Document:

Exhibit 4.9

 

 

 

 

 

 

 

 

 

 

the COMMUNITY FINANCIAL CORPORATION

 

SUBORDINATED INDENTURE

 

DATED AS OF [•]

 

[•], AS TRUSTEE

 

 

 

 

 

 

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page Number	 
	 	 	 	 
	ARTICLE I	DEFINITIONS AND INCORPORATION BY REFERENCE	1	 
	 	 	 	 
	Section 1.1	Definitions	1	 
	Section 1.2	Other Definitions	6	 
	Section 1.3	Incorporation by Reference of Trust Indenture Act	6	 
	Section 1.4	Rules of Construction	6	 
	 	 	 	 
	ARTICLE II	THE SECURITIES	7	 
	 	 	 	 
	Section 2.1	Issuable in Series	7	 
	Section 2.2	Establishment of Terms of Series of Securities	7	 
	Section 2.3	Execution and Authentication	9	 
	Section 2.4	Registrar and Paying Agent	10	 
	Section 2.5	Paying Agent to Hold Money in Trust	10	 
	Section 2.6	Securityholder Lists	11	 
	Section 2.7	Transfer and Exchange	11	 
	Section 2.8	Mutilated, Destroyed, Lost and Stolen Securities	11	 
	Section 2.9	Outstanding Securities	12	 
	Section 2.10	Treasury Securities	12	 
	Section 2.11	Temporary Securities	13	 
	Section 2.12	Cancellation	13	 
	Section 2.13	Defaulted Interest	13	 
	Section 2.14	Global Securities	13	 
	Section 2.15	CUSIP Numbers	14	 
	 	 	 	 
	ARTICLE III	REDEMPTION	15	 
	 	 	 	 
	Section 3.1	Notice to Trustee	15	 
	Section 3.2	Selection of Securities to be Redeemed	15	 
	Section 3.3	Notice of Redemption	16	 
	Section 3.4	Effect of Notice of Redemption	16	 
	Section 3.5	Deposit of Redemption Price	17	 
	Section 3.6	Securities Redeemed in Part	17	 
	 	 	 	 
	ARTICLE IV	COVENANTS	17	 
	 	 	 	 
	Section 4.1	Payment of Principal and Interest	17	 
	Section 4.2	SEC Reports	17	 
	Section 4.3	Compliance Certificate	17	 
	Section 4.4	Stay, Extension and Usury Laws	17	 
	Section 4.5	Corporate Existence	18	 
	Section 4.6	Taxes	18	 

 

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	ARTICLE V	SUCCESSORS	18	 
	 	 	 	 
	Section 5.1	When Company May Merge, Etc	18	 
	Section 5.2	Successor Corporation Substituted	18	 
	 	 	 	 
	ARTICLE VI	DEFAULTS AND REMEDIES	19	 
	 	 	 	 
	Section 6.1	Events of Default	19	 
	Section 6.2	Acceleration of Maturity; Rescission and Annulment	20	 
	Section 6.3	Collection of Indebtedness and Suits for Enforcement by Trustee	21	 
	Section 6.4	Trustee may File Proofs of Claim	21	 
	Section 6.5	Trustee may Enforce Claims Without Possession of Securities	22	 
	Section 6.6	Application of Money Collected	22	 
	Section 6.7	Limitation on Suits	22	 
	Section 6.8	Unconditional Right of Holders to Receive Principal and Interest	23	 
	Section 6.9	Restoration of Rights and Remedies	23	 
	Section 6.10	Rights and Remedies Cumulative	23	 
	Section 6.11	Delay or Omission Not Waiver	23	 
	Section 6.12	Control by Holders	24	 
	Section 6.13	Waiver of Past Defaults	24	 
	Section 6.14	Undertaking for Costs	24	 
	 	 	 	 
	ARTICLE VII	TRUSTEE	25	 
	 	 	 	 
	Section 7.1	Duties of Trustee	25	 
	Section 7.2	Rights of Trustee	26	 
	Section 7.3	Individual Rights of Trustee	28	 
	Section 7.4	Trustee’s Disclaimer	28	 
	Section 7.5	Notice of Defaults	28	 
	Section 7.6	Reports by Trustee to Holders	28	 
	Section 7.7	Compensation and Indemnity	28	 
	Section 7.8	Replacement of Trustee	29	 
	Section 7.9	Successor Trustee by Merger, Etc	30	 
	Section 7.10	Eligibility; Disqualification	30	 
	Section 7.11	Referential Collection of Claims Against Company	30	 
	 	 	 	 
