Document:

Exhibit 10.1

First Choice Healthcare Solutions, Inc

709 S. Harbor City Blvd., Suite 250

Melbourne, Florida 32901

Phone: 321-725-009 Fax: 321-723-3996

 

 

January 30,
2015

 

Hillair Capital Investments L.P.

c/o Hillair Capital Management, LLC

345 Lorton Avenue

Suite 303

Burlingame, CA 94010

Attn: Neal Kaufman

 

		Re:	Extension of Amortization Payment

 

Dear Mr. Kaufman:

 

Reference
is made to that certain 8% Original Issue Discount Secured Convertible Debenture due December
28, 2013 (although subsequently extended to November 1, 2015) the “Debenture”) issued by First Choice Healthcare
Solutions, Inc. (the “Company”) to Hillair Capital Investments L.P. (“Hillair”). Pursuant
to Section 6(b) of the Debenture, the Company is obligated to redeem $580,000 principal amount of the Debenture plus interest on
or before February 1, 2015 (“February Periodic Redemption”). In consideration for 100,000 shares of Common Stock
(as defined in the Debenture) and cash in the amount of $30,000, the Company hereby requests that the February Periodic Redemption
date be extended to April 1, 2015. For an additional $20,000 cash (provided written notice and payment are made prior to March
15, 2015), the Company requests that the February Periodic Redemption date be extended to May 1, 2015. The Periodic Redemption
Amount and Periodic Redemption Date (both as defined in the Debenture) shall not be modified or extended hereunder and shall be
due and payable on the respective dates and amounts set forth in the Debenture (it being understood if the Company exercises all
of its extension rights hereunder, the principal amount owing on May 1, 2015 shall be $1,160,000 plus interest). The shares of
Common Stock issuable hereunder shall have the same rights as the Conversion Shares issuable pursuant to the Debenture (including
those right under the Securities Purchase Agreement). The shares issuable hereunder and the initial cash payment shall be made
to Hillair on or prior to February 1, 2015. Except as set forth herein, all terms and conditions of the Debenture and any other
documents entered into in connection therewith shall remain unchanged and in full force and effect.

 

	 	Sincerely,
	 	 
	 	FIRST CHOICE HEALTHCARE SOLUTIONS,
    INC.
	 	 
	 	By: /s/ Christian C. Romandetti
	 	Name: Christian C. Romandetti
	 	Title: President and CEO

 

Accepted and Agreed to:

 

HILLAIR CAPITAL INVESTMENTS L.P.

 

By: /s/ Scott Kaufman

Name: Scott Kaufman

Title: Managing PartnerLightPath Technologies, Inc. 10-Q

 

Exhibit 10.1

AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT

This AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of December 23, 2014 is between AVIDBANK
(“Bank”), and LIGHTPATH TECHNOLOGIES, INC., a Delaware corporation (“Borrower”).

RECITALS

Borrower and Bank
are party to that certain Loan and Security Agreement dated as of September 30, 2013 and as amended from time to time (the “Original
Agreement”). The parties desire to amend and restate the Original Agreement in accordance with the terms of this Agreement,
and set forth the terms on which Bank will advance credit to Borrowers, and Borrowers will repay the amounts owing to Bank.

AGREEMENT

The parties agree
as follows:

1.

Definitions,
Accounting and Other Terms; Amendment and restatement

1.1

Definitions.
As used in this Agreement, the following terms shall have the following definitions:

“Account”
means any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes,
without limitation, all accounts receivable and other sums owing to Borrower.

“Account
Balance” means, at any time, the aggregate of the Receivable Amounts of all Financed Receivables at such time, as reflected
on the records maintained by Bank.

“Account
Debtor” means as defined in the Code and shall include, without limitation, any person liable on any Financed Receivable,
such as, a guarantor of the Financed Receivable and any issuer of a letter of credit or banker’s acceptance.

“Adjustment”
means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short
payments, asserted by or on behalf of any Account Debtor with respect to any Financed Receivable.

“Administrative
Fee” shall have the meaning set forth in Section 2.4(b) of this Agreement.

“Advance”
shall have the meaning set forth in Section 2.1(a)(i) of this Agreement.

“Advance
Rate” means eighty percent (80%), net of any offsets related to each specific Account Debtor, or such other
percentage as Bank may determine in its sole discretion.

“Affiliate”
of any Person means a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled
by or is under common control with the Person, and each of that Person’s senior executive officers, directors, and, for any
Person that is a limited liability company, that Person’s managers and officers.

“Applicable
Rate” means the per annum rate equal to the Prime Rate plus three percent (3.0%).

“Bancontrol
Account” shall have the meaning set forth in Section 2.1(a)(v) of this Agreement.

 

    	 

    	 

    

 

“Bank Expenses”
means all: reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s
reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and
expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

“Borrower’s
Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets
or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment,
containing such information.

“Borrower’s
Knowledge” and terms and phrases of similar import, whether or not capitalized, means (i) actual knowledge, awareness
or belief possessed by the executive officers and directors of Borrower, and (ii) the knowledge, awareness or belief that the executive
officers and directors would have possessed by using reasonable care and diligence under the circumstances.

“Business
Day” means any day that is not a Saturday, Sunday or a day on which Bank is closed.

“Cash Reserve”
means for any Financed Receivable which has been paid in full during any particular month, the amount by which the amount(s) paid
on such Financed Receivable exceeds the Advance made on such Financed Receivable.

“Change in
Control” shall mean a transaction in which any “person” or “group” (within the meaning of Section
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then
outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group”
to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction..

“Closing
Date” means the date of this Agreement.

“Code”
means the California Uniform Commercial Code.

“Collateral”
means the properties, rights and assets of Borrower described on Exhibit A.

“Collections”
means all funds received by Bank from or on behalf of an Account Debtor with respect to any Accounts.

“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; (ii) any obligations with
respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person;
and (iii) all obligations arising under any agreement or arrangement designed to protect such 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 Bank 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.

“Copyrights”
means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship
and derivative work thereof.

“Credit Extension”
means any Advance or any other extension of credit by Bank for Borrower’s benefit.

