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  Exhibit 10.15    
    

 
  LOAN AND SECURITY AGREEMENT    

          THIS
LOAN AND SECURITY AGREEMENT is made and dated as of August 19, 2014 and is entered into by and between CERECOR INC., a Delaware
corporation, and each of its Domestic Subsidiaries (hereinafter collectively referred to as the "Borrower"), the several banks and other financial institutions or entities from time to time parties to
this Agreement (collectively, referred to as "Lender") and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent for itself and the Lender
(in such capacity, the "Agent"). 

 
 

  RECITALS    
    

          A.      Borrower
has requested Lender to make available to Borrower a term loan in an aggregate principal amount of up to Seven Million Five Hundred Thousand Dollars
($7,500,000.00) (the "Term Loan"); and 

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

 
 

  AGREEMENT    
    

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

 
 

  SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION

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

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

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

          "Advance(s)"
means a Term Loan Advance. 

          "Advance
Date" means the funding date of any Advance. 

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

          "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 June 1, 2015; provided however, if the Interest Only Extension Conditions are satisfied, then March 1, 2016. 

          "Assignee"
has the meaning given to it in Section 11.13. 

          "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. 

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

          "Cash"
means all cash 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 fifty percent (50%) of the voting power of the surviving entity of such transaction or series of related transactions (or the parent of such surviving entity if such surviving
entity is wholly owned by such parent), in each case without regard to whether Borrower 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 fifty percent (50%) of the aggregate liquidation preference of
all shares of Preferred Stock of Borrower; provided, however, an Initial Public Offering shall not constitute a Change in Control. 

          "Claims"
has the meaning given to it in Section 11.10. 

          "Closing
Date" means the date of this Agreement. 

          "Collateral"
means the property described in Section 3. 

          "Commitment
Fee" means $35,000, which fee has been received by Lender, and shall be deemed fully earned on the Closing Date regardless of the early termination of this Agreement. 

          "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. 

          "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. 

          "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. 

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          "Domestic
Subsidiary" means any Subsidiary that is not a Foreign Subsidiary. 

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

          "Excluded
Property" means any property, right or asset held by the Borrower to the extent that a grant of a security interest therein constitutes a breach or default under or results in
the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except to the extent that the
term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under
Section 9406, 9407, 9408 or 9409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the U.S. Bankruptcy Code) or
principles of equity; provided, however, that such security interest shall attach immediately at such time as such prohibition, breach, default or termination is no longer applicable or is waived, and
to the extent severable, shall attach immediately to any portion of the Collateral that does not result in such consequences. 

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

          "Facility
Charge" means $75,000, representing one percent (1.0%) of Maximum Term Loan Amount. 

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

          "Foreign
Subsidiary" means any Subsidiary other than a Subsidiary organized under the laws of any state or other jurisdiction within the United States. 

          "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 due within sixty (60) days), 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. 

          "Initial
Public Offering" means the initial firm commitment underwritten offering of Borrower's common stock pursuant to a registration statement under the Securities Act of 1933, as
amended, filed with and declared effective by the Securities and Exchange Commission. 

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

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

          "Interest
Only Extension Conditions" shall mean satisfaction of each of the following events: (a) no default or Event of Default shall have occurred; and (b) Borrower
shall have received the second tranche of Borrower's Preferred Series B equity financing in an amount of at least $15,000,000 funded on at least the same terms and conditions as the closing of
the initial tranche of Borrower's Preferred Series B equity financing, or received minimum net proceeds of at least $15,000,000 from an Initial Public Offering. 

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          "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 each Subsidiary other than a Foreign 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. 

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

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

          "Loan"
means the Advances made under this Agreement. 

          "Loan
Documents" means this Agreement, the Notes (if any), the ACH Authorization, the Account Control Agreements, the Joinder Agreements, all UCC Financing Statements, the Warrant, the
Subordination Agreement (if any), 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; or (ii) the ability of
Borrower to perform the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lender to enforce any of its rights or remedies with respect to the Secured
Obligations; or (iii) the Collateral or Agent's Liens on the Collateral or the priority of such Liens. 

          "Maximum
Term Loan Amount" means Seven Million Five Hundred Thousand and No/100 Dollars ($7,500,000). 

          "Maximum
Rate" shall have the meaning assigned to such term in Section 2.3. 

          "Note(s)"
means a Term Note. 

          "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 $250,000 outstanding at any time secured by a Lien described in clause (vii) of the
defined term "Permitted Liens," provided such Indebtedness does not exceed the 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 or cash equivalents and
issued on behalf of the Borrower or a Subsidiary thereof in an amount not to exceed $250,000 at any time outstanding, (viii) Indebtedness secured by a Lien described in clause (xi) of
the defined term Permitted Liens; (ix) other Indebtedness in an amount not to exceed $250,000 at any time outstanding, and 

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(x) 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) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business ; (iv) 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; (v) Investments accepted in connection with
Permitted Transfers; (vi) 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;
(vii) 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 (vii) shall not apply to Investments of Borrower in any Subsidiary; (viii) 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; (ix) Investments consisting of relocation loans not to exceed $250,000 in the aggregate outstanding at any time and travel advances
in the ordinary course of business; (x) 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; (xi) Investments in Foreign Subsidiaries approved in advance in writing by Agent;
(xii) 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 $250,000 in the aggregate in any fiscal year; (xiii) Investments consisting of deposit accounts or securities
accounts subject to compliance with Section 7.12; and (xiv) 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 

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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 by Borrower or any of its Subsidiaries 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 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 the
insurance policies so financed and all money due Borrower thereunder (including the return of premiums and dividends) to the extent of any unpaid policy premiums or financing and not to any other
property or assets; (xii) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and
brokerage firms; (xiii) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do
not materially impair the value or marketability of the related property; (xiv) Liens on cash or cash equivalents 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
(xiv) 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) licenses and similar arrangements for the use of Intellectual Property that
could not result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete
geographical areas outside of the United States, in each case in the ordinary course of business, (iii) dispositions of worn-out, obsolete or surplus Equipment at fair market value in the
ordinary course of business, (iv) Permitted Liens and Permitted Investments, 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 Borrower's common stock. 

          "Prepayment
Charge" shall have the meaning assigned to such term in Section 2.5. 

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

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

          "Secured
Obligations" means Borrower's obligations under this Agreement and any Loan Document (but excluding 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. 

          "Subordination
Agreement" means any written subordination agreement among Borrower, Agent and the subordinating creditor thereunder regarding specific Subordinated Indebtedness, as
applicable. 

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          "Subsequent
Financing" means the closing of any Borrower financing, including without limitation a second tranche of Preferred Series B equity or Initial Public Offering, which
becomes effective after the Closing Date and results in aggregate proceeds to Borrower of at least $15,000,000. 

          "Subsidiary"
means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Borrower owns or controls 50% or more of the outstanding
voting securities, including each entity listed on Schedule 1 hereto. 

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

          "Term
Loan Advance" means any Term Loan funds advanced under this Agreement. 

          "Term
Loan Interest Rate" means for any day a floating per annum rate of interest equal to the greater of either (i) 7.95% plus the prime rate as reported in The Wall Street
Journal minus 3.25%, and (ii) 7.95%. 

          "Term
Loan Maturity Date" means August 1, 2017, but if the Interest Only Conditions are satisfied, then May 1, 2018. 

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

          "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. 

          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. 

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  SECTION 2. THE LOAN    
    

 
 
          2.1    [Intentionally Omitted.]
    

 
 
          2.2    Term Loan.
    

 
 
           (a)    Advances.
    Subject to the terms and conditions of this Agreement, Lender will severally (and not jointly) make in an amount not to exceed its respective Term Commitment, and Borrower agrees to
draw, a Term Loan Advance of $7,500,000 on the Closing Date. The aggregate outstanding Term Loan Advances shall not exceed the Maximum Term Loan Amount. 

 
 
           (b)    Advance Request.
    To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least five (5) Business Days before the Advance Date) to Agent. Lender shall fund
the Term Loan Advance in the manner requested by the Advance Request provided that each of the conditions precedent to such Term Loan Advance is satisfied as of the requested Advance Date. 

 
 
          (c)    Interest.
    The principal balance of each Term Loan Advance shall bear interest thereon from such 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 each Term Loan Advance on the first (1st) Business Day of each month, beginning the month after the Advance Date. Borrower shall repay the
aggregate principal balance of the Term Loan Advances that is outstanding on the day immediately preceding the Amortization Date, in equal monthly installments of principal and interest (mortgage
style) beginning on the Amortization Date and continuing on the first (1st) Business Day of each month thereafter until the Secured Obligations are repaid. After any change in the
effective rate hereunder, Agent shall recalculate future payments of principal and interest to fully amortize the outstanding principal amount over the remaining scheduled monthly payments hereunder
prior to the Term Loan Maturity Date. The entire principal balance of the Term Loan Advance 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 the Borrower's account as
authorized on the ACH Authorization on each payment date of all periodic obligations payable to Lender under each Term Loan Advance. 

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

 
 
          2.4    Default Interest.
    In the event any payment is not paid on the scheduled payment date, an amount equal to three percent (3%) 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 2.2(c), plus three percent (3%) per annum. In the event any 

8

 

interest
is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forth in Section 2.2(c) or
Section 2.4, as applicable. 