	ARTICLE VIII	SATISFACTION AND DISCHARGE; DEFEASANCE	30	 
	 	 	 	 
	Section 8.1	Satisfaction and Discharge of Indenture	30	 
	Section 8.2	Application of Trust Funds; Indemnification	31	 
	Section 8.3	Legal Defeasance of Securities of any Series	32	 
	Section 8.4	Covenant Defeasance	33	 
	Section 8.5	Repayment to Company	34	 
	 	 	 	 
	ARTICLE IX	AMENDMENTS AND WAIVERS	34	 
	 	 	 	 
	Section 9.1	Without Consent of Holders	34	 
	Section 9.2	With Consent of Holders	36	 
	Section 9.3	Limitations	36	 
	Section 9.4	Compliance with Trust Indenture Act	37	 
	Section 9.5	Revocation and Effect of Consents	37	 
	Section 9.6	Notation on or Exchange of Securities	37	 
	Section 9.7	Trustee Protected	37	 

 

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	ARTICLE X	MISCELLANEOUS	37	 
	 	 	 	 
	Section 10.1	Trust Indenture Act Controls	37	 
	Section 10.2	Notices	38	 
	Section 10.3	Communication by Holders with Other Holders	38	 
	Section 10.4	Certificate and Opinion as to Conditions Precedent	39	 
	Section 10.5	Statements Required in Certificate or Opinion	39	 
	Section 10.6	Rules by Trustee and Agents	39	 
	Section 10.7	Legal Holidays	39	 
	Section 10.8	No Recourse Against Others	39	 
	Section 10.9	Counterparts	39	 
	Section 10.10	Governing Laws	40	 
	Section 10.11	No Adverse Interpretation of Other Agreements	40	 
	Section 10.12	Successors	40	 
	Section 10.13	Severability	40	 
	Section 10.14	Table of Contents, Headings, Etc	40	 
	Section 10.15	Waiver of Trial by Jury	40	 
	Section 10.16	Consent to Jurisdiction	40	 
	Section 10.17	USA Patriot Act	41	 
	 	 	 	 
	ARTICLE XI	SINKING FUNDS	41	 
	 	 	 	 
	Section 11.1	Applicability of Article	41	 
	Section 11.2	Satisfaction of Sinking Fund Payments with Securities	41	 
	Section 11.3	Redemption of Securities for Sinking Fund	42	 
	 	 	 	 
	ARTICLE XII	SUBORDINATION OF SECURITIES	42	 
	 	 	 	 
	Section 12.1	Agreement of Subordination	42	 
	Section 12.2	Payments to Holders	43	 
	Section 12.3	Subrogation of Securities	45	 
	Section 12.4	Authorization to Effect Subordination	46	 
	Section 12.5	Notice to Trustee	46	 
	Section 12.6	Trustee’s Relation to Senior Indebtedness	47	 
	Section 12.7	No Impairment of Subordination	47	 
	Section 12.8	Article Applicable to Paying Agents	47	 
	Section 12.9	Senior Indebtedness Entitled to Rely	48	 

 

 

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CROSS REFERENCE TABLE

 

	Trust Indenture	 	Indenture
	Act Section	 	Section
	Section 310	(a)(1)	7.10
	 	(a)(2)	7.10
	 	(a)(3)	N/A
	 	(a)(4)	N/A
	 	(a)(5)	7.10
	 	(b)	7.10
	Section 311	(a)	7.11
	 	(b)	7.11
	 	(c)	N/A
	Section 312	(a)	2.6
	 	(b)	10.3
	 	(c)	10.3
	Section 313	(a)	7.6
	 	(b)(1)	7.6
	 	(b)(2)	7.6
	 	(c)(1)	7.6
	 	(d)	7.6
	Section 314	(a)	4.2, 10.5
	 	(b)	N/A
	 	(c)(1)	10.4
	 	(c)(2)	10.4
	 	(c)(3)	N/A
	 	(d)	N/A
	 	(e)	10.5
	 	(f)	N/A
	Section 315	(a)	7.1
	 	(b)	7.5
	 	(c)	7.1
	 	(d)	7.1
	 	(e)	6.14
	Section 316	(a)	2.10
	 	(a)(1)(A)	6.12
	 	(a)(1)(B)	6.13
	 	(b)	6.8
	Section 317	(a)(1)	6.3
	 	(a)(2)	6.4
	 	(b)	2.5
	Section 318	(a)	10.1