 

    	2

    	 

    

 

“Eligible
Accounts” means those Accounts that arise in the ordinary course of Borrower’s business that comply with all of
Borrower’s representations and warranties to Bank set forth in Section 5.4; provided, that standards of eligibility
may be fixed and revised from time to time by Bank in Bank’s reasonable judgment and upon notification thereof to Borrower
in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following:

(a)

Accounts that the
Account Debtor has failed to pay within ninety (90) days of invoice date;

(b)

Accounts with respect
to which the Account Debtor is an officer, employee, or agent of Borrower;

(c)

Accounts with respect
to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and hold, demo or promotional,
or other terms by reason of which the payment by the Account Debtor may be conditional;

(d)

Accounts with respect
to which the Account Debtor is an Affiliate of Borrower;

(e)

Accounts with respect
to which the Account Debtor does not have its principal place of business in the United States, except for Eligible Foreign Accounts;

(f)

Accounts with respect
to which the account debtor is the United States or any department, agency, or instrumentality of the United States, except for
Accounts of the United States if the payee has assigned its payment rights to Bank, the assignment has been acknowledged under
the Assignment of Claims Act of 1940 (31 U.S.C. Section 3727), and such assignment otherwise complies with the Assignment of Claims
Act to Bank’s reasonable satisfaction in the exercise of its reasonable credit judgment;

(g)

Accounts with respect
to which Borrower is liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower or for
deposits or other property of the Account Debtor held by Borrower;

(h)

Accounts that have
not yet been billed to the Account Debtor or that relate to deposits (such as good faith deposits) or other property of the Account
Debtor held by Borrower for the performance of services or delivery of goods which Borrower has not yet performed or delivered;

(i)

Prebillings, retention
billings, progress billings or bonded receivables;

(j)

Accounts with respect
to which the Account Debtor disputes liability or makes any claim with respect thereto as to which Bank believes, in its sole discretion,
that there may be a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to
any Insolvency Proceeding, or becomes insolvent, or goes out of business;

(k)

Accounts for which
the Account Debtor has not been invoiced; or

(l)

Accounts which Bank
reasonably determines to be unsatisfactory for inclusion as an Eligible Account.

“Eligible
Foreign Accounts” means Accounts with respect to which the Account Debtor does not have its principal place of business
in the United States and that (i) are supported by one or more letters of credit in an amount and of a tenor, and issued by a financial
institution, reasonably acceptable to Bank, (ii) covered in full by credit insurance reasonably satisfactory to Bank, or (iii)
that Bank approves on a case-by-case basis.

“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

 

    	3

    	 

    

 

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

“Event of
Default” has the meaning set forth in Section 8 of this Agreement.

“Facility
Amount” means One Million Dollars ($1,000,000).

“Fees”
means the Finance Charges, the Facility Fee, Administrative Fees, Recovery Fees, and any other fees and charges set forth in Section
2 of this Agreement.

“Finance
Charge” has the meaning as set forth in Section 2.3(a) of this Agreement.

“Financed
Receivables” means all those Eligible Accounts and any other Accounts which Bank finances and makes an Advance, as set
forth in Section 2.1 of this Agreement, including their proceeds. A Financed Receivable stops being a Financed Receivable (but
remains Collateral) when the Advance made for the Financed Receivable has been fully paid.

“Financed
Receivable Balance” means the total outstanding gross face amount of the Eligible Account underlying any Financed
Receivable, at any time.

“GAAP”
means generally accepted accounting principles as in effect from time to time.

“Indebtedness” means (a) all
indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation 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.

 

“Insolvency Proceeding” means
any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Intellectual
Property” means all of Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks and
Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of the
rights included above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and
royalties arising from such use to the extent permitted by such license or rights; all amendments, renewals and extensions of any
of the Copyrights, Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all payments
under insurance or any indemnity or warranty payable in respect of any of the foregoing.

“Inventory”
means all inventory in which Borrower has or acquires any interest, including work in process and finished products intended for
sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned
by or in the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s
Books relating to any of the foregoing.

“Investment”
means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance
or capital contribution to any Person.

“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

 

    	4

    	 

    

 

“Loan Documents”
means, collectively, this Agreement, any note or notes executed by Borrower, any guarantees by third parties, and any other present
or future agreement entered into in connection with this Agreement (including the Lockbox Agreement), or any other credit facilities
or services provided by Bank to Borrower (including pursuant), all as amended, restated, or otherwise modified from time to time.

“Lockbox
Agreement” means that certain Lockbox Service Agreement between Borrower and Bank dated as of August 6, 2013, as amended,
restated or otherwise modified from time to time.

“Material
Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise)
of Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform
its obligations under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral.

“Negotiable
Collateral” means all letters of credit of which Borrower is a beneficiary, notes, drafts, instruments, securities, documents
of title, and chattel paper, and Borrower’s Books relating to any of the foregoing.

“Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any
other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest
that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower
to others that Bank may have obtained by assignment or otherwise.

“Patents”
means all patents, patent applications and like protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.

“Periodic
Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to
pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower
and Bank.

“Permitted
Indebtedness” means:

(a)

Indebtedness of Borrower
in favor of Bank arising under this Agreement or any other Loan Document;

(b)

Indebtedness existing
on the Closing Date and disclosed in the Schedule;

(c)

Indebtedness secured
by a lien described in clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness does
not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness and (ii) such Indebtedness
(excluding such Indebtedness in favor of Bank) does not exceed $250,000 in the aggregate at any given time;

(d)

Subordinated Debt;

(e)

Indebtedness incurred
in connection with the terms of any lease agreement for facilities to which Borrower or its foreign Subsidiary is currently a party
to or any lease agreement hereinafter entered into by Borrower or its foreign Subsidiary in the ordinary course of business, including,
but not limited to any tenant improvements; and

(f)

Indebtedness incurred
in connection with the extension, renewal or refinancing of the Indebtedness described in clauses (a) through (e) above, provided
that the principal amount of the indebtedness being extended, renewed or refinanced does not increase or the terms modified do
not impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

    	5

    	 

    

 

“Permitted
Investment” means:

(a)

Investments, including
the ownership of Shares, existing on the Closing Date and disclosed in the Schedule; and

(b)

(i) marketable direct
obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within
one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s
Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued
by Bank and (iv) Borrower’s money market accounts at Bank or disclosed in the Schedule (provided that such accounts are subject
to account control agreement(s) in form and substance satisfactory to Bank).

“Permitted
Liens” means the following:

(a)

Any Liens
existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan Documents;

 

(b)

Liens for
taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate
proceedings, provided the same have no priority over any of Bank’s security interests;

 

(c)

Liens (i)
upon or in any equipment which was not financed by Bank acquired or held by Borrower or any of its Subsidiaries to secure the purchase
price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, (ii) existing
on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such equipment or (iii) upon or in any equipment which was leased by Borrower as disclosed in the
Schedule or is leased hereafter; and

 

(d)

Liens incurred
in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses
(a) through (c) 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 does not increase.