 
 
          2.5    Prepayment.
    At its option upon at least seven (7) Business Days prior notice to Agent, Borrower may prepay all, but not less than all, of the outstanding Advances by paying the entire
principal balance, all accrued and unpaid interest thereon, together with a prepayment charge equal to the following percentage of the Advance amount being prepaid: if such Advance amounts are prepaid
in any of the first twelve (12) months following the Closing Date, 2.0%; after twelve (12) months but prior to twenty four (24) months, 1.0% (each, a "Prepayment Charge"); and
none thereafter. Borrower agrees that the Prepayment Charge is a reasonable calculation of Lender's lost profits in view of the difficulties and impracticality of determining actual damages resulting
from an early repayment of the Advances. Borrower shall prepay the outstanding amount of all principal and accrued interest through the prepayment date and the Prepayment Charge upon the occurrence of
a Change in Control. 

 
 
          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 a charge of $187,500. Notwithstanding the required payment date of such charge, it shall be deemed earned by Lender as of the
Closing Date. 

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

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

 
 

  SECTION 3. SECURITY INTEREST    
    

          3.1     As
security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower grants to
Agent a security interest in all of Borrower's right, title, and interest in 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. Upon payment in full of the
Secured Obligations (other than inchoate indemnity obligations), Agent's Lien on and security interest in the Collateral shall terminate and be automatically released and all rights therein shall
revert to Borrower. 

          3.2     Notwithstanding
the broad grant of the security interest set forth in Section 3.1, above, the Collateral shall not include (i) any Excluded Property or
(ii) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder
thereof to vote for directors or any other matter. 

9

 
 
 

  SECTION 4. CONDITIONS PRECEDENT TO LOAN    
    

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

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

          (a)     executed
originals of the Loan Documents, 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 (i) the Loan and other transactions evidenced by the Loan Documents; and
(ii) the Warrant and transactions evidenced thereby; 

          (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 its state of incorporation and similar certificates from all other jurisdictions in which it does business and where
the failure to be qualified would have 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    All Advances.
    On each Advance Date: 

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

          (b)     The
representations and warranties set forth in Section 5 of this Agreement and in the Warrant 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. 

          (c)     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. 

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

 
 
          4.3    No Default.
    As of the Closing Date and each Advance Date, (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 could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. 

 
 

  SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER    
    

          Borrower represents and warrants that: 

 
 
          5.1    Corporate Status.
    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 

10

 

jurisdictions
in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material
Adverse Effect. 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, and Borrower's execution of the Warrant, (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 or Articles of Incorporation (as applicable), bylaws, or any, law, regulation, order, injunction,
judgment, decree or writ to which Borrower is subject and (iv) except as described on Schedule 5.3, do not violate any contract or agreement or require the consent or approval of any
other Person which has not already been obtained. The individual or individuals executing the Loan Documents and the Warrant are duly authorized to do so. 

 
 
          5.4    Material Adverse Effect.
    No event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. 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. 

 
 
          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 is 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, contains or will contain any material misstatement of fact or 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 (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, state and local tax returns that it is required to file, (b) Borrower has duly paid or fully
reserved for all taxes or installments thereof (including any interest or penalties) as and when due, which have or may become due pursuant to such returns, and (c) Borrower has paid or fully
reserved for any 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. 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 has
been made to Borrower 

11

 

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, or in the case of any proposed business, will have, all material rights with respect to Intellectual Property necessary 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 and restrictions that may be enforceable under foreign law, Borrower has the right, to the extent required to operate Borrower's
business, to freely transfer, license or assign Intellectual Property 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 used in the design, development, promotion, sale, license, manufacture, import, export, use or distribution of Borrower Products. 

 
 
          5.11    Borrower Products.
    Except as described on Schedule 5.11, no 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. 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 (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. Neither Borrower's use of its Intellectual Property nor the production and sale of Borrower Products infringes the Intellectual Property or other rights of others. 

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

 
 
          5.13    Employee Loans.
    Except for Permitted Investments of the type described in clause (viii) or (ix) of the definition thereof, Borrower has no outstanding loans to any employee, officer or
director of the Borrower nor has Borrower guaranteed the payment of any loan made to an employee, officer or director of the Borrower by a third party. 

12

 

 

 
 
          5.14    Capitalization and Subsidiaries.
    Borrower's capitalization as of the Closing Date is set forth on Schedule 5.14 annexed hereto. Borrower does not own any stock, partnership interest or other securities of any
Person, except for Permitted Investments. Attached as Schedule 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. 

 
 
          5.15    JOBS Act.
    Borrower has confidentially submitted a registration statement to the Securities and Exchange Commission under the JOBS Act for confidential, nonpublic review. 

 
 

  SECTION 6. INSURANCE; INDEMNIFICATION    
    

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

 
 
          6.2    Certificates.
    Borrower shall deliver to Agent certificates of insurance that evidence Borrower's compliance with its insurance obligations in Section 6.1 and the obligations contained in this
Section 6.2. Borrower's insurance certificate shall state Agent is an additional insured for commercial general liability, a designated payee for the key man life insurance policy, a loss payee
for all risk property damage insurance, subject to the insurer's approval, and a loss payee for property insurance and additional insured for liability insurance for any future insurance that Borrower
may acquire from such insurer. Attached to the certificates of insurance will be additional insured endorsements for liability and lender's loss payable endorsements for all risk property damage
insurance. All certificates of insurance will provide for a minimum of thirty (30) days (ten (10) days for non-payment of premium) advance written notice to Agent of cancellation or any
other change adverse to Agent's interests. Any failure of Agent to scrutinize such insurance certificates for compliance is not a waiver of any of Agent's rights, all of which are reserved. 

 
 
          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 solely 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
(excluding taxes imposed on or measured by the net income of Agent or Lender) that may be payable or determined to be payable with respect to any of the 

13

 

Collateral
or this Agreement. In no event shall any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits,
business or anticipated savings). 

 
 

  SECTION 7. COVENANTS OF BORROWER    
    

Borrower
agrees as follows: 

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

          (a)     as
soon as practicable (and in any event within 30 days) after the end of each month, unaudited interim and year-to-date financial statements as of the end of
such month (prepared on a consolidated 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 have a Material Adverse Effect, all certified
by Borrower's Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, (ii) that
they are subject to normal year end adjustments, and (iii) they do not contain certain non-cash items that are customarily included in quarterly and annual financial statements; 

          (b)     as
soon as practicable (and in any event within 45 days) after the end of each calendar quarter, unaudited interim and year-to-date financial statements as of
the end of such calendar quarter (prepared on a consolidated 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 have a Material Adverse
Effect, certified by Borrower's Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes,
and (ii) that they are subject to normal year end adjustments; as well as the most recent capitalization table for Borrower if there were any changes from the last capitalization table
provided, including the weighted average exercise price of employee stock options; 

          (c)     as
soon as practicable (and in any event within one hundred eighty (180) days) after the end of each fiscal year, unqualified audited financial statements as of
the end of such year (prepared on a consolidated 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 14 Business 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
holders of its Preferred Stock and copies of any regular, periodic and special reports or registration statements that Borrower files with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or any national securities exchange; 

          (g)     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 

14

 

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, attorney/client privileged communications, matters that present a direct conflict of interest to Agent or any Lender, such as a take-out financing proposal, and executive session
materials; and 

          (h)     financial
and business projections promptly following their approval by Borrower's Board of Directors, and in any event, within 30 days after the commencement of
Borrower's fiscal year, as well as budgets, operating plans and other financial information reasonably requested by Agent. 

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. The fiscal year of Borrower shall end on December 31. 

The
executed Compliance Certificate may be sent via facsimile to Agent at (650) 473-9194 or via e-mail to pedwards@herculestech.com. All Financial Statements required to be delivered pursuant
to clauses (a), (b) and (c) shall be sent via e-mail to financialstatements@herculestech.com with a copy to pedwards@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 Credit 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 that, such inspection and examination shall be conducted no more
often than twice every twelve (12) months unless an Event of Default has occurred. 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 protect and defend Borrower's
title to the Collateral and Agent's Lien thereon against all Persons claiming any interest adverse to Borrower or Agent other than Permitted Liens. 

 
 
          7.4    Indebtedness.
    Borrower shall not create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or
prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except for the Secured Obligations, the conversion of Indebtedness into equity securities
and the payment of cash in lieu of fractional shares in connection with such conversion. 

15

 

 
 
          7.5    Collateral.
    Borrower shall at all times keep the Collateral, the Intellectual Property and all other property and assets used in Borrower's business or in which Borrower now or hereafter holds any
interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any legal process affecting the Collateral, the
Intellectual Property, such other property and assets, or any Liens thereon, provided however, that the Collateral and such other property and assets may be subject to Permitted Liens except that
there shall be no Liens whatsoever on Intellectual Property, except for Permitted Liens described in clause (ix) of the definition thereof. 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, except for Permitted Liens described in clause (ix) of the definition thereof), 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 (i) pursuant to employee,
director or consultant stock purchase or 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, and (ii) the conversion of any of its convertible securities into equity securities pursuant to the terms of such convertible securities or otherwise in
exchange therefor, or (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 Borrower and Borrower may pay dividends solely in common stock, or (c) lend money to any employees, officers or directors or guarantee the payment of any such loans granted by
a third party in excess of $250,000 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 voluntarily or involuntarily transfer, sell, lease, license, lend or in any other manner convey any equitable, beneficial or legal
interest in any material portion of its assets. 

