the information called for in all
material respects and has been prepared in accordance with the
Commission’s rules and guidelines applicable
thereto.

 

(g) Conformity
with EDGAR Filing. The Preliminary Prospectus and Final
Prospectus delivered to the Underwriter for use in connection with
the sale of the Offered Shares pursuant to this Agreement will be
identical to the versions of the Preliminary Prospectus and Final
Prospectus created to be transmitted to the Commission for filing
via EDGAR, except to the extent permitted by Regulation
S-T.

 

(h) Organization.
The Company and any subsidiary that is a significant subsidiary (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by
the Commission) (each, a “Subsidiary”, collectively, the
“Subsidiaries”),
are, and will be, duly organized, validly existing as a corporation
and in good standing under the Laws of their respective
jurisdictions of organization. The Company and the Subsidiaries
are, and will be, duly licensed or qualified as a foreign
corporation for transaction of business and in good standing under
the Laws of each other jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such license or qualification, and have all
corporate power and authority necessary to own or hold their
respective properties and to conduct their respective businesses as
described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would
not, individually or in the aggregate, have a material adverse
effect or would reasonably be expected to have a material adverse
effect on the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’
equity or results of operations of the Company and the Subsidiaries
taken as a whole, or prevent the consummation of the transactions
contemplated hereby (a “Material Adverse
Effect”).

 

(i) Subsidiaries.
As of the date hereof, the Company’s only Subsidiaries are
set forth on Schedule 6(g). The Company owns directly or
indirectly, all of the equity interests of the Subsidiaries free
and clear of any lien, charge, security interest, encumbrance,
right of first refusal or other restriction, and all the equity
interests of the Subsidiaries are validly issued and are fully
paid, nonassessable and free of preemptive and similar
rights.

 

(j) No
Violation or Default. Neither the Company nor any Subsidiary
is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of the
property or assets of the Company or any Subsidiary is subject; or
(iii) in violation of any Law of any Governmental Authority,
except, in the case of each of clauses (ii) and (iii) above, for
any such violation or default that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. To the Company’s knowledge, no other party under any
material contract or other agreement to which it or any Subsidiary
is a party is in default in any respect thereunder where such
default would reasonably be expected to have a Material Adverse
Effect.

 

 

 

 

(k) No
Material Adverse Effect. Subsequent to the respective dates
as of which information is given in the Registration Statement, the
Time of Sale Prospectus, the Prospectus and the Free Writing
Prospectuses, if any (including any document deemed incorporated by
reference therein), there has not been (i) any Material Adverse
Effect, or any development involving a prospective Material Adverse
Effect, in or affecting the business, properties, management,
condition (financial or otherwise), results of operations, or
prospects of the Company and the Subsidiaries taken as a whole,
(ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation or liability,
direct or contingent (including any off-balance sheet obligations),
incurred by the Company or the Subsidiaries, which is material to
the Company and the Subsidiaries taken as a whole, (iv) any
material change in the capital stock (other than (A) the grant of
additional options under the Company’s existing stock option
plans, (B) changes in the number of shares of outstanding Common
Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof, (C)
as a result of the issuance of Offered Shares, or (D) any
repurchases of capital stock of the Company) or outstanding
long-term indebtedness of the Company or the Subsidiaries or (v)
any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or any Subsidiary, other than in
each case above in the ordinary course of business or as otherwise
disclosed in the Registration Statement or Prospectus (including
any document deemed incorporated by reference
therein).

 

(l) Capitalization.
The issued and outstanding shares of capital stock of the Company
have been validly issued, are fully paid and nonassessable and,
other than as disclosed in the Registration Statement, the Time of
Sale Prospectus or the Prospectus, are not subject to any
preemptive rights, rights of first refusal or similar rights. The
Company has an authorized, issued and outstanding capitalization as
set forth in the Registration Statement and the Prospectus as of
the dates referred to therein (other than (i) the grant of
additional options under the Company’s existing stock option
plans, (ii) changes in the number of shares of outstanding Common
Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof,
(iii) as a result of the issuance of Offered Shares, or (iv) any
repurchases of capital stock of the Company) and such authorized
capital stock conforms to the description thereof set forth in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus. The description of the Common Stock in the Registration
Statement, the Time of Sale Prospectus or the Prospectus is
complete and accurate in all material respects. As of the date
referred to therein, the Company did not have outstanding any
options to purchase, or any rights or warrants to subscribe for, or
any securities or obligations convertible into, or exchangeable
for, or any contracts or commitments to issue or sell, any shares
of capital stock or other securities.

 

(m) S-3
Eligibility. (i) At the time of filing the Registration
Statement and (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Section 13 or
15(d) of the Exchange Act or form of prospectus), the Company met
the then applicable requirements for use of Form S-3 under the
Securities Act, including compliance with General Instruction I.B.1
of Form S-3.

 

(n) Authorization;
Enforceability. The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that (i)
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification and contribution provisions
of Section 11 hereof may be limited by federal or state securities
Laws and public policy considerations in respect
thereof.

 

(o) Authorization
of Offered Shares. The Offered Shares have been duly
authorized for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company against payment therefor
pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any
pledge, lien, encumbrance, security interest or other claim arising
from an act or omission of an Agent or a purchaser), including any
statutory or contractual preemptive rights, resale rights, rights
of first refusal or other similar rights, and will be registered
pursuant to Section 12 of the Exchange Act. The Offered Shares,
when issued, will conform in all material respects to the
description thereof set forth in or incorporated into the
Registration Statement, the Time of Sale Prospectus and the
Prospectus.

 

(p) No
Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any Governmental
Authority is required for the execution, delivery and performance
by the Company of this Agreement, and the issuance and sale by the
Company of the Offered Shares as contemplated hereby, except for
such consents, approvals, authorizations, orders and registrations
or qualifications as may be required under applicable state
securities Laws or Laws of the Financial Industry Regulatory
Authority (“FINRA”) or the NASDAQ, including
any notices that may be required by Exchange, in connection with
the sale of the Offered Shares.

 

(q) No
Preferential Rights. Except as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, (i) no
person, as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock or upon the exercise
of options that have been granted under the Company’s stock
option plans), (ii) no Person has any preemptive rights, rights of
first refusal, or any other rights (whether pursuant to a
“poison pill” provision or otherwise) to purchase any
Common Stock or shares of any other capital stock or other
securities of the Company from the Company which have not been duly
waived with respect to the offering contemplated hereby, (iii) no
Person has the right to act as an underwriter or as a financial
advisor to the Company in connection with the offer and sale of the
Common Stock, and (iv) no Person has the right, contractual or
otherwise, to require the Company to register under the Securities
Act any Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Offered Shares as contemplated thereby or otherwise.

 

 

 

 

(r) Independent
Registered Public Accounting Firm. CohnReznick LLP (the
“Accountant”),
whose reports on the audits of the consolidated financial
statements and internal control over financial reporting of the
Company are filed with or incorporated into the Commission as part
of the Company’s most recent Annual Report on Form 10-K filed
with the Commission and incorporated into the Registration
Statement and the Prospectus, is and, during the periods covered by
their report, was an independent registered public accounting firm
within the meaning of the Securities Act and the Public Company
Accounting Oversight Board (United States). To the Company’s
knowledge, with due inquiry, the Accountant is not in violation of
the auditor independence requirements of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley
Act”) with respect to the Company.

 

(s) Enforceability
of Agreements. All agreements between the Company and third
parties expressly referenced in the Prospectus, other than such
agreements that have expired by their terms or whose termination is
disclosed in documents filed by the Company on EDGAR, are legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification provisions of certain
agreements may be limited by federal or state securities Laws or
public policy considerations in respect thereof, and except for any
unenforceability that, individually or in the aggregate, would not
unreasonably be expected to have a Material Adverse
Effect.

 

(t) No
Litigation. Except as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, there
are no legal, governmental or regulatory actions, suits or
proceedings by or before any Governmental Authority pending, nor,
to the Company’s knowledge, any legal, governmental or
regulatory investigations by or before any Governmental Authority,
to which the Company or a Subsidiary is a party or to which any
property of the Company or any Subsidiary is the subject that,
individually or in the aggregate, if determined adversely to the
Company or any Subsidiary, would reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the
ability of the Company to perform its obligations under this
Agreement; to the Company’s knowledge, no such actions, suits
or proceedings are threatened or contemplated by any Governmental
Authority or threatened by others that, individually or in the
aggregate, if determined adversely to the Company or any
Subsidiary, would reasonably be expected to have a Material Adverse
Effect; and (i) there are no current or pending legal, governmental
or regulatory investigations, actions, suits or proceedings by or
before any Governmental Authority that are required under the
Securities Act to be described in the Time of Sale Prospectus or
the Prospectus that are not described in the Time of Sale
Prospectus or the Prospectus including any Incorporated Document;
and (ii) there are no contracts or other documents that are
required under the Securities Act to be filed as exhibits to the
Registration Statement that are not so filed.

 

(u) Licenses
and Permits. Except as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, the
Company and the Subsidiaries possess or have obtained, all
licenses, certificates, consents, orders, approvals, permits and
other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
Governmental Authority that are necessary for the ownership or
lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement,
the Time of Sale Prospectus and the Prospectus (the
“Permits”),
except where the failure to possess, obtain or make the same would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any
Subsidiary have received written notice of any proceeding relating
to revocation or modification of any such Permit or has any reason
to believe that such Permit will not be renewed in the ordinary
course, except where the failure to obtain any such renewal would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(v) No
Material Defaults. Neither the Company nor any Subsidiary
has defaulted on any installment on indebtedness for borrowed money
or on any rental on one or more long-term leases, which defaults,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. The Company has not filed a report
pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 10-K, indicating that it
(i) has failed to pay any dividend or sinking fund installment on
preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect.

 

(w) Certain
Market Activities. Neither the Company, nor any Subsidiary,
nor any of their respective directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or
that has constituted or would reasonably be expected to cause or
result in, under the Exchange Act or otherwise, the stabilization
or manipulation of the price of the Shares or of any
“reference security” (as defined in Rule 100 of
Regulation M under the Exchange Act (“Regulation M”))
with respect to the Shares, whether to facilitate the sale or
resale of the Offered Shares or otherwise, and has taken no action
which would directly or indirectly violate Regulation
M.

 

(x) Broker/Dealer
Relationships. Neither the Company nor any Subsidiary or any
related entities (i) is required to register as a
“broker” or “dealer” in accordance with the
provisions of the Exchange Act or (ii) directly or indirectly
through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a
member” (within the meaning set forth in the FINRA
Manual).

 

(y) No
Reliance. The Company has not relied upon the Underwriter or
legal counsel for the Underwriter for any legal, tax or accounting
advice in connection with the offering and sale of the Offered
Shares.

 

(z) Taxes.
The Company and the Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed
and paid all taxes shown thereon through the date hereof, to the
extent that such taxes have become due and are not being contested
in good faith, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect. Except as
otherwise disclosed in or contemplated by the Registration
Statement, the Time of Sale Prospectus or the Prospectus, no tax
deficiency has been determined adversely to the Company or any
Subsidiary which has had, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The
Company has no knowledge of any federal, state or other
governmental tax deficiency, penalty or assessment which has been
or might be asserted or threatened against it which could have a
Material Adverse Effect.

 

 

 

 

(aa) Title
to Real and Personal Property. Except as set forth in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, the Company and the Subsidiaries have good and valid
title in fee simple to all items of real property and good and
valid title to all personal property described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus as being
owned by them that are material to the businesses of the Company or
such Subsidiary, in each case free and clear of all liens,
encumbrances and claims, except those that (i) do not materially
interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries or (ii) would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Any real property described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus as being leased by the Company and the Subsidiaries is
held by them under valid, existing and enforceable leases, except
those that (A) do not materially interfere with the use made or
proposed to be made of such property by the Company or the
Subsidiaries or (B) would not be reasonably expected, individually
or in the aggregate, to have a Material Adverse
Effect.

 

(bb) Intellectual
Property. Except as set forth in the Registration Statement,
the Time of Sale Prospectus and the Prospectus, the Company and the
Subsidiaries own or possess adequate enforceable rights to use all
patents, patent applications, trademarks (both registered and
unregistered), service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
(collectively, the “Intellectual Property”), necessary
for the conduct of their respective businesses as conducted as of
the date hereof, except to the extent that the failure to own or
possess adequate rights to use such Intellectual Property would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; the Company and the Subsidiaries
have not received any written notice of any claim of infringement
or conflict which asserted Intellectual Property rights of others,
which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect; there are no
pending, or to the Company’s knowledge, threatened judicial
proceedings or interference proceedings against the Company or its
Subsidiaries challenging the Company’s or any of its
Subsidiary’s rights in or to or the validity of the scope of
any of the Company’s or any Subsidiary’s patents,
patent applications or proprietary information; no other entity or
individual has any right or claim in any of the Company’s or
any of its Subsidiary’s patents, patent applications or any
patent to be issued therefrom by virtue of any contract, license or
other agreement entered into between such entity or individual and
the Company or any Subsidiary or by any non-contractual obligation,
other than by written licenses granted by the Company or any
Subsidiary; the Company and the Subsidiaries have not received any
written notice of any claim challenging the rights of the Company
or its Subsidiaries in or to any Intellectual Property owned,
licensed or optioned by the Company or any Subsidiary which claim,
if the subject of an unfavorable decision would result in a
Material Adverse Effect.

 

(cc) Environmental
Laws. Except as set forth in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, the Company and the
Subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign Laws, rules, regulations,
decisions and orders relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”); (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses as described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except, in the case of any of clauses
(i), (ii) or (iii) above, for any such failure to comply or failure
to receive required permits, licenses, other approvals or liability
as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(dd) Disclosure
Controls. The Company maintains systems of internal
accounting controls designed to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company is not aware of any
material weaknesses in its internal control over financial
reporting (other than as set forth in the Registration Statement,
the Time of Sale Prospectus or the Prospectus). Since the date of
the latest audited financial statements of the Company included in
the Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting (other
than as set forth in the Registration Statement, the Time of Sale
Prospectus or the Prospectus). The Company has established
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15 and 15d-15) for the Company and designed such
disclosure controls and procedures to ensure that material
information relating to the Company and the Subsidiaries is made
known to the certifying officers by others within those entities,
particularly during the period in which the Company’s Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case
may be, is being prepared. The Company’s certifying officers
have evaluated the effectiveness of the Company’s controls
and procedures as of a date within 90 days prior to the filing date
of the Form 10-K for the fiscal year most recently ended (such
date, the “Evaluation
Date”). The Company presented in its Form 10-K for the
fiscal year most recently ended the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the most recent
Evaluation Date. Since the most recent Evaluation Date, there have
been no significant changes in the Company’s internal
controls (as such term is defined in Item 307(b) of Regulation S-K
under the Securities Act) or, to the Company’s knowledge, in
other factors that could significantly affect the Company’s
internal controls. To the knowledge of the Company, the
Company’s “internal controls over financial
reporting” and “disclosure controls and
procedures” are effective.

 

(ee) Sarbanes-Oxley
Act. There is and has been no failure on the part of the
Company or, to the knowledge of the Company, any of the
Company’s directors or officers, in their capacities as such,
to comply with any applicable provisions of the Sarbanes-Oxley Act
and the rules and regulations promulgated thereunder. Each of the
principal executive officer and the principal financial officer of
the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company
as applicable) has made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be
filed by it or furnished by it to the Commission during the past 12
months. For purposes of the preceding sentence, “principal
executive officer” and “principal financial
officer” shall have the meanings given to such terms in the
Exchange Act Rules 13a-15 and 15d-15.

 

 

 

 

(ff) Finder’s
Fees. Neither the Company nor any Subsidiary has incurred
any liability for any finder’s fees, brokerage commissions or
similar payments in connection with the transactions herein
contemplated, except as may otherwise exist with respect to the
Underwriter pursuant to this Agreement.

 

(gg) Labor
Disputes. No labor disturbance by or dispute with employees
of the Company or any Subsidiary exists or, to the knowledge of the
Company, is threatened which would reasonably be expected to result
in a Material Adverse Effect.

 

(hh) Investment
Company Act. Neither the Company nor any Subsidiary is or,
after giving effect to the offering and sale of the Offered Shares,
will be an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment
Company Act”).

 

(ii) Operations.
The operations of the Company and the Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering Laws of all jurisdictions to which the Company or the
Subsidiaries are subject, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority
(collectively, the “Money Laundering Laws”),
except as would not reasonably be expected to result in a Material
Adverse Effect; and no action, suit or proceeding by or before any
Governmental Authority involving the Company or any Subsidiary with
respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.

 

(jj) Off-Balance
Sheet Arrangements. There are no transactions, arrangements
and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any
unconsolidated entity, including, but not limited to, any
structured finance, special purpose or limited purpose entity
(each, an “Off Balance Sheet
Transaction”) that could reasonably be expected to
affect materially the Company’s liquidity or the availability
of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s
Statement about Management’s Discussion and Analysis of
Financial Conditions and Results of Operations (Release Nos.
33-8056; 34-45321; FR-61), required to be described in the
Registration Statement or the Prospectus which have not been
described as required.

 

(kk) ERISA.
To the knowledge of the Company, each material employee benefit
plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and the
Subsidiaries has been maintained in material compliance with its
terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred which would result in a material liability to
the Company with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of
the assets of each such plan (excluding for these purposes accrued
but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions.

 

(ll) Forward-Looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E of the
Exchange Act) (a “Forward-Looking Statement”) contained
in the Registration Statement, the Time of Sale Prospectus or the
Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith. The Forward-Looking
Statements incorporated by reference in the Registration Statement
and the Prospectus from the Company’s Annual Report on Form
10-K for the fiscal year most recently ended (i) except for any
Forward-Looking Statement included in any financial statements and
notes thereto, are within the coverage of the safe harbor for
forward looking statements set forth in Section 27A of the
Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6
under the Exchange Act, as applicable, (ii) were made by the
Company with a reasonable basis and in good faith and reflect the
Company’s good faith commercially reasonable best estimate of
the matters described therein as of the respective dates on which
such statements were made, and (iii) have been prepared in
accordance with Item 10 of Regulation S-K under the Securities
Act.

 

(mm) Margin
Rules. Neither the issuance, sale and delivery of the
Offered Shares nor the application of the proceeds thereof by the
Company as described in the Registration Statement, the Time of
Sale Prospectus or the Prospectus will violate Regulation T, U or X
of the Board of Governors of the Federal Reserve System or any
other regulation of such Board of Governors.

 

(nn) Insurance.
The Company and the Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company
and the Subsidiaries reasonably believe are adequate for the
conduct of their business and as is customary for companies of
similar size engaged in similar businesses in similar
industries.

 

 

 

 

(oo) No
Improper Practices. (i) Neither the Company nor, to the
Company’s knowledge, any Subsidiary, nor to the
Company’s knowledge, any of their respective executive
officers has, in the past five years, made any unlawful
contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of law) or made any
contribution or other payment to any official of, or candidate for,
any federal, state, municipal, or foreign office or other person
charged with similar public or quasi-public duty in violation of
any Law or of the character required to be disclosed in the
Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge,
any Subsidiary or any affiliate of any of them, on the one hand,
and the directors, officers and stockholders of the Company or, to
the Company’s knowledge, any Subsidiary, on the other hand,
that is required by the Securities Act to be described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus that is not so described; (iii) no relationship, direct
or indirect, exists between or among the Company or any Subsidiary
or any affiliate of them, on the one hand, and the directors,
officers, stockholders or directors of the Company or, to the
Company’s knowledge, any Subsidiary, on the other hand, that
is required by the rules of FINRA to be described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus that is not so described; (iv) there are no material
outstanding loans or advances or material guarantees of
indebtedness by the Company or, to the Company’s knowledge,
any Subsidiary to or for the benefit of any of their respective
officers or directors or any of the members of the families of any
of them; and (v) the Company has not offered, or caused any
placement agent to offer, Common Stock to any person with the
intent to influence unlawfully (A) a customer or supplier of the
Company or any Subsidiary to alter the customer’s or
supplier’s level or type of business with the Company or any
Subsidiary or (B) a trade journalist or publication to write or
publish favorable information about the Company or any Subsidiary
or any of their respective products or services, and, (vi) neither
the Company nor any Subsidiary nor, to the Company’s
knowledge, any employee or agent of the Company or any Subsidiary
has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any Law, rule or
regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of
funds is of a character required to be disclosed in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus.

 

(pp) No
Conflicts. Neither the execution of this Agreement, nor the
issuance, offering or sale of the Offered Shares, nor the
consummation of any of the transactions contemplated herein and
therein, nor the compliance by the Company with the terms and
provisions hereof and thereof will conflict with, or will result in
a breach of, any of the terms and provisions of, or has constituted
or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to
the terms of any contract or other agreement to which the Company
may be bound or to which any of the property or assets of the
Company is subject, except (i) such conflicts, breaches or defaults
as may have been waived and (ii) such conflicts, breaches and
defaults that would not reasonably be expected to have a Material
Adverse Effect; nor will such action result (x) in any violation of
the provisions of the organizational or governing documents of the
Company, or (y) in any material violation of the provisions of any
statute or any order, rule or regulation applicable to the Company
or of any Governmental Authority having jurisdiction over the
Company, except where such violation would not reasonably be
expected to have a Material Adverse Effect.

 

(qq) OFAC.

 

(i) The
Company represents that, neither the Company nor any Subsidiary
(collectively, the “Entity”) or any director, officer,
employee, agent, affiliate or representative of the Entity, is a
government, individual, or entity (in this paragraph (vv),
“Person”) that
is, or is owned or controlled by a Person that is:

 

(a) the
subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control
(“OFAC”), the
United Nations Security Council (“UNSC”), the European Union
(“EU”), Her
Majesty’s Treasury (“HMT”), or other relevant sanctions
authority (collectively, “Sanctions”), nor

 

(b) located,
organized or resident in a country or territory that is the subject
of Sanctions.

 

(ii) The
Entity represents and covenants that it will not, directly or
indirectly, knowingly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person:

 

(a) to
fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or

 

(b) in
any other manner that will result in a violation of Sanctions by
any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or
otherwise).

 

(iii) The
Entity represents and covenants that, except as detailed in the
Prospectus, for the past 5 years, it has not knowingly engaged in,
is not now knowingly engaged in, and will not engage in, any
dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.

 

 

 

 

(rr) Compliance
with Applicable Laws. The Company and the Subsidiaries: (A)
are and at all times have been in material compliance with all
statutes, rules and regulations applicable to the ownership,
testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale,
storage, import, export or disposal of any product under
development, manufactured or distributed by the Company or the
Subsidiaries (“Applicable
Laws”), (b) have not received any Form 483 from the
FDA, notice of adverse finding, warning letter, or other written
correspondence or notice from the FDA or any other Governmental
Authority, the European Medicines Agency (the “EMA”), or any other federal,
state, local or foreign governmental or regulatory authority
alleging or asserting material noncompliance with any Applicable
Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto
required by any such Applicable Laws (“Authorizations”), which would,
individually or in the aggregate, result in a Material Adverse
Effect; (C) possess all material Authorizations and such
Authorizations are valid and in full force and effect and neither
the Company nor the Subsidiaries is in material violation of any
term of any such Authorizations; (D) have not received written
notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
Governmental Authority or third party alleging that any Company
product, operation or activity is in material violation of any
Applicable Laws or Authorizations and has no knowledge that any
such Governmental Authority or third party is considering any such
claim, litigation, arbitration, action, suit, investigation or
proceeding against the Company; (E) have not received notice that
any Governmental Authority has taken, is taking or intends to take
action to limit, suspend, modify or revoke any material
Authorizations and has no knowledge that any Governmental Authority
is considering such action; and (F) have filed, obtained,
maintained or submitted all reports, documents, forms, notices,
applications, records, claims, submissions and supplements or
amendments as required by any Applicable Laws or Authorizations
except where the failure to file such reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments would not result in a Material Adverse Effect, and
that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
materially complete and correct on the date filed (or were
corrected or supplemented by a subsequent submission).

 

(ss) Statistical
and Market-Related Data. All statistical, demographic and
market-related data included in the Registration Statement, the
Time of Sale Prospectus or the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate
or represent the Company’s good faith estimates that are made
on the basis of data derived from such sources.

  

(tt) Clinical
Studies. All animal and other preclinical studies and
clinical trials conducted by the Company or on behalf of the
Company were, and, if still pending are, to the Company’s
knowledge, being conducted in all material respects in compliance
with all Applicable Laws and in accordance with experimental
protocols, procedures and controls generally used by qualified
experts in the preclinical study and clinical trials of new drugs
and biologics as applied to comparable products to those being
developed by the Company; the descriptions of the results of such
preclinical studies and clinical trials contained in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus are accurate in all material respects, and, except as
set forth in the Registration Statement, the Time of Sale
Prospectus or the Prospectus, the Company has no knowledge of any
other clinical trials or preclinical studies, the results of which
reasonably call into question the clinical trial or preclinical
study results described or referred to in the Registration
Statement, the Time of Sale Prospectus or the Prospectus when
viewed in the context in which such results are described; and the
Company has not received any written notices or correspondence from
the FDA, the EMA, or any other domestic or foreign governmental
agency requiring the termination or suspension of any preclinical
studies or clinical trials conducted by or on behalf of the Company
that are described in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or the results of which are referred
to in the Registration Statement, the Time of Sale Prospectus or
the Prospectus.

 

(uu) Compliance
Program. The Company has established and administers a
compliance program applicable to the Company, to assist the Company
and the directors, officers and employees of the Company in
complying with applicable regulatory guidelines (including, without
limitation, those administered by the FDA, the EMA, and any other
foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the
FDA or EMA); except where such noncompliance would not reasonably
be expected to have a Material Adverse Effect.

 

(vv) Stock
Transfer Taxes. On each Settlement Date, all stock transfer
or other taxes (other than income taxes) which are required to be
paid in connection with the sale and transfer of the Offered Shares
to be sold hereunder will be, or will have been, fully paid or
provided for by the Company and all Laws imposing such taxes will
be or will have been fully complied with by the
Company.

 

(ww) FINRA
Exemption. To enable the Underwriter to rely on Rule
5110(b)(7)(C)(i) of FINRA, the Company represents that the Company
(i) has a non-affiliate, public common equity float of at least
$150 million or a non-affiliate, public common equity float of at
least $100 million and annual trading volume of at least three
million shares and (ii) has been subject to the Exchange Act
reporting requirements for a period of at least 36
months.

 

(xx) Stock
Exchange Listing. The Shares are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and are quoted on the
The NASDAQ Capital Market (the “NASDAQ”), and the Company has
taken no action designed to, or likely to have the effect of,
terminating the registration of the Shares under the Exchange Act
or delisting the Shares from the NASDAQ, nor has the Company
received any notification that the Commission or the NASDAQ is
contemplating terminating such registration or listing. To the
Company’s knowledge, it is in compliance with all applicable
listing requirements of NASDAQ.

 

 

 

 

(yy) Related-Party
Transactions. There are no business relationships or
related-party transactions involving the Company or any of its
subsidiaries or any other person required to be described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus that have not been described as required.

 

(zz) Parties
to Lock-Up Agreements. The Company has furnished to the
Underwriter a letter agreement in the form attached hereto as
Exhibit A (the
“Lock-up
Agreement”) from each of the persons listed on
Exhibit B.
Such Exhibit B
lists under an appropriate caption the directors and executive
officers of the Company. If any
additional persons shall become directors or executive
officers of the Company prior to the
end of the Company Lock-up Period (as defined below), the Company
shall cause each such person, prior to or contemporaneously
with their appointment or election as a director or executive
officer of the Company, to execute and
deliver to the Underwriter a Lock-up Agreement.

 

(aa) No
Rights to Purchase Preferred Stock. The issuance and sale of
the Shares as contemplated hereby will not cause any holder of any
shares of capital stock, securities convertible into or
exchangeable or exercisable for capital stock or options, warrants
or other rights to purchase capital stock or any other securities
of the Company to have any right to acquire any shares of preferred
stock of the Company.

 

(bb) No
Contract Terminations. Neither the Company nor any of its
subsidiaries has sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Registration Statement,
the Time of Sale Prospectus or the Prospectus, and no such
termination or non-renewal has been threatened by the Company or
any of its subsidiaries or, to the Company’s knowledge, any
other party to any such contract or agreement, which threat of
termination or non-renewal has not been rescinded as of the date
hereof.

 

(cc) Dividend
Restrictions. No subsidiary of the Company is prohibited or
restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such
subsidiary’s equity securities or from repaying to the
Company or any other subsidiary of the Company any amounts that may
from time to time become due under any loans or advances to such
subsidiary from the Company or from transferring any property or
assets to the Company or to any other subsidiary.

 

Any
certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Underwriter or to counsel for the
Underwriter in connection with the offering, or the purchase and
sale, of the Offered Shares shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters
covered thereby.

 

The
Company has a reasonable basis for making each of the
representations set forth in this Section 1. The Company
acknowledges that the Underwriter and, for purposes of the opinions
to be delivered pursuant to Sections 6(d), (e) and (f), counsel to
the Company and counsel to the Underwriter, will rely upon the
accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.

 

2. Purchase,
Sale and Delivery of the Offered Shares.

 

(a) The
Firm Shares. Upon the terms herein set forth, the Company
agrees to issue and sell to the Underwriter an aggregate of
4,100,000 Firm Shares. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Underwriter agrees
to purchase from the Company the Firm Shares. The purchase price
per Firm Share to be paid by the Underwriter to the Company shall
be $5.87 per share.

 

(b) The
First Closing Date. Delivery of certificates for the Firm
Shares to be purchased by the Underwriter and payment therefor
shall be be made through the facilities of The Depository Trust
Company, New York, New York (or such other place as may be agreed
to by the Company and the Underwriter) at 10:00 a.m. Eastern time,
on March 5, 2019, or such other time and date not later than 4:00
p.m. Eastern time, on March 15, 2019, as the Underwriter shall
designate by notice to the Company (the time and date of such
closing are called the “First
Closing Date”). The Company hereby acknowledges that
circumstances under which the Underwriter may provide notice to
postpone the First Closing Date as originally scheduled include,
but are not limited to, any determination by the Company or the
Underwriter to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the
provisions of Section 11.

 

(c) The
Option Shares; Option Closing Date. In addition, on the
basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein
set forth, the Company hereby grants an option to the Underwriter
to purchase up to an aggregate of 615,000 Option Shares from the
Company at the purchase price per share to be paid by the
Underwriter for the Firm Shares. The option granted hereunder may
be exercised at any time and from time to time in whole or in part
upon notice by the Underwriter to the Company, which notice may be
given at any time within 30 days from the date of this Agreement.
Such notice shall set forth (i) the aggregate number of Option
Shares as to which the Underwriter is exercising the option and
(ii) the time, date and place at which certificates for the Option
Shares will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in the
event that such time and date are simultaneous with the First
Closing Date, the term “First
Closing Date” shall refer to the time and date of
delivery of certificates for the Firm Shares and such Option
Shares). Any such time and date of delivery, if subsequent to the
First Closing Date, is called an “Option Closing Date,” shall be
determined by the Underwriter and shall not be earlier than three
or later than five full Business Days after delivery of such notice
of exercise. If any Option Shares are to be purchased, (a) the
Underwriter agrees to purchase the number of Option Shares (subject
to such adjustments to eliminate fractional shares as the
Underwriter may determine) that bears the same proportion to the
total number of Option Shares to be purchased as the number of Firm
Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Shares and (b)
the Company agrees to sell the number of Option Shares set forth in
the paragraph “Introductory” of this Agreement (subject
to such adjustments to eliminate fractional shares as the
Underwriter may determine). The Underwriter may cancel the option
at any time prior to its expiration by giving written notice of
such cancellation to the Company.

