Document:

Exhibit 10.2

 

INVIVO THERAPEUTICS HOLDINGS CORP.

 

2015 EQUITY INCENTIVE PLAN

 

 

INVIVO THERAPEUTICS HOLDINGS CORP.

2015 EQUITY INCENTIVE PLAN

 

	
1.
    	
Purpose
    	
3
    
	
 
    	
 
    	
 
    
	
2.
    	
Definitions
    	
3
    
	
 
    	
 
    	
 
    
	
3.
    	
Administration.
    	
7
    
	
 
    	
 
    	
 
    
	
4.
    	
Shares   Subject to Plan.
    	
8
    
	
 
    	
 
    	
 
    
	
5.
    	
Eligibility;   Per-Participant Limitations
    	
9
    
	
 
    	
 
    	
 
    
	
6.
    	
Specific   Terms of Awards.
    	
9
    
	
 
    	
 
    	
 
    
	
7.
    	
Certain   Provisions Applicable to Awards.
    	
15
    
	
 
    	
 
    	
 
    
	
8.
    	
Code   Section 162(m) Provisions.
    	
17
    
	
 
    	
 
    	
 
    
	
9.
    	
Change   in Control.
    	
19
    
	
 
    	
 
    	
 
    
	
10.
    	
General   Provisions.
    	
21
    

 

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INVIVO THERAPEUTICS HOLDINGS CORP.

2015 EQUITY INCENTIVE PLAN

 

1.  Purpose.  The purpose of this INVIVO THERAPEUTICS HOLDINGS CORP. 2015 EQUITY INCENTIVE PLAN (the “Plan”) is to assist INVIVO THERAPEUTICS HOLDINGS CORP., a Nevada corporation (the “Company”), and its Related Entities (as defined below) in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers, directors and consultants to the Company or its Related Entities by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s shareholders, and providing such persons with performance incentives to expend their maximum efforts in the creation of shareholder value.

 

2.  Definitions.  For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 and elsewhere herein.

 

(a)           “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Share granted as a bonus or in lieu of another Award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest relating to Shares or other property (including cash), granted to a Participant under the Plan.

 

(b)           “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder.

 

(c)           “Beneficial Owner” and “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.

 

(d)           “Beneficiary” means the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant’s death or to which Awards or other rights are transferred if and to the extent permitted under Section 10(b) hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

(e)           “Board” means the Company’s Board of Directors.

 

(f)            “Cause” shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, “Cause” shall have the equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment, consulting, or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform, in a reasonable manner, his or her duties as assigned by the Company or a Related Entity; (ii) any violation or breach by the Participant of his or her employment, consulting or other similar agreement with the Company or a Related Entity, if any; (iii) any violation or breach by the Participant of any non-competition, non-solicitation, non- disclosure and/or other similar agreement with the Company or a Related Entity; (iv) any act by the Participant of dishonesty or bad faith with respect to the Company or a Related Entity; (v) any material violation or breach by the Participant of the Company’s or Related Entity’s policy for employee conduct, if any; (vi) use of alcohol, drugs or other similar substances in a manner that adversely affects the Participant’s work performance, or (vii) the commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Company or any Related Entity. The good faith determination by the Committee of whether the Participant’s Continuous Service was terminated by the Company for “Cause” shall be final and binding for all purposes hereunder.

 

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(g)           “Change in Control” means a Change in Control as defined in Section 9(b) hereof.

 

(h)           “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

 

(i)            “Committee” means the Governance, Nominating and Compensation Committee of the Board, a subcommittee thereof formed by the such committee to act as the Committee under this Plan, or such other committee as the Board of Directors shall appoint from time to time; provided, however, that if the Board fails to designate a committee or if there are no longer any members on the committee so designated by the Board, or for any other reason determined by the Board, then the Board shall serve as the Committee. While it is intended that the Committee shall consist of at least two directors, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) “Independent,” the failure of the Committee to be so comprised shall not invalidate any Award that otherwise satisfies the terms of the Plan.

 

(j)            “Consultant” means any consultant or advisor who is a natural person and who provides services to the Company or any Related Entity, so long as such person (i) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital- raising transaction, (ii) does not directly or indirectly promote or maintain a market for the Company’s securities and (iii) otherwise qualifies as a de facto employee or consultant under the applicable rules of the SEC for registration of shares of stock on a Form S-8 registration statement.

 

(k)           “Continuous Service” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee, Director or Consultant. Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.

 

(l)            “Covered Employee” means the Person who, as of the end of the taxable year, either is the principal executive officer of the Company or is serving as the acting principal executive officer of the Company, and each other Person whose compensation is required to be disclosed in the Company’s filings with the SEC by reason of that person being among the three highest compensated officers of the Company (other than the chief financial officer) as of the end of a taxable year, or such other person as shall be considered a “covered employee” for purposes of Section 162(m) of the Code.

 

(m)          “Director” means a member of the Board or the board of directors of any Related Entity.

 

(n)           “Disability” means a Participant’s eligibility to receive long-term disability benefits under a plan sponsored by the Company or a Related Entity, or if no such plan is applicable, a Participant’s inability to perform the essential functions of his or her duties due to a medically- determinable physical or mental impairment, illness or injury, which can be expected to result in death or to be of long-continued and indefinite duration as determined in the sole discretion of the Committee. Notwithstanding the foregoing, in the case of any Option that is an Incentive Stock Option, if and to the extent required in order for the Option to satisfy the requirements of Section 422 of the Code, the term “Disability” means disabled within the meaning of Section 22(e)(3) of the Code.

 

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(o)           “Dividend Equivalent” means a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.

 

(p)           “Effective Date” means the effective date of the Plan, which shall be April 16, 2015.

 

(q)           “Eligible Person” means each officer, Director, Employee or Consultant to the Company or any Related Entity. The foregoing notwithstanding, only Employees of the Company, or any parent corporation or subsidiary corporation of the Company (as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible Persons for purposes of receiving any Incentive Stock Options. An Employee on leave of absence may, in the discretion of the Committee, be considered as still in the employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan.

 

(r)            “Employee” means any person, including an officer or Director, who is an employee of the Company or any Related Entity, or is a prospective employee of the Company or any Related Entity (conditioned upon and effective not earlier than such person becoming an employee of the Company or any Related Entity). The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

 

(s)            “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

 

(t)            “Fair Market Value” means the fair market value of Shares, Awards or other property as determined by the Committee, or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of a Share as of any given date shall be the closing sale price per Share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date as of which such value is being determined (or as of such later measurement date as determined by the Committee on the date the Award is authorized by the Committee), or, if there is no sale on that date, then on the last previous day on which a sale was reported.

 

(u)           “Good Reason” shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, “Good Reason” shall have the equivalent meaning or the same meaning as “good reason” or “for good reason” set forth in any employment, consulting or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as assigned by the Company or Related Entity, or any other action by the Company or a Related Entity which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related Entity to comply with its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (iii) the Company’s or Related Entity’s requiring the Participant to be based at any office or location outside of 50 miles from the location of employment or service as of the date of Award, except for travel reasonably required in the performance of the Participant’s responsibilities; (iv) any purported termination by the Company or Related Entity of the Participant’s Continuous Service other than for Cause, death or by reason of the Participant’s Disability, or (v) any material reduction in the Participant’s base

 

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salary (unless such reduction is part of a Company-wide reduction that affects a majority of the persons of comparable level to the Participant).

 

(v)           “Incentive Stock Option” means any Option intended to be designated as an incentive stock option within the meaning of Section 422 of the Code or any successor provision thereto.

 

(w)          “Incumbent Board” means the Incumbent Board as defined in Section 9(b)(ii) hereof.

 

(x)           “Independent”, when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the Listing Market or, if the Listing Market does not have such rules, the rules of The NASDAQ Stock Market, LLC.

 

(y)           “Listing Market” means the principal stock exchange or market on which Shares are then traded.

 

(z)           “Option” means a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during specified time periods.

 

(aa)         “Optionee” means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan.

 

(bb)         “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(i) hereof.

 

(cc)         “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.

 

(dd)         “Performance Award” means any Award of Performance Shares or Performance Units granted pursuant to Section 6(h) hereof.

 

(ee)         “Performance Period” means the period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

 

(ff)          “Performance Share” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

(gg)         “Performance Unit” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

(hh)         “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section 13(d) thereof.

 

(ii)           “Prior Plan” means the InVivo Therapeutics Holdings Corp. 2010 Equity Incentive Plan, as amended from time to time.

 

(jj)           “Related Entity” means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by the Board, in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly.

 

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(kk)         “Restricted Stock” means any Share issued with such risks of forfeiture and other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

 

(ll)           “Restricted Stock Award” means an Award granted to a Participant under Section 6(d) hereof.

 

(mm)      “Restricted Stock Unit” means a right to receive Shares, including Restricted Stock, cash measured based upon the value of Shares or a combination thereof, at the end of a specified deferral period.

 

(nn)         “Restricted Stock Unit Award” means an Award of Restricted Stock Unit granted to a Participant under Section 6(e) hereof.

 

(oo)         “Restriction Period” means the period of time specified by the Committee that Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose.

 

(pp)         “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the SEC under Section 16 of the Exchange Act.

 

(qq)         “SEC” means the United States Securities and Exchange Commission.

 

(rr)           “Shares” means the shares of common stock of the Company, and such other securities as may be substituted (or resubstituted) for Shares pursuant to Section 10(c) hereof.

 

(ss)          “Stock Appreciation Right” means a right granted to a Participant under Section 6(c) hereof.

 

(tt)           “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of the assets on liquidation or dissolution.

 

(uu)         “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, Awards previously granted, or the right or obligation to make future Awards, by an entity, (i) acquired by the Company or any Related Entity, (ii) which becomes a Related Entity after the date hereof, or (iii) with which the Company or any Related Entity combines.

 

3.  Administration.

 

(a)  Authority of the Committee.  The Plan shall be administered by the Committee, except to the extent (and subject to the limitations imposed by Section 3(b) hereof) the Board elects to administer the Plan, in which case the Plan shall be administered by only those members of the Board who are Independent members of the Board, in which case references herein to the “Committee” shall be deemed to include references to the Independent members of the Board. The Committee shall have full and final authority, subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the

 

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Plan. In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past practices, act in a manner consistent with past practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of any other Eligible Persons or Participants. Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Subsidiary or any Participant or Beneficiary, or any transferee under Section 10(b) hereof or any other person claiming rights from or through any of the foregoing persons or entities.

 

(b)  Manner of Exercise of Committee Authority.  The Committee, and not the Board, shall exercise sole and exclusive discretion (i) on any matter relating to a Participant then subject to Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act or (ii) with respect to any Award that is intended to qualify as “performance-based compensation” under Section 162(m), to the extent necessary in order for such Award to so qualify. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to members of the Board, or officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms and limitations as the Committee shall determine, to perform such functions, including administrative functions as the Committee may determine to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify. The Committee may appoint agents to assist it in administering the Plan.

 

(c)  Limitation of Liability.  The Committee and the Board, and each member thereof, shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or Employee, the Company’s independent auditors, Consultants or any other agents assisting in the administration of the Plan. Members of the Committee and the Board, and any officer or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination

 

4.  Shares Subject to Plan.

 

(a)  Limitation on Overall Number of Shares Available for Delivery Under Plan.  Subject to adjustment as provided in Section 10(c) hereof, the total number of Shares reserved and available for delivery under the Plan shall be equal to (i) 4,000,000, plus (ii) any Shares that become available in connection with the cancellation, forfeiture, or expiration of awards issued and outstanding as of the Effective Date under the Prior Plan, plus (iii) any Shares remaining available for delivery under the Prior Plan on the Effective Date of the Plan. Any Shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.

 

(b)  Application of Limitation to Grants of Awards.  No Award may be granted if the number of Shares to be delivered in connection with such an Award exceeds the number of Shares remaining available for delivery under the Plan, minus the number of Shares deliverable in settlement of or relating to then outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with an Award.

 

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(c)  Availability of Shares Not Delivered under Awards and Adjustments to Limits.

 

(i)            If any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or an Award is settled for cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, then such Shares shall, to the extent of such forfeiture, expiration, termination, non-issuance or cash settlement, again be available for delivery with respect to Awards under the Plan.

 

(ii)           Substitute Awards shall not reduce the Shares authorized for delivery under the Plan or authorized for delivery to a Participant in any period. Additionally, in the event that an entity acquired by the Company or any Related Entity or with which the Company or any Related Entity combined has shares available under a pre-existing plan approved by its shareholders and not adopted in contemplation of such acquisition or combination, the shares available for delivery pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for delivery under the Plan if and to the extent that the use of such Shares would not require approval of the Company’s shareholders under the rules of the Listing Market.

 

(iii)          Any Share that again becomes available for delivery pursuant to this Section 4(c) shall be added back as one Share.

 

(iv)          Notwithstanding anything in this Section 4(c) to the contrary but subject to adjustment as provided in Section 10(c) hereof, the maximum aggregate number of Shares that may be delivered under the Plan as a result of the exercise of the Incentive Stock Options shall be 4,000,000 Shares.

 

(v)           Notwithstanding anything in this Section 4 to the contrary, but subject to adjustment as provided in Section 10(c) hereof, in any fiscal year of the Company during any part of which the Plan is in effect, no Participant who is a Director but is not also an Employee or Consultant may be granted any Awards that have a “fair value” as of the date of grant, as determined in accordance with FASB ASC Topic 718 (or any other applicable accounting guidance), that exceed $1,000,000 in the aggregate.

 

(d)  No Further Awards Under Prior Plan.  In light of the adoption of this Plan, no further awards shall be made under the Prior Plan on and after the Effective Date.

 

5.  Eligibility; Per-Participant Limitations.  Awards may be granted under the Plan only to Eligible Persons. Subject to adjustment as provided in Section 10(c) of this Plan, in any fiscal year of the Company during any part of which the Plan is in effect, no Participant may be granted (i) Options and/or Stock Appreciation Rights with respect to more than 4,000,000 Shares or (ii) Restricted Stock, Restricted Stock Units, Performance Shares and/or Other Stock-Based Awards denominated in or valued by reference to a designated number of Shares and that are subject to Section 8 hereof, with respect to more than 4,000,000 Shares. In addition, the maximum dollar value payable to any one Participant with respect to Performance Units that are subject to Section 8 hereof is (x) $2,000,000 with respect to any 12 month Performance Period (pro-rated for any Performance Period that is less than 12 months based upon the ratio of the number of days in the Performance Period as compared to 365), and (y) with respect to any Performance Period that is more than 12 months, $2,000,000.

 

6.  Specific Terms of Awards.

 

(a)  General.  Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant

 

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or thereafter (subject to Section 10(e) hereof), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of the Participant’s Continuous Service and terms permitting a Participant to make elections relating to his or her Award. Except as otherwise expressly provided herein, the Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of Nevada law, no consideration other than services may be required for the grant (as opposed to the exercise) of any Award.

 

(b)  Options.  The Committee is authorized to grant Options to any Eligible Person on the following terms and conditions:

 

(i)    Exercise Price.  Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall be determined by the Committee, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option. If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such Employee, the exercise price of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value of a Share on the date such Incentive Stock Option is granted. Other than pursuant to Section 10(c)(i) and (ii) hereof, the Committee shall not be permitted to (A) lower the exercise price per Share of an Option after it is granted, (B) cancel an Option when the exercise price per Share exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award, (C) cancel an outstanding Option in exchange for an Option with an exercise price that is less than the exercise price of the original Options or (D) take any other action with respect to an Option that may be treated as a repricing pursuant to the applicable rules of the Listing Market, without approval of the Company’s shareholders.

 

(ii)   Time and Method of Exercise.  The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals or future service requirements), the time or times at which Options shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Shares (including without limitation the withholding of Shares otherwise deliverable pursuant to the Award), other Awards or awards granted under other plans of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis provided that such deferred payments are not in violation of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder or any other applicable law), and the methods by or forms in which Shares will be delivered or deemed to be delivered to Participants.

 

(iii)  Incentive Stock Options.  The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock Appreciation Right issued in tandem therewith) shall be

 

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interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of the Code, unless the Participant has first requested, or consents to, the change that will result in such disqualification. Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the following special terms and conditions:

 

(A)  the Option shall not be exercisable for more than ten years after the date such Incentive Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant;

 

(B)  The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) that become exercisable for the first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed $100,000; and

 

(C)  if shares acquired by exercise of an Incentive Stock Option are disposed of within two years following the date the Incentive Stock Option is granted or one year following the transfer of such Shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Committee may reasonably require.

 

(c)  Stock Appreciation Rights.  The Committee may grant Stock Appreciation Rights to any Eligible Person in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation Right”), or without regard to any Option (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including the following:

 

(i)    Right to Payment.  A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee. The grant price of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a Share on the date of grant; provided, however, that if and to the extent that it would not violate Section 409A of the Code, the grant price for a Stock Appreciation Right that is granted as a Substitute Award for an outstanding Option may be lower than 100% of the Fair Market Value of a Share on the date of grant of the Stock Appreciation Right if it is not less than the exercise price of the Option for which it is substituted. Other than pursuant to Section 10(c)(i) and (ii) of this Plan, the Committee shall not be permitted to (A) lower the grant price per Share of a Stock Appreciation Right after it is granted, (B) cancel a Stock Appreciation Right when the grant price per Share exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award, (C) cancel an outstanding Stock Appreciation Right in exchange for a

 

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Stock Appreciation Right with a grant price that is less than the grant price of the original Stock Appreciation Right, or (D) take any other action with respect to a Stock Appreciation Right that may be treated as a repricing pursuant to the applicable rules of the Listing Market, without shareholder approval.

 

(ii)   Other Terms.  The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals or future service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.

 

(iii)  Tandem Stock Appreciation Rights.  Any Tandem Stock Appreciation Right may be granted at the same time as or subsequently to the related Option is granted. Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares can be acquired pursuant to the Option. In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised.