 
 
          7.9    Mergers or Acquisitions.
    Borrower shall not merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of
(a) a Subsidiary which is not a Borrower into another Subsidiary or into Borrower or (b) a Borrower into another Borrower), or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person. 

 
 
          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 Borrower, Agent, Lender (to the extent assessed in connection with the making of the Loan hereunder but excluding taxes on Agent's or Lender's net income) or the Collateral or upon
Borrower's ownership, possession, use, operation or disposition thereof or upon Borrower's rents, receipts or earnings arising therefrom. Borrower shall file on or before the due date therefor all
personal property tax returns in respect of the Collateral. Notwithstanding the foregoing, Borrower may contest, in good faith and by appropriate proceedings, taxes for which Borrower maintains
adequate reserves therefor in accordance with GAAP. 

 
 
          7.11    Corporate Changes.
    Neither Borrower nor any Subsidiary shall change its corporate name, legal form or jurisdiction of formation without twenty (20) days' prior written notice to Agent. Neither
Borrower nor any Subsidiary of Borrower shall suffer a Change in Control; provided, however, that 

16

 

Borrower
or any Subsidiary of the Borrower may suffer a Change in Control so long as in connection with such Change in Control the Secured Obligations (other than inchoate indemnity obligations) are
paid in full. Neither Borrower nor any Domestic Subsidiary shall relocate its chief executive office or its principal place of business unless: (i) it has provided prior written notice to
Agent; and (ii) such relocation shall be within the continental United States. Neither Borrower nor any Domestic Subsidiary shall relocate any item of Collateral (other than
(w) worn-out, obsolete or surplus Equipment, (x) sales of Inventory in the ordinary course of business, (y) relocations of Equipment having an aggregate value of up to $250,000 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. 

 
 
          7.12    Deposit Accounts.
    Neither Borrower nor any Domestic Subsidiary shall maintain any Deposit Accounts, or accounts holding Investment Property, except with respect to which Agent has an Account Control
Agreement; provided that, upon any Borrower's opening of a new Deposit Account that is subject to an Account Control Agreement in favor of Agent, Agent hereby agrees to permit such Borrower to close
any other account that has been replaced by such new Deposit Account upon written request from such Borrower and immediately following all funds in such former account have been transferred to a
Deposit Account that is subject to an Account Control Agreement in favor of Agent. 

          7.13    Borrower
shall notify Agent of each Subsidiary formed subsequent to the Closing Date and, within 15 days of formation, shall cause any such Domestic 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, such notice to be sent via facsimile to Agent. 

          7.15    [Intentionally
Omitted.] 

 
 
          7.16    Post-Closing Items.
    Borrower shall use its commercially reasonable efforts to deliver or cause to be delivered the documents listed on Schedule 7.16 on or before the corresponding dates set forth on
Schedule 7.16. 

 
 

  SECTION 8. RIGHT TO INVEST    
    

          8.1     Lender
or its assignee or nominee shall have the right, in its discretion, to participate (a) in the first tranche of Borrower's Series B financing in an
amount of up to $1,000,000 to be funded on the Closing Date, and (b) in the second tranche of Borrower's Series B financing in an amount of up to $1,000,000, on the same terms,
conditions and pricing afforded to others participating in the applicable financing. 

 
 

  SECTION 9. EVENTS OF DEFAULT    
    

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

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

17

 

 

 
 
          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 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 and 7.14), any other Loan Document
or any other agreement among Borrower, Agent and Lender, such default continues for more than ten (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 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 and 7.14,
the occurrence of such default; or 

 
 
          9.3    Material Adverse Effect.
    A circumstance has occurred that has a Material Adverse Effect; notwithstanding the foregoing, the occurrence of any of the following, in and of itself, shall not constitute a "Material
Adverse Effect" for purposes of this Section 9.3: (a) adverse results or delays in any nonclinical or clinical trial, including without limitation, the failure to demonstrate the desired
safety or efficacy or any implant or drug; (b) the denial, delay or limitation of approval of, or taking of any other regulatory action by, the United States Food and Drug Administration or any
other governmental entity with respect to any implant or drug; or (c) a change in or discontinuation of a strategic partnership or other collaboration or license arrangement; or 

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

 
 
          9.5    Insolvency.
    (A) Borrower (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., 331/3% 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) thirty (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) thirty (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, individually or in
the aggregate, of at least $500,000 (not covered by independent third party insurance as to which such liability has been accepted by such insurance carrier as of the date of such attachment, seizure,
levy or entry of judgment and such judgment remains unsatisfied, unvacated or unstayed for a period of ten (10) days after the entry thereof), or Borrower is enjoined or in any way prevented by
court order from conducting any part of its business; or 

18

 

 
 
          9.7    Other Obligations.
    The occurrence of any default under any agreement or obligation of Borrower involving any Indebtedness in excess of $250,000, or the occurrence of any default under any agreement or
obligation of Borrower that could reasonably be expected to have a Material Adverse Effect. 

 
 

  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. 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 ten (10) calendar days' prior written notice to
Borrower. Agent may require Borrower to assemble the Collateral and make it available to Agent at a place designated by Agent that is reasonably convenient to Agent and Borrower. The proceeds of any
sale, disposition or other realization upon all or any part of the Collateral shall be applied by Agent in the following order of priorities: 

First,
to Agent and Lender in an amount sufficient to pay in full Agent's and Lender's 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 any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as
a court of competent jurisdiction may direct. 

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

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

 
 
          10.4    Cumulative Remedies.
    The rights, powers and remedies of Agent hereunder shall be in addition to all rights, powers and remedies given by statute or rule of law and are cumulative. The 

19

 

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: Chief Legal Officer and Paul Edwards

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: Chief Legal Officer and Paul Edwards

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060 

	(c)
	If
to Borrower: 

CERECOR INC.

Attention:
Chief Financial Officer

400 E. Pratt Street, Suite 606

Baltimore, MD 21202

Facsimile: 443-708-0451

Telephone: 443-304-8002 

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 

20

 

respect
to the subject matter hereof or thereof (including Agent's proposal letter dated June 13, 2014 and accepted by Borrower on June 18, 2014). 

          (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, the Agent and the Borrower party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or the Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (A) forgive the principal
amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan Advance, reduce the stated rate of any interest or
fee payable hereunder) or extend the scheduled date of any payment thereof, in each case without the written consent of each Lender directly affected thereby; (B) eliminate or reduce the voting
rights of any Lender under this Section 11.3(b) without the written consent of such Lender; (C) reduce any percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release a Borrower
from its obligations under the Loan Documents, in each case without the written consent of all Lenders; or (D) amend, modify or waive any provision of Section 11.17 without the written
consent of the Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, the Lender, the Agent and all future
holders of the Loans. 

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

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

 
 
          11.6    Survival.
    All agreements, representations and warranties contained in this Agreement and the other Loan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit
of Agent and Lender and shall survive the execution and delivery of this Agreement. The indemnity obligations of Borrower in Section 6.3 shall survive until the statute of limitations with
respect to such claim or cause of action shall have run. 

 
 
          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 

21

 

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. 

 
 
          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 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. 

22

 

 

 
 
          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, provided, however, that Agent and Lender shall use their best efforts to keep such fees and expenses below $35,000. 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. 

 
 
          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 shall not be disclosed to any other Person or entity in any manner whatsoever, in whole or in part, without the prior written consent of Borrower, except that Agent and Lender may
disclose any such information: (a) to its own directors, officers, employees, accountants, counsel and other professional advisors and to its affiliates if Agent or Lender in their sole
discretion determines that any such party should have access to such information in connection with such party's responsibilities in connection with the Loan or this Agreement and, provided that such
recipient of such Confidential Information either (i) agrees to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions
that reasonably protect against the disclosure of Confidential Information; (b) if such information is generally available to the public at the time of disclosure by Agent or Lender;
(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 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 

23

 

thereon
a notation as to the portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the date to which interest shall have been last paid thereon. 

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

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

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

 
 
          11.17    Agency.
    

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

          (b)     Lender
agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so),
according to its respective Term Commitment percentages (based upon the total outstanding Term 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 the Agent in any way relating to or arising out of, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; The
agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder. 

          (c)     Agent
in Its Individual Capacity. The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Agent and the term "Lender" shall, unless otherwise expressly indicated or unless the context otherwise requires, include each such Person serving as
Agent hereunder in its individual capacity. 

24

 

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

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

	(ii)
	have
any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and

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

          (e)     The
Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Lender or as the Agent shall believe in good
faith shall be necessary, under the circumstances or (ii) in the absence of its own gross negligence or willful misconduct. 

          (f)     The
Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith,
(iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent. 

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

 
 
          11.18    Publicity.
    (a) Borrower consents to the publication and use by Agent or Lender and any of its member businesses and affiliates of (i) Borrower's name (including a brief description of
the relationship among Borrower, Agent and Lender) and logo and a hyperlink to Borrower's web site, separately or 

25

 

together,
in written and oral presentations, advertising, promotional and marketing materials, client lists, public relations materials or on its web site (together, the "Lender Publicity Materials");
(ii) the names of
officers of Borrower in the Lender Publicity Materials; and (iii) Borrower's name, trademarks or servicemarks in any news release concerning Agent or Lender. 