 

 

 

 

(d) Public
Offering of the Offered Shares. The Underwriter hereby
advises the Company that the Underwriter intends to offer for sale
to the public, initially on the terms set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, the
Offered Shares as soon after this Agreement has been executed as
the Underwriter, in its sole judgment, has determined is advisable
and practicable.

 

(e) Payment
for the Offered Shares. (i) Payment for the Offered Shares
shall be made at the First Closing Date (and, if applicable, at
each Option Closing Date) by wire transfer of immediately available
funds to the order of the Company, and (ii) it is understood that
the Underwriter has been authorized, for its own account, to accept
delivery of and receipt for, and make payment of the purchase price
for, the Firm Shares and any Option Shares the Underwriter has
agreed to purchase.

 

(f) Delivery
of the Offered Shares. The Company shall deliver, or cause
to be delivered to the Underwriter certificates for the Firm Shares
at the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company shall also deliver, or cause
to be delivered through the facilities of DTC unless the
Underwriter shall otherwise instruct, to the Underwriter
certificates for the Option Shares the Underwriter has agreed to
purchase at the First Closing Date or the applicable Option Closing
Date, as the case may be, against the release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. If the Underwriter so elects, delivery of the Offered
Shares may be made by credit to the accounts designated by the
Underwriter through The Depository Trust Company’s full fast
transfer or DWAC programs. The certificates for the Offered Shares
shall be registered in such names and denominations as the
Underwriter shall have requested at least two full Business Days
prior to the First Closing Date (or the applicable Option Closing
Date, as the case may be) and shall be made available for
inspection on the Business Day preceding the First Closing Date (or
the applicable Option Closing Date, as the case may be) at a
location in New York City as the Underwriter may designate. Time
shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the
obligations of the Underwriter.

 

3. Additional
Covenants of the
Company.

 

The
Company further covenants and agrees with the Underwriter as
follows:

 

(a) Delivery
of Registration Statement, Time of Sale Prospectus and
Prospectus. 
The Company shall furnish to the Underwriter in New York City,
without charge, prior to 10:00 a.m. New York City time on the
Business Day next succeeding the date of this Agreement and during
the period when a prospectus relating to the Offered Shares is
required by the Securities Act to be delivered (whether physically
or through compliance with Rule 172 under the Securities Act or any
similar rule) in connection with sales of the Offered Shares, as
many copies of the Time of Sale Prospectus, the Prospectus and any
supplements and amendments thereto or to the Registration Statement
as the Underwriter may reasonably request.

 

(b) Underwriter’s
Review of Proposed Amendments and Supplements. During the
period when a prospectus relating to the Offered Shares is required
by the Securities Act to be delivered (whether physically or
through compliance with Rule 172 under the Securities Act or any
similar rule), the Company (i) will furnish to the Underwriter for
review, a reasonable period of time prior to the proposed time of
filing of any proposed amendment or supplement to the Registration
Statement, a copy of each such amendment or supplement and (ii)
will not amend or supplement the Registration Statement (including
any amendment or supplement through incorporation of any report
filed under the Exchange Act) without the Underwriter’s prior
written consent. Prior to amending or supplementing any preliminary
prospectus, the Time of Sale Prospectus or the Prospectus
(including any amendment or supplement through incorporation of any
report filed under the Exchange Act), the Company shall furnish to
the Underwriter for review, a reasonable amount of time prior to
the time of filing or use of the proposed amendment or supplement,
a copy of each such proposed amendment or supplement. The Company
shall not file or use any such proposed amendment or supplement
without the Underwriter’s prior written consent. The Company
shall file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.

 

(c) Free
Writing Prospectuses. The Company shall furnish to the
Underwriter for review, a reasonable amount of time prior to the
proposed time of filing or use thereof, a copy of each proposed
free writing prospectus or any amendment or supplement thereto
prepared by or on behalf of, used by, or referred to by the
Company, and the Company shall not file, use or refer to any
proposed free writing prospectus or any amendment or supplement
thereto without the Underwriter’s prior written consent. The
Company shall furnish to the Underwriter, without charge, as many
copies of any free writing prospectus prepared by or on behalf of,
used by or referred to by the Company as the Underwriter may
reasonably request. If at any time when a prospectus is required by
the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar
rule) in connection with sales of the Offered Shares (but in any
event if at any time through and including the First Closing Date)
there occurred or occurs an event or development as a result of
which any free writing prospectus prepared by or on behalf of, used
by, or referred to by the Company conflicted or would conflict with
the information contained in the Registration Statement or included
or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
prevailing at such time, not misleading, the Company shall promptly
amend or supplement such free writing prospectus to eliminate or
correct such conflict so that the statements in such free writing
prospectus as so amended or supplemented will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances prevailing at such time, not misleading, as the
case may be; provided, however, that prior to amending
or supplementing any such free writing prospectus, the Company
shall furnish to the Underwriter for review, a reasonable amount of
time prior to the proposed time of filing or use thereof, a copy of
such proposed amended or supplemented free writing prospectus, and
the Company shall not file, use or refer to any such amended or
supplemented free writing prospectus without the
Underwriter’s prior written consent.

 

(d) Filing
of Underwriter Free Writing Prospectuses.  The Company shall not take any
action that would result in the Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on
behalf of the Underwriter that the Underwriter otherwise would not
have been required to file thereunder.

 

 

 

 

(e) Amendments
and Supplements to Time of Sale Prospectus.  If the Time of Sale Prospectus
is being used to solicit offers to buy the Offered Shares at a time
when the Prospectus is not yet available to prospective purchasers,
and any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Time of Sale Prospectus
so that the Time of Sale Prospectus does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances when delivered to a prospective purchaser, not
misleading, or if any event shall occur or condition exist as a
result of which the Time of Sale Prospectus conflicts with the
information contained in the Registration Statement, or if, in the
opinion of counsel for the Underwriter, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable
Law, the Company shall (subject to Section 3(b) and Section 3(c))
promptly prepare, file with the Commission and furnish, at its own
expense, to the Underwriter and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that
the statements in the Time of Sale Prospectus as so amended or
supplemented will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances when
delivered to a prospective purchaser, not misleading or so that the
Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the information contained in the Registration
Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable Law.

 

(f) Certain
Notifications and Required Actions. After the date of this
Agreement, the Company shall promptly advise the Underwriter in
writing of: (i) the receipt of any comments of, or requests for
additional or supplemental information from, the Commission;
(ii) the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus or the Prospectus; (iii)
the time and date that any post-effective amendment to the
Registration Statement becomes effective; and (iv) the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereto
or any amendment or supplement to any preliminary prospectus, the
Time of Sale Prospectus or the Prospectus or of any order
preventing or suspending the use of any preliminary prospectus, the
Time of Sale Prospectus, any free writing prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Shares from any securities exchange
upon which they are listed for trading or included or designated
for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time, the Company will use its best
efforts to obtain the lifting of such order at the earliest
possible moment. Additionally, the Company agrees that it shall
comply with all applicable provisions of Rule 424(b), Rule 433
and Rule 430B under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under Rule
424(b) or Rule 433 were received in a timely manner by the
Commission.

 

(g) Amendments
and Supplements to the Prospectus and Other Securities Act
Matters. If any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the
Prospectus so that the Prospectus does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered (whether
physically or through compliance with Rule 172 under the Securities
Act or any similar rule) to a purchaser, not misleading, or if in
the opinion of the Underwriter or counsel for the Underwriter it is
otherwise necessary to amend or supplement the Prospectus to comply
with applicable Law, the Company agrees (subject to Section 3(b)
and Section 3(c)) to promptly prepare, file with the Commission and
furnish, at its own expense, to the Underwriter and to any dealer
upon request, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will
not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered
(whether physically or through compliance with Rule 172 under the
Securities Act or any similar rule) to a purchaser, not misleading
or so that the Prospectus, as amended or supplemented, will comply
with applicable Law. Neither the Underwriter’s consent to,
nor delivery of, any such amendment or supplement shall constitute
a waiver of any of the Company’s obligations under Section
3(b) and Section 3(c).

 

(h) Blue
Sky Compliance. The Company shall cooperate with the
Underwriter and counsel for the Underwriter to qualify or register
the Offered Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky Laws or Canadian
provincial securities Laws of those jurisdictions designated by the
Underwriter, shall comply with such Laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Offered Shares. The Company
shall not be required to qualify as a foreign corporation or to
take any action that would subject it to general service of process
in any such jurisdiction where it is not presently qualified. The
Company will advise the Underwriter promptly of the suspension of
the qualification or registration of (or any such exemption
relating to) the Offered Shares for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof
at the earliest possible moment.

 

(i) Use
of Proceeds. The Company shall apply the net proceeds from
the sale of the Offered Shares sold by it in the manner described
under the caption “Use of Proceeds” in the Registration
Statement, the Time of Sale Prospectus and the
Prospectus.

 

(j) Transfer
Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the
Shares.

 

 

 

 

(k) Earnings
Statement. The Company will make generally available to its
security holders and to the Underwriter as soon as practicable an
earnings statement (which need not be audited) covering a period of
at least twelve months beginning with the first fiscal quarter of
the Company commencing after the date of this Agreement that will
satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission
thereunder.

 

(l) Continued
Compliance with Securities Laws. The Company will comply
with the Securities Act and the Exchange Act so as to permit the
completion of the distribution of the Offered Shares as
contemplated by this Agreement, the Registration Statement, the Time
of Sale Prospectus and the Prospectus. Without limiting the
generality of the foregoing, the Company will, during the period
when a prospectus relating to the Offered Shares is required by the
Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar
rule), file on a timely basis with the Commission and the NASDAQ
all reports and documents required to be filed under the Exchange
Act.

 

(m) Listing.
The Company will use its best efforts to list, subject to notice of
issuance, the Offered Shares on the NASDAQ.

 

(n) Company
to Provide Copy of the Prospectus in Form That May be Downloaded
from the Internet. If requested by the Underwriter, the
Company shall cause to be prepared and delivered, at its expense,
within one Business Day from the effective date of this Agreement,
to the Underwriter, an “electronic Prospectus” to be used
by the Underwriter in connection with the offering and sale of the
Offered Shares. As used herein, the term “electronic Prospectus” means a
form of Time of Sale Prospectus, and any amendment or supplement
thereto, that meets each of the following conditions: (i) it shall
be encoded in an electronic format, satisfactory to the
Underwriter, that may be transmitted electronically by the
Underwriter to offerees and purchasers of the Offered Shares;
(ii) it shall disclose the same information as the paper Time
of Sale Prospectus, except to the extent that graphic and image
material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or
tabular representation of such material, as appropriate; and
(iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Underwriter, that will allow
investors to store and have continuously ready access to the Time
of Sale Prospectus at any future time, without charge to investors
(other than any fee charged for subscription to the Internet as a
whole and for on-line time). The Company hereby confirms that it
has included or will include in the Prospectus filed pursuant to
EDGAR or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking
that, upon receipt of a request by an investor or his or her
representative, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Time of
Sale Prospectus.

 

(o) Agreement
Not to Offer or Sell Additional Shares. During the period
commencing on and including the date hereof and continuing through
and including the 90th day following the date of the Prospectus
(such period, as extended as described below, being referred to
herein as the “Lock-up
Period”), the Company will not, without the prior
written consent of CF&CO (which consent may be withheld in its
sole discretion), directly or indirectly: (i) sell, offer to sell,
contract to sell or lend any Shares or Related Securities (as
defined below); (ii) effect any short sale, or establish or
increase any “put equivalent position” (as defined in
Rule 16a-1(h) under the Exchange Act) or liquidate or decrease any
“call equivalent position “ (as defined in
Rule 16a-1(b) under the Exchange Act) of any Shares or Related
Securities; (iii) pledge, hypothecate or grant any security
interest in; (iv) in any other way transfer or dispose of any
Shares or Related Securities; (v) enter into any swap, hedge
or similar arrangement or agreement that transfers, in whole or in
part, the economic risk of ownership of any Shares or Related
Securities, regardless of whether any such transaction is to be
settled in securities, in cash or otherwise; (vi) announce the
offering of any Shares or Related Securities; (vii) file any
registration statement under the Securities Act in respect of any
Shares or Related Securities (other than as contemplated by this
Agreement with respect to the Offered Shares); or (viii) publicly
announce the intention to do any of the foregoing; provided, however, that the Company may
(A) effect the transactions contemplated hereby; (B) issue Shares
or options to purchase Shares, or issue Shares upon exercise of
options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, but only if the holders
of such Shares or options agree in writing with the Underwriter not
to sell, offer, dispose of or otherwise transfer any such Shares or
options during such Lock-up Period without the prior written
consent of the Underwriter (which consent may be withheld in its
sole discretion); and (C)  issue and sell Common Shares
pursuant to the At Market Issuance Sales Agreement among the
Company and Cantor, Jefferies LLC, B. Riley FBR, Inc., SunTrust
Robinson Humphrey, Inc., Raymond James & Associates, Inc.,
Ladenburg Thalmann & Co. Inc. and H.C. Wainwright & Co.,
LLC dated May 26, 2017 and the related prospectus supplement,
provided that no such Common Shares may be sold during the period
commencing on and including the date hereof and continuing through
and including the 45th day following
the date of the Prospectus. For purposes of the foregoing,
“Related
Securities” shall mean any options or warrants or
other rights to acquire Shares or any securities exchangeable or
exercisable for or convertible into Shares, or to acquire other
securities or rights ultimately exchangeable or exercisable for, or
convertible into, Shares.

 

 

 

 

(p) Future
Reports to the Underwriter. During the period of five years
hereafter, the Company will furnish to Cantor Fitzgerald & Co.,
at 499 Park Avenue, New York, New York 10022, Attention: Equity
Capital Markets, with copies to Cantor Fitzgerald & Co., 499
Park Avenue, New York, New York 10022, Attention: General Counsel:
(i) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance
sheet of the Company as of the close of such fiscal year and
statements of income, stockholders’ equity and cash flows for the
year then ended and the opinion thereon of the Company’s
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, FINRA or any securities exchange; and
(iii) as soon as available, copies of any report or communication
of the Company furnished or made available generally to holders of
its capital stock; provided, however, that the requirements
of this Section 3(p) shall be satisfied to the extent that such
reports, statement, communications, financial statements or other
documents are available on EDGAR.

 

(q) Investment
Limitation. The Company shall not invest or otherwise use
the proceeds received by the Company from its sale of the Offered
Shares in such a manner as would require the Company or any of its
subsidiaries to register as an investment company under the
Investment Company Act.

 

(r) No
Stabilization or Manipulation; Compliance with Regulation M.
The Company will not take, and will ensure that no affiliate of the
Company will take, directly or indirectly, without giving effect to
activities by the Underwriter, any action designed to or that might
cause or result in stabilization or manipulation of the price of
the Shares or any reference security with respect to the Shares,
whether to facilitate the sale or resale of the Offered Shares or
otherwise, and the Company will, and shall cause each of its
affiliates to, comply with all applicable provisions of Regulation
M.

 

(s) Enforce
Lock-Up Agreements. During the Lock-up Period, the Company
will enforce all agreements between the Company and any of its
security holders that restrict or prohibit, expressly or in
operation, the offer, sale or transfer of Shares or Related
Securities or any of the other actions restricted or prohibited
under the terms of the form of Lock-up Agreement. In addition, the
Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound
by such “lock-up” agreements for the duration of the
periods contemplated in such agreements, including
“lock-up” agreements entered into by the
Company’s officers and directors and affiliates pursuant to
Section 1(a) hereof.

 

(t) Company
to Provide Interim Financial Statements. Prior to the First
Closing Date and each applicable Option Closing Date, the Company
will furnish the Underwriter, as soon as they have been prepared by
or are available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent to
the period covered by the most recent financial statements
appearing in the Registration Statement and the
Prospectus.

 

(u) Amendments
and Supplements to Permitted Section 5(d) Communications. If
at any time following the distribution of any Permitted Section
5(d) Communication, there occurred or occurs an event or
development as a result of which such Permitted Section 5(d)
Communication included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances existing at that subsequent time, not misleading,
the Company will promptly notify the Underwriter and will promptly
amend or supplement, at its own expense, such Permitted Section
5(d) Communication to eliminate or correct such untrue statement or
omission.

 

The
Underwriter may, in its sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.

 

 

 

 

4. Payment
of Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions
contemplated hereby, including (i) all expenses incident to the
issuance and delivery of the Offered Shares (including all printing
and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Shares, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and
sale of the Offered Shares to the Underwriter, (iv) all fees and
expenses of the Company’s counsel, independent public or
certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and
certificates of experts), the Time of Sale Prospectus, the
Prospectus, each free writing prospectus prepared by or on behalf
of, used by, or referred to by the Company, and each preliminary
prospectus, each Permitted Section 5(d) Communication, and all
amendments and supplements thereto, and this Agreement, (vi) all
filing fees, attorneys’ fees and expenses incurred by the
Company or the Underwriter in connection with qualifying or
registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Offered Shares for offer
and sale under the state securities or blue sky Laws or the
provincial securities Laws of Canada, and, if requested by the
Underwriter, preparing and printing a “Blue Sky Survey”
or memorandum and a “Canadian wrapper”, and any
supplements thereto, advising the Underwriter of such
qualifications, registrations and exemptions, in an amount not to
exceed $7,500, (vii) the costs, fees and expenses incurred by the
Underwriters in connection with determining their compliance with
the rules and regulations of FINRA related to the
Underwriters’ participation in the offering and distribution
of the Offered Shares, including any related filing fees and the
legal fees of, and disbursements by, counsel to the Underwriters,
(viii) the costs and expenses of the Company relating to investor
presentations on any “road show”, any Permitted Section
5(d) Communication or any Section 5(d) Oral Communication
undertaken in connection with the offering of the Shares, including
expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
Underwriter, employees and officers of the Company and any such
consultants, (ix) the fees and expenses associated with listing the
Offered Shares on the NASDAQ, and (x) all other fees, costs and
expenses of the nature referred to in Item 13 of Part II of the
Registration Statement. Any such amount payable to the Underwriter
may be deducted from the purchase price for the Offered Shares.
Except as provided in this Section 4 or in Section 7, Section 9 or
Section 10, the Underwriter shall pay its own expenses, including
the fees and disbursements of its counsel.

 

5. Covenant
of the Underwriter. The Underwriter covenants with the
Company not to take any action that would result in the Company
being required to file with the Commission pursuant to Rule 433(d)
under the Securities Act a free writing prospectus prepared by or
on behalf of the Underwriter that otherwise would not, but for such
actions, be required to be filed by the Company under Rule
433(d).

 

6. Conditions
of the Obligations of the Underwriter. The obligations of
the Underwriter hereunder to purchase and pay for the Offered
Shares as provided herein on the First Closing Date and, with
respect to the Option Shares, each Option Closing Date, shall be
subject to the accuracy of the representations and warranties on
the part of the Company set forth in Section 1 as of the date
hereof and as of the First Closing Date as though then made and,
with respect to the Option Shares, as of each Option Closing Date
as though then made, to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the
following additional conditions:

 

(a) Comfort
Letter. On the date hereof, the Underwriter shall have
received from CohnReznick LLP, an independent registered public
accounting firm for the Company, a letter dated the date hereof
addressed to the Underwriter, in form and substance satisfactory to
the Underwriter, containing statements and information of the type
ordinarily included in accountant’s “comfort
letters” to underwriters, delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin), with respect
to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement, the
Time of Sale Prospectus, and each free writing prospectus, if
any.

 

(b) Compliance
with Registration Requirements; No Stop Order; No Objection from
FINRA. For a period from and after the date of this
Agreement and through and including the First Closing Date and,
with respect to any Option Shares purchased after the First Closing
Date, each Option Closing Date:

 

(i) The
Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required
by Rule 424(b) under the Securities Act; or the Company shall have
filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective.

 

(ii) No
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment to the Registration
Statement shall be in effect, and no proceedings for such purpose
shall have been instituted or threatened by the
Commission.

 

(iii) FINRA
shall have raised no objection to the fairness and reasonableness
of the underwriting terms and arrangements.

 

(c) No
Material Adverse Effect or Ratings Agency Change. For the
period from and after the date of this Agreement and through and
including the First Closing Date and, with respect to any Option
Shares purchased after the First Closing Date, each Option Closing
Date, in the judgment of the Underwriter there shall not have
occurred any material adverse change in the authorized capital
stock of the Company or any Material Adverse Effect or any
development that would cause a Material Adverse Effect, or a
downgrading in or withdrawal of the rating assigned to any of the
Company’s securities (other than asset backed securities) by
any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of
any of the Company’s securities (other than asset backed
securities), the effect of which, in the case of any such action by
a rating organization described above.

 

 

 

 

(d) Opinion
of Counsel for the Company. On each of the First Closing
Date and each Option Closing Date the Underwriter shall have
received the opinion and negative assurance letter of Alston &
Bird LLP, counsel for the Company, dated as of such date, in form
and substance satisfactory to the Underwriter.

 

(e) Opinion
of Intellectual Property Counsel. On each of the First
Closing Date and each Option Closing Date, the Underwriter shall
have received the opinion of Alston & Bird LLP, counsel for the
Company with respect to intellectual property matters, dated as of
such date, in form and substance satisfactory to the
Underwriter.

 

(f) Opinion
of Counsel for the Underwriter. On each of the First Closing
Date and each Option Closing Date the Underwriter shall have
received the opinion and negative assurance letter of Duane Morris
LLP, counsel for the Underwriter in connection with the offer and
sale of the Offered Shares, in form and substance satisfactory to
the Underwriter, dated as of such date.

 

(g) Officers’
Certificate. On each of the First Closing Date and each
Option Closing Date, the Underwriter shall have received a
certificate executed by the Chief Executive Officer or President of
the Company and the Chief Financial Officer of the Company, dated
as of such date, to the effect set forth in Section 6(b)(ii) and
further to the effect that:

 

(i) for
the period from and including the date of this Agreement through
and including such date, there has not occurred any Material
Adverse Effect;

 

(ii) the
representations, warranties and covenants of the Company set forth
in Section 1 are true and correct with the same force and
effect as though expressly made on and as of such date;
and

 

(iii) the
Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such date.

 

(h) Chief
Financial Officer’s Certificate. On each of the
First Closing Date and each Option Closing Date, the Underwriter
shall have received a certificate executed by the Chief Financial
Officer of the Company, dated as of such date, in form and
substance satisfactory to the Underwriter.

 

(i) Bring-down
Comfort Letter. On each of the First Closing Date and each
Option Closing Date the Underwriter shall have received from
CohnReznick LLP, an independent registered public accounting firm
for the Company, a letter dated such date, in form and substance
satisfactory to the Underwriter, which letter shall: (i) reaffirm
the statements made in the letter furnished by them pursuant to
Section 6(a), except that the specified date referred to therein
for the carrying out of procedures shall be no more than three
Business Days prior to the First Closing Date or the applicable
Option Closing Date, as the case may be; and (ii) cover certain
financial information contained in the Prospectus.

 

(j) Lock-Up
Agreements. On or prior to the date hereof, the Company
shall have furnished to the Underwriter an agreement in the form of
Exhibit A hereto
from the directors and officers (as defined in Rule 16a-1(f) under
the Exchange Act), and each such agreement shall be in full force
and effect on each of the First Closing Date and each Option
Closing Date.

 

(k) Rule
462(b) Registration Statement. In the event that a Rule
462(b) Registration Statement is filed in connection with the
offering contemplated by this Agreement, such Rule 462(b)
Registration Statement shall have been filed with the Commission on
the date of this Agreement and shall have become effective
automatically upon such filing.

 

(l) NASDAQ.
The Company shall have submitted a listing of additional shares
notification form to NASDAQ with respect to the Offered Shares and
shall have received no objection thereto from NASDAQ.

 

(m) Additional
Documents. On or before each of the First Closing Date and
each Option Closing Date, the Underwriter and counsel for the
Underwriter shall have received such information, documents and
opinions as they may reasonably request for the purposes of
enabling them to pass upon the issuance and sale of the Offered
Shares as contemplated herein, or in order to evidence the accuracy
of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained; and all
proceedings taken by the Company in connection with the issuance
and sale of the Offered Shares as contemplated herein and in
connection with the other transactions contemplated by this
Agreement shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.

 

If any
condition specified in this Section 6 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Underwriter by notice from the Underwriter to the Company at any
time on or prior to the First Closing Date and, with respect to the
Option Shares, at any time on or prior to the applicable Option
Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4,
Section 7, Section 9 and Section 10 shall at all times be effective
and shall survive such termination.

 

 

 

 

7. Reimbursement
of Underwriter’s Expenses. If this Agreement is
terminated by the Underwriter pursuant to Section 6, Section 11 or
Section 12, or if the sale to the Underwriter of the Offered Shares
on the First Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company to perform
any agreement herein or to comply with any provision hereof, the
Company agrees to reimburse the Underwriter upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by
the Underwriter in connection with the proposed purchase and the
offering and sale of the Offered Shares, including fees and
disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges.

 

8. Effectiveness
of this Agreement. This Agreement shall become effective
upon the execution and delivery hereof by the parties
hereto.

 

9. Indemnification.

 

(a) Indemnification
of the Underwriter. The Company agrees to indemnify and hold
harmless the Underwriter, its affiliates and their respective
partners, members, directors, officers, employees and agents, and
each person, if any, who controls the Underwriter or any affiliate
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act as follows:

 

(i) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus, Time of Sale Prospectus, any free writing
prospectus, any Marketing Material, any Section 5(d) Written
Communication or the Prospectus (or any amendment or supplement to
the foregoing), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;

 

(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any Governmental Authority, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided
that (subject to Section 9(d)) any such settlement is effected
with the written consent of the Company, which consent shall not
unreasonably be delayed, conditioned or withheld; and

 

(iii) against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any Governmental Authority, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission (whether or not a party), to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with the Underwriter Information
(as defined below).

 

(b) Indemnification
of the Company, its Directors and Officers. The Underwriter
agrees to indemnify and hold harmless the Company, and its
directors, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section
9(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement, any preliminary prospectus, the Time of
Sale Prospectus, any free writing prospectus, any Section 5(d)
Written Communication or the Prospectus (or any amendment or
supplement to the foregoing), in reliance upon and in conformity
with information relating to such Underwriter and furnished to the
Company in writing by the Underwriter expressly for use therein.
The Company hereby acknowledges that the only information that the
Underwriter has furnished to the Company expressly for use in the
Registration Statement, any preliminary prospectus, the Time of
Sale Prospectus, any free writing prospectus, any Section 5(d)
Written Communication or the Prospectus (or any amendment or
supplement to the foregoing) are the statements set forth in the
first paragraph under the caption “Commissions and
Expenses” and the first sentence of the second paragraph
under the caption “Market Making, Stabilization and Other
Transactions” in the Preliminary Prospectus and Prospectus
(the “Underwriter
Information”).

 

 (c) Notifications
and Other Indemnification Procedures. Any party that
proposes to assert the right to be indemnified under this Section 9
will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 9,
notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve the indemnifying
party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and
(ii) any liability that it may have to any indemnified party
under the foregoing provision of this Section 9 unless, and only to
the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for
any other legal expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense.

 

 

 

 

The indemnified
party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action or
counsel reasonably satisfactory to the indemnified party, in each
case, within a reasonable time after receiving notice of the
commencement of the action; in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that
the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges of
more than one separate firm admitted to practice in such
jurisdiction (plus local counsel) at any one time for all such
indemnified party or parties. All such fees, disbursements and
other charges will be reimbursed by the indemnifying party promptly
as they are incurred. An indemnifying party will not, in any event,
be liable for any settlement of any action or claim effected
without its written consent. No indemnifying party shall, without
the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding relating to the matters
contemplated by this Section 9 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or
consent (1) includes an express and unconditional release of
each indemnified party, in form and substance reasonably
satisfactory to such indemnified party, from all liability arising
out of such litigation, investigation, proceeding or claim and
(2) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d) Settlement
Without Consent if Failure to Reimburse. If an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 9(a)(ii)
effected without its written consent if (1) such settlement is
entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (2) such indemnifying party
shall have received notice of the terms of such settlement at least
30 days prior to such settlement being entered into and
(3) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date
of such settlement.

 

10. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of Section 9 is applicable in accordance with
its terms but for any reason is held to be unavailable or
insufficient from the Company or the Underwriter, the Company and
the Underwriter will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which any indemnified party
may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand. The relative benefits
received by the Company on the one hand and the Underwriter on the
other hand shall be deemed to be in the same proportion as the
total net proceeds from the sale of the Offered Shares (before
deducting expenses) received by the Company bear to the total
compensation received by the Underwriter (before deducting
expenses) from the sale of Offered Shares on behalf of the Company.
If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable Law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence
but also the relative fault of the Company, on the one hand, and
the Underwriter, on the other hand, with respect to the statements
or omission that resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the
Underwriter, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata
allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense, or damage, or action in respect
thereof, referred to above in this Section 10 shall be deemed to
include, for the purpose of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim
to the extent consistent with Section 9(c). Notwithstanding the
foregoing provisions of Section 9 and this Section 10, the
Underwriter shall not be required to contribute any amount in
excess of the commissions actually received by it under this
Agreement and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, any person who controls a party to
this Agreement within the meaning of the Securities Act, any
affiliates of the respective Underwriter and any officers,
directors, partners, employees or agents of the Underwriter or its
affiliates, will have the same rights to contribution as that
party, and each director of the Company and each officer of the
Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made
under this Section 10, will notify any such party or parties from
whom contribution may be sought, but the omission to so notify will
not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this
Section 10 except to the extent that the failure to so notify such
other party materially prejudiced the substantive rights or
defenses of the party from whom contribution is sought. Except for
a settlement entered into pursuant to the last sentence of Section
9(c), no party will be liable for contribution with respect to any
action or claim settled without its written consent if such consent
is required pursuant to Section 9(c).

 

 

 

 

11. Termination
of this Agreement. Prior to the purchase of the Firm Shares
by the Underwriter on the First Closing Date, this Agreement may be
terminated by the Underwriter by notice given to the Company if at
any time: (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission
or by the NASDAQ, or trading in securities generally on either the
NASDAQ or the NYSE shall have been suspended or limited, or minimum
or maximum prices shall have been generally established on any of
such stock exchanges; (ii) a general banking moratorium shall have
been declared by any of federal, New York, or Delaware authorities;
(iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or
any change in the United States or international financial markets,
or any substantial change or development involving a prospective
substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of
the Underwriter is material and adverse and makes it impracticable
to market the Offered Shares in the manner and on the terms
described in the Time of Sale Prospectus or the Prospectus or to
enforce contracts for the sale of securities; (iv) in the judgment
of the Underwriter there shall have occurred any change, or any
development or event involving a prospective change, in the
condition, financial or otherwise, or in the business, properties,
earnings, results of operations or prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as in the judgment of the
Underwriter may interfere materially with the conduct of the
business and operations of the Company regardless of whether or not
such loss shall have been insured. Any termination pursuant to this
Section 12 shall be without liability on the part of (a) the
Company to the Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Underwriter pursuant to
Section 4 or Section 7 hereof or (b) the Underwriter to the
Company; provided,
however, that the
provisions of Section 9 and Section 10 shall at all times be
effective and shall survive such termination.