 

(d)  Restricted Stock Awards.  The Committee is authorized to grant Restricted Stock Awards to any Eligible Person on the following terms and conditions:

 

(i)    Grant and Restrictions.  Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan during the Restriction Period. The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan. The restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the period that the Restricted Stock Award is subject to a risk of forfeiture, subject to Section 10(b) hereof and except as otherwise provided in the Award Agreement, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant or Beneficiary.

 

(ii)   Forfeiture.  Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable Restriction Period, the Participant’s Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or

 

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otherwise been satisfied shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to Restricted Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock.

 

(iii)  Certificates for Stock.  Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

 

(iv)  Dividends and Splits.  As a condition to the grant of a Restricted Stock Award, the Committee may require or permit a Participant to elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to the purchase of additional Awards under the Plan, or except as otherwise provided in the last sentence of Section 6(h) hereof, may require that payment be delayed (with or without interest at such rate, if any, as the Committee shall determine) and remain subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such cash dividend is payable, in each case in a manner that does not violate the requirements of Section 409A of the Code. Unless otherwise determined by the Committee, Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been distributed.

 

(e)  Restricted Stock Unit Award.  The Committee is authorized to grant Restricted Stock Unit Awards to any Eligible Person on the following terms and conditions:

 

(i)    Award and Restrictions.  Satisfaction of a Restricted Stock Unit Award shall occur upon expiration of the deferral period specified for such Restricted Stock Unit Award by the Committee (or, if permitted by the Committee, as elected by the Participant in a manner that does not violate the requirements of Section 409A of the Code). In addition, a Restricted Stock Unit Award shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at other specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. A Restricted Stock Unit Award may be satisfied by delivery of Shares, cash equal to the Fair Market Value of the specified number of Shares covered by the Restricted Stock Units, or a combination thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction of a Restricted Stock Unit Award, a Restricted Stock Unit Award carries no voting or dividend or other rights associated with Share ownership. Prior to satisfaction of a Restricted Stock Unit Award, except as otherwise provided in an Award Agreement and as permitted under Section 409A of the Code, a Restricted Stock Unit Award may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant or any Beneficiary.

 

(ii)   Forfeiture.  Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Restricted Stock Unit Award), the Participant’s Restricted Stock Unit Award that is at that

 

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time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited; provided that the Committee may provide, by resolution or action or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to a Restricted Stock Unit Award shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of any Restricted Stock Unit Award.

 

(iii)  Dividend Equivalents.  Unless otherwise determined by the Committee at the date of grant, and except as otherwise provided in the last sentence of Section 6(h) hereof, any Dividend Equivalents that are granted with respect to any Restricted Stock Unit Award shall be either (A) paid with respect to such Restricted Stock Unit Award at the dividend payment date in cash or in Shares of unrestricted stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Restricted Stock Unit Award and whether the amount or value thereof shall be automatically deemed reinvested in additional Restricted Stock Units or other Awards, or if not so reinvested shall earn interest and at what rate for the period deferred, as the Committee shall determine or permit the Participant to elect. The applicable Award Agreement shall specify whether any Dividend Equivalents shall be paid at the dividend payment date, deferred or deferred at the election of the Participant. If the Participant may elect to defer the Dividend Equivalents, such election shall be made at such other times prescribed by the Committee as shall not result in a violation of Section 409A of the Code.

 

(f)  Bonus Stock and Awards in Lieu of Obligations.  The Committee is authorized to grant Shares to any Eligible Persons as a bonus, or to grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, provided that, in the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from liability under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee.

 

(g)  Dividend Equivalents.  The Committee is authorized to grant Dividend Equivalents to any Eligible Person entitling the Eligible Person to receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of Shares, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. Except as otherwise provided in the last sentence of Section 6(h) hereof, the Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or at some later date, or whether such Dividend Equivalents shall be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. Notwithstanding the foregoing, Dividend Equivalents credited in connection with an Award that vests based on the achievement of performance goals shall be subject to restrictions and risk of forfeiture to the same extent as the Award with respect to which such Dividend Equivalents have been credited.

 

(h)  Performance Awards.  The Committee is authorized to grant Performance Awards to any Eligible Person payable in cash, Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 hereof if and to the extent that the Committee shall, in its sole discretion, determine that an Award shall be subject to those provisions. The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award; provided, however, that a Performance Period shall not be shorter than 12 months nor longer than 5 years. Except as provided in Section 9 or as may be provided in an

 

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Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 8(b) hereof, or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria that the Committee, in its sole discretion, shall determine should be used for that purpose. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis in a manner that does not violate the requirements of Section 409A of the Code. Notwithstanding any other provision of this Plan to the contrary, cash dividends, Shares, and any other property (other than cash) distributed as a dividend or otherwise with respect to any Performance Awards or any other Awards that are subject to satisfaction of performance goals, shall either (i) not be paid or credited, or (ii) be accumulated, shall be subject to satisfaction of the same performance goals to which the vesting of the underlying Award is subject, and shall be paid at the time such restrictions and risk of forfeiture lapses.

 

(i)  Other Stock-Based Awards.  The Committee is authorized, subject to limitations under applicable law, to grant to any Eligible Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan. Other Stock-Based Awards may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(i) shall be purchased for such consideration, (including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder or any other applicable law) paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall determine.

 

7.  Certain Provisions Applicable to Awards.

 

(a)  Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity, or any other right of a Participant to receive payment from the Company or any Related Entity. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Related Entity, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for example, Restricted Stock or Restricted Stock Units), or in which the exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Shares minus the value of the cash compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price or grant price “discounted” by the amount of the cash compensation surrendered), provided that any such determination to grant an Award in lieu of cash compensation must be made in a manner intended to comply with Section 409A of the Code.

 

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(b)  Term of Awards.  The term of each Award shall be for such period as may be determined by the Committee. The term of any Option or Stock Appreciation Right shall not exceed a period of ten years (or in the case of an Incentive Stock Option such shorter term as may be required under Section 422 of the Code); provided, however, that in the event that on the last day of the term of an Option or a Stock Appreciation Right, other than an Incentive Stock Option, (i) the exercise of the Option or Stock Appreciation Right is prohibited by applicable law, or (ii) Shares may not be purchased, or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended for a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement, provided that such extension of the term of the Option or Stock Appreciation Right would not cause the Option or Stock Appreciation Right to violate the requirements of Section 409A of the Code.

 

(c)  Form and Timing of Payment Under Awards; Deferrals.  Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Shares, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis, provided that any determination to pay in installments or on a deferred basis shall be made by the Committee at the date of grant. Any installment or deferral provided for in the preceding sentence shall, however, be subject to the Company’s compliance with applicable law and all applicable rules of the Listing Market, and in a manner intended to be exempt from or otherwise satisfy the requirements of Section 409A of the Code. Subject to Section 7(e) hereof, the settlement of any Award may be accelerated, and cash paid in lieu of Shares in connection with such settlement, in the sole discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Any such settlement shall be at a value determined by the Committee in its sole discretion, which, without limitation, may in the case of an Option or Stock Appreciation Right be limited to the amount if any by which the Fair Market Value of a Share on the settlement date exceeds the exercise or grant price. Installment or deferred payments may be required by the Committee (subject to Section 7(e) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms and conditions established by the Committee. The acceleration of the settlement of any Award, and the payment of any Award in installments or on a deferred basis, all shall be done in a manner that is intended to be exempt from or otherwise satisfy the requirements of Section 409A of the Code. The Committee may, without limitation, make provision for the payment or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Shares.

 

(d)  Exemptions from Section 16(b) Liability.  It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b).

 

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(e)  Code Section 409A.

 

(i) The Award Agreement for any Award that the Committee reasonably determines to constitute a “nonqualified deferred compensation plan” under Section 409A of the Code (a “Section 409A Plan”), and the provisions of the Section 409A Plan applicable to that Award, shall be construed in a manner consistent with the applicable requirements of Section 409A of the Code, and the Committee, in its sole discretion and without the consent of any Participant, may amend any Award Agreement (and the provisions of the Plan applicable thereto) if and to the extent that the Committee determines that such amendment is necessary or appropriate to comply with the requirements of Section 409A of the Code.

 

(ii)  If any Award constitutes a Section 409A Plan, then the Award shall be subject to the following additional requirements, if and to the extent required to comply with Section 409A of the Code:

 

(A) Payments under the Section 409A Plan may be made only upon (1) the Participant’s “separation from service,” (2) the date the Participant becomes “disabled,” (3) the Participant’s death, (4) a “specified time (or pursuant to a fixed schedule)” specified in the Award Agreement at the date of the deferral of such compensation, (5) a “change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets” of the Company, or (6) the occurrence of an “unforeseeable emergency”;

 

(B)  The time or schedule for any payment of the deferred compensation may not be accelerated, except to the extent provided in applicable Treasury Regulations or other applicable guidance issued by the Internal Revenue Service;

 

(C)  Any elections with respect to the deferral of such compensation or the time and form of distribution of such deferred compensation shall comply with the requirements of Section 409A(a)(4) of the Code; and

 

(D)  In the case of any Participant who is “specified employee,” a distribution on account of a “separation from service” may not be made before the date which is six months after the date of the Participant’s “separation from service” (or, if earlier, the date of the Participant’s death).

 

For purposes of the foregoing, the terms in quotations shall have the same meanings as those terms have for purposes of Section 409A of the Code, and the limitations set forth herein shall be applied in such manner (and only to the extent) as shall be necessary to comply with any requirements of Section 409A of the Code that are applicable to the Award.

 

(iii)  Notwithstanding the foregoing, or any provision of this Plan or any Award Agreement, the Company does not make any representation to any Participant or Beneficiary that any Awards made pursuant to this Plan are exempt from, or satisfy, the requirements of, Section 409A of the Code, and the Company shall have no liability or other obligation to indemnify or hold harmless the Participant or any Beneficiary for any tax, additional tax, interest or penalties that the Participant or any Beneficiary may incur in the event that any provision of this Plan, or any Award Agreement, or any amendment or modification thereof, or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A of the Code.

 

8.  Code Section 162(m) Provisions.

 

(a)  Covered Employees.  The provisions of this Section 8 shall be applicable to any Restricted Stock Award, Restricted Stock Unit Award, Performance Award, or Other Stock-Based Award if it is granted to an Eligible Person who is, or is likely to be, as of the end of the tax year in which the

 

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Company would claim a tax deduction in connection with such Award, a Covered Employee, and is intended to qualify as “performance-based compensation” that is exempt from the deduction limitations imposed under Section 162(m) of the Code.

 

(b)  Performance Criteria.  If an Award is subject to this Section 8, then the payment or distribution thereof or the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be contingent upon achievement of one or more objective performance goals. Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” One or more of the following business criteria for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical units of the Company and/or a Related Entity (except with respect to the total shareholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for such Awards: (1) earnings per share; (2) achievement of domestic and international regulatory milestones, including the submission of filings required to advance products, services and technologies in clinical development and the achievement of approvals by regulatory authorities relating to the commercialization of products, services and technologies; (3) the achievement of discovery, preclinical and clinical stage scientific objectives, discoveries or inventions for products, services and technologies under research and development; (4) the entry into or completion of a phase of clinical development for any product, service or technology; (5) specified levels of product sales; (6) earnings before or after discontinued operations, interest, taxes, depreciation and/or amortization, operating profit before or after discontinued operations and/or taxes, sales, sales growth, earnings growth, cash flow or cash position, gross margins or working capital; (7) stock price, (8) return on sales, assets, equity or investment; (9) operating income or income from operations after excluding extraordinary or special items (including, without limitation, stock-based compensation, goodwill impairments, building and other significant asset sales, asset write-downs, plant closures and related layoffs, and/or amortization of intangibles); (10) net income; (11) management of fixed costs or variable costs; (12) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including financings, strategic mergers, acquisitions or divestitures; (13) total shareholder return; (14) debt reduction; (15) market share; (16) entry into new markets, either geographically or by business unit; and/or (17) the Fair Market Value of a Share. Any of the above goals may be determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the NASDAQ Composite Index, the NASDAQ Biotechnology Index or a group of companies that are comparable to the Company. In determining the achievement of the performance goals, the Committee may, at the time the performance goals are set, require that those goals be determined by excluding the impact of (i) restructurings, discontinued operations, and extraordinary items (as defined pursuant to generally accepted accounting principles), and other unusual or non-recurring charges, (ii) change in accounting standards required by generally accepted accounting principles; or (iii) such other exclusions or adjustments as the Committee specifies at the time the Award is granted.

 

(c)  Performance Period; Timing For Establishing Performance Goals.  Achievement of performance goals in respect of Performance Awards shall be measured over a Performance Period no shorter than 12 months and no longer than 5 years, as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any Performance Period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

 

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(d)  Adjustments.  The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with Awards subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of an Award subject to this Section 8. The Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Awards.

 

(e)  Committee Certification.  No Participant shall receive any payment under the Plan that is subject to this Section 8 unless the Committee has certified, by resolution or other appropriate action in writing, that the performance criteria and any other material terms previously established by the Committee or set forth in the Plan, have been satisfied to the extent necessary to qualify as “performance based compensation” under Section 162(m) of the Code.

 

9.  Change in Control.

 

(a)  Effect of “Change in Control.”  If and only to the extent provided in any employment or other agreement between the Participant and the Company or any Related Entity, or in any Award Agreement, or to the extent otherwise determined by the Committee in its sole discretion and without any requirement that each Participant be treated consistently, upon the occurrence of a “Change in Control,” as defined in Section 9(b):

 

(i)  Any Option or Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, subject to applicable restrictions set forth in Section 10(a) hereof.

 

(ii)  Any restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Restricted Stock Unit Award or an Other Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable restrictions set forth in Section 10(a) hereof.

 

(iii)  With respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its discretion, consider such Awards to have been earned and payable based on achievement of performance goals or based upon target performance (either in full or pro-rata based on the portion of the Performance Period completed as of the Change in Control).

 

(iv)  Notwithstanding the foregoing or any provision in any Award Agreement to the contrary, and unless the Committee otherwise determines in a specific instance, or as is provided in any employment or other agreement between the Participant and the Company any Subsidiary, and unless the Committee otherwise determines in a specific instance, each outstanding Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award shall not be accelerated as described in Sections 9(a)(i), (ii) and (iii), if either (A) the Company is the surviving entity in the Change in Control and the Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award continues to be outstanding after the Change in Control on substantially the same terms and conditions as were applicable immediately prior to the Change in Control or (B) the successor company or its parent company assumes or substitutes for the applicable Award, as determined in accordance with Section 10(c)(ii) hereof. For the purposes of this Agreement, an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award shall be considered assumed or substituted for if following the Change in Control the Award confers the right to purchase or receive, for each Share subject to the

 

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Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award, for each Share subject thereto, will be solely common stock of the successor company or its parent or subsidiary substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

 

(b)  Definition of “Change in Control”.  Unless otherwise specified in any employment or other agreement for services between the Participant and the Company or any Related Entity, or in an Award Agreement, a “Change in Control” shall mean the occurrence of any of the following:

 

(i) The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (A) the value of then outstanding equity securities of the Company (the “Outstanding Company Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change in Control: (1) any acquisition by the Company; (2) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Entity; or (4) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or

 

(ii) During any period of two consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

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(iii)  Consummation of (A) a reorganization, merger, statutory share exchange or consolidation or similar transaction involving (1) the Company or (2) any of its Subsidiaries, but in the case of this clause (2) only if equity securities of the Company are issued or issuable in connection with the transaction (each of the events referred to in this clause (A) being hereinafter referred to as a “Business Reorganization”), or (B) a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Subsidiaries (each an “Asset Sale”), in each case, unless, following such Business Reorganization or Asset Sale, (1) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Reorganization or Asset Sale beneficially own, directly or indirectly, more than 50% of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Reorganization or Asset Sale (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Entity”) in substantially the same proportions as their ownership, immediately prior to such Business Reorganization or Asset Sale, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be (excluding any outstanding equity or voting securities of the Continuing Entity that such Beneficial Owners hold immediately following the consummation of the Business Reorganization or Asset Sale as a result of their ownership, prior to such consummation, of equity or voting securities of any company or other entity involved in or forming part of such Business Reorganization or Asset Sale other than the Company), (2) no Person (excluding any employee benefit plan (or related trust) of the Company or any Continuing Entity or any entity controlled by the Continuing Corporation or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, 50% or more of the value of the then outstanding equity securities of the Continuing Entity or the combined voting power of the then outstanding voting securities of the Continuing Entity except to the extent that such ownership existed prior to the Business Reorganization or Asset Sale and (3) at least a majority of the members of the Board of Directors or other governing body of the Continuing Entity were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Reorganization or Asset Sale.

 

10.  General Provisions.

 

(a)  Compliance With Legal and Other Requirements.  The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration or qualification of such Shares or other required action under any federal or state law, rule or regulation, listing or other required action with respect to the Listing Market, or compliance with any other obligation of the Company, as the Committee, may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Shares or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.

 

(b)  Limits on Transferability; Beneficiaries.  No Award or other right or interest granted under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by such

 

21

 

Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) may be transferred to one or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms and conditions which the Committee may impose thereon), are by gift or pursuant to a domestic relations order, and are to a “Permitted Assignee” that is a permissible transferee under the applicable rules of the SEC for registration of shares of stock on a Form S-8 registration statement. For this purpose, a Permitted Assignee shall mean (i) the Participant’s spouse, children or grandchildren (including any adopted and step children or grandchildren), parents, grandparents or siblings, (ii) a trust for the benefit of one or more of the Participant or the persons referred to in clause (i), (iii) a partnership, limited liability company or corporation in which the Participant or the persons referred to in clause (i) are the only partners, members or shareholders, or (iv) a foundation in which any person or entity designated in clauses (i), (ii) or (iii) above control the management of assets. A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

 

(c)   Adjustments.

 

(i)  Adjustments to Awards.  In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or such other securities of the Company or any other issuer, then the Committee shall, in such manner as it may deem equitable, substitute, exchange or adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B) the number and kind of Shares by which annual per-person Award limitations are measured under Section 4 hereof, (C) the number and kind of Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or make provision for payment of cash or other property in respect of any outstanding Award, and (E) any other aspect of any Award that the Committee determines to be appropriate.