 

“Person”
means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

“Prime Rate”
means the variable rate of interest, per annum, that appears in The Wall Street Journal from time to time, whether or not
such announced rate is the lowest rate available from Bank. If the Prime Rate is no longer published in the Wall Street Journal
or is otherwise no longer available, Bank will choose a new index within its reasonable discretion that is determined by the Bank
to be based upon comparable information.

“Receivable
Amount” means the amount due from the Account Debtor with respect to an Eligible Account after deducting all discounts,
credits, offsets, payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor.

“Recovery
Fee” means for each item of Collections which Borrower has failed to remit as required by the Agreement, a fee equal
to the lesser of $5,000 or 5% of the amount of such item, but in no case less than $1,000.

“Refundable
Reserve” means, for any month end, the sum of (i) the total of the Cash Reserves as to all Financed Receivables as of
such month end, plus (ii) the amount of Collections received by Bank during such month with respect to Accounts other than
Financed Receivables and not previously remitted to Borrower, minus (iii) the total of all outstanding Fees, Adjustments,
any overadvanced amount, Bank Expenses, and all Collections received by Borrower that were not in compliance remitted to Bank pursuant
to Section 2.1(a)(v). The Refundable Reserve is a book balance maintained on the records of Bank (and not a segregated fund, or
the property of Borrower).

 

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“Responsible
Officer” means any of the Chief Executive Officer, President, Chief Financial Officer or Controller of Borrower.

“Revolving
Maturity Date” means the first anniversary of the Closing Date.

“Schedule”
means the schedule of exceptions attached hereto and approved by Bank, if any.

“Shares”
is the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower or any Subsidiary
of Borrower, in any direct or indirect Subsidiary.

“Subordinated
Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Bank on terms acceptable
to Bank (and identified as being such by Borrower and Bank).

“Subsidiary”
means any corporation, company or partnership in which (i) any general partnership interest or (ii) more than 50% of the stock
or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors, managers
or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through
an Affiliate.

“Trademarks”
means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

“Transfer”
shall have the meaning set forth in Section 7.1 of this Agreement.

1.2

Accounting and
Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations
made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include
the notes and schedules thereto. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning
provided by the Code to the extent such terms are defined therein.

1.3

Amendment and
Restatement. This Agreement is intended to and does completely amend and restate, without novation, the Original Agreement.
All security interests granted under the Original Agreement and all security agreements entered into in connection therewith are
hereby confirmed and ratified and shall continue to secure all Obligations under this Agreement; provided however the parties acknowledge
and agree that that certain Intellectual Property Security Agreement between Borrower and Bank dated as of September 30, 2013 is,
upon the effectiveness of this Agreement, terminated and of no further force or effect; and Bank shall return to Borrower any pledged
Shares in Bank’s possession to Borrower. All filings and financing statements filed in connection with the Original Agreement
and continue to perfect Bank’s Lien in the Collateral. All promissory notes and other instruments delivered to Bank in connection
with the Original Agreement are hereby confirmed and ratified and shall continue to apply to all Obligations under this Agreement.
Borrower acknowledges and agrees that the Lockbox Agreement is in full force and effect as of the date hereof, and Section 12 of
the Lockbox Agreement is deleted in its entirety and of no further force or effect.

2.

Loan
and Terms of Payment

2.1

Promise to Pay.
Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and
unpaid interest thereon together with any fees and Finance Charges as and when due in accordance with this Agreement. Borrower
shall use, and authorizes Bank to apply, the proceeds from the initial Advance to repay the existing obligations owing under the
Original Loan Agreement.

 

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(a)

Financing of Accounts.

(i)

Availability.
Subject to the terms of this Agreement, Borrower may request that Bank finance specific Eligible Accounts. Bank may, in its sole
discretion in each instance, finance such Eligible Accounts by extending credit to Borrower in an amount equal to the result of
the Advance Rate multiplied by the Receivable Amount (the “Advance”). Bank may, in its sole discretion, change
the percentage of the Advance Rate for a particular Eligible Account on a case by case basis. When Bank makes an Advance, the Eligible
Account becomes a “Financed Receivable.” The aggregate face amount of all Advances outstanding at any time may
not exceed the Facility Amount. Amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at any time
prior to the Revolving Maturity Date, at which time all Advances and all Obligations related thereto under this Section 2.1(a)
shall be immediately due and payable. Borrower may prepay any Advances.

(ii)

Borrowing Procedure.
Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or email no later than 2:00 p.m. Pacific
Time, on the Business Day that is one day before the Business Day the Advance is to be made. Each such notification shall include
an Advance Request Form in substantially the form of Exhibit B hereto. Borrower will deliver copies of invoices with
respect to each Eligible Account being requested for financing (including the Account Debtor’s, name, address, invoice amount,
invoice date and invoice number), and all supporting documents and agreements, plus transaction files for all invoices and a payment
application in an electronic format reasonably acceptable to Bank for processing. In addition, upon Bank’s request, Borrower
shall deliver to Bank any contracts, purchase orders, or other underlying supporting documentation with respect to such Eligible
Account. Documents received by 2:00 p.m. Pacific Time on accounts acceptable to Bank will be processed on the following Business
Day. Documents received after then will be processed within two Business Days. Bank is authorized to make Advances under this Agreement,
based upon instructions received from a Responsible Officer or a designee of a Responsible Officer. Bank shall be entitled to rely
on any facsimile or email notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof,
and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank
will credit the amount of Advances made under this Section 2.1 to Borrower’s deposit account at Bank.

(iii)

Account Verification;
Notification/Collection. Bank may, at its option, conduct a credit check of the Account Debtor for each Eligible Account requested
by Borrower for financing hereunder to approve any such Account Debtor’s credit before agreeing to finance such Eligible
Account. Bank may also verify directly with the respective Account Debtors the validity, amount and other matters relating to the
Accounts (including confirmations of Borrower’s representations in Section 5.4 of this Agreement) by means of mail, telephone
or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion. Bank may notify any Account Debtor
of Bank’s security interest in the Borrower’s Accounts and verify and/or collect them.