 

12. No
Advisory or Fiduciary Relationship. The Company acknowledges
and agrees that (a) the purchase and sale of the Offered Shares
pursuant to this Agreement, including the determination of the
public offering price of the Offered Shares and any related
discounts and commissions, is an arm’s-length commercial
transaction between the Company, on the one hand, and the
Underwriter, on the other hand, (b) in connection with the offering
contemplated hereby and the process leading to such transaction,
the Underwriter is and has been acting solely as a principal and is
not the agent or fiduciary of the Company, or its stockholders, or
its creditors, employees or any other party, (c) the Underwriter
has not assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of
whether the Underwriter has advised or is currently advising the
Company on other matters) and Underwriter has no obligation to the
Company with respect to the offering contemplated hereby except the
obligations expressly set forth in this Agreement, (d) the
Underwriter and its affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the
Company, and (e) the Underwriter has not provided any legal,
accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed
appropriate.

 

13. Representations
and Agreements to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other
statements of the Company, its officers and the Underwriter set
forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on
behalf of the Underwriter or the Company or any of its or their
partners, affiliates, officers, directors or employees or any
controlling person, as the case may be, and, anything herein to the
contrary notwithstanding, will survive delivery of and payment for
the Offered Shares sold hereunder and any termination of this
Agreement.

 

14. Notices.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:

 

If to
the
Underwriter:                             
Cantor Fitzgerald & Co.

499
Park Avenue

New
York, NY 10022

Facsimile: (212)
829-4708

Attention: General
Counsel

 

with a
copy
to:                                        
Duane Morris LLP

1540
Broadway

New
York, NY 10036

Attention: James T.
Seery

Email:
jtseery@duanemorris.com

 

If to
the
Company:                                  
TG Therapeutics, Inc.

2
Gansevoort Street, 9th Floor

New
York, NY 10014

Attention: Sean A.
Power

Telephone: (212)
554-4484

Email:
sp@tgtxinc.com

 

with a
copy
to:                                        
Alston & Bird LLP

90 Park
Avenue

New
York, NY 10016

Attention: Mark F.
McElreath, Esq.

Telephone: (212)
210-9595

Email:
mark.mcelreath@alston.com

 

 

 

 

Each
party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication
shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on
or before 4:30 p.m., New York City time, on a Business Day or,
if such day is not a Business Day, on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the
Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage
prepaid).

 

15. Electronic
Notice. An electronic communication (“Electronic Notice”) shall be
deemed written notice for purposes of this Section 16 if sent to
the electronic mail address specified by the receiving party under
separate cover. Electronic Notice shall be deemed received at the
time the party sending Electronic Notice receives verification of
receipt by the receiving party. Any party receiving Electronic
Notice may request and shall be entitled to receive the notice on
paper, in a nonelectronic form (“Nonelectronic Notice”) which shall
be sent to the requesting party within ten (10) days of receipt of
the written request for Nonelectronic Notice.

 

16. Successors
and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Underwriter and its
successors and the parties referred to in Section 11. References to
any of the parties contained in this Agreement shall be deemed to
include the successors and permitted assigns of such party. Nothing
in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Neither party may assign its
rights or obligations under this Agreement without the prior
written consent of the other party; provided, however, that the Underwriter
may assign its rights and obligations hereunder to an affiliate
thereof without obtaining the Company’s consent.

 

17. Partial
Unenforceability. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other section, paragraph or
provision hereof. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.

 

1. Entire
Agreement; Amendment; Severability; Waiver. This Agreement
(including all schedules and exhibits attached hereto issued
pursuant hereto) constitutes the entire agreement and supersedes
all other prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto with regard to the
subject matter hereof. Neither this Agreement nor any term hereof
may be amended except pursuant to a written instrument executed by
the Company and the Underwriter. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable as
written by a court of competent jurisdiction, then such provision
shall be given full force and effect to the fullest possible extent
that it is valid, legal and enforceable, and the remainder of the
terms and provisions herein shall be construed as if such invalid,
illegal or unenforceable term or provision was not contained
herein, but only to the extent that giving effect to such provision
and the remainder of the terms and provisions hereof shall be in
accordance with the intent of the parties as reflected in this
Agreement. No implied waiver by a party shall arise in the absence
of a waiver in writing signed by such party. No failure or delay in
exercising any right, power, or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any right, power, or privilege hereunder.

 

2. GOVERNING
LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

3. CONSENT
TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION
CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT
TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.
EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT
FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.

 

 

 

 

4. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile or
electronic transmission.

 

5. Construction.

 

(a) the
section and exhibit headings herein are for convenience only
and shall not affect the construction hereof;

 

(b) words
defined in the singular shall have a comparable meaning when used
in the plural, and vice versa;

 

(c) the
words “hereof,” “hereto,”
“herein” and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement;

 

(d) wherever
the word “include,” “includes” or
“including” is used in this Agreement, it shall be
deemed to be followed by the words “without
limitation”;

 

(e) references
herein to any gender shall include each other gender;

 

(f) references
herein to any law, statute, ordinance, code, regulation, rule or
other requirement of any Governmental Authority shall be deemed to
refer to such law, statute, ordinance, code, regulation, rule or
other requirement of any Governmental Authority as amended,
reenacted, supplemented or superseded in whole or in part and in
effect from time to time and also to all rules and regulations
promulgated thereunder;

 

(g) if
the last day for the giving of any notice or the performance of any
act required or permitted under this Agreement is a day that is not
a Business Day, then the time for the giving of such notice or the
performance of such action shall be extended to the next succeeding
Business Day;

 

(h) “knowledge”
means, as it pertains to the Company, the actual knowledge of the
officers and directors of the Company, together with the knowledge
which they would have had if they had conducted a reasonable
inquiry of the relevant persons into the relevant subject
matter;

 

(i) “Governmental
Authority” means (i) any federal, provincial,
state, local, municipal, national or international government or
governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or
instrumentality, court, tribunal, arbitrator or arbitral body
(public or private); (ii) any self-regulatory organization; or
(iii) any political subdivision of any of the
foregoing;

 

(j) “Law”
means any and all laws, including all federal, state, local,
municipal, national or foreign statutes, codes, ordinances,
guidelines, decrees, rules, regulations and by-laws and all
judicial, arbitral, administrative, ministerial, departmental or
regulatory judgments, orders, directives, decisions, rulings or
awards or other requirements of any Governmental Authority, binding
on or affecting the person referred to in the context in which the
term is used and rules, regulations and policies of any stock
exchange on which securities of the Company are listed for trading;
and

 

(k) “Business
Day” means any day on which NASDAQ and commercial
banks in the City of New York are open for business.

 

6. General
Provisions.

 

Each of
the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including the
indemnification provisions of Section 9 and the contribution
provisions of Section 10, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that
the provisions of Section 9 and Section 10 hereof fairly allocate
the risks in light of the ability of the parties to investigate the
Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, each free
writing prospectus and the Prospectus (and any amendments and
supplements to the foregoing), as contemplated by the Securities
Act and the Exchange Act.

 

  

 [Signature
Page Follows]

 

 

 

 

 

If the
foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and the
Underwriter.

 

Very
truly yours,
 

	

TG
THERAPEUTICS, INC.

 

	
 

	

By:

	
  
/s/
Sean A. Power  

	
 

	

Name:                       Sean
Power

	
 

	

Title:                       Chief
Financial Officer

 

ACCEPTED as of the
date first-above written:
 

	

CANTOR
FITZGERALD & CO.

   

	

	

By:

	
   /s/
Sage Kelly

	
 

	

Name:                       Sage
Kelly

	
 

	

Title:                       Head
of Investment Banking

 

 

 

 

Signature Page

 

 TG Therapeutics, Inc. – Underwriting
Agreement

 

SCHEDULE 6(g)

______________________

 

Subsidiaries

_______________________

 

 

Ariston
Pharmaceuticals, Inc.

TG
Biologics, Inc.

 

 

 

  

SCHEDULE A

 

 

 

Free Writing Prospectuses Included in the Time of Sale
Prospectus

 

None.

 

 

 

 

 

 

 

SCHEDULE B

 

Pricing Information

 

Firm
Shares: 4,100,000

 

Option
Shares: 615,000

 

Price
to Public: The public offering price as to each investor shall be
the price paid by each investor.

 

Underwriter’s
Discount: The Underwriter’s discount shall be the difference
between the price at which the underwriter purchases shares from us
and the price at which the underwriter resells such
shares.

 

 

 

 

 

SCHEDULE C

 

Permitted Section 5(d) Communications

 

 

 

None.

 

 

Exhibit A

 

Form of Lock-up Agreement

 

Cantor
Fitzgerald & Co.

499
Park Avenue

New
York, New York 10022

Attn:
Equity Capital Markets

 

Re: Proposed Registered Follow-On Offering by TG Therapeutics,
Inc.

 

Ladies
and Gentlemen:

 

The
undersigned, a securityholder and/or officer and/or a director of
TG Therapeutics, Inc., a Delaware corporation (the
“Company”), understands
that Cantor Fitzgerald & Co. (“CF&Co.”) proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”)
with the Company relating to the proposed registered follow-on
offering (the “Offering”) of shares of
the Company’s common stock, par value $0.001 per share (the
“Common
Stock”). The undersigned acknowledges that CF&Co.
is relying on the representations and agreements of the undersigned
contained in this lock-up agreement in conducting the Offering and,
at a subsequent date, in entering into the Underwriting Agreement
and other underwriting arrangements with the Company with respect
to the Offering.

 

In
recognition of the benefit that the Offering will confer upon the
undersigned as a securityholder and/or officer and/or a director of
the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees that, during the period beginning on the date
hereof and ending on the date that is 90 days from the date of the
Underwriting Agreement (the “Lock-Up Period”), the
undersigned will not (and will cause any immediate family member
not to), without the prior written consent of CF&Co., which may
withhold its consent in its sole discretion, directly or
indirectly, (i) sell, offer to sell, contract to sell or lend,
effect any short sale or establish or increase a Put Equivalent
Position (as defined in Rule 16a-1(h) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) or
liquidate or decrease any Call Equivalent Position (as defined in
Rule 16a-1(b) under the Exchange Act), pledge, hypothecate or grant
any security interest in, or in any other way transfer or dispose
of, any Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock, in each case whether
now owned or hereafter acquired by the undersigned or with respect
to which the undersigned has or hereafter acquires the power of
disposition (collectively, the “Lock-Up Securities”),
(ii) make any demand for, or exercise any right with respect to the
registration of any of the Lock-Up Securities, or the filing of any
registration statement, prospectus or prospectus supplement (or an
amendment or supplement thereto) in connection therewith, under the
Securities Act of 1933, as amended, (iii) enter into any swap,
hedge or any other agreement or any transaction that transfers, in
whole or in part, the economic consequence of ownership of the
Lock-Up Securities, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, or (iv) publicly announce the intention to do any of the
foregoing.

 

 Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer the Lock-Up Securities pursuant to clauses
(i) through (v) below without the prior written consent
of CF&Co., provided that (1) prior to
any such transfer, CF&Co. receives a signed lock-up agreement,
substantially in the form of this lock-up agreement, for the
balance of the Lock-Up Period from each donee, trustee, distributee
or transferee, as the case may be, (2) any such transfer shall
not involve a disposition for value, (3) in the case of
clauses (i) through (iii) below, such transfers are not
required to be reported with the Securities and Exchange Commission
under the Exchange Act, and (4) the undersigned does not
otherwise voluntarily effect any public filing or report regarding
such transfers:

 

(i) as
a bona fide gift or gifts; or

 

(ii) to any trust
for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned (for purposes of this lock-up
agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than
first cousin); or

 

(iii) pursuant to a
qualified domestic order or in connection with a divorce
settlement; or

 

(iv) by will or
intestate succession to the legal representative, heir, beneficiary
or immediate family of the undersigned upon the death of the
undersigned; or

 

(v) any
exercise, conversion or exchange of any options, warrants, rights
or convertible securities outstanding on the date hereof, including
any exercise effected by the delivery or sale of the
undersigned’s securities to the company (including, without
limitation, to finance a “cashless exercise”);
provided that the transfer
restrictions shall apply to any of the undersigned’s
securities issued upon such exercise, conversion or exchange,
except to the extent such securities are withheld or sold by the
Company or its administrator to cover tax liabilities (including
due to the vesting of restricted stock).

 

 

 

 

The
undersigned further agrees that the foregoing provisions shall be
equally applicable to any Common Stock the undersigned may purchase
or otherwise receive in the Offering.

 

The
undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar
against the transfer of the Lock-Up Securities except in compliance
with the foregoing restrictions.

 

With
respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities
Act of the offer and sale of any shares of Common Stock and/or any
options or warrants or other rights to acquire Common Stock or any
securities exchangeable or exercisable for or convertible into
Common Stock, or to acquire other securities or rights ultimately
exchangeable or exercisable for or convertible into Common Stock,
owned either of record or beneficially by the undersigned,
including any rights to receive notice of the
Offering.

 

The
undersigned confirms that the undersigned has not, and has no
knowledge that any immediate family member has, directly or
indirectly, taken any action designed to or that might reasonably
be expected to cause or result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale
of the Common Stock The undersigned will not, and will cause any
immediate family member not to take, directly or indirectly, any
such action.

 

As used
herein, “immediate family” shall mean the spouse,
domestic partner, lineal descendant, father, mother, brother,
sister, or any other person with whom the undersigned has a
relationship by blood, marriage or adoption not more remote than
first cousin.

 

The
undersigned represents and warrants that the undersigned has full
power, capacity and authority to enter into this letter agreement.
This letter agreement is irrevocable and will be binding on the
undersigned and the successors, heirs, personal representatives and
assigns of the undersigned.

 

This
lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York.

 

Whether
or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and
CF&CO.

 

This
lock-up agreement shall automatically terminate, and the
undersigned shall be released from its obligations hereunder, upon
the earliest to occur, if any, of (i) the Company advising
CF&Co. in writing, prior to the execution of the Underwriting
Agreement, that it has determined not to proceed with the Offering,
(ii) the executed Underwriting Agreement being terminated
prior to the closing of the Offering (other than the provisions
thereof that survive termination), and (iii) May 31, 2019, in the
event that the Underwriting Agreement has not been executed by such
date.

 

 

[Signature
Page Follows]

 

 

 

 

Very
truly yours,

 

 

 

___________________________________

Name of Securityholder/Director/Officer
(Print exact
name)

 

By:
_________________________________

   
   Signature

 

 

If
not signing in an individual capacity:

 

 

___________________________________

Name of Authorized Signatory (Print)

 

 

___________________________________

Title of Authorized Signatory (Print)

(indicate
capacity of person signing if signing as custodian, trustee or on
behalf of an entity) 

 

 

 

 

Exhibit B

 

Parties to Lock-up Agreement

 

Michael
S. Weiss

Sean A.
Power

Laurence
Charney

William
Kennedy

Mark
Schoenebaum

Yann
Echelard

Kenneth
Hoberman

Daniel
Hume

Opus
Point Partners, LLCBlueprint

  Exhibit 10.2

Execution Version

 

 

LOAN
AND SECURITY AGREEMENT

 

THIS
LOAN AND SECURITY AGREEMENT is made and dated as of February 28,
2019 and is entered into by and among TG THERAPEUTICS, INC., a
Delaware corporation (the “Parent”), TG BIOLOGICS,
INC., a Delaware corporation (“TG Bio”; together with
Parent and each of Parent’s Subsidiaries that delivers a
Joinder Agreement pursuant to Section 7.13 of this Agreement,
individually and collectively, jointly and severally, the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to this
Agreement (collectively, referred to as “Lender”) and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and the Lender
(in such capacity, the “Agent”).

 

RECITALS

 

A.

Borrower has
requested Lender to make available to Borrower a loan in an
aggregate principal amount of up to Sixty Million Dollars
($60,000,000) (the “Term Loan”); and

 

B.

Lender
is willing to make the Term Loan on the terms and conditions set
forth in this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, Borrower, Agent and Lender agree as
follows:

 

SECTION 1. DEFINITIONS
AND RULES OF CONSTRUCTION

 

1.1 Unless otherwise
defined herein, the following capitalized terms shall have the
following meanings:

 

“Account
Control Agreement(s)” means any agreement entered into by and
among the Agent, Borrower and a third party Bank or other
institution (including a Securities Intermediary) in which Borrower
maintains a Deposit Account or an account holding Investment
Property and which perfects Agent’s first priority security
interest in the subject account or accounts.

 

“ACH
Authorization” means the ACH Debit Authorization Agreement in
substantially the form of Exhibit I, which account numbers shall be
redacted for security purposes if and when filed publicly by the
Borrower.

 

“Advance(s)”
means a Term Loan Advance.

 

“Advance
Date” means the funding date of any Advance.

 

“Advance
Request” means a request for an Advance submitted by Borrower
to Agent in substantially the form of Exhibit A, which account
numbers shall be redacted for security purposes if and when filed
publicly by the Borrower.

 

“Affiliate”
means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in
question, (b) any Person directly or indirectly owning, controlling
or holding with power to vote twenty percent (20%) or more of the
outstanding voting securities of another Person, or (c) any Person
twenty percent (20%) or more of whose outstanding voting securities
are directly or indirectly owned, controlled or held by another
Person with power to vote such securities. As used in the
definition of “Affiliate,” the term
“control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

 

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

 

“Agreement”
means this Loan and Security Agreement, as amended, restated,
amended and restated, supplemented or otherwise modified from time
to time.

 

“Amortization
Date” means October 1, 2020; provided however, if the
Interest Only Extension Conditions are satisfied, then April 1,
2021.

 

“Anti-Corruption
Laws” means all laws, rules, and regulations of any
jurisdiction applicable to Borrower or any of its Affiliates from
time to time concerning or relating to bribery or corruption,
including without limitation the United States Foreign Corrupt
Practices Act of 1977, as amended, the UK Bribery Act 2010 and
other similar legislation in any other jurisdictions.

 

“Anti-Terrorism
Laws” means any laws, rules, regulations or orders relating
to terrorism or money laundering, including without limitation
Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the laws comprising or implementing the Bank Secrecy
Act, and the laws administered by OFAC.

 

“Ariston”
means Ariston Pharmaceuticals, Inc., a Delaware
corporation.

 

“Ariston
Notes” means those certain 5% Convertible Promissory Notes
issued by Ariston to the holders thereof, in an initial aggregate
principal amount outstanding not in excess of
$15,500,000.

 

“Assignee”
has the meaning assigned to such term in Section
11.13.

 

“Biologics
License Application” means an application for licensure of a
biological product submitted to the FDA under 42 U.S.C. §
262(k) for permission to introduce, or deliver for introduction, a
biologic product into interstate commerce.

 

“Blocked
Person” means any Person: (a) listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224,
(b) a Person owned or controlled by, or acting for or on behalf of,
any Person that is listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224, (c) a Person with
which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law, (d) a Person that
commits, threatens or conspires to commit or supports
“terrorism” as defined in Executive Order No. 13224, or
(e) a Person that is named a “specially designated
national” or “blocked person” on the most current
list published by OFAC or other similar list.

 

 

 

 

“Borrower
Products” means all products, software, service offerings,
technical data or technology currently being designed, manufactured
or sold by Borrower or which Borrower intends to sell, license, or
distribute in the future including any products or service
offerings under development, collectively, together with all
products, software, service offerings, technical data or technology
that have been sold, licensed or distributed by Borrower since its
incorporation.

 

“Business
Day” means any day other than Saturday, Sunday and any other
day on which banking institutions in the State of California are
closed for business.

 

“Cash”
means all cash, cash equivalents (including Cash Equivalents) and
liquid funds.

 

“Cash
Equivalents” means: (a) marketable direct obligations issued
or unconditionally guaranteed by the United States of America or
any agency or any State thereof maturing within one year from the
date of acquisition thereof having a rating of at least A-2 or P-2
from either Standard & Poor’s Corporation or
Moody’s Investors Services at the time of acquisition; (b)
commercial paper maturing no more than one year from the date of
creation thereof and having a rating of at least A-2 or P-2 from
either Standard & Poor’s Corporation or Moody’s
Investors Service at the time of acquisition; (c) certificates of
deposit issued by any bank with assets of at least $500,000,000
maturing no more than one year from the date of investment therein;
(d) money market accounts; (e) repurchases of stock from former
employees, directors, or consultants of Borrower under the terms of
applicable repurchase agreements at the original issuance price of
such securities in an aggregate amount not to exceed $250,000 in
any fiscal year, provided that no Event of Default has occurred, is
continuing or could exist after giving effect to the repurchases;
and (f) any other Investments in cash equivalents as described in
Borrower’s investment policy, as such investment policy has
been approved by Agent in writing.

 

“Cash
Interest Reduction Amount” has the meaning set forth in
Section 2.2(c)(iii).

 

“Change in Control” means any reorganization,
recapitalization, consolidation or merger (or similar transaction
or series of related transactions) of Borrower, sale or exchange of
outstanding shares (or similar transaction or series of related
transactions) of Borrower in which the holders of Borrower’s
outstanding shares immediately before consummation of such
transaction or series of related transactions do not, immediately
after consummation of such transaction or series of related
transactions, retain shares representing more than fifty percent
(50%) of the voting power of the surviving entity of such
transaction or series of related transactions (or the parent of
such surviving entity if such surviving entity is wholly owned by
such parent), in each case without regard to whether Borrower is
the surviving entity.

 

“Claims”
has the meaning assigned to such term in Section
11.10.

 

“Closing
Date” means the date of this Agreement.

 

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

 

“Collateral”
means the property described in Section 3.

 

“Confidential
Information” has the meaning assigned to such term in Section
11.12.

 

“Contingent
Obligation” means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with
respect to (i) any Indebtedness, lease, dividend, letter of credit
or other obligation of another, including any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted
or sold with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate
credit cards or merchant services issued for the account of that
Person; and (iii) all obligations arising under any interest rate,
currency or commodity swap agreement, interest rate cap agreement,
interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; provided,
however, that the term “Contingent Obligation” shall
not include endorsements for collection or deposit in the ordinary
course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determined amount
of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined
by such Person in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations
under the guarantee or other support arrangement.

 

“Copyright
License” means any written agreement granting any right to
use any Copyright or Copyright registration, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest.

 

“Copyrights”
means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States of America, any State
thereof, or of any other country.

 

“Default”
means any event, circumstance or condition that has occurred or
exists, that could, with the passage of time or the requirement
that notice be given or both, unless cured or waived by Agent in
its sole discretion, become an Event of Default.

 

“Deposit
Accounts” means any “deposit accounts,” as such
term is defined in the UCC, and includes any checking account,
savings account, or certificate of deposit.

 

“Disqualified
Lender” means any financial institutions, investors or
competitors (and any Affiliates thereof clearly identifiable as
such solely on the basis of the name thereof) designated in writing
by Borrower to the Agent on or prior to the Closing Date; provided
that any such modification after the Closing Date to such list
shall be subject to approval at the reasonable discretion of Agent,
and any additional direct competitors of Borrower and its
Subsidiaries that are separately identified in writing by Borrower
to the Agent (and made available to Lender upon request) from time
to time; provided that any subsequent designation of a competitor
as a “Disqualified Lender” hereunder shall not
retroactively apply to disqualify any Persons that have acquired an
interest in the Loans prior to the date of such designation;
provided further that Disqualified Lenders shall exclude any Person
that Borrower has designated as no longer being a Disqualified
Lender by written notice delivered to the Agent from time to time.
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 Lenders and (b) each of Borrower and Lender
acknowledge and agree that the Agent shall have no obligation to
determine whether any Lender or potential Lender is a Disqualified
Lender and that the Agent shall have no liability with respect to
any assignment or participation made to a Disqualified
Lender.

 

“Domestic
Subsidiary” means any Subsidiary that is not a Foreign
Subsidiary.

 

“DSMB”
means data safety monitoring board.

 

“Due
Diligence Fee” means $40,000, which fee has been paid to
Lender prior to the Closing Date, and shall be deemed fully earned
on such date regardless of the early termination of this
Agreement.

 

 

 

 

“End of Term
Charge” means any end of term charge payable pursuant to
Section 2.6.

 

“Equity
Interests” means, with respect to any Person, the capital
stock, partnership or limited liability company interests, all
warrants, options or other rights for the purchase or acquisition
from such Person of shares of capital stock, partnership or limited
liability company interests or other equity securities or equity
ownership interests of such Person.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

 

“Event of
Default” has the meaning assigned to such term in
Section 9.

 

“Excluded
Accounts” means any Deposit Accounts, securities accounts or
other similar accounts (i) into which there are deposited no funds
other than those intended solely to cover wages for employees (and
related contributions to be made on behalf of such employees to
health and benefit plans) plus balances for outstanding checks for
wages from prior periods provided that the aggregate amounts
deposited in all such accounts shall not exceed the amount
reasonably expected to be due and payable for the next two (2)
succeeding pay periods; (ii) constituting Israel Discount Bank
account ending XXX157 into which there are deposited no funds other
than funds constituting cash collateral and not to exceed
$1,500,000 at any time; (iii) into which there are deposited no
funds other than those that are deposited for employee benefits
(e.g. health insurance, flexible spending, retirement savings
plans, etc.); (iv) zero balance accounts; and (v) other Deposit
Accounts, securities accounts or similar accounts maintained in
Australia by TG Australia if the amount on deposit and value in
security in such account does not exceed $250,000 in the aggregate
at any time, after the payment of any expenses paid or to be paid
within the then-next thirty (30) days pursuant to invoiced accounts
payable, with any amounts on deposit in such Deposit Accounts,
securities accounts or similar accounts.

 

“Excluded
Foreign Subsidiary” means any Foreign Subsidiary and any
Subsidiary directly or indirectly owning any Foreign Subsidiary so
long as such Subsidiary’s sole assets are the shares of such
Foreign Subsidiary for which a guarantee or pledge by such
Subsidiary or Subsidiaries would result in a material adverse tax
consequence to Borrower, Parent or such Subsidiary under Section
956 of the Code, as determined by Borrower in good faith and in
consultation with the Agent and Lenders.

 

“Excluded
Taxes” means any of the following Taxes imposed on or with
respect to a Recipient or required to be withheld or deducted from
a payment to a Recipient, (a) Taxes imposed on or measured by net
income (however denominated), franchise Taxes, and branch profits
Taxes, in each case, (i) imposed as a result of such Recipient
being organized under the laws of, or having its principal office
or, in the case of any Lender, its applicable lending office
located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b)
in the case of a Lender, withholding Taxes imposed on amounts
payable to or for the account of such Lender with respect to an
applicable interest in a Loan or Term Commitment pursuant to a law
in effect on the date on which (i) such Lender acquires such
interest in the Loan or Term Commitment or (ii) such Lender changes
its lending office, except in each case to the extent that,
pursuant to Section 2.9, 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, (c) Taxes attributable to
such Recipient’s failure to comply with Section 2.9(g) and
(d) any withholding Taxes imposed under FATCA.

 

“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.

 

“FDA”
means the U.S. Food and Drug Administration or any successor
thereto or any other comparable Governmental
Authority.

 

“Financial
Statements” has the meaning assigned to such term in
Section 7.1.

 

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

 

“Foreign
Subsidiary” means any Subsidiary other than a Subsidiary
organized under the laws of any state within the United States of
America.

 

“GAAP”
means generally accepted accounting principles in the United States
of America, as in effect from time to time.

 

“Indebtedness”
means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services (excluding trade credit
entered into in the ordinary course of business due within one
hundred and twenty (120) days or being contested, challenged or
discussed in good faith), including reimbursement and other
obligations with respect to surety bonds and letters of credit, (b)
all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations, (d) equity
securities of any Person subject to repurchase or redemption other
than at the sole option of such Person, (e) “earnouts,”
purchase price adjustments, profit sharing arrangements, deferred
purchase money amounts and similar payment obligations or
continuing obligations of any nature arising out of purchase and
sale contracts, in each case that in accordance with GAAP would be
shown on the liabilities side of the balance sheet of such Person,
(f) obligations arising under bonus, deferred compensation,
incentive compensation or similar arrangements (other than those
arising in the ordinary course of business), (g) non-contingent
obligations to reimburse any bank or Person in respect of amounts
paid under a letter of credit, banker’s acceptance or similar
instrument, and (h) all Contingent Obligations (other than for the
avoidance of doubt, any Contingent Obligations of the nature set
forth in clause (e) above).

 

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

 

“Initial
Facility Charge” means a fee payable to Agent in an amount
equal to Five Hundred Thousand Dollars ($500,000), fully earned and
due and payable on the Closing Date.

 

“Insolvency
Proceeding” is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or
insolvency law, including assignments for the benefit of creditors,
compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other similar
relief.

 

“Intellectual
Property” means all of Borrower’s Copyrights;
Trademarks; Patents; Licenses; trade secrets and inventions; mask
works; Borrower’s applications therefor and reissues,
extensions, or renewals thereof; and Borrower’s goodwill
associated with any of the foregoing, together with
Borrower’s rights to sue for past, present and future
infringement of Intellectual Property and the goodwill associated
therewith.

 

“Intercompany
Subordination Agreement” means that certain Omnibus
Intercompany Subordination Agreement, dated as of the date hereof,
by and among Agent, Borrower, and each of Borrower’s
Subsidiaries, as amended, amended and restated, supplemented or
otherwise modified from time to time.

 

 

 

 

“Interest
Only Extension Conditions” means satisfaction of each of the
following events: (a) no Default or Event of Default shall have
occurred; and (b) on or before September 30, 2020, Borrower
achieves either Performance Milestone III or Performance Milestone
IV.

 

“Investment”
means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any
loan, advance or capital contribution to any Person or the
acquisition of all or substantially all of the assets of another
Person.

 

“IRS”
means the United States Internal Revenue Service.

 

“Joinder
Agreements” means for each Subsidiary formed or acquired
after the Closing Date in accordance with Section 7.13, a completed
and executed Joinder Agreement in substantially the form attached
hereto as Exhibit G.

 

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

 

“License”
means any Copyright License, Patent License, Trademark License or
other license of rights or interests.

 

“Lien”
means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy, lien
or charge of any kind, whether voluntarily incurred or arising by
operation of law or otherwise, against any property, any
conditional sale or other title retention agreement, and any lease
in the nature of a security interest.

 

“Loan”
means the Advances made under this Agreement.

 

“Loan
Documents” means this Agreement, the Notes (if any), the ACH
Authorization, the Account Control Agreements, the Joinder
Agreements, all UCC Financing Statements, the Warrant, the Pledge
Agreement and any other documents executed in connection with the
Secured Obligations or the transactions contemplated hereby, as the
same may from time to time be amended, restated, amended and
restated, supplemented or otherwise modified.

 

“Material
Adverse Effect” means a material adverse effect upon:
(i) the business, operations, properties, assets or financial
condition of Borrower and its Subsidiaries taken as a whole; or
(ii) the ability of Borrower taken as a whole to perform or
pay the Secured Obligations in accordance with the terms of the
Loan Documents, or the ability of Agent or Lender to enforce any of
its rights or remedies with respect to the Secured Obligations; or
(iii) the Collateral or Agent’s Liens on the Collateral or
the priority of such Liens.

 

“Maximum Term
Loan Amount” means Sixty Million and No/100 Dollars
($60,000,000).

 

“Maximum
Rate” has the meaning assigned to such term in
Section 2.3.

 

“MZL” means marginal zone lymphoma.

 

“New Drug
Application” means a new drug application in the United
States for authorization to market a product, as defined in the
applicable laws and regulations and submitted to the
FDA.