 

(ii)  Adjustments in Case of Certain Transactions.  In the event of any merger, consolidation or other reorganization in which the Company does not survive, or in the event of any Change in Control (and subject to the provisions of Section 9 of this Plan relating to vesting of Awards in the event of any Change in Control), any outstanding Awards may be dealt with in accordance with any of the following approaches, without the requirement of obtaining any consent or agreement of a Participant as such, as determined by the agreement effectuating the transaction or, if and to the extent not so determined, as determined by the Committee: (A) the continuation of the outstanding Awards by the Company, if the Company is a surviving entity, (B) the assumption or substitution for, as those terms are defined below, the outstanding Awards by the surviving entity or its parent or subsidiary, (C) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (D) settlement of the value of the outstanding Awards in cash or cash equivalents or other property followed by cancellation of such Awards (which value, in the case of Options or

 

22

 

Stock Appreciation Rights, shall be measured by the amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the effective date of the transaction). For the purposes of this Agreement, an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award shall be considered assumed or substituted for if following the Change in Control the Award confers the right to purchase or receive, for each Share subject to the Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award, for each Share subject thereto, will be solely common stock of the successor company or its parent or subsidiary substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. The Committee shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) at a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after the approval of such transaction), in order that Participants may have a reasonable period of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable (including any Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his exercise of any Awards upon the consummation of the transaction.

 

(iii)  Other Adjustments.  The Committee (and the Board if and only to the extent such authority is not required to be exercised by the Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Awards subject to satisfaction of performance goals, or performance goals and conditions relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the Company, any Subsidiary or any business unit, or the financial statements of the Company or any Subsidiary, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any Subsidiary or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that such authority or the making of such adjustment would cause Awards granted pursuant to Section 8(b) hereof to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder. Adjustments permitted hereby may include, without limitation, increasing the exercise price of Options and Stock Appreciation Rights,

 

23

 

increasing performance goals, or other adjustments that may be adverse to the Participant. Notwithstanding the foregoing, no adjustments may be made with respect to any Awards subject to Section 8 hereof if and to the extent that such adjustment would cause the Award to fail to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

(d)  Award Agreements.  Each Award Agreement shall either be (i) in writing in a form approved by the Committee and executed by the Company by an officer duly authorized to act on its behalf, or (ii) an electronic notice in a form approved by the Committee and recorded by the Company (or its designee) in an electronic recordkeeping system used for the purpose of tracking one or more types of Awards as the Committee may provide; in each case and if required by the Committee, the Award Agreement shall be executed or otherwise electronically accepted by the recipient of the Award in such form and manner as the Committee may require. The Committee may authorize any officer of the Company to execute any or all Award Agreements on behalf of the Company. The Award Agreement shall set forth the material terms and conditions of the Award as established by the Committee consistent with the provisions of the Plan.

 

(e)  Taxes.  The Company and any Related Entity are authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.

 

(f)  Changes to the Plan and Awards.  The Board may amend, alter, suspend, discontinue or terminate the Plan, or the Committee’s authority to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of the Company’s shareholders not later than the annual meeting next following such Board action if such shareholder approval is required by any federal or state law or regulation (including, without limitation, Rule 16b-3 or Code Section 162(m)) or the rules of the Listing Market, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided that, except as otherwise permitted by the Plan or Award Agreement, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under the terms of any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that, except as otherwise permitted by the Plan or Award Agreement, without the consent of an affected Participant, no such Committee or the Board action may materially and adversely affect the rights of such Participant under terms of such Award.

 

(g)  Limitation on Rights Conferred Under Plan.  Neither the Plan nor any action taken hereunder or under any Award shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company or any Related Entity including, without limitation, any right to receive dividends or distributions, any right to vote or act by written

 

24

 

consent, any right to attend meetings of shareholders or any right to receive any information concerning the Company’s or any Related Entity’s business, financial condition, results of operation or prospects, unless and until such time as the Participant is duly issued Shares on the stock books of the Company or any Related Entity in accordance with the terms of an Award. None of the Company, its officers or its directors shall have any fiduciary obligation to the Participant with respect to any Awards unless and until the Participant is duly issued Shares pursuant to the Award on the stock books of the Company in accordance with the terms of an Award. Neither the Company, nor any Related Entity, nor any of the their respective officers, directors, representatives or agents is granting any rights under the Plan to the Participant whatsoever, oral or written, express or implied, other than those rights expressly set forth in this Plan or the Award Agreement.

 

(h)  Clawback of Benefits.

 

(i)    The Company may (A) cause the cancellation of any Award, (B) require reimbursement of any Award by a Participant or Beneficiary, and (C) effect any other right of recoupment of equity or other compensation provided under this Plan or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the future by the Company or applicable law (each, a “Clawback Policy”), provided that the following conditions are satisfied: (1) there is an accounting restatement of the Company’s financial statements or results and (2) the restatement results from a noncompliance by the Company with any requirements under or related to the federal securities laws. In such an event, the claw back will be in an amount of up to the total economic gain from any stock-based grants within the five-year period preceding the restatement. By accepting an Award, a Participant is also agreeing to be bound by any existing or future Clawback Policy adopted by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company in its discretion (including without limitation any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and is further agreeing that all of the Participant’s Award Agreements may be unilaterally amended by the Company, without the Participant’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.

 

(ii)   If the Participant, without the consent of the Company, while employed by or providing services to the Company or any Subsidiary or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise engages in activity that is in conflict with Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics or any other corporate governance materials specified by the SEC or exchange on which common stock of the Company is listed, then (A) any outstanding, vested or unvested, earned or unearned portion of the Award may, at the Committee’s discretion, be canceled and (B) the Committee, in its discretion, may require the Participant or other person to whom any payment has been made or Shares or other property have been transferred in connection with the Award to forfeit and pay over to the Company, on demand, all or any portion of the gain (whether or not taxable) realized upon the exercise of any Option or Stock Appreciation Right and the value realized (whether or not taxable) on the vesting or payment of any other Award during the time period specified in the Award Agreement or otherwise specified by the Committee.

 

(i)  Unfunded Status of Awards; Creation of Trusts.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give any such Participant any rights that are greater than those of a general creditor of the Company or Related Entity that issues the Award; provided that

 

25

 

the Committee may authorize the creation of trusts and deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet the obligations of the Company or Related Entity under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law.

 

(j)  Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable including incentive arrangements and awards which do not qualify under Section 162(m) of the Code.

 

(k)  Payments in the Event of Forfeitures; Fractional Shares.  Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

(l)  Governing Law.  Except as otherwise provided in any Award Agreement, the validity, construction and effect of the Plan, any rules and regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Nevada without giving effect to principles of conflict of laws, and applicable federal law.

 

(m)  Non-U.S. Laws.  The Committee shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Related Entities may operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan.

 

(n)  Construction and Interpretation.  Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Headings of Articles and Sections hereof are inserted for convenience and reference and constitute no part of the Plan.

 

(o)  Severability.  If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

 

(p)  Plan Effective Date and Shareholder Approval; Termination of Plan.  The Plan shall become effective on the Effective Date, subject to subsequent approval, within 12 months of its adoption by the Board, by shareholders of the Company eligible to vote in the election of directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or automated quotation system on which the Shares may be listed or quoted, and other laws, regulations, and obligations of the Company applicable to the Plan. Awards may be granted subject to shareholder approval, but may not be exercised or otherwise settled in the event the shareholder approval is not obtained. The Plan shall terminate at the earliest of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall remain in effect until they have been exercised or terminated, or have expired.

 

26Exhibit
10.1

 

LOAN AND
SECURITY AGREEMENT

 

THIS LOAN AND SECURITY
AGREEMENT is made and dated as of June 11, 2015 and is entered into by and among Pulmatrix
Inc., a Delaware corporation, and each of its subsidiaries (hereinafter collectively referred to as “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 TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, as administrative agent
(in such capacity, “Agent”) and as a Lender.

 

RECITALS

 

A.           Lender
has agreed to make available to Borrower (or an Affiliate thereof pursuant to the terms of this Agreement) a loan in an aggregate
principal amount of $7,000,000 (the “Term Loan,” and such amount the “Term Loan Amount”).

 

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

 

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

 

“Account Control
Agreement(s)” means any agreement entered into by and among 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 grants Agent a perfected first priority security interest in the subject account or accounts.

 

“ACH Authorization”
means the ACH Debit Authorization Agreement in substantially the form of Exhibit H.

 

“Advance”
means the Term Loan funds advanced under this Agreement.

 

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

 

“Advance Request”
means a request for the Advance submitted by Borrower to Agent in substantially the form of Exhibit A.

    	 

    	 

    

 

“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 10% or more of the outstanding voting
securities of another Person, (c) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned,
controlled or held by another Person with power to vote such securities, or (d) any Person related by blood or marriage to any
Person described in subsection (a), (b) or (c) of this paragraph. 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
given to it in the preamble to this Agreement.

 

“Agreement”
means this Loan and Security Agreement, as amended from time to time.

 

“Amortization
Date” means August 1, 2016.

 

“Assignee”
has the meaning given to it in Section 11.13.

 

“Borrower”
has the meaning given to it in the preamble to this Agreement, and, for the avoidance of doubt, in connection with Lender’s
making of the Advance “Borrower” shall include the Parent Company and its Subsidiaries.

 

“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.

 

“Cap”
has the meaning given to it in Section 2.5(d).

 

“Cash”
means cash, cash equivalents and liquid funds.

 

“Change
in Control” means any (i) reorganization, recapitalization, consolidation or merger (or similar transaction or series
of related transactions) of Borrower or any Subsidiary, sale or exchange of outstanding shares (or similar transaction or series
of related transactions) of Borrower or any Subsidiary in which the holders of Borrower or Subsidiary’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 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 or Subsidiary is the surviving entity, or (ii)
sale or issuance by Borrower of new shares of Preferred Stock of Borrower to investors, none of whom are current investors
in Borrower, and such new shares of Preferred Stock are senior to all existing Preferred Stock and Common Stock with respect to
liquidation preferences, and the aggregate liquidation preference of the new shares of Preferred Stock is more than 50% of the
aggregate liquidation preference of all shares of Preferred Stock of Borrower; provided, however, the Merger and
the transactions related to the Merger as described in the Form S-4 shall not constitute a Change in Control.

 

    	 

    	 

    

 

“Claims”
has the meaning given to it in Section 11.10(a).

 

“Closing Date”
means the date of this Agreement.

 

“Collateral”
means the property described in Section 3.

 

“Commitment
Fee” means $35,500, which fee is due to Lender on or prior to the Closing Date, and shall be deemed fully earned on
such date regardless of the early termination of this Agreement.

 

“Common Stock”
means, following the consummation of the Merger and the delivery by the Parent Company of a Joinder Agreement to Agent, the common
stock, $0.0001 par value per share, of the Parent Company.

 

“Confidential Information”
has the meaning given to it 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.

 

“Conversion
Conditions” has the meaning given to it in Section 2.5(b).

 

“Conversion
Election Notice” has the meaning given to it in Section 2.5(a).

 

“Conversion
Option” has the meaning given to it in Section 2.5(a).

 

“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, any State thereof,
or of any other country.

 

 

“Delivery Date”
has the meaning given to it in Section 2.5(a).

 

“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.

 

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

 

“Eligible Market”
means the NYSE MKT, the New York Stock Exchange, the Nasdaq Global Market or the Nasdaq Global Select Market (or any successors
to any of the foregoing).

 

“End of Term
Charge” has the meaning given to it in Section 2.6.

 

“Equity Event”
means the first sale or issuance, after the consummation of the Merger, of Borrower securities to institutional accredited investors
in a private financing exempt from registration under the Securities Act of 1933, as amended, for the primary purpose of raising
capital for aggregate gross proceeds to the Company of at least $10,000,000.

 

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

 

“Event of Default”
has the meaning given to it in Section 9.

 

“Excluded Taxes”
means taxes imposed on or measured by net income (however denominated) of Agent or Lender.

 

“Facility Charge”
means an amount equal to 1.00% of the Term Loan Amount, which is $70,000.

 

“Financial Statements”
has the meaning given to it in Section 7.1.

 

“Fixed Conversion
Price” has the meaning given to it in Section 2.5(a).

 

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

 

“Form S-4”
means the Form S-4 filed on April 15, 2015 by Ruthigen, Inc. (file no. 333-203417), as amended from time to time.

 

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

 

“Indebtedness”
means indebtedness of any kind, including (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 that is not more than sixty (60) days past due),
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, and (d) all Contingent Obligations.

 

    	 

    	 

    

 

“Indemnified
Person” has the meaning given to it in Section 6.3.

 

“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.

 

“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.

 

“Joinder Agreements”
means, for the Parent Company and each Subsidiary, a completed and executed Joinder Agreement in substantially the form attached
hereto as Exhibit G.

 

“Lender”
has the meaning given to it in the preamble to this Agreement.

 

“Liabilities”
has the meaning given to it in Section 6.3.

 

“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 Advance
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 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, modified, supplemented or restated.

 

“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 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 Agent’s Liens on the Collateral or the priority of such Liens.

 

“Maximum Rate”
has the meaning given to it in Section 2.2.

 

    	 

    	 

    

 

“Merger”
means the merger of the Borrower and Ruthigen Merger Corp. described in the Form S-4.

 

“NASDAQ”
has the meaning given to it in Section 2.5(b).

 

“Note(s)”
means a secured term promissory note or secured term promissory notes to evidence the Loan under this Agreement, in substantially
the form attached hereto as Exhibit B.

 

“Parent Company”
means the entity existing as of the date hereof and known as Ruthigen, Inc., and that following the consummation of the Merger
will be the sole owner of Borrower which shall change its name to and be known as Pulmatrix Operating Company, Inc.

 

“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 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 or any
other country.

 

“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 $100,000 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 lesser of the cost or fair market value of the Equipment financed with such Indebtedness;
(iv) Indebtedness to trade creditors incurred in the ordinary course of business, including 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 Borrower or a Subsidiary thereof in an amount not to exceed $200,000 at any time outstanding, (viii) other Indebtedness in
an amount not to exceed $300,000 at any time outstanding; and (ix) extensions, refinancings and renewals of any items of Permitted
Indebtedness, provided that the principal amount is not increased 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) (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, (b) commercial paper maturing no more than one year from
the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation
or Moody’s Investors Service, (c) certificates of deposit issued by any bank with assets of at least $500,000,000 maturing
no more than one year from the date of investment therein, and (d) money market accounts; (iii) 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 would exist after giving effect to the repurchases; (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 Domestic 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 (which approval shall not be unreasonably withheld) and not to exceed $250,000 in the aggregate in any fiscal year;
(xi) joint ventures or strategic alliances 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 $100,000 in the aggregate in any fiscal year; and (xii) additional Investments that do not exceed $250,000
in the aggregate.

 

“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 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 without
action of such parties; provided, that the payment thereof is not yet required; (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 in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in connection with Subordinated Indebtedness;
(ix) leasehold interests in leases or subleases and licenses granted in the ordinary course of business and not interfering in
any material respect with the business of the licensor; (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) 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) Liens on
Cash securing obligations permitted under clause (vii) of the definition of Permitted Indebtedness; and (xv) Liens incurred in
connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (i)
through (xi) 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.

 

    	 

    	 

    

 

“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 that would not result in a legal transfer
of title of the licensed property (for the avoidance of doubt, nothing contain herein shall prohibit the Borrower from entering
into an exclusive license for the use of its Intellectual Property for use in a particular field or a particular geographic region
so long as any such license (x) could not result in a legal transfer of title of the licensed property and (y) is entered into
in the ordinary course of business as presently conducted or as proposed to be conducted on the date hereof); (iii) dispositions
of worn-out, obsolete or surplus Equipment at fair market value in the ordinary course of business; (iv) the sale or other disposition
of all or any part of the assets of Parent Company relating solely to the business conducted by the Parent Company prior to the
Merger having a value not exceeding $1,000,000, or such greater amount as otherwise approved in
advance in writing by Agent (which approval shall not be unreasonably withheld), and (v) other Transfers of assets having
a fair market value of not more than $250,000 in the aggregate in any fiscal year.

 

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

 

“Preferred
Stock” means at any given time any equity security issued by Borrower that has any rights, preferences or privileges
senior to the Common Stock.

 

“Prepayment
Charge” has the meaning given to it in Section 2.4.

 

“Principal
Installment Due Date” has the meaning given to it in Section 2.5(a).

 

“Principal
Installment Payment” has the meaning given to it in Section 2.5(a).

 

“Prime Rate”
means the “prime rate” as reported in The Wall Street Journal, and if not reported, then the prime rate most recently
reported in The Wall Street Journal.

 

“Publicity
Materials” has the meaning given to it in Section 11.18.

 

“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.

 

    	 

    	 

    

 

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

 

“Rights to
Payment” has the meaning given to it in Section 3.

 

“Rule 144”
has the meaning given to it in Section 2.5(e).

 

“SEC”
has the meaning given to it in Section 2.5(e).

 

“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.

 

“Subordinated
Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions satisfactory
to Agent in its sole discretion.

 

“Subsidiary”
means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Borrower or,
following the consummation of the Merger, the Borrower or Parent Company owns or controls 50% or more of the outstanding voting
securities, including each entity listed on Schedule 1 hereto, which Schedule may be updated from time to time.

 

“Term Commitment”
means as to any Lender, the obligation of such Lender, if any, to make the Advance to 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”
has the meaning given to it in the Recitals.

 

“Term Loan
Amount” has the meaning given to it in the Recitals.

 

“Term Loan
Interest Rate” means for any day a per annum rate of interest equal to the greater of either (i) 9.50% plus the Prime
Rate minus 3.25%, and (ii) 9.50%.

 

“Term Loan
Maturity Date” means July 1, 2018.

 

“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, any State thereof or any other country or any political subdivision thereof.