          (b)     Neither
Borrower nor any of its member businesses and affiliates shall, without Agent's and Lender's consent, publicize or use (i) Agent's or Lender's name
(including a brief description of the relationship among Borrower, Agent and Lender), logo or hyperlink to Agent's or Lender's 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 "Borrower Publicity Materials"); (ii) the names of officers of Agent
or Lender in the Borrower Publicity Materials; and (iii) Agent's or Lender's name, trademarks, servicemarks in any news release concerning Borrower. 

(SIGNATURES
TO FOLLOW) 

26

 

 

          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:
	

 	
 	
 CERECOR INC.
	

 	
 	
  Signature:	
 	
 

 
	 	 	 	 	Print Name: Blake M. Paterson
	 	 	 	 	Title: President & CEO

 

 Accepted
in Palo Alto, California: 

 

					
	 	 	AGENT:
	

 	
 	
 HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	

 	
 	
  By:	
 	
 

  Ben Bang, Senior Counsel
	

 	
 	
LENDER:
	

 	
 	
 HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	

 	
 	
  By:	
 	
 

  Ben Bang, Senior Counsel

 

27

 

Table
of Exhibits and Schedules 

 

			
	Exhibit A:	 	Advance Request

Attachment to Advance Request
	
 Exhibit B:	
 	
Term Note
	
 Exhibit C:	
 	
Name, Locations, and Other Information for Borrower
	
 Exhibit D:	
 	
Borrower's Patents, Trademarks, Copyrights and Licenses
	
 Exhibit E:	
 	
Borrower's Deposit Accounts and Investment Accounts
	
 Exhibit F:	
 	
Compliance Certificate
	
 Exhibit G:	
 	
Joinder Agreement
	
 Exhibit H:	
 	
ACH Debit Authorization Agreement
	

Schedule 1.1 Commitments
	Schedule 1A Existing Permitted Indebtedness
	Schedule 1C Existing Permitted Liens
	Schedule 5.10 Intellectual Property
	Schedule 5.14 Capitalization
	Schedule 7.16 Post-Closing Items

 

 28

 

 

 
 

  EXHIBIT A    
    

 
    ADVANCE REQUEST    
    

 

							
	To:	 	Agent:	 	Date:	 	August        , 2014
	

 	
 	
Hercules Technology Growth Capital, Inc. (the "Agent")

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Attn:	
 	
 	
 	
 

 

 Cerecor Inc.
("Borrower") hereby requests from Hercules Technology Growth Capital, Inc. ("Lender") an Advance in the amount of                    Dollars
($                    ) on
                    ,             (the "Advance Date") pursuant to the Loan and
Security Agreement among Borrower, Agent and Lender (the "Agreement"). Capitalized words and other terms used but not
otherwise defined herein are used with the same meanings as defined in the Agreement. 

Please:

	(a)
	Issue
a check payable to Borrower 

                                       or

	(b)
	Wire
Funds to Borrower's account 

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 have 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; 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 this representation and,
based upon such review in its reasonable business judgment, Lender may decline to fund the requested Advance. 

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

          Borrower
agrees to notify Agent promptly before the funding of the Loan if any of the matters which have been represented above shall not be true and correct on the Advance 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. 

29

 

          Executed
as of August        , 2014. 

 

					
	 
	 	BORROWER: CERECOR INC.
	 
	 	 SIGNATURE:
	 	  

 
	 
	 	 	 	TITLE:
	 
	 	 	 	PRINT NAME:

 

 30

 
 
 

  ATTACHMENT TO ADVANCE REQUEST    
    

Dated:                    

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

 

			
	Name:	 	Cerecor Inc.
	
Type of organization:	
 	
Corporation
	
State of organization:	
 	
Delaware
	
Organization file number:	
 	
 

 

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

31

 

 
 

  EXHIBIT B
  
    SECURED TERM PROMISSORY NOTE    
    

 

			
	$[       ],000,000	 	Advance Date:                          , 20[    ]

	

 	
 	
Maturity Date:                          , 20[    ]

 

           FOR
VALUE RECEIVED, CERECOR INC., a Delaware corporation, for itself and each of its Domestic Subsidiaries (the "Borrower") hereby promises to pay to the order of Hercules
Technology Growth Capital, Inc., a Maryland corporation or the holder of this Note (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
[       ] Million Dollars ($[       ],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 that certain Loan and Security Agreement dated August 19, 2014, by and among Borrower, Hercules Technology Growth
Capital, Inc., a Maryland corporation (the "Agent") and the several banks and other financial institutions or entities from time to time party thereto as lender (as the same may from time to
time be amended, modified or supplemented in accordance with its terms, the "Loan Agreement"). 

          This
Promissory Note is the Term 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 DOMESTIC SUBSIDIARIES:	 	CERECOR INC.
	

 	
 	
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:	 	Cerecor Inc.
	
Type of organization:	
 	
Corporation
	
State of organization:	
 	
Delaware
	
Organization file number:	
 	
140942445

 

           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:
Ceregen Corporation

Used during dates of: January 31, 2011 through March 17, 2011

Type of Organization:                         

State of organization:                        

Organization file Number:                          

Borrower's
fiscal year ends on December 31

Borrower's federal employer tax identification number is: 45-0705648 

          3.       Borrower
represents and warrants to Agent that its chief executive office is located at 400 E. Pratt Street, Suite 606, Baltimore, MD 21202. 

 
 

  EXHIBIT D    
    
    BORROWER'S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES    
    

The following are license agreements with respect to the proprietary rights of the Company:  

	•
	 Exclusive License Agreement, dated March 28, 2011, by and between Fells Laboratories, LLC and Johns Hopkins University,
as amended by the First Amendment dated March 21, 2014, by and between the Company and Johns Hopkins University. 

	•
	 Exclusive Patent and Know-How License Agreement for COMT Inhibitor Compound, dated March 19, 2013, by and between the Company
and Essex Chemie AG. 

	•
	 Exclusive Patent and Know-How License Agreement for NR2B Inhibitor Compound known as MK-0657, dated March 19, 2013, by and
between the Company and Essex Chemie AG. 

	•
	 Patent License Agreement, dated February 5, 2014, by and between the Company and RCT Logic, LLC. 

          The following is a list of the current patent applications related to the Company's product pipeline:

FP01  

	1.
	US
Patent Serial No. 8501816, titled "Antitussive Compositions Comprising Memantine", issued August 6, 2013;

	2.
	US
Non-provisional Patent Application Serial No. 13/933,666 titled "Antitussive Compositions Comprising Memantine", filed July 2, 2013

	3.
	PCT
Patent Application Serial No. PCT/US2013/035748, titled "Compositions and Methods for Treating Cough", filed April 9, 2013;

	4.
	US
Non-provisional Patent Application Serial No. 13/827,936 titled "Compositions and Methods for Treating Cough", filed March 14, 2013;

	5.
	U.S.
Nonprovisional Patent Application Serial # 13/272,031, titled "Antitussive Compositions Comprising Memantine," filed October 12, 2011; and

	6.
	International
applications based on PCT Patent Application Serial No. PCT/US2011/056004 titled "Antitussive Compositions Comprising Memantine," filed
October 12, 2011; Canada Application No. 2,814,194; Mexico Application No. MX/a/2013/004123. [only for US, Canada and Mexico] 

NR2B  

	1.
	US
Patent Serial No. 7053089, titled "N-substituted Nonaryl-heterocyclic NMDA/NR2B Antagonists", issued April 25, 2006 (and European issued
patents in France, United Kingdom, and Germany); and 

 

									
	Country Code

 
	 	Status 	 	Patent No.

(Appl. No.) 	 	Grant Date

(Filing Date) 	 	Expiration

Date 
	 US
	 	Granted	 	7,053,089	 	 05/30/2006	 	02/20/2022
	 
	 	 	 	 	 	 	 	+103 days
	 
	 	 	 	(10/079,452)	 	(02/20/2002)	 	 
	 
	 	 	 	 	 	 	 	+ any PTE
	 US
	 	 Lapsed
	 	 7,217,716
	 	 05/15/2007
	 	 —

	 
	 	 	 	(10/470,561)	 	(02/20/2002)	 	 
	 DE
	 	 	 	 1379520
	 	 04/25/2006
	 	 02/20/2022 + SPC

	 FR
	 	Granted,	 	(2721105.1)	 	(02/20/2002)	 	 
	 GB
	 	Opposed	 	 	 	 	 	 

 

 
	2.
	US
Patent Serial No. 7592360, titled "3-Fluoro-piperidines as NMDA/NR2B Antagonists", issued September 22, 2007 (and European issued patents in
France, United Kingdom, and Germany; also Australia, Canada, Japan, Switzerland). 

 

									
	Country Code

 
	 	Status 	 	Patent No.