 

“Non-Disclosure
Agreement” means that certain Non-Disclosure Agreement by and
between Hercules Capital, Inc. and TG Therapeutics, Inc. dated as
of January 24, 2019.

 

“Note(s)”
means a Term Note.

 

“OFAC”
means the U.S. Department of Treasury Office of Foreign Assets
Control.

 

“OFAC
Lists” means, collectively, the Specially Designated
Nationals and Blocked Persons List maintained by OFAC pursuant to
Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
and/or any other list of terrorists or other restricted Persons
maintained pursuant to any of the rules and regulations of OFAC or
pursuant to any other applicable Executive Orders.

 

“Other
Connection Taxes” means, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such
Recipient and the jurisdiction imposing such Tax (other than
connections arising from such Recipient having executed, delivered,
become a party to, performed its obligations under, received
payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced any Loan
Document, or sold or assigned an interest in any 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.

 

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

 

“Patent
License” means any written agreement granting any right with
respect to any invention on which a Patent is in existence or a
Patent application is pending, in which agreement Borrower now
holds or hereafter acquires any interest.

 

“Patents”
means all letters patent of, or rights corresponding thereto, in
the United States of America or in any other country, all
registrations and recordings thereof, and all applications for
letters patent of, or rights corresponding thereto, in the United
States of America or any other country.

 

“Performance
Milestone I” means satisfaction of each of the following
events: (a) no Default or Event of Default shall have occurred and
be continuing; and (b) Borrower has announced efficacy data (including
overall response rate as assessed by an independent review
committee) from the full Stage 1 cohort of patients with MZL
through six-months follow-up in the Phase 2b UNITY-NHL trial of
umbralisib (clinical trial protocol UTX-TGR-205 and
ClinicalTrials.gov identifier NCT02793583) that supports the
submission of a New Drug Application to the FDA under an FDA
“accelerated approval” pathway, as such pathway is set
forth in 21 C.F.R. §
314 Subpart H, and
with umbralisib demonstrating an acceptable safety/tolerability
profile such that Borrower’s executive officers have approved
proceeding towards the filing of a New Drug Application, in each
case subject to reasonable verification by Agent (including
supporting documentation reasonably requested by
Agent).

 

 

 

 

“Performance
Milestone II” means satisfaction of each of the following
events: (a) no Default or Event of Default shall have occurred and
be continuing; and (b) Borrower has announced that the Phase 3 UNITY-CLL
trial (clinical trial protocol UTX-TGR-304 and ClincalTrials.gov
identifier NCT02612311) has achieved the protocol-specified primary
efficacy endpoint of a statistically significant improvement in
progression-free survival and with the combination of ublituximab
and umbralisib demonstrating an acceptable safety profile
(including no significantly detrimental mortality or overall
survival trends unfavorable to the combination of ublituximab and
umbralisib study arm), which together is sufficient to file a New
Drug Application and a Biologics License Application with the FDA
for the combination of ublituximab and umbralisib for the treatment
of chronic lymphocytic leukemia, in each case subject to reasonable
verification by Agent (including supporting documentation
reasonably requested by Agent).

 

“Performance
Milestone III” means satisfaction of each of the following
events: (a) no Default or Event of Default shall have occurred and
be continuing; and (b) Borrower shall have achieved Performance
Milestone II, subject to
reasonable verification by Agent (including supporting
documentation reasonably requested by Agent) and (c) the FDA
shall have accepted for filing the New Drug Application for
umbralisib for the
treatment of MZL, subject to in each case reasonable verification
by Agent (including supporting documentation reasonably requested
by Agent).

 

“Performance
Milestone IV” means satisfaction of each of the following
events: (a) no Default or Event of Default shall have occurred and
be continuing; and (b) Parent has raised at least an amount equal
to One Hundred Fifty Million Dollars ($150,000,000.00) in
unrestricted (including, not subject to any redemption, clawback,
escrow or similar encumbrance or restriction other than in the case
the Permitted Convertible Debt Financing) net cash proceeds from
one or more bona fide equity financings, Subordinated Indebtedness
(which, for the avoidance of doubt, may include the net proceeds
received from any Permitted Convertible Debt Financing) and/or
upfront proceeds from business development transactions permitted
under this Agreement, in each case after February 7, 2019, and
prior to September 30, 2020, in each case subject to
verification by Agent (including supporting documentation requested
by Agent).

 

“Permitted
Acquisition” shall mean any acquisition (including by way of
merger) by Borrower of all or substantially all of the assets of
another Person, or of a division or line of business of another
Person, or capital stock of another Person, in each case located
entirely within the United States of America or other such
jurisdiction as approved by Agent in its reasonable discretion,
which is conducted in accordance with the following
requirements:

 

(a)
such acquisition is of a business or Person engaged in a line of
business related to that of the Borrower or its
Subsidiaries;

 

(b) if
such acquisition is structured as a stock acquisition, then the
Person so acquired shall either (i) become a wholly-owned
Subsidiary of Borrower or of a Subsidiary and the Borrower shall
comply, or cause such Subsidiary to comply, with 7.13 hereof or
(ii) such Person shall be merged with and into Borrower (with the
Borrower being the surviving entity);

 

(c) if
such acquisition is structured as the acquisition of assets, such
assets shall be acquired by Borrower, and shall be free and clear
of Liens other than Permitted Liens;

 

(d) the
Borrower shall have delivered to Lender not less than ten (10) nor
more than forty-five (45) days prior to the date of such
acquisition, notice of such acquisition together with pro forma
projected financial information, copies of all material documents
relating to such acquisition, and historical financial statements
for such acquired entity, division or line of business, in each
case in form and substance reasonably satisfactory to Lender and
demonstrating compliance with the covenants set forth in Section
7.21 hereof on a pro forma basis as if the acquisition occurred on
the first day of the most recent measurement period;

 

(e)
both immediately before and after such acquisition no Default or
Event of Default shall have occurred and be
continuing;

 

(f) the
sum of the cash portion of the purchase price of such proposed new
acquisition, computed on the basis of total acquisition
consideration paid or incurred, or to be paid or incurred, by
Borrower with respect thereto, including the amount of Permitted
Indebtedness assumed or to which such assets, businesses or
business or ownership interest or shares, or any Person so
acquired, is subject (excluding Indebtedness comprised of
performance-based milestones, earnouts, or royalties that qualify
as Indebtedness pursuant to clause (e) or (h) of the definition of
Indebtedness so long as no payments with respect to such
Indebtedness are paid or scheduled to be paid prior to the Term
Loan Maturity Date), shall not be greater than One Million Five
Hundred Thousand Dollars ($1,500,000) for all such acquisitions
during the term of this Agreement; and

 

(g) the
sum of any consideration for all such acquisitions paid in Equity
Interests of Borrower shall not exceed One Million Five Hundred
Thousand Dollars ($1,500,000) for all such acquisitions during the
term of this Agreement.

 

“Permitted
Convertible Debt Financing” means issuance by Parent of
convertible notes in an aggregate principal amount of not more than
One Hundred Fifty Million Dollars ($150,000,000); provided that
such convertible notes shall (a) have a scheduled maturity date no
earlier than one hundred eighty (180) days after the Term Loan
Maturity Date, (b) be unsecured, (c) not be guaranteed by any
Subsidiary of Parent that is not a Borrower, (d) contain usual and
customary subordination terms for underwritten offerings of senior
subordinated convertible notes and (e) shall specifically designate
this Agreement and all Secured Obligations as “designated
senior indebtedness” or similar term so that the
subordination terms referred to in clause (d) of this definition
specifically refer to such notes as being subordinated to the
Secured Obligations pursuant to such subordination
terms.

 

“Permitted
Indebtedness” means: (i) Indebtedness of Borrower in favor of
Lender or Agent arising under this Agreement or any other Loan
Document; (ii) Indebtedness existing on the Closing Date which is
disclosed in Schedule 1A; (iii) Indebtedness of up to $250,000
outstanding at any time secured by a Lien described in clause (vii)
of the defined term “Permitted Liens,” provided such
Indebtedness does not exceed the cost of the Equipment or the
software or the intellectual property financed with such
Indebtedness; (iv) Indebtedness to trade creditors incurred in the
ordinary course of business, including vendor financing, the
deferred purchase price for goods and services rendered under
contract manufacturing and/or licensing arrangements, in each case
in the ordinary course of business, or Indebtedness incurred in the
ordinary course of business with corporate credit cards; (v)
Indebtedness that also constitutes a Permitted Investment; (vi)
Subordinated Indebtedness; (vii) reimbursement obligations in
connection with letters of credit that are secured by Cash and
issued on behalf of the Borrower or a Subsidiary thereof in an
amount not to exceed $200,000 at any time outstanding; (viii) other
unsecured Indebtedness in an amount not to exceed $500,000 at any
time outstanding; (ix) intercompany Indebtedness subject to the
Intercompany Subordination Agreement; (x) Permitted Convertible
Debt Financing; (xi) Indebtedness owed to any Person (including
obligations in respect of letters of credit for the benefit of such
Person) providing workers’ compensation, health, disability
or other employee benefits or property, casualty, liability
insurance, self-insurance, pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred
in the ordinary course of business, not to exceed $100,000 at any
time outstanding; (xii) Indebtedness in respect of or guarantee of
performance bonds, bid bonds, appeal bonds, surety bonds,
performance and completion guarantees, workers’ compensation
claims, letters of credit, bank guarantees and banker’s
acceptances, warehouse receipts or similar instruments and similar
obligations (other than in respect of other Indebtedness for
borrowed money) including those incurred to secure health, safety
and environmental obligations, in each case provided in the
ordinary course of business, not to exceed $100,000 at any time
outstanding; (xiii) Indebtedness consisting of the financing of
insurance premiums in an aggregate amount not exceeding $750,000 at
any time outstanding; (xiv) endorsement of instruments or other
payment items for deposit in the ordinary course of business and
Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of
business; (xv) Contingent Obligations in respect of Indebtedness
otherwise constituting Permitted Indebtedness; (xvi) any
Indebtedness assumed or acquired in accordance with clause (f) of
the definition of Permitted Acquisition; and (xvii) extensions,
refinancings and renewals of any items of Permitted Indebtedness,
provided that the principal amount is not increased (except by an
amount equal to the lesser of (A) the existing unutilized
commitments thereunder, accrued but unpaid interest thereon and a
reasonable premium paid, and fees and expenses reasonably incurred,
in connection with such extension, refinancing or renewal
(including any fees and original issue discount incurred in respect
of such resulting Indebtedness) and (B) five percent (5%) of such
principal amount) or the terms modified to impose materially more
burdensome terms upon Borrower or its Subsidiary, as the case may
be.

 

 

 

 

“Permitted
Investment” means: (i) Investments existing on the Closing
Date which are disclosed in Schedule 1B; (ii) Cash Equivalents;
(iii) to the extent constituting Investments, any transactions
permitted pursuant to Section 7.7 or Section 7.9; (iv) Investments
accepted in connection with Permitted Transfers; (v) Investments
(including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with,
customers or suppliers arising in the ordinary course of
Borrower’s business; (vi) Investments consisting of notes
receivable of, or prepaid royalties and other credit extensions, to
customers and suppliers who are not Affiliates, in the ordinary
course of business, provided that this subparagraph (vi) shall not
apply to Investments of Borrower in any Subsidiary; (vii) Investments consisting of loans not
involving the net transfer on a substantially contemporaneous basis
of cash proceeds to employees, officers or directors relating to
the purchase of capital stock of Borrower pursuant to employee
stock purchase plans or other similar agreements approved by
Borrower’s Board of Directors; (viii) Investments consisting
of travel advances in the ordinary course of business;
(ix) Investments in newly-formed
Domestic Subsidiaries, provided that each such Subsidiary enters
into a Joinder Agreement promptly after its formation by Borrower
and execute such other documents as shall be reasonably requested
by Agent; (x) Investments in Foreign Subsidiaries approved in
advance in writing by Agent; (xi) joint ventures, strategic
alliances, collaboration arrangements or non-exclusive licensing
arrangements in the ordinary course of Borrower’s business
consisting of the nonexclusive licensing of technology, the
development of technology or the providing of technical support,
provided that any cash Investments by Borrower do not exceed
$500,000 in the aggregate in any fiscal year; (xii) Permitted
Acquisitions; (xiii) Investments between and among Borrowers; (xiv)
Investments by any Borrower in TG Australia; provided that prior to
and immediately after giving effect to each such Investment,
Borrower is in compliance with Section 7.14 and such Investments
are used solely to fund research and development activities of TG
Australia; (xv) Investments made by any Subsidiary that is not a
Borrower in any Borrower; (xvi) Investments of any Person existing
at the time such Person becomes a Subsidiary or consolidates,
amalgamates or merges with any Borrower or any Subsidiary; provided
that such Investment otherwise qualifies as a Permitted Investment
and was not made in contemplation of such Person becoming a
Subsidiary or such consolidation or merger; (xvii) loans or
advances to officers, partners, directors, consultants and
employees of any Borrower or any Subsidiary for relocation,
entertainment, travel expenses, or similar expenditures in an
aggregate amount not to exceed $100,000 at any time outstanding;
and (xviii) additional Investments (including Investments in
connection with in-licensing transactions) that do not exceed an
aggregate amount equal to One Million Five Hundred Thousand Dollars
($1,500,000) minus the
aggregate amount of all consideration paid for Permitted
Acquisitions pursuant to clause (f) of the definition of Permitted
Acquisition and (xix) other Investments described in
Borrower’s investment policy, as such investment policy has
been approved by Agent in writing.

 

“Permitted
Liens” means any and all of the following: (i) Liens in favor
of Agent or Lender; (ii) Liens existing on the Closing Date which
are disclosed in Schedule 1C; (iii) Liens for taxes, fees,
assessments or other governmental charges or levies, either not
delinquent or not overdue by more than 30 days or being contested
in good faith by appropriate proceedings; provided, that Borrower
maintains adequate reserves therefor in accordance with GAAP;
(iv) Liens securing claims or demands of materialmen,
artisans, mechanics, carriers, warehousemen, landlords and other
like Persons arising in the ordinary course of Borrower’s
business and imposed by law or without action of such parties;
provided, that the payment thereof is either not yet required or
not overdue by more than 30 days or being contested in good faith
by appropriate proceedings; (v) Liens arising from judgments,
decrees or attachments in circumstances which do not constitute an
Event of Default hereunder; (vi) the following deposits, to
the extent made in the ordinary course of business: deposits under
worker’s compensation, unemployment insurance, social
security and other similar laws, or to secure the performance of
bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts
(other than for the repayment of borrowed money) or to secure
statutory obligations (other than Liens arising under ERISA or
environmental Liens) or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds; (vii) Liens on
Equipment or software or other intellectual property constituting
purchase money Liens and Liens in connection with capital leases
securing Indebtedness permitted by clause (iii) of the definition
of Permitted Indebtedness; (viii) Liens incurred in connection with
Subordinated Indebtedness; (ix) leasehold interests in leases or
subleases; (x) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of custom duties that
are promptly paid on or before the date they become due; (xi) Liens
on insurance proceeds securing the payment of financed insurance
premiums that are promptly paid on or before the date they become
due (provided that such Liens extend only to such insurance
proceeds and not to any other property or assets); (xii) statutory
and common law rights of set-off and other similar rights as to
deposits of cash and securities in favor of banks, other depository
institutions and brokerage firms; (xiii) easements, zoning
restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of
business so long as they do not materially impair the value or
marketability of the related property; (xiv) (A) Liens on Cash or
Cash Equivalents securing obligations permitted under clause (vii)
of the definition of Permitted Indebtedness and (B) security
deposits in connection with real property leases, the combination
of (A) and (B) in an aggregate amount not to exceed $500,000 at any
time; (xv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing
on any property or asset of any Person that became or becomes a
Subsidiary after the Closing Date prior to the time such Person
became or becomes a Subsidiary, in each case as contemplated by the
definition of Permitted Acquisition and solely to the extent
otherwise constituting Permitted Liens; (xvi) Liens (of a
collecting bank arising in the ordinary course of business under
Section 4-208 or Section 4-210, as applicable, of the Uniform
Commercial Code in effect in the relevant jurisdiction covering
only the items being collected upon; (xvii) the filing of Uniform
Commercial Code (or equivalent) financing statements solely as a
precautionary measure in connection with operating leases provided
that such Liens and collateral descriptions in such financing
statements be limited to such specific operating leases and not all
assets or substantially all assets of any Borrower or Subsidiary;
(xviii) licenses or sublicenses permitted hereunder; and (xix)
Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by Liens of the type
described in clauses (i) through (xviii) above; provided, that
any extension, renewal or replacement Lien shall be limited to the
property encumbered by the existing Lien and the principal amount
of the Indebtedness being extended, renewed or refinanced (as may
have been reduced by any payment thereon) does not increase, except
for the lesser of (A) an amount equal to any accrued but unpaid
interest (including any portion thereof which is payable in kind in
accordance with the terms of such extended, renewed or replaced
Indebtedness) and premium payable by the terms of such obligations
thereon and reasonable fees and expenses associated therewith and
(B) five percent (5%) of such principal amount.

 

“Permitted
Transfers” means (i) sales of Inventory in the ordinary
course of business; (ii) non-exclusive licenses and similar
arrangements for the use of Intellectual Property in the ordinary
course of business (including in the context of joint ventures,
strategic alliances, collaboration arrangements or licensing
arrangements) and licenses that could
not result in a legal transfer of title of the licensed property
but that may be exclusive in respects other than territory and that
may be exclusive as to territory only as to discreet geographical
areas outside of the United States of America in the ordinary
course of business; (iii) dispositions of worn-out, obsolete
or surplus Equipment at fair market value in the ordinary course of
business; (iv) other Transfers of assets having a fair market value
of not more than $250,000 in the aggregate in any fiscal year; (v)
any issuance or sale by Borrower or any Subsidiary of its Equity
Interests or other securities, in each case to the extent otherwise
permitted pursuant to this Agreement; (vi) sales, transfers, leases
and other dispositions of property to the extent that such property
constitutes an Investment that is a Permitted Investment; (vii)
sales, transfers, leases and other dispositions of property to any
Borrower; (viii) leases or licenses or subleases or sublicenses
entered into in the ordinary course of business (other than in
respect of Intellectual Property), in each case, in connection with
real property; (ix) any distributions, dividends, repurchases or
redemptions permitted pursuant to Section 7.7; (x) converting any
Indebtedness to equity interests; and (xi) transfers of Cash
pursuant to transactions not prohibited herein and in the ordinary
course of business.

 

“Person”
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, other entity
or government.

 

“PIK Deferral
Period” has the meaning set forth in
2.2(c)(iii).

 

“Pledge
Agreement” means the Pledge Agreement dated as of the Closing
Date between Borrower and Agent, as the same may from time to time
be amended, restated, amended and restated, supplemented or
otherwise modified.

 

“Prepayment Charge”
has the meaning assigned to such term
in Section 2.5.

 

 

 

 

 “Receivables”
means (i) all of Borrower’s Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds
of any letter of credit, and Letter of Credit Rights, and (ii) all
customer lists, software, and business records related
thereto.

 

“Recipient”
means (a) the Agent, or (b) any Lender.

 

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

 

“Required
Lenders” means at any time, the holders of more than 50% of
the sum of the aggregate unpaid principal amount of the Term Loans
then outstanding.

 

“Restricted
License” is any material License or other agreement with
respect to which Borrower is the licensee (a) that prohibits
or otherwise restricts Borrower from granting a security interest
in Borrower’s interest in such License or agreement or any
other property, or (b) for which a default under or
termination of could interfere with the Agent’s right to sell
any Collateral.

 

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

 

“Sanctioned
Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the
Office of Foreign Assets Control of the U.S. Department of the
Treasury or the U.S. Department of State, or by the United Nations
Security Council, the European Union or any EU member state, (b)
any Person operating, organized or resident in a Sanctioned Country
or (c) any Person controlled by any such Person.

 

“Sanctions”
means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S.
government, including those administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S.
Department of State, or (b) the United Nations Security Council,
the European Union or Her Majesty’s Treasury of the United
Kingdom.

 

“SBA”
has the meaning assigned to such term
in Section 7.16.

 

“SBIC”
has the meaning assigned to such term
in Section 7.16.

 

“SBIC
Act” has the meaning assigned to
such term in Section 7.16.

 

“SEC”
means the Securities and Exchange Commission.

 

“Secured
Obligations” means Borrower’s obligations under this Agreement and any Loan
Document (other than the
Warrant), including any obligation to pay any amount now owing or
later arising.

 

“Securities
Act” means the Securities Act of 1933, as
amended.

 

“Subordinated
Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to
Agent in its sole discretion and subject to a subordination
agreement in form and substance satisfactory to Agent in its sole
discretion.

 

“Subsequent
Financing” means the closing of any Borrower financing which
becomes effective after the Closing Date.

 

“Subsidiary”
means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which Borrower owns or
controls 50% or more of the outstanding voting securities,
including each entity listed on Schedule 1 hereto. Unless otherwise
specifically set forth herein, reference to a Subsidiary shall be
deemed to be a reference to a Subsidiary of Parent.

 

“Taxes”
means all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding),
assessments, fees or other charges imposed by any governmental
authority responsible for the assessment and collection of taxes,
including any interest, additions to tax or penalties applicable
thereto.

 

“Term
Commitment” means as to any Lender, the obligation of such
Lender, if any, to make a Term Loan Advance to the Borrower in a
principal amount not to exceed the amount set forth under the
heading “Term Commitment” opposite such Lender’s
name on Schedule 1.1.

 

“Term Loan
Advance” means each Tranche 1 Advance, Tranche 2 Advance,
Tranche 3 Advance, Tranche 4 Advance and any other Term Loan funds
advanced under this Agreement.

 

“Term Loan
Cash Interest Rate” means, for any day a per annum rate of
interest equal to the greater of either (i) the “prime
rate” as reported in The Wall Street Journal plus 4.75%, and
(ii) 10.25%; provided that
the Term Loan Cash Interest Rate may be reduced from time to time
in accordance with Section 2.2(c)(iii).

 

“Term Loan
PIK Interest” has the meaning set forth in Section
2.2(c)(ii).

 

“Term Loan
PIK Interest Rate” means, for any day a per annum rate of
interest equal to (a) during any PIK Deferral Period, the Cash
Interest Reduction Amount, multiplied by 1.2, and (b) otherwise,
0.00%.

 

“Term Loan
Maturity Date” means March 1, 2022.

 

“Term
Note” means a Promissory Note in substantially the form of
Exhibit B.

 

“TG
Australia” means TG Therapeutics AUS Pty Ltd, a proprietary
limited company organized under the laws of Australia.

 

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

 

“Trademark
License” means any written agreement granting any right to
use any Trademark or Trademark registration, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest.

 

 

 

 

“Trademarks”
means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations,
recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United
States of America, any State thereof or any other country or any
political subdivision thereof.

 

“Tranche 1
Advance” has the meaning
assigned to such term in Section 2.2(a).

 

“Tranche 2
Advance” has the meaning
assigned to such term in Section 2.2(a).

 

“Tranche 3
Advance” has the meaning
assigned to such term in Section 2.2(a).

 

“Tranche 4
Advance” has the meaning
assigned to such term in Section 2.2(a).

 

“Tranche 4
Facility Charge” means one percent (1.0%) of the aggregate
Tranche 4 Advances, which is payable to Lender in accordance with
Section 4.2(d).

 

“UCC”
means the Uniform Commercial Code as the same is, from time to
time, in effect in the State of California; provided, that in the
event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect
to, Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code as the same is, from time to time, in effect in a
jurisdiction other than the State of California, then the term
“UCC” shall mean the Uniform Commercial Code as in
effect, from time to time, in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions
related to such provisions.

 

“Unrestricted
Cash” means unrestricted Cash held by Borrower in account(s)
subject to an Account Control Agreement in favor of
Agent.

 

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

 

“Warrant”
means any warrant entered into in connection with the Loan, as may
be amended, restated, amended and restated, supplemented or
otherwise modified from time to time.

 

“Withholding
Agent” means the Borrower and the Agent.

 

Unless
otherwise specified, all references in this Agreement or any Annex
or Schedule hereto to a “Section,”
“subsection,” “Exhibit,”
“Annex,” or “Schedule” shall refer to the
corresponding Section, subsection, Exhibit, Annex, or Schedule in
or to this Agreement. Unless otherwise specifically provided
herein, any accounting term used in this Agreement or the other
Loan Documents shall have the meaning customarily given such term
in accordance with GAAP, and all financial computations hereunder
shall be computed in accordance with GAAP, consistently applied.
Unless otherwise defined herein or in the other Loan Documents,
terms that are used herein or in the other Loan Documents and
defined in the UCC shall have the meanings given to them in the
UCC. For all purposes under the Loan Documents, in connection with
any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws): (a)
if any asset, right, obligation or liability of any Person becomes
the asset, right, obligation or liability of a different Person,
then it shall be deemed to have been transferred from the original
Person to the subsequent Person and (b) if any new Person comes
into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its
Equity Interests at such time.

 

SECTION 2. THE
LOAN

 

2.1 [Reserved.]

 

2.2
Term
Loan.

 

(a)   
Advances. Subject to the terms and conditions of this Agreement,
Lender will severally (and not jointly) make in an amount not to
exceed its respective Term Commitment, and Borrower agrees to draw,
a Term Loan Advance of Thirty Million Dollars ($30,000,000) on the
Closing Date (the “Tranche 1 Advance”). Subject to the
terms and conditions of this Agreement, beginning on the date
Borrower achieves Performance Milestone II and continuing through
June 30, 2020, Borrower may request and Lender shall make an
additional Term Loan Advance in a principal amount of Ten Million
Dollars ($10,000,000) (the “Tranche 2 Advance”).
Subject to the terms and conditions of this Agreement, beginning on
the date Borrower achieves Performance Milestone III and continuing
through June 30, 2020, Borrower may request and Lender shall make
an additional Term Loan Advance in an aggregate principal amount of
up to Ten Million Dollars ($10,000,000) (the “Tranche 3
Advance”). Subject to the terms and conditions of this
Agreement, and conditioned on approval by Lenders’ investment
committee in its sole discretion, on or before December 15, 2020,
Borrower may request additional Term Loan Advances in an aggregate
principal amount of up to Ten Million Dollars ($10,000,000), in
minimum increments of $5,000,000 (each, a “Tranche 4
Advance”). The aggregate outstanding Term Loan Advances may
be up to but shall not exceed the Maximum Term Loan Amount plus,
for the avoidance of doubt, any amount equal to the Term Loan PIK
Interest added to principal pursuant to Section
2.2(c)(ii).

 

(b)
Advance
Request. To obtain a Term Loan Advance, Borrower shall complete,
sign and deliver an Advance Request at least three (3) Business
Days before the proposed Advance Date (other than the Tranche 1
Advance to be made on the Closing Date, for which Borrower shall
complete, sign and deliver an Advance Request at least one (1)
Business Day prior to the Closing Date) to Agent. Lender shall fund
the Term Loan Advance in the manner requested by the Advance
Request provided that each of the conditions precedent to such Term
Loan Advance is satisfied as of the requested Advance
Date.

 

(c) Interest.

 

(i)
Term
Loan Cash Interest Rate. In addition to interest accrued pursuant
to the Term Loan PIK Interest Rate, the principal balance
(including, for the avoidance of doubt, any amount equal to the
Term Loan PIK Interest added to principal pursuant to Section
2.2(c)(ii)) of each Term Loan Advance shall bear interest thereon
from such Advance Date (or from the date such amount equal to the
Term Loan PIK Interest is added to the principal) at the Term Loan
Cash Interest Rate (as such rate may be reduced for a given PIK
Deferral Period in an amount equal to the applicable Cash Interest
Reduction Amount pursuant to Section 2.2(c)(iii)) based on a year
consisting of 360 days, with interest computed daily based on the
actual number of days elapsed. The Term Loan Cash Interest Rate
will float and change on the day the “prime rate” as
reported in the Wall Street Journal changes from time to
time.

 

(ii)
Term
Loan PIK Interest Rate. In addition to interest accrued pursuant to
the Term Loan Cash Interest Rate, to the extent Parent has
initiated a PIK Deferral Period, the principal balance of each Term
Loan Advance shall bear interest thereon from such Advance Date at
the Term Loan PIK Interest Rate based on a year consisting of 360
days, with interest computed daily based on the actual number of
days elapsed (the “Term Loan PIK Interest”), which
amount shall be added to the outstanding principal balance and so
capitalized so as to increase the outstanding principal balance of
such Term Loan Advance on each payment date for such Advance and
which amount shall be payable when the principal amount of the
applicable Advance is payable in accordance with Section
2.2(d).

 

 

 

 

(iii)
Parent
may elect, by prior written notice to Agent either: (a) prior to an
Advance Date, or (b) at least five (5) Business Days prior to the
first Business Day of a month, to reduce the then effective per
annum Term Loan Cash Interest Rate applicable to the Term Loan
Advances, by up to 1.50% (the amount of such reduction, the
“Cash Interest Reduction Amount”) for a period
specified in such notice, provided that such period shall begin on
the first (1st) Business Day of
the next month and shall end on the last day of the third
(3rd)
month or any subsequent month thereafter (the “PIK Deferral
Period”), provided that after the expiration of any PIK
Deferral Period, the reduction to the Term Loan Cash Interest Rate
by an amount equal to the Cash Interest Reduction Amount shall
cease to apply. If during a PIK Deferral Period, Parent desires to
terminate such PIK Deferral Period prior to the previously
requested end date of such PIK Deferral Period, Parent may by
written notice to Agent at least five (5) Business Days prior to
the previously scheduled end date of such PIK Deferral Period,
elect an earlier end date (which must be the last day of a month
that is no earlier than the last day of the third (3rd) month after the
commencement of such PIK Deferral Period). If during a PIK Deferral
Period, Parent desires to change the Cash Interest Reduction
Amount, Parent may by written notice to Agent at least five (5)
Business Days prior to the first (1st) Business Day of
the month when such change is to take effect, elect a different
Cash Interest Reduction Amount, provided that the Cash Interest
Reduction Amount shall not be changed more frequently than once
during any consecutive three (3) month period.

 

(d) Payment.
Borrower will pay interest on the Term Loan Advance on the first
(1st)
Business Day of each month, beginning on the first (1st) Business Day of
the month after the Advance Date continuing until the Amortization
Date. Borrower shall repay the principal balance of the Term Loan
Advance that is outstanding as of the day immediately preceding the
Amortization Date, in equal monthly installments of principal and
interest beginning on the Amortization Date and continuing on the
first (1st) Business Day of
each month thereafter until the Secured Obligations are repaid;
provided, that if the Term Loan Cash Interest Rate is adjusted in
accordance with its terms, or the Amortization Date or the Maturity
Date is extended, or a PIK Deferral Period becomes effective, the
amount of each subsequent monthly installment shall be recalculated
so that the remaining payments shall be equal monthly installments
of principal and interest beginning on the first (1st) Business Day of
the month following such recalculation and continuing on the first
(1st)
Business Day of each month thereafter until the Secured Obligations
are repaid in full. The entire remaining principal balance of the
Term Loan Advance and all accrued but unpaid interest hereunder,
shall be due and payable on the Term Loan Maturity Date. Borrower
shall make all payments under this Agreement without setoff,
recoupment or deduction and regardless of any counterclaim or
defense. Lender will initiate debit entries to the Borrower’s
account as authorized on the ACH Authorization (i) on each payment
date of all periodic obligations payable to Lender with respect to
the Term Loan Advance and (ii) out-of-pocket legal fees and costs
incurred by Agent or Lender in connection with Section 11.11 of
this Agreement; provided that, with respect to clause (i) above, in
the event that Lender or Agent informs Borrower that Lender will
not initiate a debit entry to such Borrower’s account for a
certain amount of the periodic obligations due on a specific
payment date, Borrower shall pay to Lender such amount of periodic
obligations in full in immediately available funds on such payment
date; provided, further, that, with respect to clause (i) above, if
Lender or Agent informs Borrower that Lender will not initiate a
debit entry as described above later than the date that is three
(3) Business Days prior to such payment date, Borrower shall pay to
Lender such amount of periodic obligations in full in immediately
available funds on the date that is three (3) Business Days after
the date on which Lender or Agent notifies Borrower thereof;
provided, further, that, with respect to clause (ii) above, in the
event that Lender or Agent informs Borrower that Lender will not
initiate a debit entry to a Borrower’s account for specified
out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrower shall pay to Lender such amount in full in immediately
available funds within three (3) Business Days.