 

“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.

 

    	 

    	 

    

 

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

 

1.2. Rules of Construction.
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.

 

SECTION
2.      THE LOAN

 

2.1           Term
Loan.

 

(a)          Advance.
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, an Advance of $7,000,000. Proceeds of any Advance shall be deposited
into an account that is subject to a first priority perfected security interest in favor of Agent perfected by an Account Control
Agreement.

 

(b)          Advance
Request. To obtain the Advance, Borrower shall complete, sign and deliver an Advance Request to Agent at least three (3) Business
Days before the Advance Date. Lender shall fund the Advance in the manner requested by the Advance Request provided that Lender’s
obligation to fund the Advance is subject to Borrower’s satisfaction of all applicable conditions precedent to the Advance
as of the requested Advance Date.

 

(c)          Interest.
The principal balance of the Advance shall bear interest thereon from the Advance Date at the Term Loan 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 Interest
Rate will float and change on the day the Prime Rate changes from time to time.

 

(d)          Payment.
Borrower will pay interest on the Advance on the first Business Day of each month, beginning the month after the Advance Date.
Commencing on the Amortization Date, and continuing on the first Business Day of each month thereafter, until the Secured Obligations
are repaid, Borrower shall repay the aggregate principal balance of the Advance that is outstanding on the immediately preceding
the Amortization Date, in equal monthly installments of principal and interest (mortgage style) based on an amortization payment
schedule consisting of 30 months (even though, for the avoidance of doubt, the amortization period applicable to the Loan shall
be of a shorter duration in accordance with the Term Loan Maturity Date), such payments beginning on the Amortization Date and
continuing on the first Business Day of each month thereafter until the Secured Obligations are repaid. The entire Term Loan principal
balance and all accrued but unpaid interest hereunder shall be due and payable on 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 Borrower’s account as authorized on the ACH Authorization (i) on each payment date of all
periodic obligations payable to Lender under the Advance and (ii) out-of-pocket legal fees and costs incurred by Agent or Lender
in connection with Section 11.11.

 

    	 

    	 

    

 

2.2           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.

 

2.3           Default
Interest. In the event any payment is not paid on the scheduled payment date, an amount equal to 5% 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 2.1(c) plus 5% 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 2.1(c) or this Section 2.3, as applicable.

 

2.4           Prepayment.
At its option upon at least seven (7) Business Days prior notice to Agent, Borrower may prepay all, but not less than all, of
the outstanding Advance by paying the entire principal balance and all accrued and unpaid interest thereon, together with a prepayment
charge in an amount equal to the following percentage of the Advance amounts being prepaid (a “Prepayment Charge”):
(i) if the Advance amounts are prepaid during any of the first 12 months after the Closing Date, 3.00%; (ii) if the Advance amounts
are prepaid during the period commencing after 12 months but on or prior to 24 months after the Closing Date, 2.00%; and (iii)
if the Advance amounts are paid during any period after 24 months following the Closing Date and prior to the Term Loan Maturity
Date, 1.00%. 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 Advance. Upon the occurrence
of a Change in Control, Borrower shall prepay the outstanding amount of all principal and accrued interest through the prepayment
date and all unpaid fees and expenses accrued to the date of repayment (including the End of Term Charge) together with the applicable
Prepayment Charge.

 

    	 

    	 

    

 

2.5          Optional
Payment of Principal by Conversion to Common Stock. 

 

(a)          Borrower
Election for Payment in Cash or Conversion to Common Stock. Subject to satisfaction of the Conversion Conditions and compliance
with the other terms and conditions of this Section 2.5, Borrower may
elect to pay, in whole or in part, any regularly scheduled installment of principal (a “Principal Installment
Payment”) up to an aggregate maximum amount of $1,000,000 by converting a
portion of the principal of the Loan into shares of Common Stock in lieu of payment thereof in cash (such option, a “Conversion
Option”). In order to validly exercise a Conversion Option, Borrower (A)
must deliver written notice thereof, in the form attached hereto as Exhibit I,
to Agent (a “Conversion Election Notice”) five
(5) days prior to the applicable due date of the applicable Principal Installment Payment (the “Principal Installment
Due Date”) and (B) shall (provided that Borrower’s transfer agent is
participating in the Fast Automated Securities Transfer Program of the Depository Trust Company) credit to Agent by no later than
the first trading day following the applicable Principal Installment Due Date (such date, the “Delivery Date”)
such aggregate number of shares of Common Stock to be issued to Lender with respect to such Conversion Election Notice, as determined
in accordance with this Section 2.5 (which shares shall be free of any
restrictions on transfer). All payments in respect of a Principal Installment Payment otherwise shall be made in cash, unless
(A) Borrower timely delivers a Conversion Election Notice in accordance with this Section 2.5,
(B) Borrower timely credits the shares of Common Stock to Lender, free of restrictive legends, in accordance with this Section
2.5 and (C) the Conversion Conditions are satisfied in respect of such payment.
A Conversion Election Notice, once delivered by Borrower, shall be irrevocable unless otherwise agreed in writing by Lender. If
Borrower elects to make a Principal Installment Payment, in whole or in part, through conversion of such amount into shares of
Common Stock, the number of such shares of Common Stock to be issued in respect of such Principal Installment Payment shall be
equal to the number determined by dividing (x) the applicable portion of such Principal Installment Payment by (y) $4.69 (the
“Fixed Conversion Price”); provided,
however, that upon the occurrence of any stock split, stock dividend,
combination of shares or reverse stock split pertaining to the Common Stock, the Fixed Conversion Price shall be proportionately
increased or decreased as necessary to reflect the proportionate change in the shares of Common Stock issued and outstanding as
a result of such stock split, stock dividend, combination of shares or reverse stock split. Any shares of Common Stock issued
pursuant to a Conversion Election Notice shall be deemed to be issued upon the applicable Principal Installment Due Date. 

 

(b)          Conversion
Conditions. Notwithstanding the foregoing, Borrower’s right to deliver, and Lender’s obligation to accept, shares
of Common Stock in lieu of payment in cash of a Principal Installment Payment is subject to the satisfaction of each of the following
conditions (the “Conversion Conditions”) as of the applicable
Delivery Date: 

 

(A)         the
closing price of the shares of Common Stock as reported on the NASDAQ Capital Market (the “NASDAQ”)
for each of the seven (7) consecutive trading days immediately preceding such Delivery Date shall be greater than or equal to
the Fixed Conversion Price; 

 

(B)         the
Common Stock issued in connection with any such payment does not exceed 20% of the total trading volume of the Common Stock for
the twenty-two (22) consecutive trading days immediately prior to and including such Delivery Date; 

 

    	 

    	 

    

 

(C)         only
one Conversion Election Notice may be given in any calendar month following the Amortization Date;

 

(D)         the
aggregate principal amount to be paid in shares of Common Stock pursuant to Section 2.5(a) shall not exceed $1,000,000;

 

(E)         the
Common Stock is (and was on each of the 22 consecutive trading days immediately preceding such Delivery Date) quoted or listed
on the NASDAQ or another Eligible Market;

 

(F)         a
registration statement is effective and available for the resale of all of the shares of Common Stock to be delivered on such
Delivery Date, or such shares of Common Stock are eligible for resale to the public pursuant to Rule 144 without any limitation;

 

(G)         after
giving effect to the issuance of such shares of Common Stock to Lender, Lender would not (x) beneficially own, together with its
Affiliates, Common Stock in excess of the limitations specified in Section 2.5(d) and (y) have been issued shares of Common
Stock pursuant to all Conversion Election Notices in an aggregate amount in excess of the Cap;

 

(H)         as
of such Delivery Date, there is no outstanding Event of Default and there is no breach or default that, if left uncured, would
reasonably be expected to result in an Event of Default; and

 

(I)          Borrower
shall have sufficient authorized but unissued shares of Common Stock to provide for the issuance of the shares of Common Stock
pursuant to the Conversion Election Notice. If any of the Conversion Conditions are not satisfied as of a Delivery Date, Borrower
shall not be permitted to pay, and Lender shall not be obligated to accept, the Principal Installment Payment in shares of Common
Stock, and Borrower shall instead pay such principal amount in cash; provided, however, that the Conversion
Conditions set forth in clauses (A), (B), (C), (E), (F) and (H) above may be waived by a writing executed by both Borrower and
Lender. In the event Borrower is relying upon an effective registration statement to satisfy clause (F) of the Conversion Conditions,
each of Borrower and Lender shall provide customary indemnification to one another with respect to such registration statement
in a form acceptable to Borrower and Lender. By no later than the first trading day following the Delivery Date, Borrower shall
(provided that Borrower’s transfer agent is participating in the Fast Automated Securities Transfer Program of the Depository
Trust Company) credit to Lender the shares of Common Stock to be delivered by Borrower with respect to the portion of the Principal
Installment Payment being paid in shares of Common Stock.

 

    	 

    	 

    

 

(c)          Lender
Election for Payment in Cash or Conversion to Common Stock. Subject to satisfaction of the Conversion Conditions and compliance
with the other terms and conditions of this Section 2.5, with respect to any Principal Installment Payment scheduled to
be paid by Borrower, Lender may elect to receive such payment in Common Stock by requiring Borrower to effect a Conversion Option.
In order to exercise its right to require Borrower to effect a Conversion Option, Lender shall deliver a Conversion Election Notice
to Borrower five (5) days prior to the applicable Principal Installment Due Date. Borrower shall (provided that Borrower’s
transfer agent is participating in the Fast Automated Securities Transfer Program of the Depository Trust Company) credit to Lender
by no later than the Delivery Date such aggregate number of shares of Common Stock to be issued to Lender with respect to such
Conversion Election Notice, as determined in accordance with this Section 2.5 (which shares shall be free of any restrictions
on transfer), by no later than the first trading day following the applicable Delivery Date. A Conversion Election Notice, once
delivered by Lender, shall be irrevocable unless otherwise agreed in writing by Borrower. If Lender elects to receive a Principal
Installment Payment in whole or in part through conversion of such amount into shares of Common Stock, the number of such shares
of Common Stock to be issued in respect of such Principal Installment Payment shall be equal to the number determined by dividing
(x) the applicable portion of such Principal Installment Payment by (y) the Fixed Conversion Price; provided, however,
that upon the occurrence of any stock split, stock dividend, combination of shares or reverse stock split pertaining to the Common
Stock, the Fixed Conversion Price shall be proportionately increased or decreased as necessary to reflect the proportionate change
in the shares of Common Stock issued and outstanding as a result of such stock split, stock dividend, combination of shares or
reverse stock split. Any shares of Common Stock issued pursuant to a Conversion Election Notice shall be deemed to be issued upon
the applicable Principal Installment Due Date. Notwithstanding the foregoing, Lender’s right to receive, and Borrower’s
obligation to issue, shares of Common Stock in lieu of payment in cash of a Principal Installment Payment is conditioned on the
satisfaction of each of the following conditions as of such Delivery Date: (A) only one Conversion Election Notice may be given
in any calendar month during the term of this Agreement; and (B) the aggregate principal amount to be paid in shares of Common
Stock pursuant to Section 2.5 shall not exceed $1,000,000.

 

(d)          Beneficial
Ownership Limitation. Notwithstanding any provision herein to the contrary, Lender, together with its Affiliates, shall not
be permitted to beneficially own a number of shares of Common Stock (other than shares that may be deemed beneficially owned except
for being subject to a limitation analogous to the limitation contained in this Section 2.5(d) in excess of 9.99% of the
number of shares of Common Stock then issued and outstanding, it being the intent of Borrower and Lender that Lender, together
with its Affiliates, not be deemed at any time to have the power to vote or dispose of greater than 9.99% of the number of shares
of Common Stock issued and outstanding at any time; provided, however, that Lender shall have the right,
upon 61 days’ prior written notice to Borrower, to waive the 9.99% limitation of this subsection. Notwithstanding anything
contained herein to the contrary, Borrower shall not be permitted to issue to Lender, and Lender shall not be required to accept,
shares of Common Stock pursuant to a Conversion Election Notice if and to the extent such issuance, when taking together with
all other issuances pursuant to prior Conversion Election Notices, would result in (A) the issuance of more than 19.99% of the
Common Stock outstanding as of the date of this Agreement or (B) Lender, together with its Affiliates, beneficially owning in
excess of 19.99% of the outstanding Common Stock (each of clauses (A) and (B) are referred to herein as the “Cap”).
As used herein, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act. For any reason at any
time, upon written or oral request of Lender, Borrower shall within one business day confirm orally and in writing to Lender the
number of shares of Common Stock then issued and outstanding as of any given date.

 

    	 

    	 

    

 

(e)          Rule
144. With a view to making available to Lender the benefits of Rule 144 under the Securities Act of 1933, as amended (including
any successor rule, “Rule 144”) and any other rule or regulation of the Securities and Exchange Commission
(the “SEC”) that may at any time permit Lender to sell shares of Common Stock issued pursuant to Section
2.5 to the public without registration, Borrower covenants and agrees to: (i) make and keep public information available,
as those terms are understood and defined in Rule 144, until six (6) months after such date as all of the shares of Common Stock
issued pursuant to Section 2.5 may be sold without restriction by Lender pursuant to Rule 144 or any other rule of similar
effect; (ii) file with the SEC in a timely manner (or obtain extensions in respect thereof and file within the applicable grace
period) all reports and other documents required to be filed by Borrower under the 1934 Act; and (iii) furnish to Lender upon
request, as long as Lender owns any shares of Common Stock issued pursuant to Section 2.5, such information as Lender or
Agent may reasonably request and that is reasonably necessary to ensure compliance with Rule 144 (or any successor rule thereto).

 

(f)          Stock
Reservation. Borrower covenants and agrees to reserve from its duly authorized capital stock not less than the number of shares
of Common Stock that may be issuable upon payment of any Principal Installment Payment pursuant to Section 2.5. Borrower
further represents, warrants and covenants that, upon issuance of any shares of Common Stock pursuant to Section 2.5, such
shares of Common Stock shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof.

 

(g)          Authorization.
For so long as Lender holds any shares of Common Stock issued pursuant to Section 2.5, Borrower shall maintain the Common
Stock’s authorization for listing on NASDAQ (or on another Eligible Market) and Borrower shall not take any action which
would reasonably be expected to result in the delisting or suspension of the Common Stock on NASDAQ (or other Eligible Market
on which the Common Stock is listed).

 

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, or (iii) the date that the Secured Obligations become due and payable, Borrower shall pay Lender an amount
equal to $245,000 (the “End of Term Charge”). Notwithstanding the required payment date of the End of Term
Charge, it shall be deemed earned by Lender as of the Closing Date.

 

2.7           Notes.
If requested by Lender in a written notice to Borrower, 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 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 Loan shall be made
pro rata according to the Term Commitments of the relevant Lender.

 

SECTION 3.      SECURITY
INTEREST

 

As security for the
prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations,
Borrower (including, for the avoidance of doubt, the Parent Company upon its delivery of a Joinder Agreement to Agent) grants
to Agent a security interest in all of Borrower’s right, title, and interest in and to the following personal property 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. Notwithstanding the broad
grant of the security interest set forth this Section 3, the Collateral shall not include (i) Intellectual Property, (ii)
more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower
in any Foreign Subsidiary and (iii) nonassignable licenses or contracts, which by their terms require the consent of the licensor
thereof or another party (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).

 

SECTION 4.      CONDITIONS
PRECEDENT TO LOAN

 

The obligations of
Lender to make the Loan hereunder are subject to the satisfaction of the conditions set forth in Section 4.1, Section
4.2 and Section 4.3.

 

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

 

(a)          executed
originals of the Loan Documents to which Borrower is a party, Account Control Agreements, and 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)          certified
copy of resolutions of Borrower’s board of directors evidencing approval of the Loan and other transactions evidenced by
the Loan Documents to which Borrower is a party;

 

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

 

(d)          a
certificate of good standing for Borrower from the Secretary of State of the State of Delaware and similar certificates from all
other jurisdictions in which it does business and where the failure to be qualified would result in a Material Adverse Effect;

 

(e)          payment
of the 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; and

 

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

 

4.2         Advance
Date Conditions. On the Advance Date:

 

(a)          Agent
shall have received (i) an Advance Request for the Advance as required by Section 2.1(b), duly executed by Borrower’s
Chief Executive Officer or Chief Financial Officer; (ii) any other documents Agent may reasonably request with respect to
the Advance; and (iii) the amounts payable pursuant to Section 4.1(e), if not otherwise paid on the Closing Date, which
amounts may be deducted from the Advance.

 

(b)          The
Parent Company shall have delivered (i) a duly executed Joinder Agreement and a duly executed Warrant; (ii) a certified copy of
resolutions of the Parent Company’s board of directors evidencing approval of the Loan, the Warrant and the transactions
and agreements contemplated by the Loan Documents; (iii) a counter-part signature page to the Perfection Certificate, originally
dated June 11, 2015 (the “Perfection Certificate”); and (iv) if not previously delivered to Agent, (a) a fully
executed Account Control Agreement with respect to the Deposit Account into which the proceeds of the Advance are to be deposited,
and (b) any other Deposit Accounts of a Borrower with cash balances then-greater than, in the aggregate, $250,000.

 

(c)          (A)
The representations and warranties set forth in (i) this Agreement, (ii) the Joinder Agreement, (iii) Section 9 of the
Warrant, and (iv) each other agreement to which the Parent Company and any Borrower is a party shall be true and correct in all
material 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; and (B) the information set forth in the Perfection Certificate
shall be true and correct in all respects as of the Advance Date (except for such changes to the Perfection Certificate as approved
by Agent, acting reasonably).

 

    	 

    	 

    

 

(d)          The
Parent Company and each other Borrower shall be in compliance with all the terms and provisions set forth herein and in each other
Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance no Event of Default
shall have occurred and be continuing.

 

(e)          The
Merger shall have been consummated

 

(f)          The
Pulmatrix Private Placement (as defined in the Form S-4) shall have been consummated in accordance with the Pulmatrix Private
Placement SPA (as defined in the Form S-4).