(Appl. No.) 	 	Grant Date

(Filing Date) 	 	Expiration

Date 
	 US
	 	Granted	 	 7,592,360	 	 09/22/2009	 	05/28/2024
	 
	 	 	 	(10/559,153)	 	(05/28/2004)	 	+825 days
	 
	 	 	 	 	 	 	 	+ any PTE
	 AU
	 	 Granted
	 	 2004245522
	 	 10/29/2009
	 	 05-28-2024 + any

	 
	 	 	 	 	 	 	 	PTE
	 
	 	 	 	(2004245522)	 	(05/28/2004)	 	 
	 CA
	 	 Granted
	 	 2527093
	 	 10/20/2009
	 	 05/28/2024

	 
	 	 	 	2527093	 	(05/28/2004)	 	 
	 CH
	 	 Granted
	 	 164882
	 	 08/06/2008
	 	 05/28/2024 + any

	 
	 	 	 	 	 	 	 	SPC
	 DE
	 	 	 	4753896.2	 	(05/28/2004)	 	 
	 FR
	 	 	 	 	 	 	 	 
	 GB
	 	 	 	 	 	 	 	 
	 JP
	 	 Granted
	 	 2006-515051
	 	 03/09/2007
	 	 05/28/2024 + any

	 
	 	 	 	 	 	 	 	PTE
	 
	 	 	 	3927228	 	(05/28/2004)	 	 

 

 

COMT—The following tables comprise the comprehensive list of countries and
corresponding application numbers for Merck COMT Patents:  

	•
	 Patent Family 1, PCT/US2011/026399, filed February 28, 201, WO/2011/109254, Inhibitors of Catechol O-Methyl Transferase and
Their Use in the Treatment of Psychotic Disorders, Wolkenberg et al. 

 

					
	Country

 
	 	Application No. 	 	Merck Ref. 
	Australia	 	2011223969	 	MRL-NOP-00089-AU-PCT
	Brazil	 	BR112012021652-0	 	MRL-NOP-00089-BR-PCT
	Canada	 	2789471	 	MRL-NOP-00089-CA-PCT
	China	 	201180012426.3	 	MRL-NOP-00089-CN-PCT
	EPC	 	11751121.2	 	MRL-NOP-00089-EP-PCT
	India	 	6908/CHENP/2012	 	MRL-NOP-00089-IN-PCT
	Japan	 	2012-556121	 	MRL-NOP-00089-JP-PCT
	Korea	 	10-2012-7023048	 	MRL-NOP-00089-KR-PCT
	Mexico	 	MX/A/2012/010187	 	MRL-NOP-00089-MX-PCT
	Russia	 	2012142194	 	MRL-NOP-00089-RU-PCT
	U.S. 	 	13/582,601	 	MRL-NOP-00089-US-PCT

 

 
	•
	 Patent Family 2, PCT/US2011/026424, filed February 28, 2011, WO/2011/109267, Inhibitors of Catechol O-Methyl Transferase and
Their Use in the Treatment of Psychotic Disorders, Wolkenberg et al. 

 

					
	Country

 
	 	Application No. 	 	Merck Ref. 
	Australia	 	2011223888	 	MRL-NOP-00091-AU-PCT
	Brazil	 	BR112012021656-2	 	MRL-NOP-00091-BR-PCT
	Canada	 	2789475	 	MRL-NOP-00091-CA-PCT
	China	 	201180012339.8	 	MRL-NOP-00091-CN-PCT
	EPC	 	11751129.5	 	MRL-NOP-00091-EP-PCT
	India	 	6907/CHENP/2012	 	MRL-NOP-00091-IN-PCT
	Japan	 	2012-556126	 	MRL-NOP-00091-JP-PCT
	Korea	 	10-2012-7023050	 	MRL-NOP-00091-KR-PCT
	Mexico	 	MX/A/2012/010189	 	MRL-NOP-00091-MX-PCT
	Russia	 	2012142171	 	MRL-NOP-00091-RU-PCT
	U.S. 	 	13/582,637	 	MRL-NOP-00091-US-PCT

 

 
	•
	 Patent Family 3, PCT/US2011/026414, filed February 28, 2011, WO/2011/109261, Inhibitors of Catechol O-Methyl Transferase and
Their Use in the Treatment of Psychotic Disorders, Wolkenberg et al. 

 

					
	Country

 
	 	Application No. 	 	Merck Ref. 
	Australia	 	20112223976	 	MRL-NOP-00090-AU-PCT
	Brazil	 	BR112012021659-7	 	MRL-NOP-00090-BR-PCT
	Canada	 	2789474	 	MRL-NOP-00090-CA-PCT
	China	 	201180012413.6	 	MRL-NOP-00090-CN-PCT
	EPC	 	11751124.6	 	MRL-NOP-00090-EP-PCT
	India	 	6909/CHENP/2012	 	MRL-NOP-00090-IN-PCT
	Japan	 	2012-556122	 	MRL-NOP-00090-JP-PCT
	Korea	 	10-2012-7023049	 	MRL-NOP-00090-KR-PCT
	Mexico	 	MX/A/2012/010188	 	MRL-NOP-00090-MX-PCT
	Russia	 	2012142180	 	MRL-NOP-00090-RU-PCT
	U.S. 	 	13/582,555	 	MRL-NOP-00090-US-PCT

 

 
	•
	Domain Name—www.cerecor.com 

 

 
 

  EXHIBIT E    
    
    BORROWER'S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS    
    

 

								
	Institution Name and Address

 
	 	Account Number 	 	Account Type 	 	Name of Account Owner 
	 PNC Bank, National AssociationAttn:
	 	 	55-6363-9943	 	Money Market	 	Cerecor Inc.
	 Maureen Smith
	 	 	 	 	 	 	 
	 Vice President, Business Banking
	 	 	 	 	 	 	 
	 Treasury Management
	 	 	 	 	 	 	 
	 One East Pratt Street
	 	 	 	 	 	 	 
	 3rd Floor
	 	 	 	 	 	 	 
	 Baltimore, Maryland 21202
	 	 	 	 	 	 	 
	 (p) 410-237-5866
	 	 	 	 	 	 	 
	 PNC Bank, National AssociationAttn:
	 	 	

55-6363-9994	 	 Business Checking
	 	 Cerecor Inc.

	 Maureen Smith
	 	 	 	 	 	 	 
	 Vice President, Business Banking
	 	 	 	 	 	 	 
	 Treasury Management
	 	 	 	 	 	 	 
	 One East Pratt Street
	 	 	 	 	 	 	 
	 3rd Floor
	 	 	 	 	 	 	 
	 Baltimore, Maryland 21202
	 	 	 	 	 	 	 
	 (p) 410-237-5866
	 	 	 	 	 	 	 
	 Wells Fargo Advisors
	 	 	

4122023377	 	 Investment
	 	 Cerecor Inc.

	 375 Park Avenue, 10th Floor
	 	 	 	 	 	 	 
	 New York, NY 10152
	 	 	 	 	 	 	 

 

 

 
 

  EXHIBIT F    
    
    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 August 19, 2014 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") by and among Hercules Technology Growth Capital, Inc. (the "Agent"), the several banks
and other financial institutions or entities from time to time party thereto (collectively, the "Lender") and Hercules Technology Growth Capital, Inc., as agent for the Lender (the "Agent") and
Cerecor Inc. (the "Company") as Borrower. All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement. 

          The
undersigned is an Officer of the Company, knowledgeable of all Company financial matters, and is authorized to provide certification of information regarding the Company; hereby
certifies 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 contained
therein. Attached are the required documents supporting the above certification. The undersigned further certifies that these are prepared in accordance with GAAP (except for the absence of footnotes
with respect to unaudited financial statement and subject to normal year end adjustments) and are consistent from one period to the next except as explained below. 

 

					
	REPORTING REQUIREMENT

 
	 	REQUIRED 	 	CHECK IF ATTACHED 
	 Interim Financial Statements
	 	 Monthly within 30 days
	 	 
	 Interim Financial Statements
	 	 Quarterly within 45 days
	 	 
	 Audited Financial Statements
	 	 FYE within 180 days
	 	 

 

 

					
	 
	 	Very Truly Yours,
	 
	 	  CERECOR INC.

	 
	 	 By:
	 	   

 
	 
	 	 	 	Name:
	 
	 	 	 	Its:

 

 

 

 
 

  EXHIBIT G
  
    FORM OF JOINDER AGREEMENT    
    

          This Joinder Agreement (the "Joinder Agreement") is made and dated as of [             ],
20[    ], and is entered into by and between                          .,
a                          corporation ("Subsidiary"), and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a
Maryland corporation (as "Agent"). 

 
 

  RECITALS    
    

          A.      Subsidiary's
Affiliate, Cerecor Inc. ("Company") has entered into that certain Loan and Security Agreement dated August 19, 2014, with the several banks
and other financial institutions or entities from time to time party thereto as lender (collectively, the "Lender") and the Agent, as such agreement may be amended (the "Loan Agreement"), together
with the other agreements executed and delivered in connection therewith; 

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

 
 

  AGREEMENT    
    

          NOW THEREFORE, Subsidiary and Agent agree as follows: 

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

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

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

	4.
	Subsidiary
acknowledges that it benefits, both directly and indirectly, from the Loan Agreement, and hereby waives, for itself and on behalf on any and all
successors in interest (including without limitation any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the
fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this 

Joinder
Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder
Agreement are avoidable as a fraudulent conveyance. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

 
 

[SIGNATURE PAGE TO JOINDER AGREEMENT]    

SUBSIDIARY: 

                                        
   . 

 

					
	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    
    
    ACH DEBIT AUTHORIZATION AGREEMENT    
    

Hercules
Technology Growth Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301 

          Re:    Loan
and Security Agreement dated August     , 2014 between Cerecor Inc., as borrower ("Borrower") and Hercules Technology Growth
Capital, Inc., in its capacity as lender and agent ("Agent") (the "Agreement") 

          In
connection with the above referenced Agreement, the Borrower hereby authorizes the Agent to initiate debit entries for the periodic payments due under the Agreement to the Borrower's
account indicated below. The Borrower authorizes the depository institution named below to debit to such account. 