 

2.3 Maximum
Interest. Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to
contract for, charge or receive interest at a rate that is greater
than the maximum rate permissible by law that a court of competent
jurisdiction shall deem applicable hereto (which under the laws of
the State of California shall be deemed to be the laws relating to
permissible rates of interest on commercial loans) (the
“Maximum Rate”). If a court of competent jurisdiction
shall finally determine that Borrower has actually paid to Lender
an amount of interest in excess of the amount that would have been
payable if all of the Secured Obligations had at all times borne
interest at the Maximum Rate, then such excess interest actually
paid by Borrower shall be applied as follows: first, to the payment
of the Secured Obligations consisting of the outstanding principal;
second, after all principal is repaid, to the payment of
Lender’s accrued interest, costs, expenses, professional fees
and any other Secured Obligations; and third, after all Secured
Obligations are repaid, the excess (if any) shall be refunded to
Borrower.

 

2.4 Default
Interest. In the event any payment is not paid on the scheduled
payment date, an amount equal to four percent (4%) of the past due
amount shall be payable on demand. In addition, upon the occurrence
and during the continuation of an Event of Default hereunder, all
Secured Obligations, including principal, interest, compounded
interest, and professional fees, shall bear interest at a rate per
annum equal to the rate set forth in Section 2.2(c), plus four
percent (4%) per annum. In the event any interest is not paid when
due hereunder, delinquent interest shall be added to principal and
shall bear interest on interest, compounded at the rate set forth
in Section 2.2(c) or Section 2.4, as
applicable.

 

2.5 Prepayment.
At its option upon at least seven (7) Business Days prior written
notice to Agent, Borrower may prepay all or any portion greater
than or equal to Five Million Dollars ($5,000,000) of the
outstanding Advances by paying the entire principal balance (or
portion thereof), all accrued and unpaid interest thereon, together
with a prepayment charge equal to the following percentage of the
Advance amount being prepaid: with respect to each Advance, if such
Advance amounts are prepaid on or prior to the first (1st) anniversary of the
Closing Date, 3.00%; after the first (1st) anniversary but on
or prior to the second (2nd) anniversary of the
Closing Date, 1.50%; and thereafter, 0.00% (each, a
“Prepayment Charge”). Borrower agrees that the
Prepayment Charge is a reasonable calculation of Lender’s
lost profits in view of the difficulties and impracticality of
determining actual damages resulting from an early repayment of the
Advances. Borrower shall prepay the outstanding amount of all
principal and accrued interest through the prepayment date and the
Prepayment Charge upon the occurrence of a Change in Control.
Notwithstanding the foregoing, no Prepayment Charge will be
required to be paid in connection with any prepayment if such
prepayment is made in connection with a refinancing of the Advances
with Agent and Lender (such refinancing to be made in Agent and
Lenders’ sole and absolute discretion) prior to the Term Loan
Maturity Date. Any amounts paid under this Section shall be applied
by Agent to the then unpaid amount of any Secured Obligations
(including principal and interest) in such order and priority as
Agent may choose in its sole discretion.

 

2.6 End
of Term Charge. On the earliest to occur of (i) the Term Loan
Maturity Date, (ii) the date that Borrower prepays the outstanding
Secured Obligations (other than any inchoate indemnity obligations
and any other obligations which, by their terms, are to survive the
termination of this Agreement) in full, or (iii) the date that the
Secured Obligations become due and payable, Borrower shall pay
Lender a charge equal to 3.25% of the aggregate principal amount of
the Term Loan Advances. Notwithstanding the required payment date
of such charge, it shall be deemed earned by Lender as of the
Closing Date.

 

2.7 Notes.
If so requested by Lender by written notice to Borrower, then
Borrower shall execute and deliver to Lender (and/or, if applicable
and if so specified in such notice, to any Person who is an
assignee of Lender pursuant to Section 11.13) (promptly after the
Borrower’s receipt of such notice) a Note or Notes to
evidence Lender’s Loans.

 

 

 

 

2.8 Pro
Rata Treatment. Each payment (including prepayment) on account of
any fee and any reduction of the Term Loans shall be made pro rata
according to the Term Commitments of the relevant
Lender.

 

2.9 Taxes.

 

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

 

(b) Payments
Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made
without deduction or withholding for any Taxes, except as required
by applicable law. If any applicable law (as determined in the good
faith discretion of an applicable Withholding Agent) requires the
deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be
entitled to make such deduction or withholding and shall timely pay
the full amount deducted or withheld to the relevant governmental
authority in accordance with applicable law and, if such Tax is an
Indemnified Tax, then the sum payable by the Borrower 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) the
applicable Recipient receives an amount equal to the sum it would
have received had no such deduction or withholding
of Indemnified Taxes been
made.

 

(c) Payment
of Other Taxes by Borrower. The Borrower 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.

 

(d) Indemnification
by Borrower. The Borrower shall indemnify each Recipient, within 10
days after demand therefor, for the full amount of any
Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable
to amounts payable under
this Section) payable or paid by such Recipient or required to be
withheld or deducted from
a payment to such Recipient and any reasonable expenses
arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were
correctly or legally
imposed or asserted by the relevant governmental authority. A
certificate as to the
amount of such payment or liability delivered to 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.

 

(e) Indemnification
by the Lenders. Each Lender shall severally indemnify the Agent,
within 10 days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Agent for such Indemnified
Taxes and without limiting the obligation of the Borrower to do
so), and (ii) 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 (e).

 

(f) Evidence
of Payments. As soon as practicable after any payment of Taxes by
the Borrower to a governmental authority pursuant to this Section,
the Borrower 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.

 

(g) 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 (g)(ii)(1), (ii)(2) and (iv) 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.

 

(ii) Without
limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,

 

1. any Lender that is a U.S. Person shall deliver to
the Borrower and the Agent on or before 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;

 

2. 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 before
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:

 

A. 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;

 

B. executed copies of IRS Form W-8ECI;

 

C. 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 K-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

 

D. 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 K-2 or Exhibit K-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 K-4 on behalf of each such direct and indirect
partner;

 

 

 

 

(iii) 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

 

(iv) if
a payment made to a Lender under any Loan Document would be subject
to U.S. federal 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 (iv),
“FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

 

(h) 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.

 

(i) Treatment
of Certain Refunds. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section
(including by the payment of additional amounts pursuant to this
Section), it shall pay to the indemnifying party an amount equal to
such refund (but only to the extent of indemnity payments made
under this Section with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any
interest paid by the relevant governmental authority with respect
to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount
paid over pursuant to this paragraph (i) (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 (i), in no event will
the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (i) the payment of
which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if
the Tax subject to indemnification and giving rise to such refund
had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such
Tax had never been paid. This paragraph shall not be construed to
require any indemnified party to make available its Tax returns (or
any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other
Person.

 

(j) Survival.
Each party’s obligations under this Section 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 Term
Commitment and the repayment, satisfaction or discharge of all
obligations under any Loan Document.

 

2.10 Borrower
agrees that any Prepayment Charge and any End of Term Charge
payable shall be presumed to be the liquidated damages sustained by
each Lender as the result of the early termination, and Borrower
agrees that it is reasonable under the circumstances existing as of
the Closing Date. The Prepayment Charge and the End of Term Charge
shall also be payable in the event the Secured 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. Borrower expressly waives (to the fullest
extent it may lawfully do so) the provisions of any present or
future statute or law that prohibits or may prohibit the collection
of the foregoing Prepayment Charge and End of Term Charge in
connection with any such acceleration. Borrower agrees (to the
fullest extent that each may lawfully do so): (a) each of the
Prepayment Charge and the End of Term Charge is reasonable and is
the product of an arm’s length transaction between
sophisticated business people, ably represented by counsel; (b)
each of the Prepayment Charge and the End of Term Charge shall be
payable notwithstanding the then prevailing market rates at the
time payment is made; (c) there has been a course of conduct
between the Lenders and Borrower giving specific consideration in
this transaction for such agreement to pay the Prepayment Charge
and the End of Term Charge as a charge (and not interest) in the
event of prepayment or acceleration; (d) Borrower shall be estopped
from claiming differently than as agreed to in this paragraph.
Borrower expressly acknowledges that their agreement to pay each of
the Prepayment Charge and the End of Term Charge to the Lenders as
herein described was on the Closing Date and continues to be a
material inducement to the Lenders to provide the Term
Loans.

 

 

 

 

SECTION 3. SECURITY
INTEREST

 

3.1 As security for the
prompt and complete payment when due (whether on the payment dates
or otherwise) of all the Secured Obligations, Borrower grants to
Agent a security interest in all of Borrower’s right, title, and interest in, to and under all of
Borrower’s personal property and other assets
(other than any Intellectual Property)
including without limitation the following (except as set forth
herein) whether now
owned or hereafter acquired (collectively, the
“Collateral”): (a) Receivables; (b) Equipment; (c)
Fixtures; (d) General Intangibles (other than Intellectual
Property); (e) Inventory; (f) Investment Property; (g) Deposit
Accounts; (h) Cash; (i) Goods; and all other tangible and
intangible personal property of Borrower whether now or hereafter
owned or existing, leased, consigned by or to, or acquired by,
Borrower and wherever located, and any of Borrower’s property
in the possession or under the control of Agent; and, to the extent
not otherwise included, all Proceeds of each of the foregoing and
all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing; provided, however, that the Collateral shall
include all Accounts and General Intangibles that consist of rights
to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the Intellectual
Property (the “Rights to Payment”). Notwithstanding the
foregoing, if a judicial authority (including a U.S. Bankruptcy
Court) holds that a security interest in the underlying
Intellectual Property is necessary to have a security interest in
the Rights to Payment, then the Collateral shall automatically, and
effective as of the date of this Agreement, include the
Intellectual Property to the extent necessary to permit perfection
of Agent’s security interest in the Rights to
Payment.

 

3.2
Notwithstanding the
broad grant of the security interest set forth in Section 3.1
above, the Collateral shall not include (a) licenses or other
contracts, which by their terms require the consent of the licensor
thereof or another party for a grant of a security interest therein
or the assignment thereof or in any assets subject thereto (but
only to the extent such prohibition on transfer is enforceable
under applicable law, including, without limitation, Sections 9406,
9407 and 9408 of the UCC), (b) any property and assets the pledge
of which would require governmental consent, approval, license or
authorization or is prohibited or restricted by applicable law
(after giving effect to the applicable anti-assignment provisions
of the UCC or other applicable law), (c) Equipment or other assets
otherwise constituting Collateral owned by Borrower on the date
hereof or hereafter acquired that is subject to a Lien securing
purchase money Indebtedness or capital lease obligations permitted
to be incurred pursuant to the provisions of this Agreement if the
contract or other agreement in which such Lien is granted (or the
documentation providing for such purchase money Indebtedness or
capital lease obligations) validly prohibits the creation of any
other Lien on such Equipment or such other asset, (d) Excluded
Accounts, or (e) more than 65% of the presently existing and
hereafter arising issued and outstanding shares of capital stock
owned by Borrower of any Excluded Foreign Subsidiary which shares
entitle the holder thereof to vote for directors or any other
matter; provided that with respect to clauses (a), (b) and (c),
upon termination of such prohibition, such interest shall
immediately become Collateral without any action by Borrower, Agent
or Lender.

  

SECTION 4. CONDITIONS
PRECEDENT TO LOAN

 

The
obligations of Lender to make the Loan hereunder are subject to the
satisfaction by Borrower of the following conditions:

 

4.1 Initial
Advance. On or prior to the Closing Date, Borrower shall have
delivered to Agent the following:

 

(a) executed
copies of the Loan Documents (including the Warrant; provided that
an original of the Warrant shall be delivered to Agent within three
(3) Business Days of the Closing Date), Account Control Agreements,
all other documents and instruments reasonably required by Agent to
effectuate the transactions contemplated hereby or to create and
perfect the Liens of Agent with respect to all Collateral, in all
cases in form and substance reasonably acceptable to
Agent;

 

(b) a
legal opinion of Borrower’s counsel, in form and substance
reasonably acceptable to Agent;

 

(c) certified
copy of resolutions of Borrower’s board of directors
evidencing approval of (i) the Loan and other transactions
evidenced by the Loan Documents; and (ii) the Warrant and
transactions evidenced thereby;

 

(d) certified
copies of the Certificate of Incorporation and the Bylaws, as
amended through the Closing Date, of Borrower;

 

(e) a
certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions
in which it is qualified to do business and where the failure to be
so qualified could reasonably be expected to have a Material
Adverse Effect;

 

(f) payment
of the Initial Facility Charge and reimbursement of Agent’s
and Lender’s current expenses reimbursable pursuant to this
Agreement, which amounts may be deducted from the initial
Advance;

 

(g) all
certificates of insurance and copies of each insurance policy
required pursuant to Section 6.1 and 6.2 hereof;

 

(h) [reserved];

 

(i) evidence
that the Phase 3 UNITY-CLL
trial (clinical trial protocol UTX-TGR-304 and ClincalTrials.gov
identifier NCT02612311) has passed the interim progression
free survival analysis performed by the DSMB for such trial at the
fifty percent (50%) information time without the DSMB for such
trial recommending the trial be stopped for futility;

 

(j) evidence
satisfactory to Agent that the Phase 3 UNITY-CLL trial (clinical trial
protocol UTX-TGR-304 and ClincalTrials.gov identifier
NCT02612311) remains ongoing as of the Closing Date;
and

 

(k) such
other documents as Agent may reasonably request.

 

 

 

 

4.2 All
Advances. On each Advance Date:

 

(a) Agent
shall have received (i) an Advance Request for the relevant
Advance as required by Section 2.2(b), each duly executed by
Borrower’s Chief Executive Officer or Chief Financial
Officer, and (ii) any other documents Agent may reasonably
request.

 

(b) The
representations and warranties set forth in this Agreement shall be
true and correct in all material respects (or, if such
representations and warranties are already qualified by
materiality, in all respects) on and as of the Advance Date with
the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to
an earlier date, in which case such representations and warranties
shall be true and correct in all material respects (or, if such
representations and warranties are already qualified by
materiality, in all respects) on and as of such earlier
date.

 

(c) with
respect to any Tranche 2 Advance and Tranche 3 Advance, a Warrant
(provided that an original of the Warrant shall be delivered to
Agent within three (3) Business Days of such Advance Date) covering
2% of any such Advance in a manner consistent with the Warrant
issued on the Closing Date, in form and substance reasonably
acceptable to Agent.

 

(d) with
respect to any Tranche 4 Advance, the Loan Parties shall have paid
the Tranche 4 Facility Charge.

 

(e) Each
Advance Request shall be deemed to constitute a representation and
warranty by Borrower on the relevant Advance Date as to the matters
specified in paragraphs (b) and (c) of this Section 4.2
and as to the matters set forth in the Advance
Request.

 

4.3 No
Default. As of the Closing Date and each Advance Date, both before
and after giving effect to the making of the applicable Advance,
(i) no Default or Event of Default shall be continuing and (ii) no
event that has had or could reasonably be expected to have a
Material Adverse Effect has occurred and is
continuing.

 

SECTION 5. REPRESENTATIONS
AND WARRANTIES OF BORROWER

 

Borrower represents
and warrants that:

 

5.1 Corporate
Status. Each Borrower is a corporation duly organized, legally
existing and in good standing under the laws of the State of
Delaware, and is duly qualified as a foreign corporation in all
jurisdictions in which the nature of its business or location of
its properties require such qualifications and where the failure to
be qualified could reasonably be expected to have a Material
Adverse Effect. Each Borrower’s present name, former names
(if any), locations, place of formation, Tax identification number,
organizational identification number and other information are
correctly set forth in Exhibit C, as may be updated by such
Borrower in a written notice (including any Compliance Certificate)
provided to Agent after the Closing Date.

 

5.2 Collateral.
Each Borrower owns the applicable Collateral and the Intellectual
Property, free of all Liens, except for Permitted Liens. Each
Borrower has the power and authority to grant to Agent a Lien in
the Collateral as security for the Secured
Obligations.

 

5.3 Consents.
Each Borrower’s execution, delivery and performance of this
Agreement and all other Loan Documents, and Parent’s
execution of the Warrant, (i) have been duly authorized by all
necessary corporate action of such Borrower or the Parent, as
applicable, (ii) will not result in the creation or imposition
of any Lien upon the Collateral, other than Permitted Liens and the
Liens created by this Agreement and the other Loan Documents, (iii)
do not (x) violate any provisions of such Borrower’s
Certificate or Articles of Incorporation (as applicable) and
bylaws, or (y) any material law, material regulation, material
order, material injunction, material judgment, material decree or
material writ to which such Borrower is subject and
(iv) except as described on Schedule 5.3, do not violate any
material contract or material agreement or require the material
consent or material approval of any other Person which has not
already been obtained. The individual or individuals executing the
Loan Documents and the Warrant are duly authorized to do
so.

 

5.4 Material
Adverse Effect. No event that has had or could reasonably be
expected to have a Material Adverse Effect has occurred and is
continuing. No Borrower is aware of any event likely to occur that
is reasonably expected to result in a Material Adverse
Effect.

 

 

 

 

5.5 Actions
Before Governmental Authorities. There are no actions, suits or
proceedings at law or in equity or by or before any governmental
authority now pending or, to the knowledge of any Borrower,
threatened against or affecting any Borrower or its property, that
is reasonably expected to result in a Material Adverse
Effect.

 

5.6 Laws.
No Borrower nor any of its Subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment,
writ, injunction or decree of any governmental authority, where
such violation or default is reasonably expected to result in a
Material Adverse Effect. To the knowledge of Borrower, no Borrower
is in default in any manner under any provision of any agreement or
instrument evidencing material Indebtedness, or any other material
agreement to which it is a party or by which it is
bound.

 

No
Borrower nor any of its Subsidiaries is an “investment
company” or a company “controlled” by an
“investment company” under the Investment Company Act
of 1940, as amended. No Borrower nor any of its Subsidiaries is
engaged as one of its important activities in extending credit for
margin stock (under Regulations X, T and U of the Federal Reserve
Board of Governors). Each Borrower and each of its Subsidiaries has
complied in all material respects with the Federal Fair Labor
Standards Act. No Borrower nor any of its Subsidiaries is a
“holding company” or an “affiliate” of a
“holding company” or a “subsidiary company”
of a “holding company” as each term is defined and used
in the Public Utility Holding Company Act of 2005. No
Borrower’s nor any of its Subsidiaries’ properties or
assets has been used by any Borrower or such Subsidiary or, to any
Borrower’s knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous
substance other than in material compliance with applicable laws.
Each Borrower and each of its Subsidiaries has obtained all
consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all Governmental
Authorities that are necessary to continue their respective
businesses as currently conducted, except as would not reasonably
be expected to have a Material Adverse Effect.

 

No
Borrower, nor any of its Subsidiaries, nor, to the knowledge of any
Borrower, any of such Borrower’s or its Subsidiaries’
controlled Affiliates or any of their respective agents acting or
benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any
Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any
transaction that evades or avoids, or has the purpose of evading or
avoiding or attempts to violate, any of the prohibitions set forth
in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of
any Borrower, or its Subsidiaries, or to the knowledge of any
Borrower, any of its controlled Affiliates or agents, acting or
benefiting in any capacity in connection with the transactions
contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, or (y) deals
in, or otherwise engages in any transaction relating to, any
property or interest in property blocked pursuant to Executive
Order No. 13224, any similar executive order or other
Anti-Terrorism Law. None of the funds to be provided under this
Agreement will be used, directly or, to the knowledge of any
Borrower, indirectly, (a) for any activities in violation of any
applicable anti-money laundering, economic sanctions and
anti-bribery laws and regulations laws and regulations or (b) for
any payment to any governmental official or employee, political
party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage,
in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

5.7 Information
Correct and Current. No information, report, Advance Request,
financial statement, exhibit or schedule furnished, by or on behalf
of Borrower to Agent in connection with any Loan Document or
included therein or delivered pursuant thereto, when taken as a
whole, contained or contains or will contain any material
misstatement of fact or, when taken together with all other such
information or documents, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be
made, not materially misleading at the time such statement was made
or deemed made. Additionally, any and all financial or business
projections provided by Borrower to Agent, whether prior to or
after the Closing Date, shall be (i) provided in good faith and
based on the most current data and information available to
Borrower, and (ii) the most current of such projections provided to
Borrower’s Board of Directors; it being understood by the
Agent and the Lender that such projections as to future events (i)
are not to be viewed as facts, (ii)(A) are subject to significant
uncertainties and contingencies, many of which are beyond the
control of Borrower, (B) no assurance is given by Borrower that the
results forecast in any such projections will be realized and (C)
the actual results during the period or periods covered by any such
projections may differ from the forecast results set forth in such
projections and such differences may be material and (iii) are not
a guarantee of performance.

 

5.8 Tax
Matters. Except as described on Schedule 5.8 and except those Taxes
being contested in good faith with adequate reserves under GAAP,
(a) Borrower has filed all material federal, state and local Tax
returns that it is required to file, (b) Borrower has duly paid or
fully reserved for all Taxes or installments thereof (including any
interest or penalties) as and prior to becoming delinquent, which
have or may become due pursuant to such returns, and (c) Borrower
has paid or fully reserved for any material Tax assessment received
by Borrower for the three (3) years preceding the Closing Date, if
any (including any Taxes being contested in good faith and by
appropriate proceedings).

 

5.9 Intellectual
Property Claims. Each Borrower is the sole owner of, or otherwise
has the right to use, the Intellectual Property material to such
Borrower’s business. Except as described on Schedule 5.9, (i)
each of the material Copyrights, Trademarks and Patents is valid
and enforceable, (ii) no material part of the Intellectual Property
has been judged invalid or unenforceable by a court of competent
jurisdiction, in whole or in part, and (iii) no claim has been made
to any Borrower that any material part of the Intellectual Property
violates the rights of any third party. Exhibit D is a true,
correct and complete list of each Borrower’s Patents,
registered Trademarks, registered Copyrights, and material
agreements under which such Borrower licenses Intellectual Property
from third parties (other than shrink-wrap software licenses),
together with application or registration numbers, as applicable,
owned by such Borrower or any Subsidiary, in each case as of the
Closing Date. No Borrower is in material breach of, nor has any
Borrower failed to perform any material obligations under, any of
the foregoing contracts, licenses or agreements and, to such
Borrower’s knowledge, no third party to any such contract,
license or agreement is in material breach thereof or has failed to
perform any material obligations thereunder.

 

5.10  Intellectual
Property. Except as described on Schedule 5.10, each Borrower has
all material rights with respect to Intellectual Property necessary
or material to the operation or conduct of such Borrower’s
business as currently conducted and proposed to be conducted by
such Borrower. Without limiting the generality of the foregoing,
and in the case of Licenses, except for restrictions that are
unenforceable under Division 9 of the UCC, each Borrower has the
right, to the extent required to operate such Borrower’s
business, to freely transfer, license or assign Intellectual
Property necessary or material in the operation or conduct of such
Borrower’s business as currently conducted and proposed to be
conducted by such Borrower, without condition, restriction or
payment of any kind (other than license payments in the ordinary
course of business) to any third party, and such Borrower owns or
has the right to use, pursuant to valid licenses, all software
development tools, library functions, compilers and all other
third-party software and other items that are material to such
Borrower’s business and used in the design, development,
promotion, sale, license, manufacture, import, export, use or
distribution of Borrower Products except customary covenants in
inbound license agreements and equipment leases where such Borrower
is the licensee or lessee. No Borrower is a party to, nor are they
bound by, any Restricted License.

 

 

 

 

5.11 Borrower
Products. Except as described on Schedule 5.11, no Intellectual
Property owned by any Borrower or Borrower Product has been or is
subject to any actual or, to the knowledge of such Borrower,
threatened litigation, proceeding (including any proceeding in the
United States Patent and Trademark Office or any corresponding
foreign office or agency) or outstanding decree, order, judgment,
settlement agreement or stipulation that restricts in any manner
such Borrower’s use, transfer or licensing thereof or that
may affect the validity, use or enforceability thereof. There is no
decree, order, judgment, agreement, stipulation, arbitral award or
other provision entered into in connection with any litigation or
proceeding that obligates any Borrower to grant licenses or
ownership interest in any future Intellectual Property related to
the operation or conduct of the business of such Borrower or
Borrower Products. No Borrower has received any written notice or
claim, or, to the knowledge of such Borrower, oral notice or claim,
challenging or questioning such Borrower’s ownership in any
Intellectual Property (or written notice of any claim challenging
or questioning the ownership in any licensed Intellectual Property
of the owner thereof) or suggesting that any third party has any
claim of legal or beneficial ownership with respect thereto nor, to
such Borrower’s knowledge is there a reasonable basis for any
such claim. To the knowledge of each Borrower, no Borrower’s
use of its Intellectual Property nor the production and sale of the
Borrower’s Borrower Products infringes the intellectual
property or other rights of others.

 

5.12 Financial
Accounts. Exhibit E, as may be updated
by the Borrower in a written notice provided to Agent after the
Closing Date, is a true, correct and complete list of
(a) all banks and other financial institutions at which
Borrower or any Subsidiary maintains Deposit Accounts and (b) all
institutions at which Borrower or any Subsidiary maintains an
account holding Investment Property, and such exhibit correctly
identifies the name, address and telephone number of each bank or
other institution, the name in which the account is held, a
description of the purpose of the account, and the complete account
number therefor.

 

5.13 Employee
Loans. No Borrower has, as of the Closing Date, any outstanding
loans to any employee, officer or director of such Borrower nor has
any Borrower guaranteed, as of the Closing Date, the payment of any
loan made to an employee, officer or director of such Borrower by a
third party.

 

5.14 Capitalization
and Subsidiaries. Borrower’s capitalization as of the Closing
Date is set forth on Schedule 5.14 annexed hereto. Borrower does
not own any stock, partnership interest or other securities of any
Person, except for Permitted Investments. Attached as Schedule 1,
as may be updated by Borrower in a written notice provided after
the Closing Date, is a true, correct and complete list of each
Subsidiary.

 

5.15 Ariston
Notes.

 

(a) Neither
the Borrower nor any Subsidiary (other than Ariston) has any
obligations, in each case under the Ariston Notes, to commercialize
or sell any AST-726 or AST-914 program candidates or otherwise to
generate any Product Proceeds in respect thereof.

 

(b) The
holders of the Ariston Notes have no recourse, now or after the
filing of any Insolvency Proceeding or other insolvency event
(including under Section 7 of the Ariston Notes or otherwise,
including without limitation under applicable law), to any Borrower
or its Subsidiaries (other than Ariston) other than with respect to
equity conversion rights specified in the Ariston
Notes.

 

(c) Ariston
has been a dormant subsidiary for the last five (5) years and holds
no assets and liabilities other than legacy intercompany
receivables and payables and the Ariston Notes.

 

SECTION 6. INSURANCE;
INDEMNIFICATION

 

6.1    Coverage.
Borrower shall cause to be carried and maintained commercial
general liability insurance, on an occurrence form, against risks
customarily insured against in Borrower’s line of business.
Such risks shall include the risks of bodily injury, including
death, property damage, personal injury, advertising injury, and
contractual liability per the terms of the indemnification
agreement found in Section 6.3. Borrower must maintain a
minimum of $2,000,000 of commercial general liability insurance for
each occurrence. Borrower has and agrees to maintain a minimum of
$2,000,000 of directors’ and officers’ insurance for
each occurrence and $5,000,000 in the aggregate. So long as there
are any Secured Obligations outstanding, Borrower shall also cause
to be carried and maintained insurance upon the Collateral,
insuring against all risks of physical loss or damage howsoever
caused, in an amount not less than the full replacement cost of the
Collateral, provided that such insurance may be subject to standard
exceptions and deductibles.

 

6.2
Certificates.
Borrower shall deliver to Agent certificates of insurance that
evidence Borrower’s compliance with its insurance obligations
in Section 6.1 and the obligations contained in this
Section 6.2. Borrower’s insurance certificate shall
state Agent (shown as “Hercules Capital, Inc., as
Agent”) is an additional insured for commercial general
liability, a loss payee for all risk property damage insurance,
subject to the insurer’s approval, and a loss payee for
property insurance and additional insured for liability insurance
for any future insurance that Borrower may acquire from such
insurer. Attached to the certificates of insurance will be
additional insured endorsements for liability and lender’s
loss payable endorsements for all risk property damage insurance.
All certificates of insurance will provide for a minimum of thirty
(30) days advance written notice to Agent of cancellation (other
than cancellation for non-payment of premiums, for which ten (10)
days’ advance written notice shall be sufficient) or any
other change adverse to Agent’s interests. Any failure of
Agent to scrutinize such insurance certificates for compliance is
not a waiver of any of Agent’s rights, all of which are
reserved. Borrower shall provide Agent with copies of each
insurance policy, and upon entering or amending any insurance
policy required hereunder, Borrower shall provide Agent with copies
of such policies and shall promptly deliver to Agent updated
insurance certificates with respect to such policies.

 

6.3
Indemnity. Borrower
agrees to indemnify and hold Agent, Lender and their officers,
directors, employees, agents, in-house attorneys, representatives
and shareholders (each, an “Indemnified Person”)
harmless from and against any and all claims, costs, expenses,
damages and liabilities (including such claims, costs, expenses,
damages and liabilities based on liability in tort, including
strict liability in tort), including reasonable attorneys’
fees and disbursements and other costs of investigation or defense
(including those incurred upon any appeal) (collectively,
“Liabilities”), that may be instituted or asserted
against or incurred by such Indemnified Person as the result of
credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents or the administration of
such credit, or in connection with or arising out of the
transactions contemplated hereunder and thereunder, or any actions
or failures to act in connection therewith, or arising out of the
disposition or utilization of the Collateral; provided that, no Indemnified
Person will be indemnified for its (or any of its Related Parties)
willful misconduct, bad faith or gross negligence (to the extent
determined in a final non-appealable order of a court of competent
jurisdiction). This Section 6.3 shall
not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax
claim. In no event shall any Indemnified Person be liable on
any theory of liability for any special, indirect, consequential or
punitive damages (including any loss of profits, business or
anticipated savings). This Section 6.3 shall survive the repayment
of indebtedness under, and otherwise shall survive the expiration
or other termination of, the Loan Agreement.