 

(g)          The
conversion the Outstanding Notes (as defined in the Form S-4) shall have been consummated in accordance with the Conversion and
Termination Agreement (as defined in the Form S-4).

 

(h)          Borrower
shall have satisfied, in all respects, the condition set forth Section 7.3(h) of that certain Agreement and Plan of Merger, dated
March 13, 2015, by and among Parent Company, Borrower and Ruthigen Merger Corp, and such condition shall have not been waived
in connection with the consummation of the Merger.

 

(i)          The
Advance Request shall be deemed to constitute a representation and warranty by Borrower (including, for the avoidance of doubt,
the Parent Company) on the Advance Date as to the matters specified in paragraphs (b)—(h) of this Section 4.2
and as to the matters set forth in the Advance Request, and each Borrower shall provide such other evidence as may requested
by Lender in connection with Lender’s verification of the condition specified in Section 4.2(h); provided,
however, if the Parent Company is not a signatory to the Advance Request, the Parent Company shall deliver a separate certificate
that shall be deemed to constitute a representation and warranty by Parent Company on the Advance Date as to the matters specified
in paragraphs (b)—(h) of this Section 4.2 and as to the other matters set forth in the Advance Request.

 

4.3           No
Default. As of the Closing Date and the Advance, (i) no fact or condition exists that would (or would, with the passage of
time, the giving of notice, or both) constitute an Event of Default and (ii) no event that has had or would reasonably be expected
to result in 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. 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 result in a Material Adverse
Effect. 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 Borrower in a written
notice (including any Compliance Certificate) provided to Agent after the Closing Date.

 

    	 

    	 

    

 

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

 

5.3           Consents.
Borrower’s execution, delivery and performance of this Agreement and all other Loan Documents to which it is a party, (i) have
been duly authorized by all necessary corporate action of Borrower, (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 violate any provisions of Borrower’s Certificate of Incorporation or bylaws, (iv) do not violate any, law,
regulation, order, injunction, judgment, decree or writ to which Borrower is subject, where the failure to comply with any such
law, regulation, order, injunction, decree or writ would result in a Material Adverse Effect, and (v) except as described
on Schedule 5.3, do not violate any material contract or material agreement or require the consent or approval of any other
Person. The individual or individuals executing the Loan Documents are duly authorized to do so.

 

5.4           Material
Adverse Effect. No event that has had or could reasonably be expected to result in a Material Adverse Effect has occurred
and is continuing. Borrower is not aware of any event likely to occur that is reasonably expected to result in a Material Adverse
Effect.

 

5.5           Actions
Before Governmental Authorities. Except as described on Schedule 5.5, 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 Borrower, threatened against or
affecting Borrower or its property, that would, if adversely determined against Borrower, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.

 

5.6           Laws.
Borrower is not 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 would reasonably expected to result in a Material Adverse Effect.
Borrower is not in default in any manner under any provision of any agreement or instrument evidencing Indebtedness, or any other
material agreement to which it is a party or by which it is bound.

 

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 contained,
or, when taken as a whole, 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 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 (or, in the case of any such information provided prior to the Closing Date, were) (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.

 

    	 

    	 

    

 

5.8           Tax
Matters. Except as described on Schedule 5.8, (a) Borrower has filed all federal, material state and material local
tax returns that it is required to file, (b) Borrower has duly paid or fully reserved for all material taxes or installments thereof
(including any interest or penalties) as and when due, 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. Borrower is the sole owner of, or otherwise has the right to use, the Intellectual Property material to 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, in whole or in part,
and (iii) no claim in writing has been made to 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 of Borrower’s Patents, registered
Trademarks, registered Copyrights, and material agreements under which Borrower licenses Intellectual Property from third parties
(other than shrink-wrap software licenses), together with application or registration numbers, as applicable, owned by Borrower
or any Subsidiary, in each case as of the Closing Date. Borrower is not in material breach of, nor has Borrower failed to perform
any material obligations under, any of the foregoing contracts, licenses or agreements and, to 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, Borrower has all material rights with respect to Intellectual Property
necessary or material in the operation or conduct of Borrower’s business as currently conducted and proposed to be conducted
by 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, Borrower has the right, to the extent required to operate Borrower’s business, to freely transfer,
license or assign Intellectual Property necessary or material in the operation or conduct of Borrower’s business as currently
conducted and proposed to be conducted by Borrower, without condition, restriction or payment of any kind (other than license
payments in the ordinary course of business) to any third party, and 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 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 Borrower is the licensee or lessee.

 

    	 

    	 

    

 

5.11         Borrower
Products. Except as described on Schedule 5.11, no material Intellectual Property owned by Borrower or Borrower Product
has been or is subject to any actual or, to the knowledge of 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 Borrower’s use, transfer or licensing thereof
or that may affect the validity, use or enforceability thereof. To the Borrower’s knowledge, there is no decree, order,
judgment, agreement, stipulation, arbitral award or other provision entered into in connection with any litigation or proceeding
that obligates Borrower to grant licenses or ownership interest in any future Intellectual Property related to the operation or
conduct of the business of Borrower or Borrower Products. Borrower has not received any written notice or claim, or, to the knowledge
of Borrower, oral notice or claim, challenging or questioning Borrower’s ownership in any Intellectual Property that is
necessary or material to the operation of the Borrower’s business (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 Borrower’s knowledge, is there a reasonable basis for any such
claim. To the Borrower’s knowledge, neither Borrower’s use of its Intellectual Property nor the production and sale
of Borrower Products infringes the Intellectual Property or other rights of any other Person.

 

5.12         Financial
Accounts. Exhibit E, as may be updated by 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. Borrower has no outstanding loans to any employee, officer or director of Borrower nor has Borrower guaranteed the
payment of any loan made to an employee, officer or director of Borrower by a third party.

 

5.14         Capitalization
and Subsidiaries. Borrower’s (not including Parent Company’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. Parent Company’s capitalization is as set forth in its reports filed with the SEC on Edgar.
Attached as Schedule 5.14, 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.

 

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 and advertising injury 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 commercially reasonable insurance upon the Collateral, insuring against such risks
of physical loss or damage from such causes as are typically covered by commercially reasonable insurance policies customary for
companies engaged in businesses similar to the business of the Borrower, 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; provided, however, with respect to Borrower’s
directors’ and officers’ insurance, borrower shall deliver to Agent such certificates of insurance within 10 Business
Days following the Closing Date. Borrower’s insurance certificate shall state 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. Borrower shall provide a minimum of 30 days advance written
notice to Agent of any cancellation or any other change adverse to Agent’s interests, under any insurance policy maintained
by Borrower. 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.

 

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, excluding in all cases Liabilities to the extent resulting from any Indemnified Person’s
gross negligence or willful misconduct. Borrower agrees to pay, and to save Agent and Lender harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (other than Excluded
Taxes) that may be payable or determined to be payable with respect to any of the Collateral or this Agreement. In no event shall
Borrower or 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).

 

SECTION 7.      COVENANTS
OF BORROWER

 

Borrower agrees as
follows:

 

7.1           Financial
Reports. Borrower (which shall mean the Parent Company upon its delivery of a Joinder Agreement to Agent) 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 and consolidating basis, if applicable), 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 would reasonably be expected
to result in 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 of the first three calendar quarters during each fiscal
year, unaudited interim and year-to-date financial statements as of the end of such calendar quarter (prepared on a consolidated
and consolidating basis, if applicable), 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 would reasonably be expected to result in 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; as well as the most recent capitalization
table for Borrower, including the weighted average exercise price of stock options;

 

(c)          as
soon as practicable (and in any event within 90 days) after the end of each fiscal year, unqualified audited financial statements
as of the end of such year (prepared on a consolidated and consolidating basis, if applicable), 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,
accompanied by any management report from such accountants;

 

(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 seven (7) days) after the end of each month, a report showing agings of accounts
receivable and accounts payable;

 

(f)          promptly
after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that
Borrower has made available to its stockholders and copies of any regular, periodic and special reports or registration statements
that Borrower files with the SEC or any governmental authority that may be substituted therefor, or any national securities exchange;
provided, that Borrower shall not be required to furnish to Agent any reports, registration statements or other documents that
are publicly available on the SEC’s website so long as Borrower notifies Agent of the availability of such materials in
accordance with the last two sentences of this Section 7.1;

 

(g)          at
the same time and in the same manner as it gives to its directors, copies of all notices, minutes, consents and other materials
that Borrower provides to its directors in connection with meetings of the Board of Directors, and within 30 days after each such
meeting, minutes of such meeting, provided that in all cases Borrower may exclude confidential compensation information and information
that may be subject to attorney-client privilege; and

 

    	 

    	 

    

 

(h)          financial
and business projections promptly following their approval by Borrower’s Board of Directors, and in any event, within 90
days prior to the end of Borrower’s fiscal year, as well as budgets and operating plans.

 

Borrower shall not
(without the consent of Agent, such consent not to be unreasonably withheld or delayed), make any change in its (a) accounting
policies or reporting practices, except as required by GAAP or (b) fiscal years or fiscal quarters. Borrower hereby represents
and confirms that Borrower’s fiscal year ends on December 31.

 

Notwithstanding anything
to the contrary in this Section 7.1, following consummation of the Merger, Borrower shall not be required to deliver any
financial statements to the Agent under clause (b) or clause (c) above with respect to any period for which it has timely filed
its Form 10-K or Form 10-Q, as the case may be, with the SEC; provided, that such Form 10-K or Form 10-Q, as the case may be,
is publicly available on the SEC’s website (or a similar website) within the time periods permitted by this Section 7.1
and Borrower promptly notifies Agent in writing (which may be by electronic mail) of the posting of any such documents. To
the extent any documents required to be delivered pursuant to the terms hereof are included in materials otherwise filed with
the SEC, Borrower may deliver such documents by e-mailing to Agent a link of the applicable filing posted on the SEC website.

 

The executed Compliance
Certificate may be sent via facsimile to Agent at (650) 473-9194 or via e-mail to financialstatements@herculestech.com
or asherwindt@herculestech.com. All Financial Statements that may be required to be delivered pursuant to Section 7.1(a),
Section 7.1(b) and Section 7.1(c) shall be sent via e-mail to the following addresses: financialstatements@herculestech.com,
asherwindt@herculestech.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 sent via facsimile to Agent at: (866) 468-8916, attention Chief Investment
Officer.

 

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; provided, however, that so long as no Event of Default
has occurred and is continuing, such examinations shall be limited to no more often than once per fiscal year; provided,
further, however, in no event shall the Borrower be required to provide access to any trade secrets, technical data
or other commercially sensitive information. In addition, any such representative shall have the right to meet with management
and officers of Borrower to discuss such books of account and records. 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 desirable, 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, 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 use reasonable efforts to 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. In addition to the foregoing, within five (5) Business Days of the Advance Date, Borrower (a) shall deliver
to Agent a duly executed waiver and consent, in such form as agreed to in Agent’s reasonable discretion, from the lessor
(and as applicable, any sub-lessor) of the property leased by Borrower for use as the Borrower’s corporate headquarters
following the Merger, and (b) shall use commercially reasonable efforts to obtain bailee waivers, in such form as agreed to in
Agent’s reasonable discretion, from any Person in possession of property of Borrower with an aggregate value greater than
$500,000 (as reasonably determined by Borrower).

 

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 or take any actions which impose on Borrower an obligation
to prepay any Indebtedness, except for the conversion of Indebtedness into equity securities and the payment of cash in lieu of
fractional shares in connection with such conversion.

 

7.5           Collateral;
Negative Pledge. Borrower shall at all times keep the Collateral and all other property and assets (including, without limitation,
Intellectual Property) used in Borrower’s business or in which Borrower now or hereafter holds any interest free and clear
from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any legal
process affecting the Collateral, the Intellectual Property, and such other property and assets, or any Liens thereon; provided,
however, that the Collateral, the and such other property and assets may be subject to Permitted Liens except that there
shall be no Liens whatsoever on Intellectual Property (other than any Lien in favor of Agent as permitted under this Agreement).
Borrower shall cause its Subsidiaries 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 or Liens whatsoever (except for Permitted Liens, provided however, that
there shall be no Liens whatsoever on Intellectual Property of any Subsidiary, other than any Lien in favor of Agent as permitted
under this Agreement), and shall give Agent prompt written notice of any legal process affecting such Subsidiary’s assets.
Borrower shall not agree with any Person other than Agent or Lender not to encumber its property.

 

    	 

    	 

    

 

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 stock or other equity interest
other than 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;
(b) declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest, except that a
Subsidiary may pay dividends or make distributions to another subsidiary or to Borrower (including, for the avoidance of doubt,
any Subsidiaries that execute a Joinder Agreement); (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 in the aggregate; 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. Other than the Merger, 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, all or substantially all of the capital stock or property of another Person. For the avoidance of
doubt, this Section 7.9 shall not prohibit the acquisition (including by exclusive license) of all or substantially all
of the property of another Person to the extent (i) that such property is comprised substantially of Intellectual Property, (ii)
the Borrower reasonably believes such acquisition is necessary in order to protect its interests in its Intellectual Property,
and (iii) such acquisitions do not exceed $250,000 in any fiscal year.

 

7.10         Taxes.
Borrower and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any
related interest or penalties) now or hereafter imposed or assessed against (i) Borrower, (ii) Agent or Borrower to the extent
arising as a result of the Loan Documents (other than Excluded Taxes), (iii) the Collateral or upon Borrower’s ownership,
possession, use, operation or disposition thereof, or (iv) 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. Other than in connection with the Merger, neither Borrower nor any Subsidiary shall change its corporate name, legal
form or jurisdiction of formation without 20 days’ prior written notice to Agent. Neither Borrower nor any Subsidiary shall
suffer a Change in Control, other than the Merger. Neither Borrower nor any 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. Neither Borrower nor any Subsidiary shall relocate any item of Collateral (other than (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 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. Lender and Agent acknowledge that Parent Company will be relocating its chief executive office
and principal place of business to the chief executive office and principal place of business of Borrower as described in the
Form S-4.

 

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; provided, however, with respect to the Deposit Accounts of
Parent Company, except as otherwise required pursuant to Section 2.1 and Section 4.2(b)(iii), Borrower shall have
five (5) Business Days after the Advance Date to deliver Account Control Agreements to Agent.

 

7.13         Subsidiaries.
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.

 

7.14         Notification
of Event of Default. Borrower shall notify Agent immediately of the occurrence of any Event of Default.

 

SECTION 8.      RIGHT
TO invest

 

Lender or its assignee
or nominee, which assignee or nominee shall be an Affiliate of Lender, shall have the right, in its discretion, to purchase Borrower
securities having an aggregate purchase price of up to $1,000,000 in the Equity Event. Such right shall be on the same terms and
conditions afforded to other investors in the Equity Event.

 

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 of principal when due under this Agreement or fails to pay accrued and unpaid interest when due
under this Agreement; 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 Lender or Borrower’s bank if Borrower had the funds to make the
payment when due and makes the payment within three 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 or any other agreement among Borrower, Agent and Lender, and (a) with respect to a default under any covenant
under this Agreement (other than under Sections 7.4, 7.5, 7.6, 7.7, 7.8, 7.9
and 7.12), any other Loan Document or any other agreement among Borrower, Agent and Lender, such default continues for
more than 10 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 7.4, 7.5,
7.6, 7.7, 7.8, 7.9 and 7.12, the occurrence of such default; or

 

9.3           Material
Adverse Effect. A circumstance has occurred that would 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 unable to pay its debts as
they become due, or be unable to pay or perform under the Loan Documents, 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) 30 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) 30 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
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 $100,000, or Borrower is enjoined
or in any way prevented by court order from conducting any part of its business; or

 

    	 

    	 

    

 

9.7           Other
Obligations. The occurrence of any default under any agreement or obligation of Borrower involving any Indebtedness in excess
of $100,000.

 

SECTION 10.    REMEDIES

 

10.1         General.
Upon and during the continuance of any one or more Events of Default, (i) Agent may, at its option, accelerate and demand payment
of all or any part of the Secured Obligations together with a Prepayment Charge 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
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 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, in any case, subject to the UCC. 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, 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 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 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, final, and
                                         indefeasible payment in Cash of all of the Secured Obligations 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 facsimile or hand delivery or delivery by an overnight express
service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States mails, with
proper first class postage prepaid, in each case addressed to the party to be notified as follows:

 

(a)          If
to Agent:

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

Legal Department

Attention: Deputy General Counsel

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060

 

(b)          If
to Lender:

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

Legal Department

Attention: Deputy General Counsel

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060

 

    	 

    	 

    

 

(c)          If
to Borrower:

 

PULMATRIX INC.

99 Hayden Avenue

Suite 390

Lexington, MA 02421

Attention: Dr. Robert Clarke

Email: rclarke@Pulmatrix.com

Telephone: 781-357-2333

 

with a copy to:

 

Haynes and Boone, LLP

30 Rockefeller Plaza

New York, NY 10012

Attention: Rick A. Werner, Esq.

Email: rick.werner@haynesboone.com

Telephone: 212-659-7300

 

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 Agent’s proposal letter executed by Borrower on March 6, 2015).

 

(b)          Neither
this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, 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, Agent and 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 or obligations of Lender
or of Borrower hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or Agent and Borrower,
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, or increase the amount or extend the expiration date of
any Lender’s Term Commitment, 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 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 Agent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, Lender, 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
and the expiration or other termination of this Agreement.

 

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 (other than with the prior written consent of Borrower)
that is (a) a direct competitor of Borrower (as reasonably determined by Agent) or (b) a non-U.S. person, as determined under
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended. In connection with any assignment, transfer or endorsement
of this Agreement, if applicable, Agent shall cause the assignee to deliver to Borrower a duly executed Form W-9 with respect
to the assignee. For the avoidance of doubt, consummation of the transaction contemplated in connection with the Merger shall
not constitute an assignment or transfer under this Section 11.7.