 

* This Cross Reference Table shall not, for any purpose, be deemed to be part of the Indenture.

 

 

 

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This SUBORDINATED INDENTURE, dated as of [•]
is made by and between THE COMMUNITY FINANCIAL CORPORATION, a Maryland corporation (the “Company”), and [•],
not in its individual capacity but solely as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture:

 

ARTICLE
I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1           
Definitions.

 

“Additional Amounts” means any additional
amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect
of certain taxes imposed on Holders specified herein or therein and which are owing to such Holders.

 

“Affiliate” of any specified person
means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified
person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), as used with respect to any person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities
or by agreement or otherwise.

 

“Agent” means any Registrar, Paying
Agent or Service Agent.

 

“Board of Directors” means the Board
of Directors of the Company or any duly authorized committee thereof.

 

“Board Resolution” means a copy
of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been adopted by the Board of Directors or
pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to
the Trustee.

 

“Business Day” means, unless otherwise
provided by Board Resolution, Officers’ Certificate or supplemental indenture hereto for a particular Series, any day except a Saturday,
Sunday, a legal holiday or any other day on which banking institutions in the City of New York, New York, or any Place of Payment are
authorized or required by law, regulation or executive order to close; provided, however, that in the case of any floating rate interest
payment date, such day is also a London banking day.

 

“Capital Stock” means any and all
shares, interests, participations, rights or other equivalents (however designated) of corporate stock.

 

“Company” means the party named
as such above until a successor replaces it and thereafter means the successor.

 

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“Company Order” means a written
order signed in the name of the Company by two Officers, one of whom must be the Company’s principal executive officer, principal
financial officer or principal accounting officer.

 

“Company Request” means a written
request signed in the name of the Company by its Chief Executive Officer, the President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Corporate Trust Office” means the
office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at
the date hereof is located at [•], Attention: The Community Financial Corporation Administrator, or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee
(or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

 

“Default” means any event which
is, or after notice or passage of time or both would be, an Event of Default.

 

“Depository” means, with respect
to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated
as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act; and if at
any time there is more than one such person, “Depository” as used with respect to the Securities of any Series shall mean
the Depository with respect to the Securities of such Series.

 

“Designated Senior Indebtedness”
means any of the Company’s senior indebtedness that expressly provides that it is “designated senior indebtedness” for
purposes of this Indenture (provided that the instrument, agreement or other document creating or evidencing such Senior Indebtedness
may place limitations and conditions on the right of such Senior Indebtedness to exercise the rights of Designated Senior Indebtedness).

 

“Discount Security” means any Security
that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the
Stated Maturity thereof pursuant to Section 6.2.

 

“Dollars” and “$”
means the currency of the United States of America.

 

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

 

“GAAP” means generally accepted
accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are
in effect as of the date of determination.

 

“Global Security” or “Global
Securities” means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2 evidencing all
or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered in the name of such Depository
or nominee.

 

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“Holder” or “Securityholder”
means a person in whose name a Security is registered.