(iv)

Bank’s
Discretion. Notwithstanding anything to the contrary contained herein, this Agreement may be terminated by Bank at any time,
and Bank is not obligated to finance any Eligible Accounts. Bank and Borrower hereby acknowledge and agree that Bank’s agreement
to finance Eligible Accounts hereunder is discretionary in each instance. Accordingly, there shall not be any recourse to Bank,
nor liability of Bank, on account of any delay in Bank’s making of, and/or any decline by Bank to make, any loan or advance
requested hereunder. Bank may deduct fees, Bank Expenses, Advances which become due, and other amounts due pursuant to this Agreement
from any Advances made or Collections received by Bank.

(v)

Lockbox.
Borrower shall cause all Account Debtors to wire any amounts owing to Borrower to one or more restricted accounts (each, a “Bancontrol
Account”) as Bank shall specify, and to mail all payments made by check to a post office box under Bank’s control.
All invoices shall specify such post office box as the payment address. Bank shall have sole authority to collect such payments
and deposit them to the Bancontrol Account.

 

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(vi)

Application of
Collections. Within two (2) Business Days of Bank’s receipt of any Collections, Bank will credit Collections with respect
to Financed Receivables to the Account Balance. If no Event of Default has occurred and is continuing, Bank agrees to credit the
Refundable Reserve with the amount of Collections it receives with respect to Accounts other than Financed Receivables; provided
that upon the occurrence and during the continuance of any Event of Default, Bank may apply all Collections to the Obligations
in such order and manner as Bank may determine. Bank has no duty to do any act other than to turnover such amounts as required
above. If an item of Collections is not honored or Bank does not receive good funds for any reason, the amount shall be included
in the Account Balance as if the Collections had not been received and Finance Charges shall accrue thereon. Unless an Event of
Default has occurred and is continuing, Bank shall refund to Borrower after the end of each month, the Refundable Reserve, if positive,
calculated for such month end. If the Refundable Reserve is negative, Borrower shall immediately pay such amount.

(vii)

Adjustments.
In the event the representations and warranties in Section 5.4 with respect to a Financed Receivable is breached or in the event
any Adjustment or dispute is asserted by any Account Debtor, Borrower shall promptly advise Bank and shall resolve such disputes
and advise Bank of any Adjustments; provided that in no case will the aggregate Adjustments made with respect to any Financed Receivable
exceed 2% of its original Receivable Amount unless Borrower has obtained the prior written consent of Bank. Unless the Advance
for the disputed Financed Receivable is repaid in full, Bank shall have the right, at any time, to take possession of any rejected,
returned, or recovered personal property. If such possession is not taken by Bank, Borrower is to resell it for Bank’s account
at Borrower’s expense with the proceeds made payable to Bank. While Borrower retains possession of any returned goods, Borrower
shall segregate said goods and mark them as property of Bank.

(viii)

Repayment.
Borrower will repay each Advance, and all Obligations related thereto, on the earliest of: (a) the date on which payment is received
on the Financed Receivable with respect to which the Advance was made, (b) the date on which the Financed Receivable is no longer
an Eligible Account or the representations and warranties in Section 5.4 with respect to such Financed Receivable is breached,
(c) the Maturity Date, (d) Bank’s demand for payment following an Event of Default, or (e) upon the occurrence of an Event
of Default under Section 8.5 of this Agreement, immediately without notice or demand from Bank.

2.2

Power of Attorney.
Borrower irrevocably appoints Bank and its successors and assigns as attorney-in-fact and authorizes Bank and its successors
and assigns, regardless of whether there has been an Event of Default, to: (a) sell, assign, transfer, pledge, compromise, or discharge
all or any part of the Financed Receivables; (b) demand, collect, sue, and give releases to any Account Debtor for monies due and
compromise, prosecute, or defend any action, claim, case or proceeding about the Financed Receivables, including filing a claim
or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; (c) prepare, file and sign
Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’
lien or similar document; (d) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against
account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors and notify all
Account Debtors to pay Bank directly; (e) receive, open, and dispose of mail addressed to Borrower; (f) endorse Borrower’s
name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this Agreement); and (g) execute on
Borrower’s behalf any instruments, documents, financing statements to perfect Bank’s interests in the Financed Receivables
and Collateral and do all acts and things necessary or prudent, as determined solely and exclusively by Bank, to protect, preserve,
and otherwise enforce Bank’s rights and remedies under the Loan Documents, as directed by Bank.

2.3

Finance Charges,
Payments, and Calculations.

(a)

Finance Charges.
 Borrower will pay an interest amount on each Financed Receivable Balance (each, a “Finance Charge” and
collectively, the “Finance Charges”) which is equal to the Applicable Rate divided by 360 multiplied
by the number of days each such Financed Receivable is outstanding multiplied by the outstanding Financed Receivable
Balance. Immediately upon the occurrence of an Event of Default, the Applicable Rate will increase an additional five percent (5.0%)
per annum. In the event the Prime Rate is changed from time to time hereafter, the Applicable Rate shall be increased or
decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. Bank may deduct
the accrued Finance Charges in calculating the Refundable Reserve.

 

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(b)

Payments. Bank
may debit any of Borrower’s deposit accounts for payments or any amounts Borrower owes Bank hereunder, which shall not constitute
a set-off. Any interest, fees or other charges not paid when due shall be compounded by becoming a part of the Obligations, and
such interest shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any
taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations
payable hereunder, regardless of source of payment.

2.4

Fees and Expenses.

(a)

Facility Fee.
On the Closing Date, Borrower shall, pay to Bank a facility fee equal to $9,375.00, which shall be fully earned and nonrefundable.

(b)

Administrative
Fee. Borrower shall pay to Bank an administrative fee equal to twenty basis points (0.20%) of the face amount of each
Eligible Account being financed (the “Administrative Fee”). The Administrative Fee is fully earned and nonrefundable
when the Advance made based on such Eligible Account, and payable on the date Collections with respect to such Financed Receivable
is received.

(c)

Late Fee. If
any payment required hereunder is not made within ten (10) days after the date such payment is due, Borrower shall pay Bank a late
fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted
to be charged under applicable law.

(d)

Recovery Fee.
If Borrower fails to remit any Collections to Bank pursuant to Section 2.1(a)(v), Borrower shall in each case pay to Bank the Recovery
Fee for such Collections, and shall immediately deliver such payment to Bank in the form received, except for an endorsement to
the order of Bank and, pending such delivery, shall hold such payment in trust for Bank.

(e)

Bank Expenses.
On the Closing Date, all Bank Expenses incurred through the Closing Date, including reasonable attorneys’ fees and expenses
and, after the Closing Date, all Bank Expenses, including reasonable attorneys’ fees and expenses, as and when they are incurred
by Bank.