 

 

 

 

SECTION 7. COVENANTS
OF BORROWER

 

Borrower agrees as
follows:

 

7.1 Financial
Reports. Borrower shall furnish to Agent the financial statements
and reports listed hereinafter (the “Financial
Statements”):

 

(a) as
soon as practicable (and in any event within 30 days) after the end
of each month, unaudited interim and year-to-date financial
statements as of the end of such month (prepared on a consolidated
basis), including balance sheet and related statements of income
and cash flows accompanied by a report detailing any material
contingencies (including the commencement of any material
litigation by or against Borrower) or any other occurrence that
could reasonably be expected to have a Material Adverse Effect, all
certified by Borrower’s Chief Executive Officer or Chief
Financial Officer to the effect that they have been prepared in
accordance with GAAP, except (i) for the absence of footnotes, (ii)
that they are subject to normal year-end adjustments, and (iii)
they do not contain certain non-cash items that are customarily
included in quarterly and annual financial statements;

 

(b) as
soon as practicable (and in any event within 45 days) after the end
of each calendar quarter, unaudited interim and year-to-date
financial statements as of the end of such calendar quarter
(prepared on a consolidated basis), including balance sheet and
related statements of income and cash flows accompanied by a report
detailing any material contingencies (including the commencement of
any material litigation by or against Borrower) or any other
occurrence that could reasonably be expected to have a Material
Adverse Effect, certified by Borrower’s Chief Executive
Officer or Chief Financial Officer to the effect that they have
been prepared in accordance with GAAP, except (i) for the absence
of footnotes, and (ii) that they are subject to normal year-end
adjustments;

 

(c) as
soon as practicable (and in any event within ninety (90) days)
after the end of each fiscal year, unqualified audited financial
statements as of the end of such year (prepared on a consolidated
basis), including balance sheet and related statements of income
and cash flows, and setting forth in comparative form the
corresponding figures for the preceding fiscal year, certified by a
firm of independent certified public accountants selected by
Borrower and reasonably acceptable to Agent;

 

(d) as
soon as practicable (and in any event within 30 days) after the end
of each month, a Compliance Certificate in the form of Exhibit
F;

 

(e) as
soon as practicable (and in any event within 30 days) after the end
of each month, a report showing agings of accounts receivable and
accounts payable, as of the end of such month;

 

(f) promptly
after the sending or filing thereof, copies of any regular,
periodic and special reports or registration statements that
Borrower files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or any
national securities exchange;

 

(g) promptly
following each meeting of any Borrower’s board of directors,
the following shall be made available for inspection by the Agent
at Borrower’s premises at reasonable times and upon
reasonable notice: copies of all presentation materials and minutes
relating to research, clinical development, regulatory activities,
and commercial timelines that Borrower provides to its directors in
connection with meetings of such board of directors, provided that
all in all cases Borrower may exclude any information or materials
related to executive compensation, confidential information, any
attorney-client privileged information and any information that
would raise a conflict of interest with Agent or Lenders, and
minutes and other materials prepared exclusively for executive
sessions of the independent directors and committees of such board
of directors;

 

(h) financial
and business projections promptly following their approval by
Borrower’s Board of Directors, and in any event, within 45
days after the end of Borrower’s fiscal year, as well as
budgets, operating plans and other financial information reasonably
requested by Agent; and

 

(i) immediate
notice if Borrower or any Subsidiary has knowledge that Borrower,
or any Subsidiary or any controlled Affiliate of Borrower, is
listed on the OFAC Lists or (a) is convicted on,
(b) pleads nolo
contendere to, (c) is indicted on, or (d) is
arraigned and held over on charges involving money laundering or
predicate crimes to money laundering.

 

Borrower shall not
make any change in its (a) accounting policies or reporting
practices, except to the extent permitted or required by GAAP, or
(b) fiscal years or fiscal quarters. The fiscal year of Borrower
shall end on December 31.

 

The
executed Compliance Certificate and all Financial Statements
required to be delivered pursuant to clauses (a), (b) and
(c) shall be sent via e-mail to Agent at financialstatements@herculestech.com with a
copy to mdutra@htgc.com, bjadot@htgc.com, and
legal@herculestech.com provided, that if e-mail is not available or
sending such Financial Statements via e-mail is not possible, they
shall be faxed to Agent at: (650) 473-9194, attention Account
Manager: TG Therapeutics, Inc.

 

Notwithstanding the
foregoing, documents required to be delivered under Sections
7.1(a), (b), (c) or (f) (to the extent any such documents are
included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to
have been delivered on the date on which Borrower emails a link
thereto to Agent; provided that Borrower shall directly provide
Agent all Financial Statements required to be delivered pursuant to
Section 7.1(b) and
(c)
hereunder.

 

 

 

 

7.2 Management
Rights. Borrower shall permit any representative that Agent or
Lender authorizes, including its attorneys and accountants, to
inspect the Collateral and examine and make copies and abstracts of
the books of account and records of Borrower at reasonable times
and upon reasonable notice during normal business hours; and any
such representative shall have the right to meet with management
and officers of Borrower to discuss such books of account and
records; provided that (i) only the Agent on behalf of Lender may
exercise rights under this Section 7.2 and (ii) other than during
the continuance of an Event of Default, the Agent shall not
exercise such rights more often than one time during any fiscal
year; and provided, further, that when an Event of Default has
occurred and is continuing the Agent or any Lender (or any of their
designated representatives) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours
and upon reasonable advance notice. The Agent and Lender shall
provide the Borrower with the opportunity to participate in any
discussion with any independent accountants. In addition, Agent or
Lender shall be entitled at reasonable times and intervals to
consult with and advise the management and officers of Borrower
concerning significant business issues affecting Borrower. Such
consultations shall not unreasonably interfere with
Borrower’s business operations. The parties intend that the
rights granted Agent and Lender shall constitute “management
rights” within the meaning of 29 C.F.R. Section
2510.3-101(d)(3)(ii), but that any advice, recommendations or
participation by Agent or Lender with respect to any business
issues shall not be deemed to give Agent or Lender, nor be deemed
an exercise by Agent or Lender of, control over Borrower’s
management or policies.

 

7.3 Further
Assurances. Borrower shall from time to time execute, deliver and
file, alone or with Agent, any financing statements, security
agreements, collateral assignments, notices, control agreements, or
other documents to perfect or give the highest priority to
Agent’s Lien on the Collateral. Borrower shall from time to
time procure any instruments or documents as may be reasonably
requested by Agent, and take all further action that may be
necessary, or that Agent may reasonably request, to perfect and
protect the Liens granted hereby and thereby. In addition, and for
such purposes only, Borrower hereby authorizes Agent to execute and
deliver on behalf of Borrower and to file such financing statements
(including an indication that the financing statement covers
“all assets or all personal property” of Borrower in
accordance with Section 9-504 of the UCC), collateral assignments,
notices, control agreements, security agreements and other
documents without the signature of Borrower either in Agent’s
name or in the name of Agent as agent and attorney-in-fact for
Borrower. Borrower shall protect and defend Borrower’s title
to the Collateral and Agent’s Lien thereon against all
Persons claiming any interest adverse to Borrower or Agent other
than Permitted Liens.

 

7.4 Indebtedness.
Borrower shall not create, incur, assume, guarantee or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary
so to do, other than Permitted Indebtedness, or prepay any
Indebtedness for borrowed money or take any actions which impose on
Borrower an obligation to prepay any Indebtedness for borrowed
money, except for (a) the conversion of Indebtedness into equity
securities and the payment of cash in lieu of fractional shares in
connection with such conversion, (b) purchase money Indebtedness
pursuant to its then applicable payment schedule, (c) prepayment by
any Subsidiary of (i) intercompany Indebtedness owed by such
Subsidiary to any Borrower, or (ii) if such Subsidiary is not a
Borrower, intercompany Indebtedness owed by such Subsidiary to
another Subsidiary that is not a Borrower, (d) payment of regularly
scheduled interest and principal payments (and fees, indemnities
and expenses payable) as, and when due in respect of any such
Indebtedness to the extent permitted by any subordination or
intercreditor provisions in respect thereof, (e) any extension,
refinancing or renewal constitutes Permitted Indebtedness or (f) as
otherwise permitted hereunder or approved in writing by
Agent.

 

7.5 Collateral.
Borrower shall at all times keep the Collateral, the Intellectual
Property and all other property and assets used in Borrower’s
business or in which Borrower now or hereafter holds any interest
free and clear from any legal process reasonably likely to result
in liability in excess of Two Hundred Fifty Thousand Dollars
($250,000) or Liens that materially affect the operation of such
Borrower’s business as currently conducted and proposed to be
conducted by such Borrower (except for Permitted Liens and except
as to legal process, to the extent contested in good faith), and
shall give Agent prompt written notice of any legal process
affecting the Collateral or the Intellectual Property or any Liens
thereon, provided however, that the Collateral may be subject to
Permitted Liens, except that there shall be no Liens whatsoever on
Intellectual Property, other than any Liens referred to in clauses
(vii), (xv) and (xviii) of the definition of Permitted Liens.
Borrower shall not agree with any Person other than Agent or Lender
not to encumber its property except in accordance with the
provisions of this Section 7.5. Borrower shall not enter into or
suffer to exist or become effective any agreement that prohibits or
limits the ability of any Borrower to create, incur, assume or
suffer to exist any Lien upon any of its Collateral or Intellectual
Property, whether now owned or hereafter acquired, to secure its
obligations under the Loan Documents to which it is a party other
than (a) this Agreement and the other Loan Documents, (b) any
agreements governing any purchase money Liens or capital lease
obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the
assets financed thereby), (c) customary restrictions on the
assignment of leases, licenses and other agreements, and (d)
restrictions and conditions imposed by (A) law or (B) any
agreements evidencing Indebtedness permitted by this Agreement.
Borrower shall cause its Subsidiaries (other than a Borrower) to
protect and defend such Subsidiary’s title to its assets from
and against all Persons claiming any interest adverse to such
Subsidiary, and Borrower shall cause its Subsidiaries at all times
to keep such Subsidiary’s property and assets free and clear
from any legal process reasonably likely to result in liability in
excess of Two Hundred Fifty Thousand Dollars ($250,000) or Liens
whatsoever (except for Permitted Liens and except as to legal
process, to the extent contested in good faith, provided however,
that there shall be no Liens whatsoever on Intellectual Property,
other than any Liens referred to in clauses (vii), (xv) and (xviii)
of the definition of Permitted Liens), and shall give Agent prompt
written notice of any legal process affecting such
Subsidiary’s assets.

 

7.6 Investments.
Borrower shall not directly or indirectly acquire or own, or make
any Investment in or to any Person, or permit any of its
Subsidiaries so to do, other than Permitted
Investments.

 

7.7 Distributions.
Borrower shall not, and shall not allow any Subsidiary to, (a)
repurchase or redeem any class of its stock or other Equity
Interest other than (i) pursuant to employee, director or
consultant repurchase plans or other similar agreements, provided,
however, in each case the repurchase or redemption price does not
exceed the original consideration paid for such stock or Equity
Interest, (ii) repurchases of stock or Equity Interests from
existing or former employees, directors, or consultants of Borrower
or any Subsidiary (or their estates, descendants, family, spouses
or former spouses) under the terms of applicable repurchase
agreements in an aggregate amount not to exceed $250,000 in any
fiscal year, provided that no Event of Default has occurred, is
continuing or could exist after giving effect to the repurchases,
(iii) repurchases of Equity Interests deemed to occur upon the
cashless exercise of stock options when such Equity Interests
represents a portion of the exercise price thereof, and (iv) to the
extent constituting a repurchase, to the extent contemplated by
Section 7.7(b)(ii) or (iii) below, or (b) declare or pay any cash
dividend or make a cash distribution on any class of its stock or
other Equity Interest, except (i) that a Subsidiary may pay
dividends or make distributions to Borrower, (ii) to pay cash in
lieu of fractional Equity Interests in connection with any
dividend, split or combination thereof or (iii) to honor any
conversion request by a holder of convertible Indebtedness
permitted pursuant to clause (ii) or (x) of the definition of
Permitted Indebtedness (to the extent such conversion request is
paid solely in shares of Equity Interests of Parent not subject to
redemption or repurchase) and make cash payments in lieu of
fractional shares in connection with any such conversion and may
make payments on convertible Indebtedness in accordance with its
terms, or (c) lend money to any employees, officers or directors or
guarantee the payment of any such loans granted by a third party in
excess of $100,000 at any time outstanding or (d) waive, release or
forgive any Indebtedness owed by any employees, officers or
directors in excess of $100,000 in the aggregate.

 

 

 

 

7.8 Transfers.
Except for Permitted Transfers, Borrower shall not, and shall not
allow any Subsidiary to, voluntarily or involuntarily transfer,
sell, lease, license, lend or in any other manner convey any
equitable, beneficial or legal interest in any material portion of
its assets.

 

7.9 Mergers
or Acquisitions. Borrower shall not merge or consolidate, or permit
any of its Subsidiaries to merge or consolidate, with or into any
other business organization (other than mergers or consolidations
of (a) a Subsidiary which is not a Borrower into another Subsidiary
or into Borrower or (b) a Borrower into another Borrower), or
acquire, or permit any of its Subsidiaries to acquire, in each case
including for the avoidance of doubt through a merger, purchase,
in-licensing arrangement or any similar transaction, all or
substantially all of the capital stock or any property of another
Person, except for (i) Permitted Acquisitions, and (ii)
in-licensing transactions permitted pursuant to clause (xviii) of
the definition of Permitted Investments.

 

7.10 Taxes.
Borrower and its Subsidiaries shall pay prior to becoming
delinquent all material Taxes, now or hereafter imposed or assessed
against Borrower or the Collateral or upon Borrower’s
ownership, possession, use, operation or disposition thereof or
upon Borrower’s rents, receipts or earnings arising
therefrom. Borrower shall file on or before the due date therefor
all personal property Tax returns in respect of the Collateral.
Notwithstanding the foregoing, Borrower may contest, in good faith
and by appropriate proceedings, Taxes for which Borrower maintains
adequate reserves therefor in accordance with GAAP.

 

7.11 Corporate
Changes. Neither Borrower nor any Subsidiary shall change its
corporate name, legal form or jurisdiction of formation without ten
(10) days’ prior written notice to Agent. Neither Borrower
nor any Subsidiary shall suffer a Change in Control. Neither
Borrower nor any Domestic Subsidiary shall relocate its chief
executive office or its principal place of business unless: (i) it
has provided prior written notice to Agent; and (ii) such
relocation shall be within the continental United States of
America. Neither Borrower nor any Subsidiary shall relocate any
item of Collateral (other than (w) Collateral in transit in the
ordinary course of business, (x) sales of Inventory in the ordinary
course of business, (y) relocations of Equipment having an
aggregate value of up to $150,000 in any fiscal year, and (z)
relocations of Collateral from a location described on Exhibit C to
another location described on Exhibit C) unless (i) it has provided
prompt written notice to Agent, (ii) such relocation is within the
continental United States of America, and (iii) if such relocation
is to a third party bailee, it has delivered a bailee agreement in
form and substance reasonably acceptable to Agent.

 

7.12 Deposit
Accounts. Neither Borrower nor any Subsidiary shall maintain any
Deposit Accounts, or accounts holding Investment Property, except
with respect to which Agent has an Account Control Agreement and
except for any Excluded Accounts.

 

7.13 Borrower
shall notify Agent of each Subsidiary formed subsequent to the
Closing Date and, within 15 days of formation, shall cause any such
Subsidiary to execute and deliver to Agent a Joinder Agreement and
any other documents and filings requested by Agent pursuant to
Section 7.3.

 

7.14 Non-Borrower
Subsidiaries. Borrower shall not permit Subsidiaries that are not
Borrowers (including, for the avoidance of doubt, TG Australia and
Ariston) to: (a) have assets and liabilities in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate at any
time, or (b) own any Intellectual Property; provided that notwithstanding the
foregoing, (A) TG Australia shall be permitted to have liabilities
in the form of accounts payable in connection with clinical trial
expenses incurred in the ordinary course of business and
intercompany Indebtedness permitted pursuant to clause (ix) of the
definition of Permitted Indebtedness, and (B) Ariston shall be
permitted to have liabilities in the form of convertible
Indebtedness and intercompany Indebtedness pursuant to clause (ix)
of the definition of Permitted Indebtedness, and assets as
contemplated by clause (v) of the definition of Excluded
Accounts.

 

7.15 Notification
of Event of Default. Borrower shall notify Agent promptly but in
any case within three (3) Business Days of the occurrence of any
Event of Default.

 

7.16 SBIC.
Agent and Lender have received a license from the U.S. Small
Business Administration (“SBA”) to extend loans as a
small business investment company (“SBIC”) pursuant to
the Small Business Investment Act of 1958, as amended, and the
associated regulations (collectively, the “SBIC Act”).
Portions of the loan to Borrower will be made under the SBA license
and the SBIC Act. Addendum 1 to this Agreement outlines various
responsibilities of Agent, Lender and Borrower associated with an
SBA loan, and such Addendum 1 is hereby incorporated in this
Agreement.

 

7.17 Use
of Proceeds. Borrower agrees that the proceeds of the Loans shall
be used solely to pay related fees and expenses in connection with
this Agreement and for working capital and general corporate
purposes. The proceeds of the Loan will not be used in violation of
Anti-Corruption Laws or applicable Sanctions.

 

7.18 Equity
Event. On or before March 7, 2019, Borrower shall provide evidence
that Parent has raised at least an amount equal to the sum of (i)
Fifteen Million Dollars ($15,000,000.00) in unrestricted
(including, not subject to any redemption, clawback, escrow or
similar encumbrance or restriction other than in the case the
Permitted Convertible Debt Financing) net cash proceeds from one or
more bona fide equity financings, Subordinated Indebtedness (which,
for the avoidance of doubt, may include the net proceeds received
from any Permitted Convertible Debt Financing (other than any
amounts used to purchase equity derivatives in connection with such
Permitted Convertible Debt Financing)), and/or upfront proceeds
from business development transactions permitted under this
Agreement, in each case after February 7, 2019, and prior to March
7, 2019, subject to reasonable verification by Agent based upon
reasonable supporting documentation.

 

7.19 Notwithstanding
anything herein to the contrary, no assets or liabilities of the
Borrower or its Subsidiaries (other than Ariston) shall be
transferred to Ariston.

 

 

 

 

7.20 Compliance
with Laws. Borrower (i) shall maintain, and shall cause its
Subsidiaries to maintain, compliance in all material respect with
all applicable laws, rules or regulations (including any such law,
rule or regulation with respect to the making or brokering of loans
or financial accommodations), and (ii) shall, or cause its
Subsidiaries to, obtain and maintain all required governmental
authorizations, approvals, licenses, franchises, permits or
registrations reasonably necessary in connection with the conduct
of Borrower’s business.

 

Neither
Borrower nor any of its Subsidiaries shall, nor shall Borrower or
any of its Subsidiaries permit any controlled Affiliate to,
directly or indirectly, knowingly enter into any documents,
instruments, agreements or contracts with any Person listed on the
OFAC Lists. Neither Borrower nor any of its Subsidiaries shall, nor
shall Borrower or any of its Subsidiaries, permit any controlled
Affiliate to, directly or indirectly (i) conduct any business
or engage in any transaction or dealing with any Blocked Person,
including, without limitation, the making or receiving of any
contribution of funds, goods or services to or for the benefit of
any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224 or any similar
executive order or other Anti-Terrorism Law, or (iii) engage
in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in Executive Order No. 13224 or
other Anti-Terrorism Law.

 

Borrower has
implemented and maintains in effect policies and procedures
designed to ensure compliance by the Borrower, its Subsidiaries and
their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions, and Borrower, its
Subsidiaries and their respective officers and employees and to the
knowledge of Borrower its directors and agents, are in compliance
with Anti-Corruption Laws and applicable Sanctions in all material
respects.

 

None of
Borrower, any of its Subsidiaries or any of their respective
directors, officers or employees, or to the knowledge of Borrower,
any agent for Borrower or its Subsidiaries that will act in any
capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Loan, use of
proceeds or other transaction contemplated by this Agreement will
violate Anti-Corruption Laws or applicable Sanctions.

 

7.21 Financial
Covenant (Minimum Cash). In the event Borrower fails to achieve
Performance Milestone I on or before July 31, 2019, beginning on
August 1, 2019, Borrower shall, at all times prior to
Borrower’s achievement of both Performance Milestone II and
Performance Milestone IV, maintain Unrestricted Cash in an amount
greater than or equal to Ten Million Dollars ($10,000,000) plus the
amount of Borrower’s accounts payable under GAAP not paid
after the 90th day following the due date for such accounts
payable, and not contested, challenged or discussed in good faith.
Borrower shall provide Agent evidence of compliance with this
Section 7.21 in each Compliance Certificate and upon request in
form and substance reasonably acceptable to Agent, along with
supporting documentation reasonably requested by
Agent.

 

7.22 Post-Closing
Obligations. Notwithstanding any provision herein or in any other
Loan Document to the contrary, to the extent not actually delivered
on or prior to the Closing Date, Borrower shall:

 

(a) within
30 days of the Closing Date, deliver to Agent all insurance
endorsements required hereunder which shall be in form and
substance reasonably satisfactory to Agent in its reasonable
discretion;

 

(b) within
3 Business Days of the Closing Date (or such later date as Agent
may agree to in its sole discretion), fully-executed copies of
Account Control Agreements with respect to Borrower’s
accounts maintained at Wells Fargo Clearing Services, LLC and
Pershing Advisor Solutions LLC, in form and substance reasonably
satisfactory to Agent;

 

(c) within
30 days of the Closing Date (or such later date as Agent may agree
to in its sole discretion), a fully-executed landlord waiver, in
form and substance reasonably satisfactory to Agent, for
Borrower’s location at: 2 Gansevoort Street, 9th Floor, New
York, NY 10014; and

 

(d) within
5 Business Days of the Closing Date (or such later date as Agent
may agree to in its sole discretion), a fully-executed Intercompany
Subordination Agreement, in form and substance reasonably
satisfactory to Agent.

 

7.23 Transactions
with Affiliates. Borrower shall not and shall not permit any
Subsidiary to, directly or indirectly, enter into or permit to
exist any transaction of any kind with any Affiliate of Borrower or
such Subsidiary on terms that are materially less favorable to
Borrower or such Subsidiary, as the case may be, than those that
might be obtained in an arm’s length transaction from a
Person who is not an Affiliate of Borrower or such Subsidiary,
except: (i) transactions between or among Borrowers (or any entity
that becomes a Borrower as a result of such transaction) not
involving any other Affiliate; (ii) loans or advances to employees,
officers and directors otherwise constituting a Permitted
Investment and (iii) transactions set forth on Schedule 7.23, as
those agreements and instruments may be amended, modified,
supplemented, extended, renewed or refinanced from time to time in
accordance with the other terms of this covenant or to the extent
not more disadvantageous to the Agent and Lender in any material
respect.

 

SECTION 8. RIGHT
TO INVEST

 

8.1 
Lender or its
assignee or nominee shall have the right, in its discretion, to
participate in any Subsequent Financing in an amount of up to
$2,000,000 on the same terms, conditions and pricing afforded to
others participating in any such Subsequent Financing. This Section
8.1, and all rights and obligations hereunder, shall terminate upon
the later of (a) the repayment in full of all Secured Obligations
(other than any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination
of this Agreement) and (b) termination or exercise in full of the
Warrant.

 

 

 

 

SECTION 9. EVENTS
OF DEFAULT

 

The
occurrence of any one or more of the following events shall be an
Event of Default:

 

9.1 Payments.
Borrower fails to pay any amount due under this Agreement or any of
the other Loan Documents on the due date; provided, however, that
an Event of Default shall not occur on account of a failure to pay
due solely to an administrative or operational error of Agent or
Lender or Borrower’s bank if Borrower had the funds to make
the payment when due and makes the payment within three (3)
Business Days following Borrower’s knowledge of such failure
to pay; or

 

9.2 Covenants.
Borrower breaches or defaults in the performance of any covenant or
Secured Obligation under this Agreement, or any of the other Loan
Documents, and (a) with respect to a default under any
covenant under this Agreement (other than under Sections 6, 7.4,
7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15, 7.16, 7.17, 7.18, 7.19, 7.20,
7.21 and 7.22), and any other Loan Document, such default continues
for more than ten (10) Business Days after the earlier of the date
on which (i) Agent or Lender has given notice of such default to
Borrower and (ii) Borrower has actual knowledge of such default or
(b) with respect to a default under any of Sections 6, 7.4, 7.5,
7.6, 7.7, 7.8, 7.9, 7.14, 7.15, 7.16, 7.17, 7.18, 7.19, 7.20, 7.21
and 7.22 the occurrence of such default; or

 

9.3 Material
Adverse Effect. A circumstance has occurred that could reasonably
be expected to have a Material Adverse Effect; or

 

9.4 Representations.
Any representation or warranty made by Borrower in any Loan
Document shall have been false or misleading in any material
respect when made or when deemed made; or

 

9.5 Insolvency.
Borrower (A) (i) shall make an assignment for the benefit of
creditors; or (ii) shall be generally unable to pay its debts
as they become due, or shall become insolvent; or (iii) shall
file a voluntary petition in bankruptcy; or (iv) shall file
any petition, answer, or document seeking for itself any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation pertinent to such circumstances;
or (v) shall seek or consent to or acquiesce in the
appointment of any trustee, receiver, or liquidator of Borrower or
of all or any substantial part (i.e., 33-1/3% or more) of the
assets or property of Borrower; or (vi) shall cease operations
of its business as its business has normally been conducted, or
terminate substantially all of its employees; or
(vii) Borrower or its directors or majority shareholders shall
take any action initiating any of the foregoing actions described
in clauses (i) through (vi); or (B) either (i) forty-five
(45) days shall have expired after the commencement of an
involuntary action against Borrower seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future statute, law or
regulation, without such action being dismissed or all orders or
proceedings thereunder affecting the operations or the business of
Borrower being stayed; or (ii) a stay of any such order or
proceedings shall thereafter be set aside and the action setting it
aside shall not be timely appealed; or (iii) Borrower shall
file any answer admitting or not contesting the material
allegations of a petition filed against Borrower in any such
proceedings; or (iv) the court in which such proceedings are
pending shall enter a decree or order granting the relief sought in
any such proceedings; or (v) forty-five (45) days shall have
expired after the appointment, without the consent or acquiescence
of Borrower, of any trustee, receiver or liquidator of Borrower or
of all or any substantial part of the properties of Borrower
without such appointment being vacated; or

 

9.6 Attachments;
Judgments. Any portion of Borrower’s assets is attached or
seized, or a levy is filed against any such assets, or a final
judgment or judgments is/are entered for the payment of money (not
covered by independent third party insurance as to which liability
has not been rejected by such insurance carrier), individually or
in the aggregate, of at least $750,000, or Borrower is enjoined or
in any way prevented by court order from conducting any part of its
business for a period of more than 30 consecutive days;
or

 

9.7 Other
Indebtedness. The occurrence of any default under any agreement of
Borrower evidencing any Indebtedness in excess of $750,000 and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Indebtedness, if the effect of such default is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or
otherwise to cause, or to permit the holder thereof to cause, such
Indebtedness to mature, in each case whether or not
exercised.

 

SECTION 10.  REMEDIES

 

10.1 
General. Upon and
during the continuance of any one or more Events of Default, (i)
Agent may, and at the direction of the Required Lenders shall,
accelerate and demand payment of all or any part of the Secured
Obligations together with a Prepayment Charge (if any) and declare
them to be immediately due and payable (provided, that upon the
occurrence of an Event of Default of the type described in Section
9.5, all of the Secured Obligations (including, without limitation,
the Prepayment Charge (if any) and the End of Term Charge) shall
automatically be accelerated and made due and payable, in each case
without any further notice or act), (ii) Agent may, at its option,
sign and file in Borrower’s name any and all collateral
assignments, notices, control agreements, security agreements and
other documents it deems necessary or appropriate to perfect or
protect the repayment of the Secured Obligations, and in
furtherance thereof, Borrower hereby grants Agent an irrevocable
power of attorney coupled with an interest, and (iii) Agent may
notify any of Borrower’s account debtors to make payment
directly to Agent, compromise the amount of any such account on
Borrower’s behalf and endorse Agent’s name without
recourse on any such payment for deposit directly to Agent’s
account. Agent may, and at the direction of the Required Lenders
shall, exercise all rights and remedies with respect to the
Collateral under the Loan Documents or otherwise available to it
under the UCC and other applicable law, including the right to
release, hold, sell, lease, liquidate, collect, realize upon, or
otherwise dispose of all or any part of the Collateral and the
right to occupy, utilize, process and commingle the Collateral. All
Agent’s rights and remedies shall be cumulative and not
exclusive.

 

10.2 Collection;
Foreclosure. Upon the occurrence and during the continuance of any
Event of Default, Agent may, and at the direction of the Required
Lenders shall, at any time or from time to time, apply, collect,
liquidate, sell in one or more sales, lease or otherwise dispose
of, any or all of the Collateral, in its then condition or
following any commercially reasonable preparation or processing, in
such order as Agent may elect. Any such sale may be made either at
public or private sale at its place of business or elsewhere.
Borrower agrees that any such public or private sale may occur upon
ten (10) calendar days’ prior written notice to Borrower.
Agent may require Borrower to assemble the Collateral and make it
available to Agent at a place designated by Agent that is
reasonably convenient to Agent and Borrower. The proceeds of any
sale, disposition or other realization upon all or any part of the
Collateral shall be applied by Agent in the following order of
priorities:

 

First,
to Agent and Lender in an amount sufficient to pay in full
Agent’s and Lender’s reasonable costs and
professionals’ and advisors’ fees and expenses as
described in Section 11.11;

 

 

 

 

Second,
to Lender in an amount equal to the then unpaid amount of the
Secured Obligations (including principal, interest, and the Default
Rate interest), in such order and priority as Agent may choose in
its sole discretion; and

 

Finally, after the
full and final payment in Cash of all of the Secured Obligations
(other than inchoate obligations), to any creditor holding a junior
Lien on the Collateral, or to Borrower or its representatives or as
a court of competent jurisdiction may direct.

 

Agent
shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it
complies with the obligations of a secured party under the
UCC.

 

10.3 No
Waiver. Agent shall be under no obligation to marshal any of the
Collateral for the benefit of Borrower or any other Person, and
Borrower expressly waives all rights, if any, to require Agent to
marshal any Collateral.

 

10.4 Cumulative
Remedies. The rights, powers and remedies of Agent hereunder shall
be in addition to all rights, powers and remedies given by statute
or rule of law and are cumulative. The exercise of any one or more
of the rights, powers and remedies provided herein shall not be
construed as a waiver of or election of remedies with respect to
any other rights, powers and remedies of Agent.

 

SECTION 11. MISCELLANEOUS

 

11.1    
Severability.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be
ineffective only to the extent and duration of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.

 

11.2
Notice. Except as
otherwise provided herein, any notice, demand, request, consent,
approval, declaration, service of process or other communication
(including the delivery of Financial Statements) that is required,
contemplated, or permitted under the Loan Documents or with respect
to the subject matter hereof shall be in writing, and shall be
deemed to have been validly served, given, delivered, and received
upon the earlier of: (i) the day of transmission by electronic
mail or hand delivery or delivery by an overnight express service
or overnight mail delivery service; or (ii) the third
(3rd)
calendar day after deposit in the United States of America mails,
with proper first class postage prepaid, in each case addressed to
the party to be notified as follows:

 

(a) If
to Agent:

HERCULES CAPITAL,
INC.