 

“Indebtedness” means, with respect
to any person, and without duplication, (a) all indebtedness, obligations and other liabilities (contingent or otherwise) of such person
for borrowed money (including obligations of the Company in respect of overdrafts, foreign exchange contracts, currency exchange agreements,
interest rate protection agreements, and any loans or advances from banks, whether or not evidenced by notes or similar instruments) or
evidenced by bonds, debentures, notes or similar instruments (whether or not the recourse of the lender is to the whole of the assets
of such person or to only a portion thereof) (other than any account payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such person with respect to letters of credit, bank guarantees or bankers’ acceptances,
(c) all obligations and liabilities (contingent or otherwise) in respect of leases of such person required, in conformity with GAAP, to
be accounted for as capitalized lease obligations on the balance sheet of such person and all obligations and other liabilities (contingent
or otherwise) under any lease or related document (including a purchase agreement) in connection with the lease of real property which
provides that such person is contractually obligated to purchase or cause a third party to purchase the leased property and thereby guarantee
a minimum residual value of the leased property to the lessor and the obligations of such person under such lease or related document
to purchase or to cause a third party to purchase such leased property, (d) all obligations of such person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other similar instrument or agreement or foreign currency hedge,
exchange, purchase or similar instrument or agreement, (e) all direct or indirect guaranties or similar agreements by such person in respect
of, and obligations or liabilities (contingent or otherwise) of such person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of indebtedness, obligations or liabilities of another person of the kind described in clauses (a) through (d),
(f) any indebtedness or other obligations described in clauses (a) through (e) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such person, regardless of whether the indebtedness or other obligation secured thereby
shall have been assumed by such person and (g) any and all refinancings, replacements, deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind described in clauses (a) through
(f).

 

“Indenture” means this Subordinated
Indenture as amended or supplemented from time to time and shall include the form and terms of particular Series of Securities established
as contemplated hereunder.

 

“interest” with respect to any Discount
Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

“Maturity,” when used with respect
to any Security or installment of principal thereof, means the date on which the principal of such Security or such installment of principal
becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption,
or otherwise.

 

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“Officer” means the Chief Executive
Officer, the President, any Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.

 

“Officers’ Certificate” means
a certificate signed by two Officers, one of whom must be the Company’s principal executive officer, principal financial officer
or principal accounting officer.

 

“Opinion of Counsel” means a written
opinion of legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.

 

“person” means any individual, corporation,
partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government
or any agency or political subdivision thereof.

 

“Place of Payment,” when used with
respect to the Securities of or within any Series, means the place or places where the principal of (and premium, if any) and interest,
if any, on such Securities are payable as specified and as contemplated by Section 2.1.

 

“principal” or “principal
amount” of a Security means the principal amount of the Security plus, when appropriate, the premium, if any, on, and any Additional
Amounts in respect of, the Security.

 

“Representative” means the (a) indenture
trustee or other trustee, agent or representative for any Senior Indebtedness or (b) with respect to any Senior Indebtedness that does
not have any such trustee, agent or other representative, (i) in the case of such Senior Indebtedness issued pursuant to an agreement
providing for voting arrangements as among the holders or owners of such Senior Indebtedness, any holder or owner of such Senior Indebtedness
acting with the consent of the required persons necessary to bind such holders or owners of such Senior Indebtedness and (ii) in the case
of all other such Senior Indebtedness, the holder or owner of such Senior Indebtedness.

 

“Responsible Officer” means any
officer of the Trustee in its Corporate Trust Office and also means, with respect to a particular corporate trust matter, any other officer
to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with a particular subject, in each case,
who has direct responsibility for the administration of this Indenture.

 

“SEC” means the Securities and Exchange
Commission.

 

“Securities” means the debentures,
notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture.

 

“Senior Indebtedness” means the
principal, premium, if any, interest, including any interest accruing after bankruptcy, Additional Amounts, if any, and rent or termination
payment on or other amounts due on the Company’s current or future indebtedness, whether created, incurred, assumed, guaranteed
or in effect guaranteed by us, including any deferrals, renewals, extensions, refundings, amendments, modifications or supplements to
the above. However, Senior Indebtedness does not include: (i) indebtedness that expressly provides that it shall not be senior in right
of payment to the Securities or expressly provides that it is on the same basis or junior to the Securities; (ii) the Company’s
indebtedness to any of the Company’s Subsidiaries; and (iii) the Securities.

 

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“Series” or “Series of
Securities” means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2.

 

“Stated Maturity” when used with
respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

“Subsidiary” of any specified person
means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person or a combination
thereof.

 

“TIA” means the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment,
the Trust Indenture Act as so amended.