3.

Conditions
of Loans

3.1

Conditions Precedent
to Effectiveness. The effectiveness of this Agreement is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary
or appropriate, including, without limitation:

(a)

this Agreement;

(b)

a certificate of the
Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement, along
with certified copies of Borrower’s current formation documents;

(c)

good standing certificate(s)
of Borrower;

(d)

an amendment filing
with respect to Bank’s existing UCC National Form Financing Statement;

(e)

affirmation of guarantee
duly executed by Geltech Inc.; and;

(f)

payment of the fees
and Bank Expenses then due specified in Section 2.4 hereof;

(g)

such other documents,
and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

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3.2

Conditions Precedent
to all Credit Extensions. Bank’s agreement to make each Credit Extension, including the initial Credit Extension, is
subject to the following:

(a)

receipt of the Advance
Request Form;

(b)

Bank shall have (at
its option) conducted the confirmations and verifications as described in Section 2.1(a) of this Agreement;

(c)

the representations
and warranties contained in Section 5 shall be true and correct in all material respects on and as of the date of such Advance
Request Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default
shall have occurred and be continuing, or would exist after giving effect to such Credit Extension. The making of each Credit Extension
shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the
facts referred to in this Section 3.2; and

(d)

in Bank’s reasonable
discretion, there has not been any material impairment in the Accounts, general affairs, management, results of operation, financial
condition or the prospect of repayment of the Obligations, or there has not been any material adverse deviation by Borrower from
the most recent business plan of Borrower presented to and accepted by Bank.

3.3

Covenant to Deliver.
Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to
any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall
not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in
the absence of a required item shall be in Bank’s sole discretion.

4.

Creation
of Security Interest

4.1

Grant of Security
Interest. Borrower grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan Documents. Such security interest constitutes a valid, first priority
security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in Collateral
acquired after the date hereof (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have
superior priority to Bank’s Lien in this Agreement).

4.2

Delivery of Additional
Documentation Required. Borrower shall from time to time execute and deliver to Bank, at the request of Bank, all Negotiable
Collateral, all financing statements and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect
and continue the perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions
contemplated under the Loan Documents. Borrower from time to time may deposit with Bank specific time deposit accounts to secure
specific Obligations. Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any
request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are
outstanding.

4.3

Termination.
This Agreement may be terminated prior to the Maturity Date by Borrower effective three (3) Business Days after written notice
of termination is given to Bank and all Obligations have been repaid. If this Agreement is terminated, Bank’s Lien in the
Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment
in full in cash of the Obligations and at such time as this Agreement has been terminated, Bank shall, at Borrower’s sole
cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

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5.

Representations
and Warranties

Borrower represents
and warrants as follows:

5.1

Due Organization
and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation
and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires
that it be so qualified in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

5.2

Due Authorization;
No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Articles of Incorporation
or Bylaws, nor will they constitute an event of default under any material agreement to which Borrower is a party or by which Borrower
is bound. Borrower is not in default under any material agreement to which it is a party or by which it is bound.

5.3

Collateral.
Borrower has good title to, has rights in, and the power to transfer, each item of the Collateral upon which it purports to grant
a Lien hereunder, free and clear of any and all Liens except Permitted Liens.

5.4

Bona Fide Accounts.
Borrower represents and warrants for each Financed Receivable that: (i) such Financed Receivable is an Eligible Account; (ii) Borrower
is the owner of and has the legal right to sell, transfer, assign and encumber such Financed Receivable; (iii) such Financed Receivable
is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default, has
not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other
than Permitted Liens; (iv) the correct amount is on the invoice submitted to Bank with respect to such Financed Receivable, (v)
payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the invoice date;
(vi) there are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount;
(vii) Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; and Borrower has not
received written notice (or to Borrower’s Knowledge, oral notice) of actual or imminent Insolvency Proceeding of any Account
Debtor of an Financed Receivable; and (viii) Bank has the right to endorse and/or require Borrower to endorse all payments received
on Financed Receivables and all proceeds of Collateral.

5.5

Merchantable
Inventory. All Inventory is in all material respects of good and marketable quality, free from all material defects, except
for Inventory for which adequate reserves have been made.

5.6

Intellectual
Property. Borrower is the sole owner of the Intellectual Property, except for non-exclusive licenses granted by Borrower to
its customers in the ordinary course of business and those exclusive licenses granted by Borrower and disclosed in the Schedule.
Each of the Patents is valid and enforceable, and no part of the Intellectual Property has been judged invalid or unenforceable,
in whole or in part, and to Borrower’s Knowledge, no written claim has been made that any part of the Intellectual Property
violates the rights of any third party. Except as set forth in the Schedule, Borrower’s rights as a licensee of intellectual
property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation
revenue derived from the sale, licensing, rendering or disposition of any product or service. Borrower is not a party to, or bound
by, any agreement that restricts the grant by Borrower of a security interest in Borrower’s rights under such agreement.

5.7

Name; Location
of Chief Executive Office. Except as disclosed in the Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof; or, in the past five (5) years, changed its jurisdiction of formation, corporate structure,
organizational type, or any organizational number assigned by its jurisdiction. The chief executive office of Borrower is located
at the address indicated in Section 10 hereof.

5.8

Litigation.
Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency which would, if there were an unfavorable decision, has or could reasonably be expected to result
in a Material Adverse Effect.

 

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5.9

No Material Adverse
Change in Financial Statements. All consolidated and consolidating financial statements related to Borrower and any Subsidiary
that Bank has received from Borrower fairly present in all material respects Borrower’s financial condition as of the date
thereof and Borrower’s consolidated and consolidating results of operations for the period then ended. There has not been
a material adverse change in the consolidated or the consolidating financial condition of Borrower since the date of the most recent
of such financial statements submitted to Bank.

5.10

Solvency, Payment
of Debts. Borrower is solvent and able to pay its debts (including trade debts) as they mature.

5.11

Regulatory Compliance.
Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA, and no event has occurred resulting from Borrower’s failure to comply with ERISA that could result in Borrower’s
incurring any material liability. Borrower is not an “investment company” or a company “controlled” by
an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally,
or as one of the important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower and each Subsidiary
have complied in all material respects with all the provisions of the Federal Fair Labor Standards Act. Borrower and each Subsidiary
have not violated any material statutes, laws, ordinances or rules applicable to it.