 

    	 

    	 

    

 

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 attorneys fees, UCC searches, filing costs, and other miscellaneous expenses. In addition,
Borrower promises to pay any and all reasonable attorneys’ and other professionals’ fees and expenses (including fees
and expenses of in-house counsel) 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. The parties hereto agree that the fees of Agent’s legal counsel payable by Borrower
in connection with the negotiation of the Loan Documents and the actions to be taken and the deliveries to be made in connection
with the Advance on the Closing Date shall equal $17,500 (such amount in addition to the costs of any UCC searches and filing
costs incurred by Agent’s legal counsel on behalf of Agent and Lender).

 

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 or otherwise pursuant to this Agreement shall not be disclosed
to any other Person or entity in any manner whatsoever or used by Agent or Borrower for any purpose other than administering,
performing or exercising their rights hereunder or under any other Loan Document, 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 reasonable 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 and unauthorized use 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.

 

    	 

    	 

    

 

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, Lender and Borrower.

 

11.17       Agency.

 

(a)          Lender
hereby irrevocably appoints Hercules Technology Growth Capital, Inc. to act on its behalf as Agent hereunder and under the other
Loan Documents and authorizes Agent to take such actions on its behalf and to exercise such powers as are delegated to Agent by
the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

 

(b)          Lender
agrees to indemnify 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 11.7, 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 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 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)          The
Person serving as 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 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)          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, 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 Agent is required to exercise as directed in writing by Lender, provided
that Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose 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 Agent shall not be liable for the
failure to disclose, any information relating to Borrower or any of its Affiliates that is communicated to or obtained by any
Person serving as Agent or any of its Affiliates in any capacity.

 

(e)          Agent
shall not be liable for any action taken or not taken by it (i) with the consent or at the request of Lender or as 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)          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 Agent.

 

(g)          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.

 

(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:
	 	 
	 	PULMATRIX INC.
	 	 	 
	 	Signature:	/s/ Robert W. Clarke, Ph.D.
	 	 	 
	 	Print Name:	Robert W. Clarke, Ph.D.
	 	 	 
	 	Title:	Chief Executive Officer
	 	 	 
	Accepted in Palo Alto, California:	 	 
	 	 	 
	 	AGENT:	 
	 	 	 
	 	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	Signature:	/s/ Christine Fera
	 	 	 
	 	Print Name:	Christine Fera
	 	 	 
	 	Title:	Director of Contract Originations
	 	 	 
	 	LENDER:
	 	 	 
	 	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	Signature:	/s/ Christine Fera
	 	 	 
	 	Print Name:	Christine Fera
	 	 	 
	 	Title:	Director of Contract Originations

 

    	 

    	 

    

 

Table of Exhibits and Schedules

 

	Exhibit A:	Advance Request 
	 	Attachment to Advance Request
	 	 
	Exhibit B:	Promissory 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 H:	ACH Debit Authorization Agreement
	 	 
	Exhibit I:	Conversion Election Notice
	 	 
	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 5.5	Actions Before Governmental Authorities
	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

 

    	 

    	 

    

 

EXHIBIT
A

 

FORM OF

ADVANCE
REQUEST

 

	To:	Agent:	Date: [●]
	 	 
	 	Hercules Technology Growth Capital, Inc. (the “Agent”)
	 	400 Hamilton Avenue, Suite 310
	 	Palo Alto, CA 94301
	 	Facsimile:  650-473-9194
	 	Attn:

 

[●] (“Borrower”)
hereby requests from Hercules Technology Growth Capital, Inc. (“Lender”) an Advance in the amount of $7,000,000
on [●], 2015 (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	________

 

	 	Bank:	 	 
	 	Address:	 	 
	 	 	 	 
	 	ABA Number:	 	 
	 	Account Number:	 	 
	 	Account Name:	 	 

 

Borrower represents
that the conditions precedent to the Advance set forth in the Agreement are satisfied and shall be satisfied upon the making of
such Advance, including but not limited to: (i) that no event that has had or could reasonably be expected to result in a
Material Adverse Effect has occurred and is continuing; (ii) that the representations and warranties set forth in the Agreement
and in the Warrant are and shall be true and correct in all material 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; (iii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to
be observed or performed prior to and as of the Advance Date; and (iv) that as of the Advance Date, no fact or condition exists
that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents.
Borrower understands and acknowledges that Agent has the right to review the financial information supporting the foregoing representation
and, based upon such review in its sole discretion, Lender may decline to fund the requested Advance if it determines that the
foregoing representation is not true, complete and accurate.

 

    	 

    	 

    

 

Borrower hereby represents
that Borrower’s corporate status and locations have not changed since the date of the Agreement as set forth in 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 [●],
2015

 

	 	BORROWER:
	 	 
	 	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:	[PULMATRIX OPERATING COMPANY, INC.]
	 	 
	Type of organization:	CORPORATION
	 	 
	State of organization:	Delaware
	 	 
	Organization file number:	3649036

 

Borrower hereby represents and warrants
to Agent that the street addresses, cities, states and postal codes of its current locations are as follows: 99 Hayden Avenue,
Suite 360, Lexington, MA 02421

 

    	 

    	 

    

 

EXHIBIT
B

 

FORM OF

SECURED
TERM PROMISSORY NOTE

 

	$7,000,000	Advance Date:  ___ __, 20[●]
	 	 
	 	Maturity Date:  _____ ___, 20[●]

 

FOR VALUE RECEIVED,
[●], a Delaware corporation, for itself and each of its Subsidiaries (the “Borrower”), hereby promises
to pay to the order of Hercules Technology Growth Capital, Inc., a Maryland corporation,
or the holder hereof (the “Lender”), at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301, or such other place
of payment as the holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time
to time in writing, in lawful money of the United States of America, the principal amount of $7,000,000 or such other principal
amount as Lender has advanced to Borrower, together with interest at the Term Loan Interest Rate, as such term is defined in that
certain Loan and Security Agreement, dated June 11, 2015, by and among Borrower, Hercules Technology Growth Capital, Inc., in its
capacity as agent (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, modified or supplemented in accordance with its
terms, the “Loan Agreement”).

 

This Promissory Note
is the Note referred to in, and is executed and delivered in connection with, 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:	[●]

 

	 	By: 	 	 
	 	Title: 	 	 

 

    	 

    	 

    

 

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:  PULMATRIX
INC.

 

Type of organization:  Corporation

 

State of organization:  DELAWARE

 

Organization file number:   3649036

 

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: PULMATRIX INC.

Used during dates of:  04/25/2003 to 6/15/20151

Type of Organization: Corporation

State of organization:  DELAWARE

Organization file Number:    3649036

Borrower’s fiscal year ends on December 31

Borrower’s federal employer tax identification
number is: 35-2203161

 

3.   Borrower represents
and warrants to Agent that its chief executive office is located at 99 Hayden Avenue, Suite 360, Lexington, MA 02421.

 

 

 

1
The Merger is currently expected to be consummated after market hours on June 15, 2015. Immediately prior to the
consummation of the Merger, Pulmatrix Inc. will change its name to “Pulmatrix Operating Company, Inc.”

 

    	 

    	 

    

 

EXHIBIT
D

 

BORROWER’S
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

 

Patents

 

Granted Patents And Pending PCT Or National Patent Filings

 

	Pulmatrix

Family	 	Pulmatrix

Id #	 	Application No. 	 	Effective

Filing Date	 	Title	 	Status	 	Patent No.
	Harv 2028	 	Harv 2028 Us Con	 	12/351,328	 	9-Jan-09	 	Surfactant Formulations Limiting Spread Of Pulmonary Infections	 	Granted	 	8,858,917
	 	HARV 2028 AU	 	2003243191	 	8-Jun-06	 	 	Granted	 	2003243191
	 	HARV 2028 CA	 	2,483,917	 	1-May-03	 	 	Granted	 	2,483 917
	 	 	 	 	 	 	 	 	 	 	 
	Pul 100	 	Pul 100 Au	 	2005219431	 	3-Mar-05	 	Formulations Decreasing Particle Exhalation	 	Granted	 	2005219431
	 	PUL 100 AU DIV	 	2009225363	 	14-Oct-09	 	 	Granted	 	2009225363
	 	PUL 100 CA	 	2558426	 	3-Mar-05	 	 	Granted	 	2558426
	 	PUL 100 US DIV	 	11/714,999	 	6-Mar-07	 	 	Granted	 	8,187,637
	 	PUL 100 US CON	 	13/455,585	 	25-Apr-12	 	 	Granted	 	8,591,866
	 	PUL 100 US CON2	 	14/058,852	 	21-Oct-13	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 101/104	 	Pul 101 Jp	 	2007-550530	 	10-Jan-06	 	
        Method And Device For Decreasing Contamination

         
	 	Granted	 	5075638
	 	PUL 101-104 US	 	11/827,031	 	10-Jul-07	 	 	Granted	 	8,627,821
	Pul 102	 	Pul 102 Au	 	2006244478	 	5-May-06	 	Ultrasonic Aerosol Generator	 	Granted	 	2006244478
	 	PUL 102 CN	 	200680019893.80	 	5-May-06	 	 	Granted	 	ZL 200680019893.8
	 	PUL 102 HK	 	9101419.2	 	5-May-06	 	 	Granted	 	HK1121424

 

    	 

    	 

    

 

	Pul 103	 	Pul 103 Eu	 	200702520	 	18-May-06	 	Formulations For Alteration Of Biophysical Properties Of Mucosal Lining	 	Granted	 	016072
	 	PUL 103 MX	 	2007/014468	 	18-May-06	 	 	Granted	 	282648
	 	PUL 103 MX-DIV	 	2011/000219	 	6-Jan-11	 	 	Granted	 	302161
	 	PUL 103 NZ	 	564110	 	18-May-06	 	 	Granted	 	564110
	 	PUL 103 NZ-DIV2	 	593475	 	15-Jun-11	 	 	Granted	 	564110
	 	PUL 103 US-CON3	 	14/541,648	 	14-Nov-14	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 107	 	Pul 107 Us-Con	 	14/568,809	 	12-Dec-14	 	Calcium Citrate And Calcium Lactate Formulations For Alteration Of Biophysical Properties Of Mucosal Lining	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 108	 	Pul 108 Au	 	2010229724	 	26-Mar-10	 	
         

        Pharmaceutical Formulations And Methods For Treating Respiratory
        Tract Infections

         

        Validated Ep Countries:

        France (Fr)

        Germany (De)

        Italy (It)

        Spain (Es)

        United Kingdom (Uk)

        Sweden (Se)

        Portugal (Pt)

        Ireland (Ie)

        Netherlands (Nl)

        Belgium (Be)

        Greece (Gr)

        Turkey (Tr)

        Norway (No)

        Denmark (Dk)
	 	Granted	 	Au 2010229724
	 	PUL 108 EP	 	10711127	 	26-Mar-10	 	 	Granted	 	EP2315580
	 	PUL 108 HK	 	11111136.9	 	18-Oct-11	 	 	Granted	 	HK1156847
	 	PUL 108 MX	 	2011-009959	 	26-Mar-10	 	 	Granted	 	316366
	 	PUL 108 US-CON	 	14/061,006	 	23-Oct-13	 	 	Active	 	Not Applicable

 

    	 

    	 

    

 

	Pul 109	 	Pul 109 Au	 	2010229668	 	26-Mar-10	 	Dry Powder Formulations And Methods For Treating Pulmonary Diseases	 	Active	 	Not Applicable
	 	PUL 109 BR	 	PI1011721-0	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 CA	 	2754691	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 CN	 	201080023554.3	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 EP	 	10713283.9	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 HK	 	12106373	 	29-Jun-12	 	 	Active	 	Not Applicable
	 	PUL 109 IN	 	7373/DELNP2011	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 IL	 	215276	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 JP	 	2012-502314	 	26-Mar-10	 	 	Granted	 	JP 5671001
	 	PUL 109 JP DIV	 	2014-256325	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 KR	 	10-2011-7024843	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 MX	 	2011-009957	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 NZ-DIV	 	621065	 	Not Available	 	 	Active	 	Not Applicable
	 	PUL 109 RU	 	2011137960	 	26-Mar-10	 	 	Active	 	Not Applicable
	 	PUL 109 US-CON	 	14/456,445	 	11-Aug-14	 	 	Active	 	Not Applicable

 

    	 

    	 

    

 

	Pul 114	 	Pul 114 Ep	 	Ep2448571	 	26-Aug-11	 	Respirably Dry Powder Comprising Calcium Lactate, Sodium Chloride And Leucine	 	Granted	 	2448571
	 	PUL 114 US	 	13/504,284	 	26-Apr-12	 	 	Granted	 	8,758,824
	 	PUL 114 US-CON	 	14/284,880	 	22-May-14	 	 	Notice Of Acceptance	 	Not Available
	 	 	 	 	 	 	 	 	 	 	 
	Pul 115	 	Pul 115 Au	 	2011308865	 	29-Sep-11	 	Monovalent Metal Cation Dry Powders	 	Active	 	Not Applicable
	 	115BR	 	BR 11 2013 007304 7	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 CA	 	2,812,414	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 CN	 	201180057314.X	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 EP	 	11770941	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 HK	 	14100210.8	 	8-Jan-14	 	 	Active	 	Not Applicable
	 	115 IN	 	2755/DELNP/2013	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 IL	 	225398	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 JP	 	2013-531826	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 KR	 	10-2013-7010157	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 RU	 	2013118453	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 MX	 	2013/003478	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	115 NZ-DIV	 	Not Available	 	Not Available	 	 	Active	 	Not Applicable
	 	PUL 115 US 	 	13/876,312	 	4-Jun-13	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 116	 	Pul 116 Us	 	13/876,315	 	27-Mar-13	 	Cationic Dry Powders	 	Active	 	Not Applicable
	 	PUL 116 AU	 	2011314007	 	29-Sep-11	 	 	Active	 	Not Applicable

 

    	 

    	 

    

 

	 	 	PUL 116 CA	 	2,812,417	 	29-Sep-11	 	 	 	Active	 	Not Applicable
	 	PUL 116 EP	 	11767877.1	 	29-Sep-11	 	 	Active	 	Not Applicable
	 	PUL 116 IL	 	225399	 	21-Mar-13	 	 	Active	 	Not Applicable
	 	PUL 116 NZ-DIV	 	Not Available	 	Not Available	 	 	Active	 	Not Applicable
	 	PUL 116 US	 	13/876,315	 	27-Mar-13	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 117	 	Pul 117 Au	 	2011296343	 	26-Aug-11	 	Dry Powder Formulations And Methods For Treating Pulmonary Diseases	 	Active	 	Not Applicable
	 	PUL 117 CA	 	2,809,666	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 CN	 	2.0118E+11	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 EP	 	11751775.5	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 HK	 	13114302.9	 	25-Dec-13	 	 	Active	 	Not Applicable
	 	PUL 117 IL	 	224916	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 JP	 	2013-527146	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 NZ_DIV	 	703804	 	26-Aug-11	 	 	Active	 	Not Applicable
	 	PUL 117 US	 	13/817,963	 	20-Feb-13	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 118	 	Pul 118 Us	 	14/350,235	 	7-Apr-14	 	Methods For Treating And Diagnosing Respiratory Tract Infections	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 121	 	Pul 121 Us	 	14/378,453	 	13-Aug-14	 	Inhalable Dry Powders	 	Active	 	Not Applicable

 

    	 

    	 

    

 

	 	 	PUL 121 AU	 	Not Available	 	Not Available	 	 	 	Active	 	Not Applicable
	 	PUL 121 CA	 	2,865,972	 	8-Oct-14	 	 	Active	 	Not Applicable
	 	PUL 121 EP	 	13709666.5	 	21-Aug-14	 	 	Active	 	Not Applicable
	 	PUL 121 IL	 	Not Available	 	Not Available	 	 	Active	 	Not Applicable
	 	PUL 121 IN	 	6933/DELNP/2014	 	19-Aug-14	 	 	Active	 	Not Applicable
	 	PUL 121 JP	 	2014-560032	 	27-Aug-14	 	 	Active	 	Not Applicable
	 	PUL 121 NZ	 	629722	 	20-Aug-14	 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 
	Pul 131	 	Pul 131 Pct	 	Pct/Us2014/25660	 	13-Mar-14	 	Tiotropium Dry Powders	 	Pct Phase	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pending Provisional Applications
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pulmatrix Family	 	Pulmatrix 

Id #	 	Application No. 	 	Effective Filing Date	 	Title	 	Status	 	Patent No.
	Pul 129	 	Pul 129 P2	 	61/976,601	 	8-Apr-14	 	iCALM Methods 	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 132	 	132p2	 	62/047,949	 	9-Sep-14	 	iSPERSE Formulations	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 133	 	Pul 133p2	 	62.047,956	 	9-Sep-14	 	iSPERSE Formulations	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 134	 	Pul 134p2	 	62/061,457	 	8-Oct-14	 	iSPERSE Methods	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 135	 	Pul 135p2	 	62/047,943	 	9-Sep-14	 	iSPERSE Formulations	 	Active	 	Not Applicable

 

    	 

    	 

    

 

	Pul 136	 	Pul 136p	 	61/977,762	 	10-Apr-14	 	iCALM Methods	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 137	 	Pul 137p	 	61/978,289	 	11-Apr-14	 	iSPERSE Methods	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 138	 	Pul 138p	 	62/061,436	 	8-Oct-14	 	PUR0200 Formulations	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 139	 	Pul 139p	 	62/061,433	 	8-Oct-14	 	PUR0200 Formulations	 	Active	 	Not Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pul 140	 	Pul 140p	 	62/081,795	 	19-Nov-14	 	iSPERSE Methods	 	Active	 	Not Applicable

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	EP	 	Active oxygen containing solution

    for promoting growth of tissue cells

    at wound sites	 	00 124 968.9 	 	1 103 264	 	11/16/00	 	11/17/99	 	05/30/07	 	Revoked following opposition.	 	 
	US	 	Solution for promoting growth of tissue cells at wound sites and production process therefore	 	09/714,826	 	 	 	11/17/00	 	11/17/99	 	 	 	Abandoned.	 	 
	US	 	Solution for promoting growth of tissue cells at wound sites and production process therefore	 	10/146,140	 	 	 	05/16/02	 	11/17/99