Legal
Department

Attention: Chief
Legal Officer and Michael Dutra and Bryan Jadot

400
Hamilton Avenue, Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com; mdutra@htgc.com;
bjadot@htgc.com

Telephone:
650-289-3060

 

(b) If
to Lender:

HERCULES CAPITAL,
INC., HERCULES TECHNOLOGY III, L.P

Legal
Department

Attention: Chief
Legal Officer and Michael Dutra and Bryan Jadot

400
Hamilton Avenue, Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com; mdutra@htgc.com;
bjadot@htgc.com

Telephone:
650-289-3060

 

(c) If
to Borrower:

TG THERAPEUTICS,
INC.

Attention: Sean
Power, Chief Financial Officer

2
Gansevoort St., 9th Floor

New
York, NY 10014

email:
sp@tgtxinc.com

Telephone:
212-554-4484

 

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

ALSTON & BIRD
LLP

Attention: Paul W.
Hespel

 90
Park Avenue

 New
York, NY 10016

 email:
paul.hespel@alston.com

 Telephone:
212-210-9492

 

or to
such other address as each party may designate for itself by like
notice.

 

 

 

 

11.3 Entire
Agreement; Amendments.

 

(a) This
Agreement and the other Loan Documents constitute the entire
agreement and understanding of the parties hereto in respect of the
subject matter hereof and thereof, and supersede and replace in
their entirety any prior proposals, term sheets, non-disclosure or
confidentiality agreements, letters, negotiations or other
documents or agreements, whether written or oral, with respect to
the subject matter hereof or thereof (including, without
limitation, Agent’s revised proposal letter dated February 7,
2019 and the
Non-Disclosure Agreement).

 

(b) Neither
this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, restated, amended and restated,
supplemented or modified except in accordance with the provisions
of this Section 11.3(b). The Required Lenders and Borrower party to
the relevant Loan Document may, or, with the written consent of the
Required Lenders, the Agent and the Borrower party to the relevant
Loan Document may, from time to time, (i) enter into written
amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the
rights of the Lenders or of the Borrower hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or
the Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents
or any default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (A) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan,
reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof, in each case
without the written consent of each Lender directly affected
thereby; (B) eliminate or reduce the voting rights of any Lender
under this Section 11.3(b) without the written consent of such
Lender; (C) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement
and the other Loan Documents, release all or substantially all of
the Collateral or release a Borrower from its obligations under the
Loan Documents, in each case without the written consent of all
Lenders; or (D) amend, modify or waive any provision of Section
11.17 without the written consent of the Agent. Any such waiver and
any such amendment, supplement or modification shall apply equally
to each Lender and shall be binding upon Borrower, the Lender, the
Agent and all future holders of the Loans.

 

11.4 No
Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

 

11.5 No
Waiver. The powers conferred upon Agent and Lender by this
Agreement are solely to protect its rights hereunder and under the
other Loan Documents and its interest in the Collateral and shall
not impose any duty upon Agent or Lender to exercise any such
powers. No omission or delay by Agent or Lender at any time to
enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by
Borrower at any time designated, shall be a waiver of any such
right or remedy to which Agent or Lender is entitled, nor shall it
in any way affect the right of Agent or Lender to enforce such
provisions thereafter.

 

11.6 Survival.
All agreements, representations and warranties contained in this
Agreement and the other Loan Documents or in any document delivered
pursuant hereto or thereto shall be for the benefit of Agent and
Lender and shall survive the execution and delivery of this
Agreement. Sections 6.3 and 8.1 shall survive the termination of
this Agreement (except as otherwise specified in Section
8.1).

 

11.7 Successors
and Assigns. The provisions of this Agreement and the other Loan
Documents shall inure to the benefit of and be binding on Borrower
and its permitted assigns (if any). Borrower shall not assign its
obligations under this Agreement or any of the other Loan Documents
without Agent’s express prior written consent, and any such
attempted assignment shall be void and of no effect. Agent and
Lender may assign, transfer, or endorse its rights hereunder and
under the other Loan Documents without prior notice to Borrower,
and all of such rights shall inure to the benefit of Agent’s
and Lender’s successors and assigns; provided that as long as
no Event of Default has occurred and is continuing, neither Agent
nor any Lender may assign, transfer or endorse its rights hereunder
or under the Loan Documents to any party that is a Disqualified
Lender, it being acknowledged that in all cases, any transfer to an
Affiliate of any Lender or Agent shall be allowed. Notwithstanding
the foregoing, (x) in connection with any assignment by a Lender as
a result of a forced divestiture at the request of any regulatory
agency, the restrictions set forth herein shall not apply and Agent
and Lender may assign, transfer or indorse its rights hereunder and
under the other Loan Documents to any Person or party and (y) in
connection with a Lender’s own financing or securitization
transactions, the restrictions set forth herein shall not apply and
Agent and Lender may assign, transfer or indorse its rights
hereunder and under the other Loan Documents to any Person or party
providing such financing or formed to undertake such securitization
transaction and any transferee of such Person or party upon the
occurrence of a default, event of default or similar occurrence
with respect to such financing or securitization transaction;
provided that no such sale, transfer, pledge or assignment under
this clause (y) shall release such Lender from any of its
obligations hereunder or substitute any such Person or party for
such Lender as a party hereto until Agent shall have received and
accepted an effective assignment agreement from such Person or
party in form satisfactory to Agent executed, delivered and fully
completed by the applicable parties thereto, and shall have
received such other information regarding such assignee as Agent
reasonably shall require.

 

11.8 Governing
Law. This Agreement and the other Loan Documents have been
negotiated and delivered to Agent and Lender in the State of
California, and shall have been accepted by Agent and Lender in the
State of California. Payment to Agent and Lender by Borrower of the
Secured Obligations is due in the State of California. This
Agreement and the other Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, excluding conflict of laws principles that would cause
the application of laws of any other jurisdiction.

 

11.9 Consent
to Jurisdiction and Venue. All judicial proceedings (to the extent
that the reference requirement of Section 11.10 is not applicable)
arising in or under or related to this Agreement or any of the
other Loan Documents may be brought in any state or federal court
located in the State of California. By execution and delivery of
this Agreement, each party hereto generally and unconditionally:
(a) consents to nonexclusive personal jurisdiction in Santa
Clara County, State of California; (b) waives any objection as
to jurisdiction or venue in Santa Clara County, State of
California; (c) agrees not to assert any defense based on lack
of jurisdiction or venue in the aforesaid courts; and
(d) irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement or the other Loan
Documents. Service of process on any party hereto in any action
arising out of or relating to this Agreement shall be effective if
given in accordance with the requirements for notice set forth in
Section 11.2, and shall be deemed effective and received as
set forth in Section 11.2. Nothing herein shall affect the
right to serve process in any other manner permitted by law or
shall limit the right of either party to bring proceedings in the
courts of any other jurisdiction.

 

 

 

 

11.10 Mutual
Waiver of Jury Trial / Judicial Reference.

 

(a) Because
disputes arising in connection with complex financial transactions
are most quickly and economically resolved by an experienced and
expert Person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire
that their disputes be resolved by a judge applying such applicable
laws. EACH OF BORROWER, AGENT AND LENDER SPECIFICALLY WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM
(COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST
AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR
THEIR RESPECTIVE ASSIGNEE AGAINST BORROWER. This waiver extends to
all such Claims, including Claims that involve Persons other than
Agent, Borrower and Lender; Claims that arise out of or are in any
way connected to the relationship among Borrower, Agent and Lender;
and any Claims for damages, breach of contract, tort, specific
performance, or any equitable or legal relief of any kind, arising
out of this Agreement, any other Loan Document.

 

(b) If
the waiver of jury trial set forth in Section 11.10(a) is
ineffective or unenforceable, the parties agree that all Claims
shall be resolved by reference to a private judge sitting without a
jury, pursuant to Code of Civil Procedure Section 638, before a
mutually acceptable referee or, if the parties cannot agree, a
referee selected by the Presiding Judge of the Santa Clara County,
California. Such proceeding shall be conducted in Santa Clara
County, California, with California rules of evidence and discovery
applicable to such proceeding.

 

(c) In
the event Claims are to be resolved by judicial reference, either
party may seek from a court identified in Section 11.9, any
prejudgment order, writ or other relief and have such prejudgment
order, writ or other relief enforced to the fullest extent
permitted by law notwithstanding that all Claims are otherwise
subject to resolution by judicial reference.

 

11.11 Professional
Fees. Borrower promises to pay Agent’s and Lender’s
fees and expenses necessary to finalize the loan documentation,
including but not limited to reasonable and invoiced
attorneys’ fees, UCC searches, filing costs, and other
miscellaneous expenses. In addition, Borrower promises to pay any
and all reasonable and invoiced attorneys’ and other
professionals’ fees and expenses incurred by Agent and Lender
after the Closing Date in connection with or related to:
(a) the Loan; (b) the administration, collection, or
enforcement of the Loan; (c) the amendment or modification of
the Loan Documents; (d) any waiver, consent, release, or
termination under the Loan Documents; (e) the protection,
preservation, audit, field exam, sale, lease, liquidation, or
disposition of Collateral or the exercise of remedies with respect
to the Collateral; (f) any legal, litigation, administrative,
arbitration, or out of court proceeding in connection with or
related to Borrower or the Collateral, and any appeal or review
thereof; and (g) any bankruptcy, restructuring,
reorganization, assignment for the benefit of creditors, workout,
foreclosure, or other action related to Borrower, the Collateral,
the Loan Documents, including representing Agent or Lender in any
adversary proceeding or contested matter commenced or continued by
or on behalf of Borrower’s estate, and any appeal or review
thereof.

 

11.12 Confidentiality.
Agent and Lender acknowledge that certain items of Collateral and
information provided to Agent and Lender by Borrower are
confidential and proprietary information of Borrower, if and to the
extent such information either (x) is marked as confidential by
Borrower at the time of disclosure, or (y) should reasonably be
understood to be confidential (the “Confidential
Information”). Accordingly, Agent and Lender agree that any
Confidential Information it may obtain in the course of acquiring,
administering, or perfecting Agent’s security interest in the
Collateral shall not be disclosed to any other Person or entity in
any manner whatsoever, in whole or in part, without the prior
written consent of Borrower, except that Agent and Lender may
disclose any such information: (a) to its own directors,
officers, employees, accountants, counsel and other professional
advisors and to its Affiliates if Agent or Lender in their sole
discretion determines that any such party should have access to
such information in connection with such party’s
responsibilities in connection with the Loan or this Agreement and,
provided that such recipient of such Confidential Information
either (i) agrees to be bound by the confidentiality provisions of
this paragraph or (ii) is otherwise subject to confidentiality
restrictions that reasonably protect against the disclosure of
Confidential Information; (b) if such information is generally
available to the public; (c) if required or appropriate in any
report, statement or testimony submitted to any governmental
authority having or claiming to have jurisdiction over Agent or
Lender; (d) if required or appropriate in response to any
summons or subpoena or in connection with any litigation, to the
extent permitted or deemed advisable by Agent’s or
Lender’s counsel; (e) to comply with any legal
requirement or law applicable to Agent or Lender; (f) to the
extent reasonably necessary in connection with the exercise of any
right or remedy under any Loan Document, including Agent’s
sale, lease, or other disposition of Collateral after default;
(g) to any participant or assignee of Agent or Lender or any
prospective participant or assignee; provided, that such
participant or assignee or prospective participant or assignee
agrees in writing to be bound by this Section prior to disclosure;
or (h) otherwise with the prior consent of Borrower; provided,
that any disclosure made in violation of this Agreement shall not
affect the obligations of Borrower or any of its Affiliates or any
guarantor under this Agreement or the other Loan Documents.
Agent’s and Lender’s obligations under this Section
11.12 shall supersede all of their respective obligations under the
Non-Disclosure Agreement.

 

11.13  Assignment
of Rights. Borrower acknowledges and understands that Agent or
Lender may, subject to Section 11.7, sell and assign all or part of
its interest hereunder and under the Loan Documents to any Person
or entity (an “Assignee”). After such assignment the
term “Agent” or “Lender” as used in the
Loan Documents shall mean and include such Assignee, and such
Assignee shall be vested with all rights, powers and remedies of
Agent and Lender hereunder with respect to the interest so
assigned; but with respect to any such interest not so transferred,
Agent and Lender shall retain all rights, powers and remedies
hereby given. No such assignment by Agent or Lender shall relieve
Borrower of any of its obligations hereunder. Lender agrees that in
the event of any transfer by it of the Note(s)(if any), it will
endorse thereon a notation as to the portion of the principal of
the Note(s), which shall have been paid at the time of such
transfer and as to the date to which interest shall have been last
paid thereon.

 

11.14 Revival
of Secured Obligations. This Agreement and the Loan Documents shall
remain in full force and effect and continue to be effective if any
petition is filed by or against Borrower for liquidation or
reorganization, if Borrower becomes insolvent or makes an
assignment for the benefit of creditors, if a receiver or trustee
is appointed for all or any significant part of Borrower’s
assets, or if any payment or transfer of Collateral is recovered
from Agent or Lender. The Loan Documents and the Secured
Obligations and Collateral security shall continue to be effective,
or shall be revived or reinstated, as the case may be, if at any
time payment and performance of the Secured Obligations or any
transfer of Collateral to Agent, or any part thereof is rescinded,
avoided or avoidable, reduced in amount, or must otherwise be
restored or returned by, or is recovered from, Agent, Lender or by
any obligee of the Secured Obligations, whether as a
“voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment,
performance, or transfer of Collateral had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced,
avoided, avoidable, restored, returned, or recovered, the Loan
Documents and the Secured Obligations shall be deemed, without any
further action or documentation, to have been revived and
reinstated except to the extent of the full, final, and
indefeasible payment to Agent or Lender in Cash.

 

11.15 Counterparts.
This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which
when so delivered shall be deemed an original, but all of which
counterparts shall constitute but one and the same
instrument.

 

 

 

 

11.16 No
Third Party Beneficiaries. No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any
third-party beneficiary rights or any other rights of any kind in
any Person other than Agent, Lender and Borrower unless
specifically provided otherwise herein, and, except as otherwise so
provided, all provisions of the Loan Documents will be personal and
solely among Agent, the Lender and the Borrower.

 

11.17 Agency.

 

(a) Lender
hereby irrevocably appoints Hercules Capital, Inc. 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.

 

(b) Lender
agrees to indemnify the Agent in its capacity as such (to the
extent not reimbursed by Borrower and without limiting the
obligation of Borrower to do so), according to its respective Term
Commitment percentages (based upon the total outstanding Term Loan
Commitments) in effect on the date on which indemnification is
sought under this Section 11.17, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out
of, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or
omitted by the Agent under or in connection with any of the
foregoing; The agreements in this Section shall survive the payment
of the Loans and all other amounts payable hereunder.

 

(c) Agent
in Its Individual Capacity. 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” shall, unless
otherwise expressly indicated or unless the context otherwise
requires, include each such Person serving as Agent hereunder in
its individual capacity.

 

(d) Exculpatory
Provisions. The Agent shall have no duties or obligations except
those expressly set forth herein and in the other Loan Documents.
Without limiting the generality of the foregoing, the Agent shall
not:

 

(i) be
subject to any fiduciary or other implied duties, regardless of
whether any default or any Event of Default has occurred and is
continuing;

 

(ii) 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
Lender, 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; and

 

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

 

(e) 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 Lender or as the
Agent shall believe in good faith shall be necessary, under the
circumstances or (ii) in the absence of its own gross negligence or
willful misconduct.

 

(f) 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 or Event of 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 Section 4 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the
Agent.

 

(g) Reliance
by Agent. Agent may rely, and shall be fully protected in acting,
or refraining to act, upon, any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond
or other paper or document that it has no reason to believe to be
other than genuine and to have been signed or presented by the
proper party or parties or, in the case of cables, telecopies and
telexes, to have been sent by the proper party or parties. In the
absence of its gross negligence or willful misconduct, Agent may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to Agent and conforming to the
requirements of the Loan Agreement or any of the other Loan
Documents. Agent may consult with counsel, and any opinion or legal
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, not taken or suffered by
Agent hereunder or under any Loan Documents in accordance
therewith. Agent shall have the right at any time to seek
instructions concerning the administration of the Collateral from
any court of competent jurisdiction. Agent shall not be under any
obligation to exercise any of the rights or powers granted to Agent
by this Agreement, the Loan Agreement and the other Loan Documents
at the request or direction of Lenders unless Agent shall have been
provided by Lender with adequate security and indemnity against the
costs, expenses and liabilities that may be incurred by it in
compliance with such request or direction.

 

 

 

 

11.18 Publicity.
None of the parties hereto nor any of its respective member
businesses and Affiliates shall, without the other parties’
prior written consent (which shall not be unreasonably withheld or
delayed), publicize or use (a) the other party’s name
(including a brief description of the relationship among the
parties hereto), logo or hyperlink to such other parties’ web
site, separately or together, in written and oral presentations,
advertising, promotional and marketing materials, client lists,
public relations materials or on its web site (together, the
“Publicity Materials”); (b) the names of officers of
such other parties in the Publicity Materials; and (c) such other
parties’ name, trademarks, servicemarks in any news or press
release concerning such party; provided however, notwithstanding
anything to the contrary herein, no such consent shall be required
(i) to the extent necessary to comply with the requests of any
regulators, legal requirements or laws applicable to such party,
pursuant to any listing agreement with any national securities
exchange (so long as such party provides prior notice to the other
party hereto to the extent reasonably practicable) and (ii) to
comply with Section 11.12.

 

11.19 Multiple
Borrowers.

 

(a) Borrower’s
Agent. Each of the Borrowers hereby irrevocably appoints Parent as
its agent, attorney-in-fact and legal representative for all
purposes, including requesting disbursement of the Term Loan and
receiving account statements and other notices and communications
to Borrowers (or any of them) from the Agent or any Lender. The
Agent may rely, and shall be fully protected in relying, on any
request for the Term Loan, disbursement instruction, report,
information or any other notice or communication made or given by
Parent, whether in its own name or on behalf of one or more of the
other Borrowers, and the Agent shall not have any obligation to
make any inquiry or request any confirmation from or on behalf of
any other Borrower as to the binding effect on it of any such
request, instruction, report, information, other notice or
communication, nor shall the joint and several character of the
Borrowers’ obligations hereunder be affected
thereby.

 

(b) Waivers.
Each Borrower hereby waives: (i) any right to require the Agent to
institute suit against, or to exhaust its rights and remedies
against, any other Borrower or any other person, or to proceed
against any property of any kind which secures all or any part of
the Secured Obligations, or to exercise any right of offset or
other right with respect to any reserves, credits or deposit
accounts held by or maintained with the Agent or any Indebtedness
of the Agent or any Lender to any other Borrower, or to exercise
any other right or power, or pursue any other remedy the Agent or
any Lender may have; (ii) any defense arising by reason of any
disability or other defense of any other Borrower or any guarantor
or any endorser, co-maker or other person, or by reason of the
cessation from any cause whatsoever of any liability of any other
Borrower or any guarantor or any endorser, co-maker or other
person, with respect to all or any part of the Secured Obligations,
or by reason of any act or omission of the Agent or others which
directly or indirectly results in the discharge or release of any
other Borrower or any guarantor or any other person or any Secured
Obligations or any security therefor, whether by operation of law
or otherwise; (iii) any defense arising by reason of any failure of
the Agent to obtain, perfect, maintain or keep in force any Lien
on, any property of any Borrower or any other person; (iv) any
defense based upon or arising out of any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any other Borrower
or any guarantor or any endorser, co-maker or other person,
including without limitation any discharge of, or bar against
collecting, any of the Secured Obligations (including without
limitation any interest thereon), in or as a result of any such
proceeding. Until all of the Secured Obligations have been paid,
performed, and discharged in full, nothing shall discharge or
satisfy the liability of any Borrower hereunder except the full
performance and payment of all of the Secured Obligations. If any
claim is ever made upon the Agent for repayment or recovery of any
amount or amounts received by the Agent in payment of or on account
of any of the Secured Obligations, because of any claim that any
such payment constituted a preferential transfer or fraudulent
conveyance, or for any other reason whatsoever, and the Agent
repays all or part of said amount by reason of any judgment, decree
or order of any court or administrative body having jurisdiction
over the Agent or any of its property, or by reason of any
settlement or compromise of any such claim effected by the Agent
with any such claimant (including without limitation the any other
Borrower), then and in any such event, each Borrower agrees that
any such judgment, decree, order, settlement and compromise shall
be binding upon such Borrower, notwithstanding any revocation or
release of this Agreement or the cancellation of any note or other
instrument evidencing any of the Secured Obligations, or any
release of any of the Secured Obligations, and each Borrower shall
be and remain liable to the Agent and the Lenders under this
Agreement for the amount so repaid or recovered, to the same extent
as if such amount had never originally been received by the Agent
or any Lender, and the provisions of this sentence shall survive,
and continue in effect, notwithstanding any revocation or release
of this Agreement. Each Borrower hereby expressly and
unconditionally waives all rights of subrogation, reimbursement and
indemnity of every kind against any other Borrower, and all rights
of recourse to any assets or property of any other Borrower, and
all rights to any collateral or security held for the payment and
performance of any Secured Obligations, including (but not limited
to) any of the foregoing rights which Borrower may have under any
present or future document or agreement with any other Borrower or
other person, and including (but not limited to) any of the
foregoing rights which any Borrower may have under any equitable
doctrine of subrogation, implied contract, or unjust enrichment, or
any other equitable or legal doctrine.

 

(c) Consents.
Each Borrower hereby consents and agrees that, without notice to or
by Borrower and without affecting or impairing in any way the
obligations or liability of Borrower hereunder, the Agent may, from
time to time before or after revocation of this Agreement, do any
one or more of the following in its sole and absolute discretion:
(i) accept partial payments of, compromise or settle, renew, extend
the time for the payment, discharge, or performance of, refuse to
enforce, and release all or any parties to, any or all of the
Secured Obligations; (ii) grant any other indulgence to any
Borrower or any other Person in respect of any or all of the
Secured Obligations or any other matter; (iii) accept, release,
waive, surrender, enforce, exchange, modify, impair, or extend the
time for the performance, discharge, or payment of, any and all
property of any kind securing any or all of the Secured Obligations
or any guaranty of any or all of the Secured Obligations, or on
which the Agent at any time may have a Lien, or refuse to enforce
its rights or make any compromise or settlement or agreement
therefor in respect of any or all of such property; (iv) substitute
or add, or take any action or omit to take any action which results
in the release of, any one or more other Borrowers or any endorsers
or guarantors of all or any part of the Secured Obligations,
including, without limitation one or more parties to this
Agreement, regardless of any destruction or impairment of any right
of contribution or other right of Borrower; (v) apply any sums
received from any other Borrower, any guarantor, endorser, or
co-signer, or from the disposition of any Collateral or security,
to any Indebtedness whatsoever owing from such person or secured by
such Collateral or security, in such manner and order as the Agent
determines in its sole discretion, and regardless of whether such
Indebtedness is part of the Secured Obligations, is secured, or is
due and payable. Each Borrower consents and agrees that the Agent
shall be under no obligation to marshal any assets in favor of
Borrower, or against or in payment of any or all of the Secured
Obligations. Each Borrower further consents and agrees that the
Agent shall have no duties or responsibilities whatsoever with
respect to any property securing any or all of the Secured
Obligations. Without limiting the generality of the foregoing, the
Agent shall have no obligation to monitor, verify, audit, examine,
or obtain or maintain any insurance with respect to, any property
securing any or all of the Secured Obligations.

 

 

 

 

(d) Independent
Liability. Each Borrower hereby agrees that one or more successive
or concurrent actions may be brought hereon against such Borrower,
in the same action in which any other Borrower may be sued or in
separate actions, as often as deemed advisable by Agent. Each
Borrower is fully aware of the financial condition of each other
Borrower and is executing and delivering this Agreement based
solely upon its own independent investigation of all matters
pertinent hereto, and such Borrower is not relying in any manner
upon any representation or statement of the Agent or any Lender
with respect thereto. Each Borrower represents and warrants that it
is in a position to obtain, and each Borrower hereby assumes full
responsibility for obtaining, any additional information concerning
any other Borrower’s financial condition and any other matter
pertinent hereto as such Borrower may desire, and such Borrower is
not relying upon or expecting the Agent to furnish to it any
information now or hereafter in the Agent’s possession
concerning the same or any other matter.

 

(e) Subordination.
All Indebtedness of a Borrower now or hereafter arising held by
another Borrower is subordinated to the Secured Obligations and the
Borrower holding the Indebtedness shall take all actions reasonably
requested by Agent to effect, to enforce and to give notice of such
subordination.

 

(SIGNATURES
TO FOLLOW)

 

 

 

 

 

IN
WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and
delivered this Loan and Security Agreement as of the day and year
first above written.

 

BORROWER:

 

TG
THERAPEUTICS, INC.

 

Signature:                            

_______________________

Print
Name:                

_______________________

Title:                                 

_______________________

 

 

 

TG
BIOLOGICS, INC.

 

Signature:                            

_______________________

Print
Name:   

_______________________

Title:              

_______________________

 

 

 

 

 

 

Accepted
in Palo Alto, California:

 

AGENT:

 

HERCULES CAPITAL,
INC.

 

Signature:             

_______________________

 

Print
Name:                

_______________________

 

Title:              

_______________________

 

LENDER:

 

HERCULES CAPITAL,
INC.

 

HERCULES
TECHNOLOGY III, L.P.,

 

a
Delaware limited partnership

 

By:            

Hercules Technology
SBICManagement, LLC, its GeneralPartner

 

By:            

Hercules Capital,
Inc., its Manager

 

By:]

 

Signature:              

_______________________

 

Print
Name:         

_______________________

 

Title:              

_______________________

 

 

 

 

Table
of Addenda, Exhibits and Schedules

 

Addendum 1: BA
Provisions

 

Exhibit A: Advance
Request

   
             
Attachment to Advance Request

 

Exhibit B: Term
Note

 

Exhibit C: Name,
Locations, and Other Information for Borrower

 

Exhibit D:
Borrower’s Patents, Trademarks, Copyrights and
Licenses

 

Exhibit E:
Borrower’s Deposit Accounts and Investment
Accounts

 

Exhibit F:
Compliance Certificate

 

Exhibit G: Joinder
Agreement

 

Exhibit I: ACH
Debit Authorization Agreement

 

 

 

 

Schedule 1
Subsidiaries

Schedule 1.1
Commitments

Schedule 1A
Existing Permitted Indebtedness

Schedule 1B
Existing Permitted Investments

Schedule 1C
Existing Permitted Liens

Schedule 5.3
Consents, Etc.

Schedule 5.8 Tax
Matters

Schedule 5.9
Intellectual Property Claims

Schedule 5.10
Intellectual Property

Schedule 5.11
Borrower Products

Schedule 5.14
Capitalization

 

 

 

 

ADDENDUM 1 to LOAN AND SECURITY AGREEMENT

 

  (a) Borrower’s
Business.  For
purposes of this Addendum 1, Borrower shall be deemed to include
its “affiliates” as defined in Title 13 Code of Federal
Regulations Section 121.103.  Borrower represents and warrants
to Agent and Lender as of the Closing Date and covenants to Agent
and Lender for a period of one year after the Closing Date with
respect to subsections 2, 3, 4, 5, 6 and 7 below, as
follows:

 

1. Size
Status.  Borrower’s primary NAICS code is 541700 and has
less than 110 employees in the aggregate;

 

2. No
Relender.  Borrower’s primary business activity does not
involve, directly or indirectly, providing funds to others,
purchasing debt obligations, factoring, or long-term leasing of
equipment with no provision for maintenance or repair;

 

3. No Passive
Business.  Borrower is engaged in a regular and continuous
business operation (excluding the mere receipt of payments such as
dividends, rents, lease payments, or royalties).
 Borrower’s employees are carrying on the majority of
day to day operations.  Borrower will not pass through
substantially all of the proceeds of the Loan to another
entity;

 

4. No Real Estate
Business.  Borrower is not classified under Major Group 65
(Real Estate) or Industry No. 1531 (Operative Builders) of the SIC
Manual.  The proceeds of the Loan will not be used to acquire
or refinance real property unless Borrower (x) is acquiring an
existing property and will use at least 51 percent of the usable
square footage for its business purposes; (y) is building or
renovating a building and will use at least 67 percent of the
usable square footage for its business purposes; or (z) occupies
the subject property and uses at least 67 percent of the usable
square footage for its business purposes.

 

5. No Project
Finance.  Borrower’s assets are not intended to be
reduced or consumed, generally without replacement, as the life of
its business progresses, and the nature of Borrower’s
business does not require that a stream of cash payments be made to
the business’s financing sources, on a basis associated with
the continuing sale of assets (e.g., real estate development
projects and oil and gas wells).  The primary purpose of the
Loan is not to fund production of a single item or defined limited
number of items, generally over a defined production period, where
such production will constitute the majority of the activities of
Borrower (e.g., motion pictures and electric generating
plants).

 

6. No Farm Land
Purchases.  Borrower will not use the proceeds of the Loan to
acquire farm land which is or is intended to be used for
agricultural or forestry purposes, such as the production of food,
fiber, or wood, or is so taxed or zoned.

 

7. No Foreign
Investment.  The proceeds of the Loan will not be used
substantially for a foreign operation.  At the time of the
Loan, Borrower will not have more than 49 percent of its employees
or tangible assets located outside the United States of
America.  The representation in this subsection (7) is made
only as of the date hereof and shall not continue for one year as
contemplated in the first sentence of this Section 1.

 

(b) Small
Business Administration Documentation.  Agent and
Lender acknowledge that Borrower completed, executed and delivered
to Agent SBA Forms 480, 652 and 1031 (Parts A and B) together
with a business plan showing Borrower’s financial projections
(including balance sheets and income and cash flows statements) for
the period described therein and a written statement (whether
included in the purchase agreement or pursuant to a separate
statement) from Agent regarding its intended use of proceeds from
the sale of securities to Lender (the “Use of Proceeds
Statement”).  Borrower represents and warrants to Agent
and Lender that the information regarding Borrower and its
affiliates set forth in the SBA Form 480, Form 652 and
Form 1031 and the Use of Proceeds Statement delivered as of
the Closing Date is accurate and complete.

 

(c) Inspection. 
The following covenants contained in this Section (c) are intended to
supplement and not to restrict the related provisions of the Loan
Documents.  Subject to the preceding sentence, Borrower will
permit, for so long as Lender holds any debt or equity securities
of Borrower, Agent, Lender or their representative, at
Agent’s or Lenders’ expense, and examiners of the SBA
to visit and inspect the properties and assets of Borrower, to
examine its books of account and records, and to discuss
Borrower’s affairs, finances and accounts with
Borrower’s officers, senior management and accountants, all
at such reasonable times as may be requested by Agent or Lender or
the SBA.

 

 

 

 

(d) Annual
Assessment.  Promptly after the end of each calendar
year (but in any event prior to February 28 of each year) and
at such other times as may be reasonably requested by Agent or
Lender, Borrower will deliver to Agent a written assessment of the
economic impact of Lender’s investment in Borrower,
specifying the full-time equivalent jobs created or retained in
connection with the investment, the impact of the investment on the
businesses of Borrower in terms of expanded revenue and taxes,
other economic benefits resulting from the investment (such as
technology development or commercialization, minority business
development, or expansion of exports) and such other information as
may be required regarding Borrower in connection with the filing of
Lender’s SBA Form 468.   Lender will assist
Borrower with preparing such assessment.  In addition to any
other rights granted hereunder, Borrower will grant Agent and
Lender and the SBA access to Borrower’s books and records for
the purpose of verifying the use of such proceeds.  Borrower
also will furnish or cause to be furnished to Agent and Lender such
other information regarding the business, affairs and condition of
Borrower as Agent or Lender may from time to time reasonably
request.