 

“Trustee” means the person named
as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter “Trustee” shall mean each person who is then a Trustee hereunder,
and if at any time there is more than one such person, “Trustee” as used with respect to the Securities of any Series shall
mean the Trustee with respect to Securities of that Series.

 

“U.S. Government Obligations” means
securities which are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged
or (b) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, and which in
the case of clauses (a) and (b) are not callable or redeemable at the option of the issuer thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest
on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depository
receipt.

 

 

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Section 1.2           
Other Definitions.

 

	Term	Defined in Section
	“Bankruptcy Law”	6.1
	“Custodian”	6.1
	“Event of Default”	6.1
	“Legal Holiday”	10.7
	“mandatory sinking fund payment”	11.1
	“optional sinking fund payment”	11.1
	“Paying Agent”	2.4
	“Payment Blockage Notice”	12.2
	“Registrar”	2.4
	“Service Agent”	2.4
	“successor person”	5.1

 

Section 1.3           
Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

 

“default” means Event of Default.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Securityholder.

 

“indenture to be qualified” means this
Indenture.

 

“indenture trustee” or “institutional
trustee” means the Trustee.

 

“obligor” on the indenture securities means
the Company and any successor obligor upon the Securities.

 

All other terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used
herein as so defined.

 

Section 1.4           
Rules of Construction. Unless the context otherwise requires:

 

		(a)	a term has the meaning assigned to it;

 

		(b)	an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted
accounting principles;

 

		(c)	references to “generally accepted accounting principles” and “GAAP” shall mean
generally accepted accounting principles in the United States of America, consistently applied, in effect as of the time when and for
the period as to which such accounting principles are to be applied;

 

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		(d)	“or” is not exclusive;

 

		(e)	words in the singular include the plural, and in the plural include the singular; and

 

		(f)	provisions apply to successive events and transactions.

 

ARTICLE
II

THE SECURITIES

 

Section 2.1           
Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture
is unlimited. The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth
or determined in the manner provided in a Board Resolution, supplemental indenture or Officers’ Certificate detailing the adoption
of the terms thereof pursuant to authority granted under a Board Resolution. In the case of Securities of a Series to be issued from time
to time, the Board Resolution, Officers’ Certificate or supplemental indenture detailing the adoption of the terms thereof pursuant
to authority granted under a Board Resolution may provide for the method by which specified terms (such as interest rate, maturity date,
record date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters;
provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture, but all Securities
issued hereunder shall be subordinate and junior in right of payment, to the extent and in the manner set forth in Article XII, to all
Senior Indebtedness of the Company.

 

Section 2.2           
Establishment of Terms of Series of Securities. At or prior to the issuance of any Securities within a Series, the following
shall be established (as to the Series generally, in the case of Section 2.2(a) and either as to such Securities within the Series or
as to the Series generally, in the case of Sections 2.2(b) through 2.2(q)) by or pursuant to a Board Resolution, and set forth or determined
in the manner provided in a Board Resolution, supplemental indenture or an Officers’ Certificate:

 

		(a)	the title of the Series (which shall distinguish the Securities of that particular Series from the Securities
of any other Series);

 

		(b)	the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities
of the Series will be issued;

 

		(c)	any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated
and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

 

		(d)	the date or dates on which the principal of the Securities of the Series is payable;

 

		(e)	the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine
such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the
Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates
on which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment
date;

 

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		(f)	the Place of Payment where the principal of and interest, if any, on the Securities of the Series shall
be payable, where the Securities of such Series may be surrendered for registration of transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of such Series and this Indenture may be served, and the method of such payment, if
by wire transfer, mail or other means;

 

		(g)	if applicable, the period or periods within which, the price or prices at which and the terms and conditions
upon which the Securities of the Series may be redeemed, in whole or in part, at the option of the Company;

 

		(h)	the obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to
any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;

 

		(i)	the dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased
by the Company at the option of the Holders thereof and other detailed terms and provisions of such repurchase obligations;

 

		(j)	if other than minimum denominations of $1,000 and any integral multiple in excess thereof, the denominations
in which the Securities of the Series shall be issuable;

 

		(k)	if the forms of the Securities of the Series will be in fully registered form, and whether the Securities
will be issuable as Global Securities;

 