    11/17/00	 	 	 	Abandoned.	 	 
	US	 	Negative and positive oxidative reductive potential (ORP) water and method and apparatus
    for producing the same	 	60/338,376	 	 	 	12/05/01	 	12/05/01	 	 	 	Expired.	 	 
	PCT	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	PCT/US02/38861 	 	 	 	12/05/02	 	12/05/01	 	 	 	Expired.	 	 
	AU	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	2002353060	 	 	 	12/05/02	 	12/05/01	 	 	 	Abandoned.	 	 
	CA	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water– Oculus Innovative Sciences, Inc.	 	2,468,856	 	2,468,856	 	12/05/02	 	12/05/01	 	07/26/11	 	Issued. 	 	12/05/2022
	JP	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	549596/2003 	 	3988827	 	12/05/02	 	12/05/01	 	07/27/07	 	Issued. 	 	12/05/2022

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	EP	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	02790029.9 	 	1 461 474	 	12/05/02	 	12/05/01	 	12/05/01	 	Issued. 	 	12/05/2022
	DE	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	02790029.9	 	602 41 680.9	 	12/05/02	 	12/05/01	 	11/30/11	 	Issued. 	 	12/05/2022
	ES	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	20020790029T 	 	2377945 	 	12/05/02	 	12/05/01	 	11/30/11	 	Issued. 	 	12/05/2022
	GB	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	02790029.9	 	1 461 474	 	12/05/02	 	12/05/01	 	11/30/11	 	Issued. 	 	12/05/2022
	FR	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water – Oculus Innovative Sciences, Inc.	 	02790029.9	 	1 461 474	 	12/05/02	 	12/05/01	 	11/30/11	 	Issued. 	 	12/05/2022

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	IT	 	Method and apparatus for producing

    negative and positive oxidative

    reductive potential (ORP) water –

    Oculus Innovative Sciences, Inc.	 	02790029.9	 	1 461 474	 	12/05/02	 	12/05/01	 	11/30/11	 	Issued. 	 	12/05/2022
	US	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	10/496,092 	 	8,062,500	 	12/05/02	 	12/05/01	 	11/22/11	 	Issued. 712 days of PTA	 	11/16/2024
	MX	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	PA/a/2003/007923	 	 	 	12/05/02	 	12/05/01	 	 	 	Abandoned	 	 
	AU 	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	2009-203008	 	 	 	12/05/02	 	12/5/01

    12/5/02	 	 	 	Abandoned	 	 
	AU	 	Method and apparatus for producing negative and positive oxidative reductive potential (ORP)
    water	 	2012201437	 	2012201437	 	12/05/02	 	12/5/02	 	 10/11/12	 	Issued. 	 	12/05/2022
	US	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	10/242,779 	 	7,090,753	 	09/13/02	 	09/14/01	 	08/15/06	 	Issued. 301 days of PTA.	 	07/11/2023
	US	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	11/502,821 	 	7,442,288	 	08/11/06	 	09/14/01	 	10/28/08	 	Issued. 35 days PTA.	 	10/18/2022

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	EP	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	02020429.3 	 	1 293 481	 	09/11/02	 	09/14/01	 	02/21/07	 	Issued.	 	09/11/2022
	AT	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	20020020429T	 	1 293 481	 	09/11/02	 	09/14/01	 	02/21/07	 	Issued.	 	09/11/2022
	DE	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	20020020429T	 	1 293 481	 	09/11/02	 	09/14/01	 	02/21/07	 	Issued.	 	09/11/2022
	DE	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	20026018256T	 	1 293 481	 	09/11/02	 	09/14/01	 	02/21/07	 	Issued	 	09/11/2022
	ES	 	Electrolytic cell for producing charged anode water suitable for surface cleaning or treatment,
    and method for producing same and use of the same	 	20020020429T	 	1 293 481	 	09/11/02	 	09/14/01	 	02/21/07	 	Issued	 	09/11/2022
	US	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	60/533,583	 	 	 	12/30/03	 	 	 	 	 	Expired	 	 

 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	US	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	10/862,092 	 	 	 	06/04/04	 	12/30/03	 	 	 	Pending	 	 
	US	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	10/916,278 	 	 	 	08/11/04	 	12/30/03	 	 	 	Pending	 	 
	US	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	10/916,566 	 	 	 	08/11/04	 	12/30/03	 	 	 	Pending	 	 
	PCT

         
	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	PCT/US04/043961	 	 	 	12/30/04	 	12/30/03	 	 	 	Expired	 	 
	CN	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	200480002201	 	 	 	12/30/04	 	12/30/03	 	 	 	Pending	 	 
	JP

         
	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	547576/2006	 	5528657	 	12/30/04	 	12/30/03	 	04/25/14	 	Issued	 	12/30/2024
	KR

         
	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	10-2006-7015435	 	10-1249639	 	12/30/04	 	12/30/03	 	03/26/13	 	Issued	 	12/30/2024
	IN	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	4188/DELNP/2005	 	249157

         
	 	12/30/04	 	12/30/03	 	10/05/11	 	Issued.	 	12/30/2024
	MX	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	PA/a/2005/009960	 	319100	 	12/30/04	 	12/30/03	 	04/04/14	 	Issued.	 	12/30/2024

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	CA	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	2,553,943	 	2,553,943 C	 	12/30/04	 	12/30/03	 	02/11/14	 	Issued.	 	12/30/2024
	AU	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	2004311432	 	 	 	12/30/04	 	12/30/03	 	 	 	Abandoned	 	 
	AU	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	2011200390	 	2011200390	 	12/30/04*	 	12/30/03	 	 09/12/13	 	Issued.	 	12/30/2024
	EP	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	04815950.3	 	 	 	12/30/04	 	12/30/03	 	 	 	Pending.	 	12/30/2024
	EP	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	10012683.8	 	 	 	12/30/04	 	12/30/03	 	 	 	Pending.	 	12/30/2024
	HK	 	Oxidative potential water solution, processes for producing same and methods of using the
    same	 	07103435.0 	 	 	 	12/30/04	 	12/30/03	 	 	 	Pending.	 	12/30/2024
	US	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	60/664,361	 	 	 	03/23/05	 	03/23/05	 	 	 	Expired.	 	 
	US	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	60/730,743	 	 	 	10/27/05	 	10/27/05	 	 	 	Expired.	 	 
	US	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	60/760,557	 	 	 	01/20/06	 	01/20/06	 	 	 	Expired.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	US	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	11/388,912	 	8,323,252	 	03/23/06	 	03/23/05	 	12/04/12	 	Issued. 580 days of PTA.	 	10/24/2027
	PCT	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	PCT/US06/11252	 	 	 	03/23/06	 	03/23/05	 	 	 	Expired.	 	 
	EP	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	06739816.4	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	CN	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	200680013613.2	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	IN	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	8161/DELNP/2007	 	 	 	03/23/06	 	03/23/05	 	 	 	Abandoned.	 	 
	KR	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	10-2007-7024246	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	JP	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	503291/2008 	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	CA	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	2,602,522	 	2,602,522	 	03/23/06	 	03/23/05	 	09/09/14	 	Issued.	 	03/23/2026
	AU	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	2006226750	 	2006226750	 	03/23/06	 	03/23/05	 	11/01/12	 	Issued.	 	03/23/2026

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	MX	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	MX/a/2007/011709	 	304153	 	03/23/06	 	03/23/05	 	10/09/12	 	Issued.	 	03/23/2026
	BR	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	PI0609429-5	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	HK	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	08106473.5	 	 	 	03/23/06	 	03/23/05	 	 	 	Abandoned.	 	 
	HK	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	08106484.2	 	 	 	03/23/06	 	03/23/05	 	 	 	Abandoned.	 	 
	HK	 	Method of treating diabetic foot ulcers using oxidative reductive potential water solution	 	08106689.5	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	US	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	60/667,101	 	 	 	03/31/05	 	03/31/05	 	 	 	Expired.	 	 
	US	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	11/388,930	 	8,840,873	 	03/23/06	 	03/23/05	 	09/23/14	 	Issued. TD over US 10/916,278 (pending); 10/916,566 (pending) (06/04/04). 1635 days of PTA	 	06/24/2024 (but can be reduced based on terminal disclaimer once those cases issue as patents)
    
	PCT	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	PCT/US06/11251	 	 	 	03/23/06	 	03/31/05	 	 	 	Expired.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	EP	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	06739815.6	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	CN	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	200680013725.8	 	101163492	 	03/23/06	 	03/23/05	 	01/30/13	 	Issued.	 	03/23/2026
	IN	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	8160/DELNP/2007	 	 	 	03/23/06	 	03/23/05	 	 	 	Abandoned.	 	 
	KR	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	10-2007-7024245	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	JP	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	503290/2008	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	CA	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	2,602,411	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 
	AU	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	2006226749	 	2006226749	 	03/23/06	 	03/23/05	 	11/01/12	 	Issued.	 	03/23/2026
	MX	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	MX/a/2007/011706	 	304152	 	03/23/06	 	03/23/05	 	10/09/12	 	Issued.	 	03/23/2026
	BR	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	PI 0609711-1	 	 	 	03/23/06	 	03/23/05	 	 	 	Pending.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	HK	 	Method of Treating Second and Third Degree Burns Using Oxidative Reductive Potential Water	 	08106681.3	 	1116340	 	03/23/06	 	03/23/05	 	10/11/13	 	Issued.	 	03/23/2026
	US	 	Method of using oxidative reductive potential water solution in dental applications	 	60/676,883	 	 	 	05/02/05	 	05/02/05	 	 	 	Expired.	 	 
	US	 	Method of using oxidative reductive potential water solution in dental applications	 	11/416,091	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 
	PCT	 	Method of using oxidative reductive potential water solution in dental applications	 	PCT/US06/16856	 	 	 	05/02/06	 	05/02/05	 	 	 	Expired.	 	 
	EP

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	06752104.7	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 
	CN

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	200680019804.X	 	101189017	 	05/02/06	 	05/02/05	 	04/03/13	 	Issued.	 	05/02/2026
	IN

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	9318/DELNP/2007	 	 	 	05/02/06	 	05/02/05	 	 	 	Abandoned.	 	 
	BR

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	PI0610901-2	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 
	CA

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	2,606,734	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	MX

         
	 	Method of using oxidative reductive potential water solution in dental applications	 	MX/a/2007/013774	 	317267	 	05/02/06	 	05/02/05	 	01/29/14	 	Issued.	 	05/02/2026
	JP	 	Method of using oxidative reductive potential water solution in dental applications	 	510139/2008	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending	 	 
	KR	 	Method of using oxidative reductive potential water solution in dental applications	 	10-2007-7028020	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 
	AU	 	Method of using oxidative reductive potential water solution in dental applications	 	2006242175	 	 	 	05/02/06	 	05/02/05	 	 	 	Abandoned.	 	 
	HK	 	Method of using oxidative reductive potential water solution in dental applications	 	08113022.7 	 	1123484	 	05/02/06	 	05/02/05	 	01/10/14	 	Issued.	 	05/02/2026
	AU	 	Method of using oxidative reductive potential water solution in dental applications	 	2012241151	 	 	 	12/30/04	 	12/30/03	 	09/12/13	 	Pending	 	 
	US	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	60/760,635	 	 	 	01/20/06	 	01/20/06	 	 	 	Expired.	 	 
	US	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	11/656,328	 	8,147,444	 	01/22/07	 	01/20/06	 	04/03/12	 	Issued. No PTA.	 	01/22/2027
	PCT	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	PCT/US07/060860	 	 	 	01/22/07	 	01/20/06	 	 	 	Expired.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	EP	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	07717981.0 	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	CN	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	200780009873.7	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	IN	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	7025/DELNP/2008	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	KR	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	10-2008-7020291 	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	JP	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	551573/2008	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	CA	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	2,637,197 	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	MX	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	MX/a/2008/009302	 	310536	 	01/22/07	 	01/20/06	 	06/14/13	 	Issued.	 	01/22/2027
	BR	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	07006676-7	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	AU	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	2007205863	 	2007205863	 	01/22/07	 	01/20/06	 	10/03/13	 	Issued.	 	01/22/2027

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	HK	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	09108793.3	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	US	 	Methods of treating or preventing peritonitis with oxidative reductive potential water solution	 	13/436,288	 	8,834,445	 	03/30/12	 	01/20/06	 	09/16/14	 	Issued. 0 days of PTA	 	01/22/2027
	US	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	60/760,567	 	 	 	01/20/06	 	01/20/06	 	 	 	Expired.	 	 
	US	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	11/656,088	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	PCT	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	PCT/US07/060856	 	 	 	01/22/07	 	01/20/06	 	 	 	Expired.	 	 
	EP	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	07718192.3	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	CN	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	200780009773.4	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	IN	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	7024/DELNP/2008	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	KR	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	10-2008-7020289	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	JP	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	551571/2008	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	CA	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	2,637,178	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	MX	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	MX/a/2008/009234	 	312635	 	01/22/07	 	01/20/06	 	08/26/13	 	Issued.	 	01/22/2027
	BR	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	PI0706677-5 	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	AU	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	2007205861	 	2007205861	 	01/22/07	 	01/20/06	 	08/22/13	 	Issued.	 	01/22/2027
	HK	 	Methods of preventing or treating sinusitis with oxidative reductive potential water solution	 	09108882.5	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	US	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	60/760,645	 	 	 	01/20/06	 	01/20/06	 	 	 	Expired.	 	 
	US	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	11/656,087	 	 	 	01/22/07	 	01/20/06	 	 	 	Abandoned.	 	 

 

 

    	 

    	 

    

 

Oculus
Patent Portfolio – Updated December 12, 2014

 

	COUNTRY	 	TITLE	 	APPLICATION NO.	 	PATENT NO. 	 	FILING

    DATE	 	PRIORITY

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF

    ISSUED)	 	STATUS	 	EXPIRATION

    DATE
	PCT	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	PCT/US07/060854	 	 	 	01/22/07	 	01/20/06	 	 	 	Expired.	 	 
	EP	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	07718160.0	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	CN	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	200780009789.5	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	IN	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	7023/DELNP/2008	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	KR	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	10-2008-7020287	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 
	JP	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	551570/2008	 	5449780	 	01/22/07	 	01/20/06	 	01/10/14	 	Issued.	 	01/22/2027
	CA	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	2,637,175	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 

    	 

    	 

    

 

 

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	MX	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	MX/a/2008/009235	 	309802	 	01/22/07	 	01/20/06	 	05/21/13	 	Issued.	 	01/22/2027	 
	BR	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	PI0706671-6	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 	 
	AU	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	2007205860	 	2007205860	 	01/22/07	 	01/20/06	 	05/16/13	 	Issued.	 	01/22/2027	 
	HK	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	09108800.4	 	 	 	01/22/07	 	01/20/06	 	 	 	Pending.	 	 	 
	US	 	Methods of Treating Inflammation and Hypersensitivity With Oxidative Reductive Potential
    Water Solution	 	12/643,191	 	 	 	12/21/09	 	01/20/06	 	 	 	Pending.	 	 	 
	US	 	Methods of Treating or Preventing Biofilm Associated Infections with Free Available Chlorine
    Water	 	61/139,972	 	 	 	12/22/08	 	12/22/08	 	 	 	Expired.	 	 	 
	US	 	Methods of Treating or Preventing Biofilm Associated Infections with Free Available Chlorine
    Water	 	12/645,419	 	 	 	12/22/09	 	12/22/08	 	 	 	Pending.	 	 	 

 

 

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION 

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	PCT	 	Methods of Treating or Preventing Biofilm Associated Infections with Free Available Chlorine
    Water	 	PCT/US09/69345	 	 	 	12/22/09	 	12/22/08	 	 	 	Expired.	 	 	 
	EP	 	Methods of Treating or Preventing Biofilm Associated Infections with Free Available Chlorine
    Water	 	09796575.0	 	 	 	12/22/09	 	12/22/08	 	 	 	Pending.	 	 	 
	US	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	61/177,275	 	 	 	05/11/09	 	05/11/09	 	 	 	Expired.	 	 	 
	PCT	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	PCT/US10/34238	 	 	 	05/10/10	 	05/11/09	 	 	 	Expired.	 	 	 
	US	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	13/320,225 	 	 	 	05/10/10	 	05/11/09	 	 	 	Pending.	 	 	 
	CN	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	201080027346.0 	 	 	 	05/10/10	 	05/11/09	 	 	 	Pending.	 	 	 
	CA	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	2,761,710	 	 	 	05/10/10	 	05/11/09	 	 	 	Pending.	 	 	 