5.12

Environmental
Condition. None of Borrower’s or any Subsidiary’s properties or assets has ever been used by Borrower or any Subsidiary
or, to Borrower’s Knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release,
or transport, any hazardous waste or hazardous substance other than in accordance with applicable law; to Borrower’s Knowledge,
none of Borrower’s properties or assets has ever been designated or identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental
protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice,
or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning any action
or omission by Borrower or any Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances
into the environment.

5.13

Taxes. Borrower
and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate
provision for the payment of, all taxes reflected therein.

5.14

Subsidiaries.
Except as set forth on the Schedule, Borrower does not own any stock, partnership interest or other equity securities of any Person,
except for Permitted Investments.

5.15

Government Consents.
Borrower and each Subsidiary have obtained all material consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s
business as currently conducted, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.

5.16

Operating, Depository
and Investment Accounts. As of the Closing Date, all of Borrower’s or any Subsidiary’s operating, depository and
investment accounts maintained outside of Bank are listed on the Schedule (collectively, the “Permitted Accounts”).
None of Borrower’s nor any domestic Subsidiary’s accounts are maintained or invested with a Person other than Bank,
except as permitted under Section 6.8.

5.17

Full Disclosure.
To Borrower’s Knowledge, no representation, warranty or other statement made by Borrower in any certificate or written statement
furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements contained in such certificates or statements not misleading.

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6.

Affirmative
Covenants. 

Borrower
shall comply with all of the following:

6.1

Good Standing.
Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation
and maintain qualification in each jurisdiction in which the failure to do so could reasonably be expected to have a Material Adverse
Effect. Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements,
the loss of which could reasonably be expected to have a Material Adverse Effect.

6.2

Government Compliance.
Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances
and government rules and regulations to which it is subject, noncompliance with which could have a Material Adverse Effect.

6.3

Financial
Statements, Reports, Certificates. Borrower shall deliver the following to Bank: (a) within thirty (30) days after the last
day of each month, aged listings of accounts receivable and accounts payable, together with a deferred revenue listing; (b) as
soon as available, but in any event within forty-five (45) days after the end of each month, a Compliance Certificate signed by
a Responsible Officer in substantially the form of Exhibit C hereto; (c) as soon as available, but in any event within forty
five (45) days after the end of each quarter, a Borrower prepared consolidated and consolidating balance sheet, income, and cash
flow statement covering Borrower’s consolidated operations during such period, prepared in accordance with GAAP, consistently
applied, in a form reasonably acceptable to Bank; provided, however, that the filing of such financial statements with the Securities
and Exchange Commission through EDGAR will satisfy Borrower’s delivery obligations hereunder upon notice to Bank of such
filings; (d) as soon as available, but in any event within one hundred twenty (120) days after the end of Borrower’s fiscal
year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied,
together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably
acceptable to Bank; provided, however that the filing of such financial statements and opinion of an independent certified public
accounting firm with the Securities and Exchange Commission through EDGAR will satisfy Borrower’s delivery obligations hereunder
upon notice to Bank of such filings; (e) unless complete copies of the following are not available on EDGAR, copies of all statements,
reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt;
(f) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary
that could result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000) or more, or any
commercial tort claim (as defined in the Code) acquired by Borrower; (g) within 30 days following the end of each month, copies
of all bank statements with respect to all accounts of Borrower or any Subsidiary maintained outside of Bank; and (h) such budgets,
sales projections, operating plans, other financial information including information related to the verification of Borrower’s
Accounts as Bank may reasonably request from time to time. For the avoidance of doubt, all information disclosed by Borrower, or
any of its Subsidiaries, to Bank pursuant to this Section 6.3, shall be kept confidential by Bank in accordance with Section 12.9.

6.4

Audits. Bank
shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense,
provided that such audits will be conducted no more often than every twelve (12) months unless an Event of Default has occurred
and is continuing.

6.5

Inventory; Returns.
Borrower shall keep all Inventory in good and marketable condition, free from all material defects except for Inventory for which
adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same
basis and in accordance with the usual customary practices of Borrower, as they exist at the time of the execution and delivery
of this Agreement. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the
return, recovery, dispute or claim involves more than One Hundred Thousand Dollars ($100,000).

 

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6.6

Taxes. Borrower
shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local
taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment or deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely payment or
deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish
Bank with proof satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments or deposits; provided that
Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate
proceedings and is reserved against (to the extent required by GAAP) by Borrower

6.7

Insurance.

(a)

Borrower,
at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards
and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations
where Borrower’s business is conducted on the date hereof. Borrower shall also maintain insurance relating to Borrower’s
business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrower’s.

 

(b)

All such policies
of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Bank. All such policies
of property insurance insuring property located in the United States shall contain a lender’s loss payable endorsement, in
a form reasonably satisfactory to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies
issued to Borrower or its domestic Subsidiaries shall show the Bank as an additional insured and shall specify that the insurer
must give at least twenty (20) days’ notice to Bank before canceling its policy for any reason. Upon Bank’s request,
Borrower shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor.
All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the Obligations.
Notwithstanding the foregoing, (x) so long as no Event of Default has occurred that is continuing, Borrower shall have the option
of applying the proceeds of any casualty policy up to One Million Dollars ($1,000,000) in the aggregate for all losses under all
casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced
or repaired property shall be of equal or like value as the replaced or repaired Collateral and shall be deemed Collateral in which
Bank has been granted a first priority security interest, and (y) after the occurrence and during the continuance of an Event of
Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations.
Borrower shall give Bank prompt written notice (which shall in no event be greater than ten (10) days following such occurrence)
of the occurrence of any casualty affecting the Collateral or properties covered by the insurance policies required by this Section
6.7(b) or any portion thereof.

 

6.8

Operating, Depository
and Investment Accounts. Borrower shall maintain and shall cause each of its domestic Subsidiaries to maintain its primary
depository and operating accounts with Bank. For each operating, depository or investment account, including each Permitted Account,
that Borrower maintains outside of Bank, Borrower shall either: (a) cause the applicable bank or financial institution at or with
which any such account is maintained to execute and deliver an account control agreement or other appropriate instrument in form
and substance reasonably satisfactory to Bank; or (b) maintain an account balance in each such Permitted Account in an amount not
to exceed Ten Thousand Dollars ($10,000) at any given time.

6.9

Intellectual
Property Rights.

(a)

Maintain the validity
and enforceability of its Intellectual Property; (ii) promptly advise Bank in writing of material infringements of its Intellectual
Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated
to the public without Bank’s written consent.