		(l)	if other than the entire principal amount thereof, the portion of the principal amount of the Securities
of the Series that shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.2;

 

		(m)	the provisions, if any, relating to any lien, security or encumbrance provided for the Securities of the
Series;

 

		(n)	any addition to or change in the Events of Default which applies to any Securities of the Series and any
change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable
pursuant to Section 6.2;

 

		(o)	any addition to or change in the covenants set forth in Article IV or V which applies to Securities of
the Series;

 

		(p)	any other terms of the Securities of the Series (which may modify or delete any provision of this Indenture
insofar as it applies to such Series); and

 

		(q)	any depositories, interest rate calculation agents, exchange rate calculation agents or other agents with
respect to Securities of such Series if other than those appointed herein.

 

    8

     

    

 

All Securities of any one Series need not be issued
at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture hereto or Officers’ Certificate referred to above, and the authorized principal amount
of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise provided in such
Board Resolution, supplemental indenture or Officers’ Certificate.

 

Section 2.3           
Execution and Authentication.

 

An Officer shall sign the Securities for the Company
by manual or facsimile signature.

 

If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent. Such a signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

 

The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or
Officers’ Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution,
a supplemental indenture hereto or an Officers’ Certificate.

 

The aggregate principal amount of Securities of any
Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution,
supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8.

 

Prior to the issuance of Securities of any Series,
the Trustee shall have received and (subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution, supplemental
indenture hereto or Officers’ Certificate establishing the form of the Securities of that Series or of Securities within that Series
and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers’ Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action may not be taken
lawfully; or (b) if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to Holders
of any then outstanding Series of Securities.

 

    9

     

    

 

The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent
to deal with the Company or an Affiliate of the Company.

 

Section 2.4           
Registrar and Paying Agent. The Company shall maintain, with respect to each Series of Securities, at the Place of Payment
specified with respect to such Series pursuant to Section 2.2, an office or agency where Securities of such Series may be presented or
surrendered for payment (the “Paying Agent”), where Securities of such Series may be surrendered for registration of transfer
or exchange (the “Registrar”) and where notices and demands (other than service of process) to or upon the Company in respect
of the Securities of such Series and this Indenture may be served (the “Service Agent”). The Registrar shall keep a register
with respect to each Series of Securities and to their transfer and exchange. The Company will give prompt written notice to the Trustee
of the name and address, and any change in the name or address, of each Registrar, Paying Agent or Service Agent. If at any time the Company
shall fail to maintain any such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands (other than
service of process).

 

The Company may also from time to time designate one
or more co-registrars, additional paying agents or additional service agents and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar,
Paying Agent and Service Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address
of any such co-registrar, additional paying agent or additional service agent. The term “Registrar” includes any co-registrar;
the term “Paying Agent” includes any additional paying agent; and the term “Service Agent” includes any additional
service agent.

 

The Company hereby appoints the Trustee as the initial
Registrar, Paying Agent and Service Agent for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be,
is appointed prior to the time Securities of that Series are first issued.

 

Section 2.5           
Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing
that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of Securities, or the Trustee, all money held
by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default
by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money.
If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit
of Securityholders of any Series of Securities all money held by it as Paying Agent.

 

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Section 2.6           
Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders of each Series of Securities and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least 10 calendar days before each interest payment
date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably
require, of the names and addresses of Securityholders of each Series of Securities.

 

Section 2.7           
Transfer and Exchange. Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register
a transfer or to exchange them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee
shall authenticate Securities at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Section 2.11, 3.6 or 9.6).

 

Neither the Company nor the Registrar shall be required
(a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening of business 15 calendar
days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the
close of business on the day of such mailing, or (b) to register the transfer of or exchange Securities of any Series selected, called
or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption
in part.

 

Notwithstanding anything herein to the contrary, neither
the Trustee nor the Registrar shall be responsible for ascertaining whether any transfer complies with the registration provisions of
or exemptions from the Securities Act of 1933 or applicable state securities laws.

 

Section 2.8           
Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of the same Series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the destruction, loss or theft of any Security and (b) such security or satisfactory indemnity
as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same
Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such
Security.

 

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Upon the issuance of any new Security under this Section
2.8, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any Series issued pursuant to
this Section 2.8 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.