 

 

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	EP	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	10775333.7 	 	 	 	05/10/10	 	05/11/09	 	 	 	Pending.	 	 	 
	IN	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	9597/DELNP/2011 	 	 	 	05/10/10	 	05/11/09	 	 	 	Abandoned.	 	 	 
	MX	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	MX/A/2011/013296	 	 	 	05/10/10	 	05/11/09	 	 	 	Pending.	 	 	 
	AU	 	Methods of Treating or Preventing Influenza Associated Illnesses with Oxidative Reductive
    Potential Water Solutions	 	2010247866 	 	 	 	05/02/06	 	05/02/05	 	 	 	Pending.	 	 	 
	US	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	60/906,939	 	 	 	03/13/07	 	03/13/07	 	 	 	Expired.	 	 	 
	PCT	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	PCT/US08/56919 	 	 	 	03/13/08	 	03/13/07	 	 	 	Expired.	 	 	 
	EP	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	08732167.5	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	CN	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	200880013108.7	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 

  

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	HK	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	10106353.6	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	IN	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	5841/DELNP/2009	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	JP	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	553790/2009	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	KR	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	10-2009-7020066	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	AU	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	2008224968	 	2008224968	 	03/13/08	 	03/13/07	 	12/05/13	 	Issued.	 	03/13/2028	 
	BR	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	PI0808856-0	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	MX	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	MX/a/2009/009760	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	CA	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	2,680,483	 	 	 	03/13/08	 	03/13/07	 	 	 	Pending.	 	 	 
	US	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	12/531,276	 	8,784,900	 	03/13/08

    371 (03/13/08)	 	03/13/07	 	07/22/14	 	Issued. 445 days of PTA. 	 	06/01/2029	 

  

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION 

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	US	 	Antimicrobial solutions containing dichloride monoxide and methods of making and using the
    same	 	14/336,575	 	 	 	07/21/14	 	03/13/07	 	 	 	Pending	 	 	 
	US	 	Method and Apparatus for Treating a Wound	 	61/058,208	 	 	 	06/03/08	 	06/03/08	 	 	 	Expired	 	 	 
	US	 	Method and Apparatus for Treating a Wound	 	12/477,792	 	 	 	06/03/09	 	06/03/08	 	 	 	Pending.	 	 	 
	PCT	 	Method and Apparatus for Treating a Wound	 	PCT/US2009/046168	 	 	 	06/03/09	 	06/03/08	 	 	 	Expired.	 	 	 
	US	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	61/268,764	 	 	 	06/15/09	 	06/15/09	 	 	 	Expired.	 	 	 
	PCT	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	PCT/US10/38697	 	 	 	06/15/10	 	06/15/09	 	 	 	Expired.	 	 	 
	US	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	13/378,659	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	CN	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	201080033620.5 	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	BR	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	PI10118861	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	MX	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	MX/A/2011/013682	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	KR	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	10-2012-7000196	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	JP	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	516208/2012	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	CA	 	Solution Containing Hypochlorous Acid and Methods of Using Same	 	CA 2,765,696 	 	 	 	06/15/10	 	06/15/09	 	 	 	Pending.	 	 	 
	US	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	61/230,023	 	 	 	07/30/09	 	07/30/09	 	 	 	Expired.	 	 	 
	PCT	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	PCT/US2010/043978	 	 	 	07/30/10	 	07/30/09	 	 	 	Expired.	 	 	 
	US	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	13/387,923	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	CN	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	201080039873.3	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	BR	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	PI1200689.1	 	 	 	07/30/09	 	07/30/09	 	 	 	Pending.	 	 	 

  

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	MX	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	MX/A/2012/001415	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	CA	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	2,769,644  	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	AU	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	2010278812	 	 	 	12/05/02	 	12/05/01	 	 	 	Pending.	 	 	 
	EP	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	EP 10805132.7 	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	HK	 	Hydrogel Formulation Comprising Oxidative Reductive Potential Water	 	12112598.7	 	 	 	07/30/10	 	07/30/09	 	 	 	Pending.	 	 	 
	US	 	Stabilized Hypochlorous Acid Solution And Use Thereof	 	61/826,382	 	 	 	05/22/13	 	05/22/13	 	 	 	Expired.	 	 	 
	PCT	 	Stabilized Hypochlorous Acid Solution And Use Thereof	 	PCT/US2014/039202	 	 	 	05/22/14	 	05/22/13	 	 	 	Expired.	 	 	 
	US	 	Methods Of Treating Polycystic Ovarian Syndrome Using Chlorogenic Acid	 	61/680,769	 	 	 	08/08/12	 	08/08/12	 	 	 	Expired.	 	 	 
	US	 	Methods of treating polycystic ovarian syndrome using chlorogenic acid	 	13/960,999	 	 	 	08/07/13	 	08/08/12	 	 	 	Pending.	 	 	 

  

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION 

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	PCT	 	Methods Of Treating Polycystic Ovarian Syndrome Using Chlorogenic Acid	 	PCT/US2013/053918

         
	 	 	 	08/07/13	 	08/08/12	 	 	 	Expired.	 	 	 
	US	 	Methods Of Treating Polycystic Ovarian Syndrome Using Chlorogenic Acid	 	14/248,064	 	 	 	04/08/14	 	04/08/14	 	 	 	Pending.	 	 	 
	JP	 	Pure Water Electrolytic Cell Provided With Intermediate Chamber	 	03-215471	 	3236315	 	08/27/91	 	 	 	12/21/93	 	Issued. Expired. 	 	08/27/2011	 
	JP	 	Liquid Coexisting Hydrogen Ion Or Hydroxide Ion With Oxidizing-Reducing Material By Electrolyzing
    Pure Water And Its Production	 	03-346494	 	3247134	 	12/27/91	 	 	 	 	 	Issued. Expired.	 	12/27/2011	 
	JP	 	Pure Water Electrolytic Bath Provided With Intermediate Room	 	2000-0249261

         
	 	3299250	 	08/21/00	 	 	 	04/10/01	 	Issued.	 	08/21/2020	 
	JP	 	Washing Water In Which Hydrogen Ions Or Hydroxy Ions And Oxidation-Reduction Substance Due
    To Electrolysis Of Pure Water Coexist And Manufacturing Method Thereof 	 	2001-0168807

         
	 	3338435	 	06/04/01	 	 	 	02/26/02	 	Issued.	 	06/04/2021	 
	JP	 	Method For Producing Water And Water Obtained	 	1994-0139190 	 	3396853	 	06/21/94	 	 	 	04/14/03	 	Issued. Expired.	 	06/21/2014	 

 

 

    	 

    	 

    

  

	COUNTRY	 	TITLE	 	APPLICATION
    NO.	 	PATENT
    NO.	 	FILING

    DATE	 	PRIORITY
    

    DATE	 	ISSUE

    DATE/

    EXPIRATION

    DATE

    (IF ISSUED)	 	STATUS	 	EXPIRATION

    DATE	 
	JP	 	Method For Producing Water Including More Excessive Hydrogen Ions Or Hydroxide Ions Than
    Counter Ions And Water Thus Obtained	 	1993-0334572	 	3458341	 	12/28/93	 	07/12/93	 	03/20/95	 	Issued. Expired.	 	07/12/2013. 	 
	JP	 	Electrolyzer And Electrolyzing Method	 	09-318775	 	3952228 	 	11/19/1997	 	—	 	06/08/99	 	Issued.	 	11/19/2017	 
	JP	 	Production Method Of Electrolytic Water, Washing Water And Washing Method	 	2000-003647	 	4462513

         
	 	01/12/2000	 	—	 	05/12/10	 	Issued.	 	01/12/2020	 
	JP	 	Method And Apparatus For Producing Sterilized Water	 	08-292519 	 	 	 	 	 	 	 	 	 	Lapsed.	 	 	 

 

    	 

    	 

    

 

Trademarks

 

[Oculus
currently holds the trademark for Ruthigen and the Ruthigen logo. Ruthigen retains rights to these marks according to the separation
agreement; however, Oculus has not signed the Assignment Agreement as of 3/10/15.]

 

    	 

    	 

    

 

	Country	 	MWE
    Ref.

    No.	 	Trademark	 	Status	 	App.
    No.	 	Filing

    Date	 	Reg.
    No.	 	Reg.

    Date
	Australia	 	083277-0051	 	PULMATRIX	 	Registered	 	1297086	 	1-May-09	 	1297086	 	7-Sep-09
	Australia	 	083277-0189	 	iSPERSE	 	Registered	 	1428406	 	1-Jun-11	 	1428406	 	1-Jun-11
	Canada	 	083277-0045	 	PULMATRIX	 	Allowed	 	1436752	 	1-May-09	 	 	 	 
	Canada	 	083277-0185	 	iSPERSE	 	Allowed	 	1529980	 	1-Jun-11	 	 	 	 
	China (People's Republic)	 	083277-0047	 	PULMATRIX	 	Registered	 	7503737	 	4-May-09	 	7503737	 	7-Apr-11
	China (People's Republic)	 	083277-0048	 	PULMATRIX	 	Registered	 	7503736	 	4-May-09	 	7503736	 	7-May-11
	China (People's Republic)	 	083277-0186	 	iSPERSE	 	Registered	 	9557497	 	2-Jun-11	 	9557497	 	28-Aug-12
	European Community	 	083277-0184	 	iSPERSE	 	Registered	 	10016434	 	2-Jun-11	 	10016434	 	27-Dec-11
	India	 	083277-0049	 	PULMATRIX	 	Registered	 	1813425	 	1-May-09	 	1813425	 	24-Feb-11
	India	 	083277-0187	 	iSPERSE	 	Pending	 	2154242	 	3-Jun-11	 	 	 	 
	Japan	 	083277-0052	 	PULMATRIX	 	Registered	 	2009-033357	 	1-May-09	 	5392167	 	18-Feb-11
	Japan	 	083277-0190	 	iSPERSE	 	Registered	 	2011-37780	 	2-Jun-11	 	5435671	 	2-Sep-11
	Korea, Republic of	 	083277-0050	 	PULMATRIX	 	Registered	 	40-2009-20429	 	4-May-09	 	828164	 	30-Jun-10
	Korea, Republic of	 	083277-0188	 	iSPERSE	 	Registered	 	40-2011-31325	 	9-Jun-11	 	40-0926855	 	11-Jul-12
	United States of America	 	083277-0012	 	PULMATRIX	 	Registered	 	77/607003	 	4-Nov-08	 	4219815	 	9-Oct-12
	United States of America	 	083277-0020	 	PULMATRIX	 	Registered	 	77/606997	 	4-Nov-08	 	4194890	 	21-Aug-12
	United States of America	 	083277-0404	 	PULMATRIX (LOGO DESIGN) #2	 	Allowed	 	86/183025	 	3-Feb-14	 	 	 	 
	United States of America	 	083277-0398	 	iSPERSE #2	 	Allowed	 	86/150908	 	23-Dec-13	 	 	 	 
	United States of America	 	083277-0011	 	EXHALAIR	 	Registered	 	77/607013	 	4-Nov-08	 	4223613	 	16-Oct-12

    	 

    	 

    

 

EXHIBIT
E

 

BORROWER’S
DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

 

	 

        Institution Name and 

        Address
	 	Account Number	 	Name of Account 

    Owner
	Comerica Bank

        226 Airport Parkway

        San Jose, CA 95110

        (408) 451-2140
	 	1893954030	 	Pulmatrix Inc.2

    (operating account)
	 	 	 	 	 
	Comerica Bank

        226 Airport Parkway

        San Jose, CA 95110

        (408) 451-2140
	 	1894064524	 	Pulmatrix Inc.2

     (restricted funds)

 

 

2 This bank account is owned by Pulmatrix Inc. on a pre-Merger basis.

 

    	 

    	 

    

 

EXHIBIT
F

 

FORM OF

COMPLIANCE
CERTIFICATE

 

Hercules Technology Growth Capital, Inc. (as “Agent”)

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

 

Reference is made
to that certain Loan and Security Agreement dated June 11, 2015 and the Loan Documents (as defined therein) entered into in connection
with such Loan and Security Agreement all as may be amended from time to time (hereinafter referred to collectively as the “Loan
Agreement”) by and among the several banks and other financial institutions or entities from time to time party thereto
(collectively, “Lender”), Hercules Technology Growth Capital, Inc., as agent for Lender (“Agent”),
and [●], as Borrower (the “Company”). 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, 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 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, after giving effect in all cases to any standard(s) of materiality contained in the Loan Agreement
as to such representations and warranties.

 

	REPORTING REQUIREMENT	REQUIRED	CHECK IF

    ATTACHED
	 	 	 
	Interim Financial Statements	Monthly within 30 days	 
	 	 	 
	Interim Financial Statements	Quarterly within 30 days	 
	 	 	 
	Audited Financial Statements	FYE within 150 days	 

 

The undersigned further
certifies that the above financial statements are prepared in accordance with GAAP (except for the absence of footnotes with respect
to unaudited financial statements and subject to normal year-end audit adjustments) and are consistent from one period to another.

 

Very Truly Yours,

 

    	 

    	 

    

 

 

	 	[●]	 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Its:	 

 

    	 

    	 

    

 

EXHIBIT
G

 

FORM OF

JOINDER
AGREEMENT

 

This Joinder
Agreement (the “Joinder Agreement”) is made and dated as of [●], 2015, and is entered into by
and between [●], a [●] corporation (“Joining Party”), and HERCULES TECHNOLOGY GROWTH CAPITAL, INC.,
a Maryland corporation (as “Agent”).

 

RECITALS

 

A. Joining Party’s
Affiliate, which is now known as Pulmatrix Operating Company, Inc., a Delaware corporation (the “Company”),
has entered into that certain Loan and Security Agreement dated June 11, 2015 with the several banks and other financial institutions
or entities from time to time party thereto as lender (collectively, the “Lender”) and Agent, as such agreement
may be amended (the “Loan Agreement”), together with the other agreements executed and delivered in connection
therewith.

 

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

 

AGREEMENT

 

NOW THEREFORE, Joining
Party 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,
                                         Joining Party shall be bound by the terms and conditions of the Loan Agreement to the
                                         same extent as if it were the Borrower (as defined in the Loan Agreement) under the Loan
                                         Agreement, mutatis mutandis (and pursuant hereto Joining Party confirms and agrees
                                         each representation, warranty, covenant, agreement and obligation as a Borrower under
                                         the Loan Agreement); provided however, that (a) with respect to (i) Section
                                         5.1 of the Loan Agreement, Joining Party 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 Joining Party arising
                                         under or related to the Loan Agreement or the other agreements executed and delivered
                                         in connection therewith, (c) if Joining Party is covered by the Company’s insurance,
                                         Joining Party shall not be required to maintain separate insurance or comply with the
                                         provisions of Sections 2.5, 6.1 and 6.2 of the Loan Agreement, and [(d) as long as the
                                         Company satisfies the requirements of Section 7.1 of the Loan Agreement, Joining Party
                                         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 agreements executed and delivered in connection therewith,
                                         those duties, responsibilities or obligations shall flow only to the Company and not
                                         to Joining Party or any other Person (as defined in the Loan Agreement). By way of example
                                         (and not an exclusive list): (i) Agent’s providing notice to the Company in accordance
                                         with the Loan Agreement or as otherwise agreed among the Company, Agent and Lender shall
                                         be deemed provided to Joining Party; (ii) a Lender’s providing an Advance to the
                                         Company shall be deemed an Advance to Joining Party; and [(iii) Joining Party shall have
                                         no right to request an Advance or make any other demand on Lender.]

 

    	 

    	 

    

 

		3.	Joining Party 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. [NTD: To be excluded from
                                         Joinder Agreement Executed by Parent Company.]

 

		4.	Joining Party 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.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

    	 

    	 

    

 

[SIGNATURE PAGE TO
JOINDER AGREEMENT]

 

Joining
Party:

 

_________________________________.

 

	 	By:	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 
	 	Address:	 	 
	 	 	 	 
	 	Telephone: 	 	 	 
	 	Facsimile: 	 	 	 

 

AGENT:

 

HERCULES
TECHNOLOGY GROWTH CAPITAL, INC.

	 	By:	 	 
	 	Name: 	 	 
	 	Title: 	 	 

 

	 	Address:
	 	400 Hamilton Ave., Suite 310
	 	Palo Alto, CA 94301
	 	Facsimile: 650-473-9194
	 	Telephone: 650-289-3060

 

    	 

    	 

    

 

EXHIBIT
H

 

FORM OF

ACH DEBIT
AUTHORIZATION AGREEMENT

 

Hercules Technology Growth Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

 

Re: Loan and Security Agreement
dated June 11, 2015 (the “Agreement”) by and among Pulmatrix Inc. (“Borrower”) and Hercules
Technology Growth Capital, Inc., as agent (“Company”), and the lenders party thereto (collectively, the “Lender”)

 

In connection with the above referenced
Agreement, 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 Borrower’s account indicated below. Borrower authorizes the depository institution named below to debit to such
account.

 

	Depository Name	Branch
	 	 
	cOMERICA bANK	226 Airport Parkway
	 	 
	
        City
	
        State and Zip Code

	 	 
	sAN
        jOSE	cALIFORNIA 95110
	 	 
	Transit/ABA Number	
        Account Number 

        

	 	 
	 	1894064524

 

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

 

	 	 	 	 
	(Borrower)(Please Print)	 
	 	 
	By:	 	 	 
	 	 	 	 
	Date:	 	 	 
	 	 	 	 

    	 

    	 

    

 

EXHIBIT
I

 

FORM
OF

CONVERSION
ELECTION NOTICE

 

[INSERT DATE]

 

[INSERT ADDRESSEE]

 

Reference
is made to that certain Loan and Security Agreement dated June 11, 2015 and all ancillary documents entered into in connection
with such Loan and Security Agreement all as may be amended from time to time, (hereinafter referred to collectively as the “Loan
Agreement”) among Hercules Technology Growth Capital, Inc., agent, the lenders party thereto and Borrower (as defined
in the Loan Agreement). All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement.

 

[Borrower/Lender]
hereby irrevocably elects [to make/to receive] the Principal Installment Payment in the amount of $[●] due on [●]
(the “Delivery Date”) in shares of Common Stock in accordance with Section 2.5 of the Loan Agreement. The number
of shares of Common Stock to be delivered to Lender, on or prior to the Delivery Date, is [●], which amount was determined
in accordance with Section 2.5 of the Loan Agreement. The stock certificates shall be delivered free and clear of any restrictive
legends.

 

[Borrower/Lender]
hereby represents, warrants and certifies to [Lender/Borrower] that, as of the date hereof, all of the Conversion Conditions applicable
to [Borrower/Lender] have been satisfied. Borrower/Lender] acknowledges and agrees that its right [to pay/to receive] the Principal
Installment Payment in Common Stock in accordance with this Conversion Election Notice is subject to the satisfaction of
all applicable Conversion Conditions on the Delivery Date and, to the extent any applicable Conversion Conditions are not satisfied
on the Delivery Date, [Borrower/Lender] shall [pay/receive] the Principal Installment Payment in cash.

 

	 	 Sincerely, 
	 	 
	 	[BORROWER/LENDER] 
	 	 
	 	By:	 
	 	 
	 	Name:	 
	 	 
	 	Its:

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