(b)

Borrower (i) shall
give Bank not less than fifteen (15) days prior written notice of the filing of any applications or registrations with the United
States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on
such applications or registrations, and the date such applications or registrations will be filed, and (ii) shall execute such
documents as Bank may reasonably request for Bank to maintain its perfection in the proceeds of such intellectual property rights
to be registered by Borrower.

 

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6.10

Further Assurances.
At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.

7.

NEGATIVE
COVENANTS. Borrower will not do any of the following:

7.1

Dispositions.
Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries
to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in the ordinary course of business;
(ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in
the ordinary course of business; or (iii) Transfers of worn-out or obsolete Equipment.

7.2

Change in Business;
Change in Control or Executive Office. Engage in any business, or permit any of its Subsidiaries to engage in any business,
other than the businesses currently engaged in by Borrower and any business substantially similar or related thereto (or incidental
thereto); cease to conduct business substantially in the manner conducted by Borrower as of the Closing Date; or suffer or permit
a Change in Control; or without thirty (30) days prior written notification to Bank, relocate its chief executive office or state
of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year
ends.

7.3

Mergers or Acquisitions.
Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization,
or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another
Person, provided however, that Borrower may acquire all or substantially all of the capital stock or property of another Person
with prior notice to Bank (but without the prior written consent of Bank) if each the following conditions is applicable: (i) no
Event of Default has occurred, is continuing or would exist after giving effect to such transactions, (ii) such transactions do
not result in a Change in Control, and (iii) Borrower is the surviving entity.

7.4

Indebtedness.
Create, incur, guarantee, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other
than Permitted Indebtedness.

7.5

Encumbrances.
Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise convey any right
to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens,
or enter into any agreement with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of
its property, or permit any Subsidiary to do so.

7.6

Distributions.
Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital
stock, or permit any of its Subsidiaries to do so, except that Borrower may repurchase the stock of former employees pursuant to
stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving
effect to such repurchase, and the aggregate amount of such repurchase does not exceed $100,000 in any fiscal year.

7.7

Investments.
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; or maintain or invest any of its property with a Person other than Bank or permit any of its
Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in form and substance reasonably
satisfactory to Bank (provided however that Borrower and its Chinese Subsidiary may maintain accounts with foreign financial institutions
that are not subject to an account control agreement in favor of Bank, consistent with past practices and in the ordinary course
of business); or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary
from paying dividends or otherwise distributing property to Borrower.

7.8

Transactions
with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower
except for (i) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are
no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person; and (ii)
transactions with Chinese Subsidiary pursuant to transfer pricing arrangements consistent with past practices and in the ordinary
course of business.

 

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7.9

Subordinated
Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except
in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated
Debt without Bank’s prior written consent.

7.10

Collateral.
Store the Collateral with a bailee, warehouseman, or other third party unless the third party has been notified of Bank’s
security interest and Bank has received a consent, waiver, acknowledgment, control agreement or other instrument or document duly
executed by such third party in form and substance reasonably satisfactory to Bank.

7.11

Compliance.
Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. Fail
to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could reasonably
be expected to have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien
on the Collateral, or permit any of its Subsidiaries to do any of the foregoing.

8.

EVENTS
OF DEFAULT.

Any one or more of
the following events shall constitute an Event of Default by Borrower under this Agreement:

8.1

Payment Default.
If Borrower fails to pay, when due, any of the Obligations;

8.2

Covenant Default.

(a)

If Borrower fails
to perform any obligation under Article 6 other than Section 6.1, 6.2, or 6.9, or violates any of the covenants contained in Article
7 of this Agreement; or

(b)

If Borrower fails
or neglects to perform or observe any provision of Section 6.1, 6.2, or 6.9 or any other material term, provision, condition, covenant
contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank
and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default
within twenty (20) days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however,
that if the default cannot by its nature be cured within the twenty (20) day period or cannot after diligent attempts by Borrower
be cured within such twenty (20) day period, and such default is likely to be cured within a reasonable time, then Borrower shall
have an additional reasonable period (which shall not in any case exceed an additional twenty (20) days) to attempt to cure such
default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default
but no Credit Extensions will be made.

8.3

Material Adverse
Effect. If there occurs any circumstance or circumstances that could reasonably be expected to have a Material Adverse Effect;

8.4

Attachment.
If any portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within twenty (20) days, or if Borrower is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any portion of Borrower’s assets, or if a notice of lien, levy, or assessment
is filed of record with respect to any of Borrower’s assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within twenty (20)
days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such
action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Credit
Extensions will be required to be made during such cure period);

 

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8.5

Insolvency.
If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within forty-five (45) days (provided that no Credit Extensions will be made prior
to the dismissal of such Insolvency Proceeding);

8.6

Other Agreements.
If there is a default or other failure to perform in any agreement to which Borrower is a party or by which it is bound resulting
in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in
excess of One Hundred Thousand Dollars ($100,000) or which could reasonably be expected to have a Material Adverse Effect;

8.7

Subordinated
Debt. If Borrower makes any payment on account of Subordinated Debt, except to the extent the payment is allowed under any
subordination agreement entered into with Bank;

8.8

Judgments.
If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand
Dollars ($100,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of twenty (20) days
(provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment);

8.9

Misrepresentations.
If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document; or

8.10

Guaranty. If
any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and effect,
or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively,
the “Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor revokes or purports
to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation
set forth in any Guaranty Document or in any certificate delivered to Bank in connection with any Guaranty Document, or if any
of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor or becomes subject to any criminal
prosecution, or any circumstances arise causing Bank, in good faith, to become insecure as to the satisfaction of any of any guarantor’s
obligations under the Guaranty Documents.

9.

Bank’s
Rights and Remedies

9.1

Rights and Remedies.
Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election
and without demand, do any one or more of the following, all of which are authorized by Borrower:

(a)

Declare all or any
portion of the Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become
immediately due and payable without any action by Bank);

(b)

Cease advancing money
or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank;

(c)

settle or adjust disputes
and claims directly with Account Debtors for amounts, on terms and in any order that Bank considers advisable and notify any Person
owing Borrower money of Bank’s security interest in such funds and verify the amount of such account. Borrower shall collect
all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the
Account Debtor, with proper endorsements for deposit;

 

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(d)

Make such payments
and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes
Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be
prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s
owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without
charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

(e)

Set off and apply
to the Obligations any and all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or
for the credit or the account of Borrower held by Bank;

(f)

Ship, reclaim, recover,
store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral.
Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks,
and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising
for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s
rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

(g)

Dispose of the Collateral
by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s
premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order
Bank deems appropriate;

(h)

place a “hold”
on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

(i)

credit bid and purchase
at any public sale;

(j)

demand and receive
possession of Borrower’s Books; and

(k)

exercise all rights
and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including
disposal of the Collateral pursuant to the terms thereof). Any deficiency that exists after disposition of the Collateral as provided
above will be paid immediately by Borrower.