 

			
	DEPOSITORY NAME	 	BRANCH
	CITY	 	STATE AND ZIP CODE
	TRANSIT/ABA NUMBER	 	ACCOUNT NUMBER

 

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

 

					
	CERECOR INC.

(Borrower)	 	 
	
 By:	
 	
      

 	
 	
 

 

 Date:

 

 
 

  SCHEDULE 1.1    
    
    COMMITMENTS    
    

 

					
	LENDER

 
	 	TERM COMMITMENT 	 
	 HERCULES TECHNOLOGY GROWTH CAPITAL, INC. 
	 	

$	7,500,000	 
	 TOTAL COMMITMENTS
	 	

$	7,500,000	 

 

  
 

  SCHEDULE 1A    
    
    EXISTING PERMITTED INDEBTEDNESS    
    

          Reimbursement obligations to PNC Bank in connection with $175,000 Standby Letter of Credit issued to the landlord of Borrower's
premises at 400 E. Pratt Street, Suite 604, Baltimore, Maryland. 

 
 

  SCHEDULE 1C    
    
    EXISTING PERMITTED LIENS    
    

          Lien on Certificate of Deposits in the amount of $175,000 held with PNC Bank given in connection with Borrower's reimbursement
obligations to PNC Bank in connection with $175,000 Standby Letter of Credit issued to the landlord of Borrower's premises at 400 E. Pratt Street, Suite 604, Baltimore, Maryland. 

 
 

  SCHEDULE 5.10    
    
    INTELLECTUAL PROPERTY    
    
    See Exhibit D.    
    
    SCHEDULE 5.14    
    
    CAPITALIZATION    
    
    See attached.    
    

 
 

  SCHEDULE 7.16    
    
    POST-CLOSING ITEMS    
    

          Borrower shall deliver or cause to be delivered to Agent: 

          1.       On
or before September 15, 2014, a Subordination Agreement or waiver in form reasonably satisfactory to Agent with PDL Pratt Associates, LLC, the landlord
of Borrower's premises located at 400 E. Pratt Street, Suite 604, Baltimore, Maryland pursuant to a lease dated August 3, 2013. 

QuickLinks

Exhibit 10.15

LOAN AND SECURITY AGREEMENT

RECITALS

AGREEMENT

SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION

SECTION 2. THE LOAN

2.1 [Intentionally Omitted.]

2.2 Term Loan.

(a)  Advances.

(b)  Advance Request.

(c)  Interest.

(d)  Payment.

2.3 Maximum Interest.

2.4 Default Interest.

2.5 Prepayment.

2.6 End of Term Charge.

2.7 Notes.

2.8 Pro Rata Treatment.

SECTION 3. SECURITY INTEREST

SECTION 4. CONDITIONS PRECEDENT TO LOAN

4.1 Initial Advance.

4.2 All Advances.

4.3 No Default.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER

5.1 Corporate Status.

5.2 Collateral.

5.3 Consents.

5.4 Material Adverse Effect.

5.5 Actions Before Governmental Authorities.

5.6 Laws.

5.7 Information Correct and Current.

5.8 Tax Matters.

5.9 Intellectual Property Claims.

5.10 Intellectual Property.

5.11 Borrower Products.

5.12 Financial Accounts.

5.13 Employee Loans.

5.14 Capitalization and Subsidiaries.

5.15 JOBS Act.

SECTION 6. INSURANCE; INDEMNIFICATION

6.1 Coverage.

6.2 Certificates.

6.3 Indemnity.

SECTION 7. COVENANTS OF BORROWER

7.1 Financial Reports.

7.2 Management Rights.

7.3 Further Assurances.

7.4 Indebtedness.

7.5 Collateral.

7.6 Investments.

7.7 Distributions.

7.8 Transfers.

7.9 Mergers or Acquisitions.

7.10 Taxes.

7.11 Corporate Changes.

7.12 Deposit Accounts.

7.14 Notification of Event of Default.

7.16 Post-Closing Items.

SECTION 8. RIGHT TO INVEST

SECTION 9. EVENTS OF DEFAULT

9.1 Payments.

9.2 Covenants.

9.3 Material Adverse Effect.

9.4 Representations.

9.5 Insolvency.

9.6 Attachments; Judgments.

9.7 Other Obligations.

SECTION 10. REMEDIES

10.1 General.

10.2 Collection; Foreclosure.

10.3 No Waiver.

10.4 Cumulative Remedies.

SECTION 11. MISCELLANEOUS

11.1 Severability.

11.2 Notice.

11.3 Entire Agreement; Amendments.

11.4 No Strict Construction.

11.5 No Waiver.

11.6 Survival.

11.7 Successors and Assigns.

11.8 Governing Law.

11.9 Consent to Jurisdiction and Venue.

11.10 Mutual Waiver of Jury Trial / Judicial Reference.

11.11 Professional Fees.

11.12 Confidentiality.

11.13 Assignment of Rights.

11.14 Revival of Secured Obligations.

11.15 Counterparts.

11.16 No Third Party Beneficiaries.

11.17 Agency.

11.18 Publicity.

EXHIBIT A

ADVANCE REQUEST

ATTACHMENT TO ADVANCE REQUEST

EXHIBIT B SECURED TERM 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 FORM OF JOINDER AGREEMENT

RECITALS

AGREEMENT

[SIGNATURE PAGE TO JOINDER AGREEMENT]

EXHIBIT H ACH DEBIT AUTHORIZATION AGREEMENT

SCHEDULE 1.1 COMMITMENTS

SCHEDULE 1A EXISTING PERMITTED INDEBTEDNESS

SCHEDULE 1C EXISTING PERMITTED LIENS

SCHEDULE 5.10 INTELLECTUAL PROPERTY See Exhibit D. SCHEDULE 5.14 CAPITALIZATION See attached.

SCHEDULE 7.16 POST-CLOSING ITEMSEX-4.1

 Exhibit 4.1 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 REYNOLDS AMERICAN INC. 

2.300% Senior Notes due 2018 
  

			
	Certificate No. [    ]		$[        ]
			CUSIP No. 761713 BC9
			ISIN US761713BC91

 Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of
[                    ] ($[        ]) on June 12, 2018. 

Interest Payment Dates: June 12 and December 12, commencing December 12, 2015. 

Record Dates: May 29 and November 28. 

 Reference is hereby made to the further provisions of this Note set forth on the reverse hereof,
which further provisions shall have the same effect for all purposes as if set forth at this place. 
 Unless the certificate of
authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal. 
 Dated:             , 2015 

 

			
	REYNOLDS AMERICAN INC.,
	as Issuer
		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Senior Vice President and Treasurer
		
	By:		  

	Name:		McDara P. Folan, III
	Title:		Senior Vice President, Deputy General Counsel and Secretary

 Each of the undersigned hereby acknowledges its obligation as a Guarantor under the Indenture. 

 

			
	 SANTA FE NATURAL TOBACCO COMPANY, INC.,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer
	
	 R. J. REYNOLDS TOBACCO COMPANY,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Treasurer

  
 Note Signature Page 

			
	 R. J. REYNOLDS TOBACCO CO.,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer
	
	 REYNOLDS INNOVATIONS INC.,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Treasurer
	
	 CONWOOD HOLDINGS, INC.,
 as
Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer
	
	 AMERICAN SNUFF COMPANY, LLC,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer

  
 Note Signature Page 

			
	 ROSSWIL LLC,
 as
Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer
	
	 R.J. REYNOLDS TOBACCO HOLDINGS, INC.,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Senior Vice President and Treasurer
	
	 R. J. REYNOLDS GLOBAL PRODUCTS, INC.,

as Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Vice President and Treasurer
	
	 RAI SERVICES COMPANY,
 as
Guarantor

		
	By:		  

	Name:		Daniel A. Fawley
	Title:		Senior Vice President and Treasurer

  
 Note Signature Page 

			
	 REYNOLDS FINANCE COMPANY,

as Guarantor

		
	By:		  

	Name:		Caroline M. Price
	Title:		President

  
 Note Signature Page 

 (Trustee’s Certificate of Authentication) 

This is one of the Notes of the series designated herein and referred to in the within-mentioned Indenture. 

Dated:             , 2015 

 

			
	 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

		
	By:		  

	Name:		
	Title:		

  
 Note Signature Page 

 [REVERSE OF NOTE] 

2.300% Senior Notes due 2018 

References herein to the “Notes” mean the Company’s 2.300% Senior Notes due 2018 and not to any other series. Other capitalized
terms used, but not defined, herein shall have the meanings assigned to them in the Indenture and Schedule I attached hereto unless otherwise indicated. 