 

(e) Use
of Proceeds.  Borrower will use the proceeds from the
Loan only for purposes set forth in Section 7.17.  Borrower
will deliver to Agent from time to time promptly following
Agent’s request, a written report, certified as correct by
Borrower’s Chief Financial Officer, verifying the purposes
and amounts for which proceeds from the Loan have been
disbursed.  Borrower will supply to Agent such additional
information and documents as Agent reasonably requests with respect
to its use of proceeds and will permit Agent and Lender and the SBA
to have access to any and all Borrower records and information and
personnel as Agent deems necessary to verify how such proceeds have
been or are being used, and to assure that the proceeds have been
used for the purposes specified in Section 7.17.

 

(f) Activities
and Proceeds.  Neither Borrower nor any of its
affiliates (if any) will engage in any activities or use directly
or indirectly the proceeds from the Loan for any purpose for which
a small business investment company is prohibited from providing
funds by the SBIC Act, including 13 C.F.R.
§107.720.  Without obtaining the prior written approval
of Agent, Borrower will not change within 1 year of the date
hereof, Borrower’s current business activity to a business
activity which a licensee under the SBIC Act is prohibited from
providing funds by the SBIC Act.

 

(g) Redemption
Provisions. Notwithstanding any provision to the contrary
contained in the Certificate of Incorporation of Borrower, as
amended from time to time (the “Charter”), if, pursuant
to the redemption provisions contained in the Charter, Lender is
entitled to a redemption of its Warrant, such redemption (in the
case of Lender) will be at a price equal to the redemption price
set forth in the Charter (the “Existing Redemption
Price”). If, however, Lender delivers written notice to
Borrower that the then current regulations promulgated under the
SBIC Act prohibit payment of the Existing Redemption Price in the
case of an SBIC (or, if applied, the Existing Redemption Price
would cause the applicable stock to lose its classification as an
“equity security” and Lender has determined that such
classification is unadvisable), the amount Lender will be entitled
to receive shall be the greater of (i) fair market value of the
securities being redeemed taking into account the rights and
preferences of such securities plus any costs and expenses of the
Lender incurred in making or maintaining the Warrant, and (ii) the
Existing Redemption Price where the amount of accrued but unpaid
dividends payable to the Lender is limited to Borrower’s
earnings plus any costs and expenses of the Lender incurred in
making or maintaining the Warrant; provided, however, the amount
calculated in subsections (i) or (ii) above shall not exceed the
Existing Redemption Price.

 

(h) Compliance
and Resolution.   Borrower agrees that a failure
to comply with Borrower’s obligations under this Addendum, or
any other set of facts or circumstances where it has been asserted
by any governmental regulatory agency (or Agent or Lender believes
that there is a substantial risk of such assertion) that Agent,
Lender and their affiliates are not entitled to hold, or exercise
any significant right with respect to, any securities issued to
Lender by Borrower, will constitute a breach of the obligations of
Borrower under the financing agreements among Borrower, Agent and
Lender.  In the event of (i) a failure to comply with
Borrower’s obligations under this Addendum; or (ii) an
assertion by any governmental regulatory agency (or Agent or Lender
believes that there is a substantial risk of such assertion) of a
failure to comply with Borrower’s obligations under this
Addendum, then (i) Agent, Lender and Borrower will meet and resolve
any such issue in good faith to the satisfaction of Borrower,
Agent, Lender, and any governmental regulatory agency, and (ii)
upon request of Lender or Agent, Borrower will cooperate and assist
with any assignment of the financing agreements among Hercules
Technology III, L.P. and Hercules Capital, Inc.

 

 

 

 

 

EXHIBIT
A

 

ADVANCE REQUEST

 

To:            

Agent:            

Date:__________,
20__

 

Hercules Capital,
Inc. (the “Agent”)

400
Hamilton Avenue, Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com

Attn:

 

TG
Therapeutics, Inc., a Delaware corporation (the
“Parent”) and TG Biologics, Inc. a Delaware corporation
(“TG Bio”; together with Parent, individually and
collectively, jointly and severally, the “Borrower”)
hereby requests from Hercules Capital, Inc., and Hercules
Technology III, L.P. (collectively “Lender”) an Advance
in the amount of _____________________ Dollars ($________________)
on ______________, _____ (the “Advance Date”) pursuant
to the Loan and Security Agreement among Borrower, Agent and Lender
(the “Agreement”). Capitalized words and other terms
used but not otherwise defined herein are used with the same
meanings as defined in the Agreement.

 

Please:

 

(a)            

Issue a check
payable to
Borrower                     

________

 

or

 

(b)            

Wire Funds to
Borrower’s
account                           

________ [LAST 3
DIGITS]

 

Bank:
_____________________________

Address:
_____________________________

                                  _____________________________

ABA
Number: _____________________________

Account
Number: _____________________________

Account
Name: _____________________________

Contact
Person: _____________________________

Phone
Number

To
Verify Wire Info: _____________________________

Email
address: _____________________________

 

Borrower hereby
represents that Borrower’s corporate status and locations
have not changed since the date of the Agreement or, if the
Attachment to this Advance Request is completed, are as set forth
in the Attachment to this Advance Request.

 

Borrower agrees to
notify Agent promptly before the funding of the Loan if any of the
matters which have been represented above shall not be true and
correct on the Borrowing Date and if Agent has received no such
notice before the Advance Date then the statements set forth above
shall be deemed to have been made and shall be deemed to be true
and correct as of the Advance Date.

 

Executed as of [ ],
20[ ].

 

BORROWER:

 

TG
THERAPEUTICS, INC.

 

SIGNATURE:________________________

 

TITLE:_____________________________

 

PRINT
NAME:______________________

 

 

TG
BIOLOGICS, INC.

 

SIGNATURE:________________________

 

TITLE:_____________________________

 

PRINT
NAME:______________________

 

 

 

 

 

 

ATTACHMENT TO ADVANCE REQUEST

 

Dated:
_______________________

 

Borrower
hereby represents and warrants to Agent that Borrower’s
current name and organizational status is as follows:

 

Name: 

TG Therapeutics,
Inc.

 

Type of
organization: 

Corporation

 

State of
organization: 

Delaware

 

Organization file
number: 

[ 

]

 

Name: 

TG Biologics,
Inc.

 

Type of
organization: 

Corporation

 

State of
organization: 

Delaware

 

Organization file
number: 

[ 

]

 

Borrower
hereby represents and warrants to Agent that the street addresses,
cities, states and postal codes of its current locations are as
follows:

 

 

 

 

EXHIBIT B

 

SECURED TERM PROMISSORY NOTE

 

	

$[
],000,000

 

	

Advance
Date: ___ __, 20[ ]

 

	
 

	

Maturity
Date: _____ ___, 20[ ]

 

FOR
VALUE RECEIVED, TG Therapeutics, Inc., a Delaware corporation and
TG Biologics, Inc., a Delaware corporation, for themselves and each
of their Subsidiaries (individually and severally, jointly and
collectively, the “Borrower”) hereby promises to pay to
Hercules Capital, Inc., a Maryland corporation, and Hercules
Technology III, L.P., a Delaware limited partnership or its
registered assigns (the “Lender”) at 400 Hamilton
Avenue, Suite 310, Palo Alto, CA 94301 or such other place of
payment as the Lender may specify from time to time in writing, in
lawful money of the United States of America, the principal amount
of [ ] Million Dollars ($[ ],000,000) or such other principal
amount as Lender has advanced to Borrower, together with interest
at a rate as set forth in Section 2.2(c) of the Loan Agreement
based upon a year consisting of 360 days, with interest computed
daily based on the actual number of days in each
month.

 

This
Secured Term Promissory Note (this “Promissory Note”)
is the Note referred to in, and is executed and delivered in
connection with, that certain Loan and Security Agreement dated
February 28, 2019, by and among Borrower, Hercules Capital, Inc., a
Maryland corporation (the “Agent”) and the several
banks and other financial institutions or entities from time to
time party thereto as lender (as the same may from time to time be
amended, restated, amended and restated, supplemented or otherwise
modified in accordance with its terms, the “Loan
Agreement”), and is entitled to the benefit and security of
the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement), to which reference is made for a statement of all
of the terms and conditions thereof. All payments shall be made in
accordance with the Loan Agreement. All terms defined in the Loan
Agreement shall have the same definitions when used herein, unless
otherwise defined herein. An Event of Default under the Loan
Agreement shall constitute a default under this Promissory
Note.

 

Borrower waives
presentment and demand for payment, notice of dishonor, protest and
notice of protest under the UCC or any applicable law. Borrower
agrees to make all payments under this Promissory Note without
setoff, recoupment or deduction and regardless of any counterclaim
or defense. This Promissory Note has been negotiated and delivered
to Lender and is payable in the State of California. This
Promissory Note shall be governed by and construed and enforced in
accordance with, the laws of the State of California, excluding any
conflicts of law rules or principles that would cause the
application of the laws of any other jurisdiction.

 

 

 

 

BORROWER
FOR ITSELF AND

 

ON
BEHALF OF ITS SUBSIDIARIES:

 

 

 

TG
THERAPEUTICS, INC.

 

SIGNATURE:________________________

 

TITLE:_____________________________

 

PRINT
NAME:______________________

 

 

 

 

 

TG
BIOLOGICS, INC.

 

SIGNATURE:________________________

 

TITLE:_____________________________

 

PRINT
NAME:______________________

 

 

 

 

 

 

EXHIBIT C

 

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

 

1.
Borrower represents and warrants to Agent that Borrower’s
current name and organizational status as of the Closing Date is as
follows:

 

Name: 

TG Therapeutics,
Inc.

 

Type of
organization: 

Corporation

 

State of
organization: 

Delaware

 

Organization file
number: 

2336756

 

Name: 

TG Biologics,
Inc.

 

Type of
organization: 

Corporation

 

State of
organization: 

Delaware

 

 

Organization file
number:

4897192

 

2.
Borrower represents and warrants to Agent that for five (5) years
prior to the Closing Date, Borrower did not do business under any
other name or organization or form except the
following:

 

Name:
TG Therapeutics, Inc.

 

Used
during dates of: 4/26/2012 – present

 

Type of
Organization: Corporation

 

State
of organization: Delaware

 

Organization file
Number: 2336756

 

Parent’s
fiscal year ends on December 31

 

Parent’s
federal employer tax identification number is:
36-3898269

 

Name:
TG Biologics, Inc.

 

Used
during dates of: 11/12/2010 – present

 

Type of
Organization: Corporation

 

State
of organization: Delaware

 

Organization file
Number: 4897192

 

TG
Bio’s fiscal year ends on December 31

 

TG
Bio’s federal employer tax identification number is:
45-2224118

 

       3.
Borrower represents and warrants to Agent that its chief executive
office is located at 2 Gansevoort Street, 9th Floor, New York, NY
10014.

 

 

 

 

 

 

EXHIBIT D

 

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND
LICENSES

 

 

 

 

 

EXHIBIT E

 

BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT
ACCOUNTS

 

  

 

	
Bank
Name

	
 Account
Number

	
Company/Subsidiary

	
Purpose of
Account

	
 Avg.
Balance

	
Chase Bank

	
 904807479,
2947694366, 974934895

	
Company &
Subsidiaries

	
Checking,
Savings

	
 $22,000,000

	
Israel Discount
Bank

	
 03-0516-7

	
Company &
Subsidiaries

	
Restricted Cash – Letter of
Credit with landlord and corresponding cash held as collateral at
IDB for office space.

	
 $1,241,375

	
Wells Fargo

	
 7861-0134

	
Company &
Subsidiaries

	
Money Market

	
 $503,309

	
Treasury
Partners

	
 TRP-TG
Therapeutics, Inc. (39184)

	
Company &
Subsidiaries

	
Short-term
securities

	
 $29,000,000

 

 

  

 

EXHIBIT
F

 

COMPLIANCE CERTIFICATE

 

Hercules
Capital, Inc. (as “Agent”)

 

400
Hamilton Avenue, Suite 310

 

Palo
Alto, CA 94301

 

Reference is made
to that certain Loan and Security Agreement dated as of February
28, 2019 and the Loan Documents (as defined therein) entered into
in connection with such Loan and Security Agreement all as may be
amended, restated, amended and restated, supplemented or otherwise
modified from time to time (hereinafter referred to collectively as
the “Loan Agreement”) by and among Hercules Capital,
Inc. (the “Agent”), the several banks and other
financial institutions or entities from time to time party thereto
(collectively, the “Lender”) and Hercules Capital,
Inc., as agent for the Lender (the “Agent”) and TG
Therapeutics, Inc., a Delaware corporation, and TG Biologics, Inc.,
a Delaware corporation, as Borrower. All capitalized terms not
defined herein shall have the same meaning as defined in the Loan
Agreement.

 

The
undersigned is an Officer of the Company, knowledgeable of all
Company financial matters, and is authorized to provide
certification of information regarding the Company; hereby
certifies, in such capacity (and not in any individual capacity),
that in accordance with the terms and conditions of the Loan
Agreement, the Company is in compliance for the period ending
___________ of all covenants, conditions and terms and hereby
reaffirms that all representations and warranties contained therein
are true and correct in all material respects (or, if qualified by
materiality, in all respects) on and as of the date of this
Compliance Certificate with the same effect as though made on and
as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in
all material respects (or, if qualified by materiality, in all
respects) as of such earlier date. Attached are the required
documents supporting the above certification. The undersigned
further certifies that these are prepared in accordance with GAAP
(except for the absence of footnotes with respect to unaudited
financial statement and subject to normal year-end adjustments) and
are consistent from one period to the next except as explained
below.

 

	

REPORTING
REQUIREMENT

 

	

REQUIRED

 

	

CHECK
IF ATTACHED

 

	

Interim
Financial Statements (Section 7.1(a))

 

	

Monthly
within 30 days

 

	
 

	

Interim
Financial Statements (Section 7.1(b))

 

	

Quarterly
within 45 days

 

	
 

	

Audited
Financial Statements (Section 7.1(c))

 

	

FYE
within 90 days

 

	
 

To the extent
applicable, the undersigned hereby confirms that the Borrower is in
compliance with Section 7.21 of the Loan Agreement (as applicable,
attached as Schedule
A hereto are the required calculations supporting this
certification(s)), as of the date first set forth
above.

 

The
aggregate assets and liabilities of Subsidiaries that are not
Borrowers (including TG Australia and Ariston) (other than accounts
payable and intercompany Indebtedness permitted pursuant to Section
7.14) equals: $_________ (must be
less than or equal to $250,000 to be in
compliance).

 

The
undersigned hereby also confirms the below disclosed accounts
represent all depository accounts and securities accounts presently
open in the name of each Borrower or Borrower Subsidiary/Affiliate,
as applicable.

 

	
 

	
 

	

Depository AC #

	

Financial Institution

	

Account Type (Depository / Securities)

	

Last Month Ending Account Balance

	

Purpose of Account

	

BORROWER Name/Address:

	
 

	
 

	

1

 

	
 

	
 

	
 

	
 

	
 

	

2

 

	
 

	
 

	
 

	
 

	
 

	

3

 

	
 

	
 

	
 

	
 

	
 

	

4

 

	
 

	
 

	
 

	
 

	
 

	

5

 

	
 

	
 

	
 

	
 

	
 

	

6

 

	
 

	
 

	
 

	
 

	
 

	
 

	

BORROWER SUBSIDIARY / AFFILIATE COMPANY Name/Address

	
 

	
 

	

1

 

	
 

	
 

	
 

	
 

	
 

	

2

 

	
 

	
 

	
 

	
 

	
 

	

3

 

	
 

	
 

	
 

	
 

	
 

	

4

 

	
 

	
 

	
 

	
 

	
 

	

5

 

	
 

	
 

	
 

	
 

	
 

	

6

 

	
 

	
 

	
 

	
 

	
 

	
 

 

Were
any accounts above opened since the last Compliance Certificate?
Yes _____ / No ______

  

 

 

Very
Truly Yours,

 

 

 

TG
THERAPEUTICS, INC.

 

 

 

By: ____________________________

Name:
_____________________________

Its: ____________________________

 

 

 

TG
BIOLOGICS, INC.

 

By: ____________________________

Name:
_____________________________

Its: ____________________________

 

 

 

 

 

 

 

 Schedule A
to Compliance Certificate

 

If

 

A.
Performance Milestone I has not been achieved on or before July 31,
2019, and

 

B. Both Performance
Milestone II and Performance Milestone IV have not yet been
achieved; then

 

 
 

	
  1)

	
Unrestricted
Cash:

	
$____________________

	
  2)

	
Sum of the
Borrower’s accounts payable under GAAP not paid after the
90th day following the due date for such account
payable:

	
$____________________

	
  3)

	
Is the amount in
line (1) greater than or
equal to the sum of (i) $10,000,000 plus (ii) line (2)?

	
YES – In
compliance

NO – Not in
compliance

 

 

 

 

 

EXHIBIT G

 

FORM OF JOINDER AGREEMENT

 

This
Joinder Agreement (the “Joinder Agreement”) is made and
dated as of [ ], 20[ ], and is entered into by and
between__________________, a ___________ corporation
(“Subsidiary”), and HERCULES CAPITAL, INC., a Maryland
corporation (as “Agent”).

 

RECITALS

 

A.
Subsidiary’s Affiliate, [ ] (“Company”) [has
entered/desires to enter] into that certain Loan and Security
Agreement dated as of February 28, 2019, with the several banks and
other financial institutions or entities from time to time party
thereto as lender (collectively, the “Lender”) and the
Agent, as such agreement may be amended, restated, amended and
restated, supplemented or otherwise modified (the “Loan
Agreement”), together with the other agreements executed and
delivered in connection therewith;

 

B.
Subsidiary acknowledges and agrees that it will benefit both
directly and indirectly from Company’s execution of the Loan
Agreement and the other agreements executed and delivered in
connection therewith;

 

AGREEMENT

 

NOW
THEREFORE, Subsidiary and Agent agree as follows:

 

1. The recitals set
forth above are incorporated into and made part of this Joinder
Agreement. Capitalized terms not defined herein shall have the
meaning provided in the Loan Agreement.

 

2.  By signing
this Joinder Agreement, Subsidiary shall be bound by the terms and
conditions of the Loan Agreement the same as if it were the
Borrower (as defined in the Loan Agreement) under the Loan
Agreement, mutatis mutandis, provided however, that (a) with
respect to (i) Section 5.1 of the Loan Agreement, Subsidiary
represents that it is an entity duly organized, legally existing
and in good standing under the laws of [ ], (b) neither Agent nor
Lender shall have any duties, responsibilities or obligations to
Subsidiary arising under or related to the Loan Agreement or the
other Loan Documents, (c) that if Subsidiary is covered by
Company’s insurance, Subsidiary shall not be required to
maintain separate insurance or comply with the provisions of
Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as
Company satisfies the requirements of Section 7.1 of the Loan
Agreement, Subsidiary shall not have to provide Agent separate
Financial Statements. To the extent that Agent or Lender has any
duties, responsibilities or obligations arising under or related to
the Loan Agreement or the other Loan Documents, those duties,
responsibilities or obligations shall flow only to Company and not
to Subsidiary or any other Person or entity. By way of example (and
not an exclusive list): (i) Agent’s providing notice to
Company in accordance with the Loan Agreement or as otherwise
agreed among Company, Agent and Lender shall be deemed provided to
Subsidiary; (ii) a Lender’s providing an Advance to Company
shall be deemed an Advance to Subsidiary; and (iii) Subsidiary
shall have no right to request an Advance or make any other demand
on Lender.

 

3. Subsidiary
agrees not to certificate its equity securities without
Agent’s prior written consent, which consent may be
conditioned on the delivery of such equity securities to Agent in
order to perfect Agent’s security interest in such equity
securities.

 

4. Subsidiary
acknowledges that it benefits, both directly and indirectly, from
the Loan Agreement, and hereby waives, for itself and on behalf on
any and all successors in interest (including without limitation
any assignee for the benefit of creditors, receiver, bankruptcy
trustee or itself as debtor-in-possession under any bankruptcy
proceeding) to the fullest extent provided by law, any and all
claims, rights or defenses to the enforcement of this Joinder
Agreement on the basis that (a) it failed to receive adequate
consideration for the execution and delivery of this Joinder
Agreement or (b) its obligations under this Joinder Agreement are
avoidable as a fraudulent conveyance.

 

5. As security for
the prompt, complete
and indefeasible payment when
due (whether on the payment dates or otherwise) of all the Secured
Obligations, Subsidiary grants to Agent a security interest in all
of Subsidiary’s right, title, and interest in and to the
Collateral.

 

 [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

[SIGNATURE
PAGE TO JOINDER AGREEMENT]

 

SUBSIDIARY:

 

_________________________________.

 

 

By:
____________________________________

Name:
____________________________________

Title:
____________________________________

 

Address:
____________________________________

 

 

Telephone: 
____________________________________

email: 
____________________________________

 

AGENT:

 

HERCULES CAPITAL,
INC.

 

By:____________________________________

 

Name:__________________________________

 

Title:
___________________________________

 

 

 

Address:

 

400
Hamilton Ave., Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com

Telephone:
650-289-3060
 

 

 

 

 

 

EXHIBIT H

 

[Reserved]

 

 

 

 

 

 

EXHIBIT I

 

ACH DEBIT AUTHORIZATION AGREEMENT

 

Hercules
Capital, Inc.

 

400
Hamilton Avenue, Suite 310

 

Palo
Alto, CA 94301

 

Re:
Loan and Security Agreement dated as of February 28, 2019 (the
“Agreement”) by and among TG Therapeutics, Inc., a
Delaware corporation (“Parent”), and TG Biologics,
Inc., a Delaware corporation (“TG Bio”; together with
Parent, individually and collectively, jointly and severally, the
“Borrower”) and Hercules Capital, Inc., as agent
(“Company”) and the lenders party thereto
(collectively, the “Lender”)

 

In
connection with the above referenced Agreement, the Borrower hereby
authorizes the Company to initiate debit entries for (i) the
periodic payments due under the Agreement and (ii) out-of-pocket
legal fees and costs incurred by Agent or Lender pursuant to
Section 11.11 of the Agreement to the Parent’s account
indicated below. The Borrower authorizes the depository institution
named below to debit to such account.

 

 

[IF
FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY
PURPOSES]

 

	

DEPOSITORY NAME

 

	

BRANCH

 

	

CITY

 

	

STATE AND ZIP CODE

 

	

TRANSIT/ABA NUMBER

 

	

ACCOUNT NUMBER

 

 

 

 

 

 

 

 

This
authority will remain in full force and effect so long as any
amounts are due under the Agreement.

 

TG
THERAPEUTICS, INC.

 

 

By:                                            

Name:                                                       

Title:                                                       

 

 

TG
BIOLOGICS, INC.

 

 

By:                                            

Name:                                                       

Title:                                                       

 

 

 

 

 

 

EXHIBIT J

 

[Reserved]

 

 

 

 

 

 

EXHIBIT K-1

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal
Income Tax Purposes)

 

Reference is hereby made to Loan and Security
Agreement dated as of February 28, 2019 (as amended,
restated, amended and restated,
supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between TG Therapeutics, Inc.,
a Delaware corporation, TG Biologics, Inc., a Delaware corporation
and each of their Subsidiaries (as defined in the Loan Agreement)
(hereinafter collectively referred to as the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and the Lender
(in such capacity, the “Agent”).

 

Pursuant
to the provisions of Section 2.9 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the Loan(s) (as well as any Note(s) evidencing
such Loan(s)) in respect of which it is providing this certificate,
(ii) it is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code, (iii) it is not a “ten percent
shareholder” of the Borrower within the meaning of Section
871(h)(3)(B) of the Code and (iv) it is not a “controlled
foreign corporation” related to the Borrower as described in
Section 881(c)(3)(C) of the Code.

 

The
undersigned has furnished the Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS
Form W-8BEN-E. By executing this certificate, the undersigned
agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform the Borrower and
the Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Agent with a properly completed and
currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either
of the two calendar years preceding such payments.

 

Unless
otherwise defined herein, terms defined in the Loan Agreement and
used herein shall have the meanings given to them in the Loan
Agreement.

 

 

 

Date: _____________ ___,
20___       
           
           
    [NAME OF LENDER]

 

By: ____________________________

Name: __________________________

Title: ___________________________

 

 

 

 

 

 

 

EXHIBIT K-2

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Not Partnerships For U.S.
Federal Income Tax Purposes)

 

Reference is hereby made to Loan and Security
Agreement dated as of February 28, 2019 (as amended,
restated, amended and restated,
supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between TG Therapeutics, Inc.,
a Delaware corporation, TG Biologics, Inc., a Delaware corporation
and each of their Subsidiaries (as defined in the Loan Agreement)
(hereinafter collectively referred to as the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and the Lender
(in such capacity, the “Agent”).

 

Pursuant
to the provisions of Section 2.9 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the participation in respect of which it is
providing this certificate, (ii) it is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a “ten percent shareholder” of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not
a “controlled foreign corporation” related to the
Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The
undersigned has furnished its participating Lender with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS
Form W-8BEN-E. By executing this certificate, the undersigned
agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Lender in
writing, and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to
be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

Unless
otherwise defined herein, terms defined in the Loan Agreement and
used herein shall have the meanings given to them in the Loan
Agreement.

 

 

 

Date: _____________ ___,
20___                                 
[NAME
OF PARTICIPANT]

 

By: ____________________________

Name: __________________________

Title: ___________________________

 

 

 

 

 

 

 

EXHIBIT K-3

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Partnerships For U.S. Federal
Income Tax Purposes)

 

Reference is hereby made to Loan and Security
Agreement dated as of February 28, 2019 (as amended,
restated, amended and restated,
supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between TG Therapeutics, Inc.,
a Delaware corporation, TG Biologics, Inc., a Delaware corporation
and each of their Subsidiaries (as defined in the Loan Agreement)
(hereinafter collectively referred to as the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and the Lender
(in such capacity, the “Agent”).

 

Pursuant
to the provisions of Section 2.9 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner
of the participation in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such participation, (iii) with respect
such participation, neither the undersigned nor any of its direct
or indirect partners/members is a “bank” extending
credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section
881(c)(3)(A) of the Code, (iv) none of its direct or indirect
partners/members is a “ten percent shareholder” of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(v) none of its direct or indirect partners/members is a
“controlled foreign corporation” related to the
Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The
undersigned has furnished its participating Lender with IRS Form
W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption:
(i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form
W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from
each of such partner’s/member’s beneficial owners that
is claiming the portfolio interest exemption. By executing this
certificate, the undersigned agrees that (1) if the information
provided in this certificate changes, the undersigned shall
promptly so inform such Lender and (2) the undersigned shall have
at all times furnished such Lender with a properly completed and
currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either
of the two calendar years preceding such payments.

 

Unless
otherwise defined herein, terms defined in the Loan Agreement and
used herein shall have the meanings given to them in the Loan
Agreement.

 

 

Date: _____________ ___,
20___                   
   
            [NAME OF
PARTICIPANT]

 

By: ____________________________

Name: __________________________

Title: ___________________________

 

 

 

 

 

 

 

EXHIBIT K-4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign lenders That Are Partnerships For U.S. Federal Income
Tax Purposes)

 

Reference is hereby made to Loan and Security
Agreement dated as of February 28, 2019 (as amended,
restated, amended and restated,
supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between TG Therapeutics, Inc.,
a Delaware corporation, TG Biologics, Inc., a Delaware corporation
and each of their Subsidiaries (as defined in the Loan Agreement)
(hereinafter collectively referred to as the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and the Lender
(in such capacity, the “Agent”).

 

Pursuant
to the provisions of Section 2.9 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in
respect of which it is providing this certificate, (ii) its direct
or indirect partners/members are the sole beneficial owners of such
Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii)
with respect to the extension of credit pursuant to this Loan
Agreement or any other Loan Document, neither the undersigned nor
any of its direct or indirect partners/members is a
“bank” extending credit pursuant to a loan agreement
entered into in the ordinary course of its trade or business within
the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its
direct or indirect partners/members is a “ten percent
shareholder” of the Borrower within the meaning of Section
871(h)(3)(B) of the Code and (v) none of its direct or indirect
partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The
undersigned has furnished the Agent and the Borrower with IRS Form
W- 8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption:
(i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form
W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from
each of such partner’s/member’s beneficial owners that
is claiming the portfolio interest exemption. By executing this
certificate, the undersigned agrees that (1) if the information
provided in this certificate changes, the undersigned shall
promptly so inform the Borrower and the Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Agent with a properly completed and currently effective certificate
in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding
such payments.

 

Unless
otherwise defined herein, terms defined in the Loan Agreement and
used herein shall have the meanings given to them in the Loan
Agreement.

 

 

Date: _____________ ___,
20___                                   
[NAME
OF LENDER]

 

By: ____________________________

Name: __________________________

Title: ____________________________

 

 

 

 

 

 

 

SCHEDULE
1

 

SUBSIDIARIES

 

 

1.

Ariston
Pharmaceuticals, Inc.

 

2.

TG Biologics,
Inc.

 

3.

TG Therapeutics AUS
Pty Ltd

 

 

 

 

 

 

 

 

 

 

SCHEDULE
1.1

 COMMITMENTS

 

	
LENDER

	
TRANCHE

	
 
TERM
COMMITMENT

	
Hercules Capital,
Inc.

 

	
Tranche 1
Advance

 

	
 $15,000,000 

	
Hercules Technology
III, L.P.

 

	
Tranche 1
Advance

 

	
 $15,000,000 

	
Hercules Capital,
Inc.

 

	
Tranche 2
Advance

 

	
 $10,000,000 

	
Hercules Capital,
Inc.

 

	
Tranche 3
Advance

 

	
 $10,000,000 

	
Hercules Capital,
Inc.

 

	
Tranche 4
Advance

 

	
 $10,000,000*

	
TOTAL
COMMITMENTS

 

	
 

	
 $60,000,000*

 

 

*
Funding of Tranche 4 is subject to approval by Lender’s
investment committee in its sole discretion.

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE
1A

 

EXISTING
PERMITTED INDEBTEDNESS

 

 

 

 

 

1.

The Ariston
Notes.

 

 

 

 

SCHEDULE
1B

 

EXISTING
PERMITTED INVESTMENTS

 

 

1.

Capital Stock of
Subsidiaries listed in Schedule 1.

2.

Intercompany
advancements to Ariston existing as of the Closing Date, which
Indebtedness shall be subject to the Intercompany Subordination
Agreement within 5 Business Days following the Closing Date (or
such later date as Agent may agree to in its sole
discretion).

 

 

 

 

SCHEDULE
1C

 

EXISTING
PERMITTED LIENS

 

 

 

None.

 

 

 

 

 

SCHEDULE
5.3

 

CONSENTS,
ETC.

 

 

 

None.

 

 

 

 

 

SCHEDULE
5.8

 

TAX MATTERS

 

 

None.

 

 

 

 

 

SCHEDULE
5.9

 

 INTELLECTUAL
PROPERTY CLAIMS 

 

 

None.

 

 

 

 

 

SCHEDULE
5.10

 

INTELLECTUAL
PROPERTY 

 

 

None.

 

 

 

 

 

SCHEDULE
5.11

 

BORROWER
PRODUCTS 

 

 

None.

 

 

 

 

 

SCHEDULE
5.14

 

CAPITALIZATION

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00292-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00292-of-00352.parquet"}]]