9.2

Right of Set-Off.
Borrower hereby grants to Bank, a lien, security interest and right of setoff as security for all Obligations to Bank, whether
now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Bank or any entity under the control of Bank (including a Bank subsidiary) or in transit to
any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank
may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

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9.3

Power of Attorney.
During the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated
officers, or employees) as Borrower’s true and lawful attorney, without limitation to any other right of Bank under this
Agreement, to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the
Accounts; (b) notify all account debtors with respect to the Accounts to pay Bank directly; (c) sign Borrower’s name on any
invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications
of Accounts, and notices to account debtors; (d) make, settle, and adjust all claims under and decisions with respect to Borrower’s
policies of insurance; (e) demand, collect, receive, sue, and give releases to any account debtor for the monies due or which may
become due upon or with respect to the Accounts and to compromise, prosecute, or defend any action, claim, case or proceeding relating
to the Accounts; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and
upon terms which Bank determines to be reasonable; (g) sell, assign, transfer, pledge, compromise, discharge or otherwise dispose
of any Collateral; (h) receive and open all mail addressed to Borrower for the purpose of collecting the Accounts; (i) endorse
Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (j) execute
on behalf of Borrower any and all instruments, documents, financing statements and the like to perfect Bank’s interests in
the Accounts and Collections and file, in its sole discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral; and (k) do all acts and things necessary or expedient, in furtherance of any such purposes;
provided however Bank may exercise such power of attorney with respect to any actions described in clause (j) above, regardless
of whether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one
of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully
repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated.

9.4

Protective Payments.
If Borrower fails to obtain the insurance called for by Section 6.6 of this Agreement or fails to pay any premium thereon or fails
to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such
insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest
at the then highest rate applicable to the Obligations, and secured by the Collateral. Bank will make reasonable efforts to provide
Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments
by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

9.5

Bank’s
Liability for Collateral. So long as Bank complies with reasonable banking practices, Bank shall not in any way or manner be
liable or responsible for: (a) the safekeeping of the Collateral; any loss or damage thereto occurring or arising in any manner
or fashion from any cause; (b) any diminution in the value thereof; or (c) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower.

9.6

No Waiver; Remedies
Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this
Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance
and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and
then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this
Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in
equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy
under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing
waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.

9.7

Demand; Protest.
Borrower waives, to the extent permitted by applicable law, demand, protest, notice of protest, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any
way be liable.

 

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10.

Notices.
All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other
Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of
actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one
(1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered
by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address
indicated below. Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party
written notice thereof in accordance with the terms of this Section 10.

If to Borrower:

LightPath Technologies, Inc.

2603 Challenger Tech Ct., Suite 100

Orlando, FL 32826

Attn: Dorothy Cipolla

FAX: (407) 382-4007

Email: dcipolla@lightpath.com

 

with a copy to:

 

Baker & Hostetler LLP

200 South Orange Avenue, Suite 2300

Orlando, FL 32801

Attn: Jeffrey E. Decker, Esq.

FAX: (407) 841-0168

Email: jdecker@bakerlaw.com

 

If to Bank:

Avidbank

50 West San Fernando Street, Suite 850

San Jose, California 95113

Attn: Jon Krogstad

FAX: (408) 200-7399; (855) 208-1157

Email: jkrogstad@avidbank.com

 

11.

Choice
of Law, Venue, Jury Trial Waiver and Judicial Reference. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of California, without regard to principles of conflicts of law. Each of Borrower and Bank
hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California.
BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES
A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

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WITHOUT INTENDING
IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the
right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature
between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California
Code of Civil Procedure § 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive
jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to
the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions
of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among
others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records
relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief,
but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the
Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the
same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be
entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable
to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to
judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge
shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement
of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right
of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private
judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

12.

General
Provisions

12.1

Successors and
Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s
prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without
the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest
in, Bank’s obligations, rights and benefits hereunder.

12.2

Indemnification.
Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of,
following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without
limitation reasonable attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful
misconduct.

12.3

Time of Essence.
Time is of the essence for the performance of all obligations in this Agreement.

12.4

Severability
of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

12.5

Correction of
Loan Documents. Bank may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent
with the agreement of the parties.

12.6

Amendments in
Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally. Subject to Section
1.3 of this Agreement, all prior agreements, understandings, representations, warranties, and negotiations between the parties
hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and
the Loan Documents.

12.7

Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one
and the same Agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
Notwithstanding the foregoing, Borrower shall deliver all original signed documents requested by Bank no later than ten (10) Business
Days following the Closing Date.

 

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12.8

Survival.
All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations
remain outstanding or Bank has any obligation to make Credit Extensions to Borrower. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought against Bank have run.

12.9

Confidentiality.
In handling any confidential information Bank and all employees and agents of Bank, including but not limited to accountants, shall
exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain
the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure
of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business
relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the loans, provided that they are similarly
bound by confidentiality obligations, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar
order, (iv) as may be required in connection with the examination, audit or similar investigation of Bank and (v) as Bank may determine
in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information
that either: (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does
not have actual knowledge that such third party is prohibited from disclosing such information.

12.10

Patriot Act Notice.
Bank hereby notifies Borrower that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into
law on October 26, 2001) (the “Patriot Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes names and addresses and other information that will allow Bank, as applicable, to identify
the Borrower in accordance with the Patriot Act.

12.11

Third Parties.
Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by
reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns;
(b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person
not an express party to this Agreement any right of subrogation or action against any party to this Agreement.

[remainder
of this page intentionally left blank]

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the Closing Date.

BORROWER

LIGHTPATH TECHNOLOGIES, INC.

	By:	/s/ J. James Gaynor	 	 
	Name:	J. James Gaynor	 	 
	Title:	CEO & President	 	 
	BANK	 	 
	AVIDBANK 	 	 
	By:	/s/ Jon Krogstad	 	 
	Name:	Jon Krogstad	 	 
	Title:	Senior Vice President	 	 

 

 

    	24

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