1. Interest. The Company promises to pay interest on the principal amount of this Note at 2.300% per annum from the date provided
below until maturity. The Company shall pay interest semi-annually, in arrears, on June 12 and December 12 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment
Date”), except that, if the maturity date of the Note falls on a day that is not a Business Day, the Company will make the required payment of interest and principal on the immediately succeeding Business Day, as if it were made on the date the
payment was due. Interest on the Notes shall accrue from the date of initial issuance or, if interest has already been paid on the Notes, from and including the most recent Interest Payment Date to which interest has been paid or provided for, to,
but excluding the relevant Interest Payment Date; provided the first Interest Payment Date shall be December 12, 2015. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. Interest will not accrue as a result of any postponed or delayed payment in accordance with this paragraph. 
 2. Method of
Payment. The Company shall pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the May 29 or November 28 immediately preceding the Interest Payment Date
(except that interest payable at maturity of the Notes shall be paid to the same persons to whom principal of such Notes is payable), except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be
payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within the Borough of Manhattan of the City of New York, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest and premium, if any, on, all
Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. 
 3. Paying Agent and Registrar. Initially, The Bank of New York Mellon Trust
Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or
any of its Subsidiaries may act in any such capacity. 
 4. Indenture. The Company issued the Notes under an Indenture dated as of
May 31, 2006, as amended and supplemented, among the Company, as issuer, certain direct and indirect subsidiaries of the Company, as guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee

  
 1 

 
(the “Indenture”). The terms of the Notes include those stated in the Indenture, those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
“TIA”), and those set forth in Schedule I attached hereto. The Notes are subject to all such terms, and Holders are referred to the Indenture, the TIA and Schedule I for a statement of such terms. 

5. Redemption at the Company’s Option. The Company may redeem all or a part of the Notes from time to time in accordance with
Article 5 of the Indenture at a redemption price equal to the greater of: 
 (a) 100% of the principal amount of such Notes being redeemed,
and 
 (b) the sum of the present values of the remaining scheduled payments of principal and interest on such Notes being redeemed
discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a yield equal to (1) the applicable Treasury Rate, plus (2) 20 basis points, 

plus, in each of case (a) and (b), accrued and unpaid interest on the principal amount being redeemed to the date of redemption. 

Notice of such optional redemption shall be mailed, by first class mail, at least 30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after
the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption (unless the Company shall default in the payment of the redemption price and accrued interest). All redemptions shall be effected pursuant to
applicable depositary procedures. 
 6. Special Mandatory Redemption. Upon the occurrence of a Special Mandatory Redemption Event,
the Company shall redeem the Notes in whole on the Special Mandatory Redemption Date. Upon such occurrence, the Company or the Trustee, at the Company’s request and on the Company’s behalf, will promptly (but in no event later than five
Business Days following such Special Mandatory Redemption Event) cause the notice of such special mandatory redemption to be distributed to each Holder in accordance with the applicable provisions of the Indenture. Such notice of special mandatory
redemption shall be mailed, by first class mail, 30 days before the Special Mandatory Redemption Date. The notice of special mandatory redemption shall specify the Special Mandatory Redemption Date, will state that all of the outstanding Notes will
be redeemed at the Special Mandatory Redemption Price on the Special Mandatory Redemption Date automatically and without any further action by the Holders and shall otherwise comply with Article 5 of the Indenture. The Company will deposit with the
Paying Agent funds sufficient to pay the Special Mandatory Redemption Price for the Notes no later than 10:00 a.m., New York City time, on the Special Mandatory Redemption Date. If such deposit is made as provided above, the Notes will cease to bear
interest on and after the Special Mandatory Redemption Date and, other than the right to receive the Special Mandatory Redemption Price, all rights under the Notes will terminate. 

  
 2 

 7. Repurchase upon Change of Control Repurchase Event. If a Change of Control Repurchase
Event occurs with respect to the Notes, unless the Company has exercised its right to redeem the Notes, the Company will make an offer to each Holder of Notes to repurchase all or any part (in excess of $2,000 and in integral multiples of $1,000) of
that Holder’s Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus any accrued and unpaid interest on the Notes repurchased to the date of repurchase. Within 30 days following any Change
of Control Repurchase Event, the Company will mail a notice to each Holder, with a copy to the Trustee, describing the transaction or transactions that constitute the Change of Control Repurchase Event and offering to repurchase Notes on the payment
date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder, to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control Repurchase Event provisions of the Notes, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations hereunder by virtue of such
conflict. On the Change of Control Repurchase Event payment date, the Company will, to the extent lawful (i) accept for payment all Notes or portions of Notes (in excess of $2,000 and in integral multiples of $1,000) properly tendered pursuant
to the Company’s offer; (ii) deposit with the Paying Agent an amount equal to the aggregate repurchase price in respect of all Notes or portions of Notes properly tendered; and (iii) deliver or cause to be delivered to the Trustee the
Notes properly accepted, together with an Officers’ Certificate stating the aggregate principal amount of Notes being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes properly tendered the repurchase price
for the Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased portion of any Notes surrendered; provided that each new Note will
be in a principal amount of $2,000 or an integral multiple of $1,000. The Company will not be required to make an offer to repurchase the notes upon a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the
times and otherwise in compliance with the requirements for an offer made by the Company, and such third party purchases all Notes properly tendered and not withdrawn under its offer. 

8. No Sinking Fund. The Company shall not be required to make sinking fund payments with respect to the Notes. 

9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture, including any transfer tax or other similar governmental charge payable in connection therewith. The Company need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Note for a period of 15 days before a
selection of Notes to be redeemed. 

  
 3 

 10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for
all purposes. 
 11. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented by the Company and Guarantors, each when authorized by a Board Resolution, with the consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such
amendment or supplement, voting as a single class, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities at
the time outstanding of all series affected by such Default or waiver of compliance, voting as a single class. Without the consent of any Holder of a Note, the Company and the Guarantors, when authorized by a Board Resolution, and the Trustee may
supplement the Indenture or the Notes: (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes any property or assets; (b) to evidence the succession of another corporation to the Company, or successive
successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company; (c) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection or benefit of the Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in the Indenture as therein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such
amendment or supplement may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such an Event of Default or
may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default; (d) to cure any ambiguity or to
correct or supplement any provision contained in the Indenture or in any indenture supplemental thereto which may be defective or inconsistent with any other provision contained in the Indenture or in any indenture supplemental thereto; (e) to
make such other provisions in regard to matters or questions arising under the Indenture or under any indenture supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the
Holders of the Notes in any material respect; (f) to establish the form or forms or terms of Securities of any series as permitted by the Indenture; (g) to evidence and provide for the acceptance of appointment under the Indenture by a
successor trustee with respect to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one trustee; (h) to provide
for uncertificated Securities and to make all appropriate changes for such purpose; (i) to comply with the requirements of the TIA; and (j) to add additional Guarantors with respect to the Notes. 

The Trustee is hereby authorized to join with the Company and the Guarantors in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. 

  
 4 

 11. Defaults and Remedies. Any of the following events which shall have occurred and be
continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) constitutes an “Event of Default” under the Indenture: (a) default in the payment of any installment of interest upon Securities of any series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal on Securities of any series as and when the same shall become due and payable either at maturity, upon any redemption, by
declaration or otherwise; or (c) default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of Securities of any series; or (d) default in the performance, or breach, of any
covenant or agreement of the Company or the Guarantors in respect of Securities of any series (other than a covenant or agreement in respect of such Securities a default in whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by first class mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the
outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or (e) a court having
jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantors in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for
any substantial part of its property, or make any general assignment for the benefit of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture), or any Guarantee is declared
in a judicial proceeding to be null and void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the Indenture, any
Security Document shall cease to be in full force and effect or shall cease to give the Collateral Agent the liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent and such default
shall continue unremedied for a period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any other Event of Default provided in Schedule I or in this Note. 

If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of Default under clause (d) or
(i) is with respect to less than all series of Securities then outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then outstanding under the Indenture (voting as a single class) by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire principal of all Securities of 

  
 5 

 
all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event
of Default described in clause (d) or (i) (if the Event of Default under clauses (d) or (i), as the case may be, is with respect to all series of Securities then outstanding), (e), (f), (g) or (h) occurs and is continuing,
then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then outstanding
under the Indenture (treated as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all the Securities then outstanding and interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become immediately due and payable. 
 The foregoing provisions,
however, are subject to the condition that if, at any time after the principal of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company or any Guarantor shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of
each such series (or of all the Securities, as the case may be) and the principal of any and all Securities of each such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest
upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest specified in the Securities of each such series to the date of
such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result of gross negligence or willful misconduct, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities which shall
have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of each such series, or of all the
Securities, in each case voting as a single class, then outstanding, by written notice to the Company and to the Trustee, may waive all defaults with respect to each such series (or with respect to all the Securities, as the case may be) and rescind
and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. 

12. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities,
and may otherwise deal with the Company, as if it were not the Trustee. 
 13. No Recourse Against Others. No director, officer,
employee, incorporator or shareholder or controlling person of the Company or the Trustee, as such, shall have any liability for any obligations of the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not
be effective to waive liabilities under the federal securities laws and it is the view of the Securities and Exchange Commission that such a waiver is against public policy. 

  
 6 

 14. Authentication. This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent and in accordance with the Indenture. 
 15. Guarantees. This Note will be
entitled to the benefits of certain Guarantees made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise, of the principal of, premium, if any, and interest
on the Notes and all other obligations of the Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the
Guarantors, the Trustee and the Holders, and of the circumstances under which the Guarantees may be released. 
 16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (=Uniform Gifts to Minors Act). 
 17. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or both numbers in notices to the Holders of the Notes
as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice to the Holders of the Notes and reliance may be placed only on the other identification numbers
placed thereon. 
 18. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. 

  
 7 

 The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to: 
 Reynolds American Inc. 

401 North Main Street 

Winston-Salem, North Carolina 27101 

Facsimile: 336-741-5000 

Attention: Treasurer 

  
 8 

 [FORM OF TRANSFER NOTICE] 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 
  

 
  

Please print the name and address including zip code of assignee 
  

 
  

the within Note and all rights thereunder, hereby irrevocably constituting and appointing
                     attorney to transfer said Note on the books of the Company with full power of substitution in the premises. 

 

			
	  

		
	Date:		  

 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the
within-mentioned instrument in every particular, without alteration or any change whatsoever. 
  

			
	Signature Guarantee:		  

 Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature
guarantor acceptable to the Trustee. 

  
 9 

 SCHEDULE I 

REYNOLDS AMERICAN INC. 
 TERMS OF
2.300% SENIOR NOTES DUE 2018 
 3.250% SENIOR NOTES DUE 2020 

4.000% SENIOR NOTES DUE 2022 

4.450% SENIOR NOTES DUE 2025 

5.700% SENIOR NOTES DUE 2035 

5.850% SENIOR NOTES DUE 2045 

Section 1.01 Designation of Notes. (a) The terms set forth in this Schedule I pertain to notes to be issued
pursuant to that certain Indenture dated May 31, 2006, as amended and supplemented, by and among Reynolds American Inc. (the “Company”) as Issuer, The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of
New York Trust Company, N.A.), as Trustee, and certain Subsidiaries of the Company who have executed such Indenture or a supplement thereto as Guarantors (as so supplemented, the “Indenture”). The notes subject to these terms are
(i) the Company’s 2.300% Senior Notes due 2018 in the original principal amount of $1,250,000,000 (CUSIP Number 761713 BC9), (the “2018 Notes”), (ii) the Company’s 3.250% Senior Notes due 2020 in the original principal
amount of $1,250,000,000 (CUSIP Number 761713 BE5) (the “2020 Notes”), (iii) the Company’s 4.000% Senior Notes due 2022 in the original principal amount of $1,000,000,000 (CUSIP Number 761713BF2) (the “2022 Notes”),
(iv) the Company’s 4.450% Senior Notes due 2025 in the original principal amount of $2,500,000,000 (CUSIP Number 761713BG0) (the “2025 Notes”), (v) the Company’s 5.700% Senior Notes due 2035 in the original principal
amount of $750,000,000 (CUSIP Number 761713 BA3) (the “2035 Notes”) and (vi) the Company’s 5.850% Senior Notes due 2045 in the original principal amount of $2,250,000,000 (CUSIP Number 761713 BB1) (the “2045 Notes,” and
collectively with the 2018 Notes, the 2020 Notes, the 2022 Notes, the 2025 Notes and the 2035 Notes, the “Notes”). 

(b) The 2018 Notes, the 2020 Notes, the 2022 Notes, the 2025 Notes, the 2035 Notes and the 2045 Notes shall each be considered a separate
series for all purposes of the Indenture. 
 Section 1.02 Initial Issuance. (a) The Notes are being offered and sold
by the Company pursuant to an Underwriting Agreement, dated June 9, 2015 (the “Underwriting Agreement”) among the Company, the guarantors listed on Schedule 1 therein, Citigroup Global Markets Inc., J.P. Morgan
Securities LLC and the other underwriters named therein. The Notes will be sold in an offering registered under the Securities Act. Each series of Notes shall be issued in the form of a permanent global note, with each such global note to be
deposited with the Trustee, as Custodian for the Depository, duly executed by the Company, and authenticated by the Trustee as hereinafter provided. Each such global note may be represented by more than one certificate, if so required by the
Depository’s rules regarding the maximum principal amount to be represented by a single certificate. The global notes representing the Notes are sometimes collectively herein referred to as the “Global Notes.” The Notes may
have notations, legends or endorsements required by law, stock exchange rule or usage. The Company and the Trustee shall approve the forms of the Notes and any notation, endorsement or legend on them.  

(b) Denominations. The Notes shall be issuable only in fully registered form, without interest coupons, and only in denominations of
$2,000 and any integral multiples of $1,000 in excess thereof. 

  
 I-1 

 Section 1.03. Depository: Custodian. The Company initially appoints The
Depository Trust Company (“DTC”) to act as Depository with respect to the Global Notes. The Company initially appoints the Trustee to act as Custodian with respect to the Global Notes. 

Section 1.04. Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another nominee of the Depository, or by the Depository or any such nominee to a successor Depository or to a nominee of such successor Depository.

 Section 1.05 Definitions. (a) Capitalized terms not defined in this Schedule I shall have the meanings
set forth in the Indenture.  
 (b) As used herein and in the Notes, the following terms shall have the meanings set forth below:

 “Below Investment Grade Rating Event” means, with respect to each series of Notes, the Notes of that series are
downgraded by each of the Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of a Change of Control
(which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies) from a rating that is Investment Grade to a rating that is below Investment Grade.

 “Change of Control” means the occurrence of any of the following: 

(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any person other than the Company or one of its wholly owned subsidiaries; 

(2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person
other than the Company or one of its wholly owned subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of Voting Stock of the Company or other Voting Stock into which the
Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; 

(3) the consolidation of the Company with, or merger of the Company with or into, any person, or the consolidation of any person with, or
merger with or into, the Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property,
other than any such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any
direct or indirect parent company of the surviving person immediately after giving effect to such transaction; and 
 (4) the adoption of a
plan relating to the Company’s liquidation or dissolution (other than its liquidation into a holding company newly formed in accordance with the following paragraph, provided that all claims and obligations of the Company are assumed by, and
all assets are transferred to such holding company). 

  
 I-2 

 Notwithstanding the foregoing, a transaction will not be deemed to involve a change of control
under clause (2) above if (1) the Company becomes a direct or indirect wholly owned subsidiary of a holding company and (2) (a) the direct or indirect holders of the Voting Stock of such holding company immediately following that
transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (b) immediately following that transaction no person (other than a holding company satisfying the requirements of
this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company. As used in this paragraph and the definition of “Change of Control,” the term “person” has the meaning
given thereto in Section 13(d)(3) of the Exchange Act and the term “beneficial owner” has the meaning given thereto in Rules 13d-3 and 13d-5 promulgated under the Exchange Act. 

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event. 
 “Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term (“Remaining Life”) of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Notes. 
 “Comparable Treasury Price” means: (1) the
average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations; or (2) if the Independent Investment Banker obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations. 
 “Custodian” means the Trustee, as custodian with respect
to the Global Notes, or any successor entity thereto. 
 “Depository” means, with respect to the Notes issued in the form
of one or more Global Notes, DTC as the Person appointed hereby as the Depository with respect to the Notes, or another Person appointed as Depository by the Company, which Person must be a clearing agency registered under the Exchange Act, and any
and all successors thereto appointed as Depository hereunder and having become such pursuant to the applicable provision of the Indenture. 

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

“Independent Investment Banker” means any of Citigroup Global Markets Inc., Goldman, Sachs & Co. or J.P. Morgan
Securities LLC, or, if all such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company. 

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories
of Moody’s); a rating of BBB- or better by S&P (or its 

  
 I-3 

 
equivalent under any successor rating categories of S&P); or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company
pursuant to clause (2) of the definition of Rating Agency. 
 “Moody’s” means Moody’s Investors Service,
Inc., and any successor to its credit ratings business. 
 “Person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 

“Rating Agency” means (1) each of Moody’s and S&P; and (2) if either of Moody’s or S&P ceases to
rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the control of the Company, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the
Exchange Act, selected by us as a replacement agency for Moody’s or S&P, as the case may be. 
 “Reference Treasury
Dealer” means: (1) Citigroup Global Markets Inc. or J.P. Morgan Securities LLC, and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York
City (a “Primary Treasury Dealer”), the Company will substitute for such firm another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with the
Company. 
 “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment
Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 
 “S&P” means
Standard & Poor’s Ratings Services, a division of Standard & Poor’s Financial Services LLC, a subsidiary of McGraw-Hill Financial, Inc., and any successor to its credit ratings business. 

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

“Special Mandatory Redemption Date” means the date specified in the notice of special mandatory redemption delivered to the
Holders in accordance with the terms of paragraph 6 of the Notes, which date shall be 30 days after the date such notice is mailed in accordance with Article 5 of the Indenture. 

“Special Mandatory Redemption Event” means the earlier to occur of (1) January 15, 2016, if the proposed merger of
the Company’s direct, wholly owned subsidiary, Lantern Acquisition Co., with and into Lorillard, Inc. is not completed on or prior to January 15, 2016 and (2) the date on or prior to January 15, 2016 on which the Agreement and
Plan of Merger, dated as of July 15, 2014, as it may be amended from time to time, among the Company, Lorillard, Inc., and Lantern Acquisition Co. is terminated. 

  
 I-4 

 “Special Mandatory Redemption Price” means a redemption price equal to 101% of
the aggregate principal amount of the Notes, plus accrued and unpaid interest to, but not including the Special Mandatory Redemption Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date). 
 “Treasury Rate” means, with respect to any redemption date: (1) the yield, under the
heading which represents the average for the immediate preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly by the Board of Governors of
the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest month); or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day
preceding the redemption date. 
 “Voting Stock” means, with respect to any specified “person” (as that term is
used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

  
 I-5

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