 

The provisions of this Section 2.8 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.

 

Section 2.9           
Outstanding Securities. The Securities outstanding at any time are all the Securities authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the
Trustee in accordance with the provisions hereof and those described in this Section 2.9 as not outstanding.

 

If a Security is replaced pursuant to Section 2.8,
such Security ceases to be outstanding until the Trustee receives proof satisfactory to it that the replacement Security is held by a
bona fide purchaser.

 

If the Paying Agent (other than the Company, a Subsidiary
of the Company or an Affiliate of the Company) holds on the Maturity of Securities of a Series money sufficient to pay such Securities
payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to
accrue (to the extent of the Maturity of such Security if less than the entire principal amount is due and payable on such date of Maturity).

 

A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

 

In determining whether the Holders of the requisite
principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 6.2.

 

Section 2.10       
Treasury Securities. In determining whether the Holders of the required principal amount of Securities of a Series have
concurred in any request, demand, authorization, direction, notice, consent or waiver, Securities of a Series owned by the Company shall
be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Securities of a Series that the Trustee actually knows are so owned shall be
so disregarded.

 

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Section 2.11       
Temporary Securities. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities upon a Company Order. Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall
prepare and the Trustee upon request shall authenticate definitive Securities of the same Series and Stated Maturity in exchange for temporary
Securities. Until so exchanged, temporary Securities shall have the same rights under this Indenture as the definitive Securities.

 

Section 2.12       
Cancellation. All Securities surrendered for payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other
person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. If the Company shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless
and until the same are surrendered to the Trustee for cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 2.12, except as expressly permitted by this Indenture. Cancelled Securities held
by the Trustee shall be destroyed by the Trustee in accordance with its customary procedures. The Company by Company Order may direct
the Trustee to deliver a certificate of such destruction to the Company.

 

Section 2.13       
Defaulted Interest. If the Company defaults in a payment of interest on a Series of Securities, it shall pay the defaulted
interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders
of the Series on a subsequent special record date. The Company shall fix the record date and payment date. At least 10 calendar days before
the record date, the Company shall mail to the Trustee and to each Securityholder of the Series a notice that states the record date,
the payment date and the amount of interest to be paid. The Company may pay defaulted interest in any other lawful manner.

 

Section 2.14       
Global Securities.

 

		(a)	Terms of Securities. A Board Resolution, a supplemental indenture hereto or an Officers’
Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities
and the Depository for such Global Security or Securities.

 

		(b)	Transfer and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.7
and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.7 for Securities registered in the names of Holders
other than the Depository for such Security or its nominee only if (i) such Depository notifies the Company that it is unwilling or unable
to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor Depository registered as a clearing agency under the Exchange
Act within 90 calendar days of such event, (ii) the Company executes and delivers to the Trustee an Officers’ Certificate to the
effect that such Global Security shall be so exchangeable or (iii) an Event of Default with respect to the Securities represented by such
Global Security shall have happened and be continuing. Any Global Security that is exchangeable pursuant to the preceding sentence shall
be exchangeable for Securities registered in such names as the Depository shall direct in writing in an aggregate principal amount equal
to the principal amount of the Global Security with like tenor and terms.

 

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Except as provided in this Section 2.14(b), a Global Security may
not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee
of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository
or a nominee of such a successor Depository.

 

		(c)	Legend. Any Global Security issued hereunder shall bear a legend in substantially the following
form:

 

“This Security is a Global Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository. This Security is
exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee
of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository
or a nominee of such a successor Depository.”

 

		(d)	Acts of Holders. The Depository, as a Holder, may appoint agents and otherwise authorize participants
to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give
or take under the Indenture.

 

		(e)	Payments. Notwithstanding the other provisions of this Indenture, unless otherwise specified as
contemplated by Section 2.2, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof.

 

		(f)	Consents, Declaration and Directions. Except as provided in Section 2.14(e), the Company, the Trustee
and any Agent shall treat a person as the Holder of such principal amount of outstanding Securities of such Series represented by a Global
Security as shall be specified in a written statement of the Depository with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture.

 

Section 2.15       
CUSIP Numbers. The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of such numbers.

 

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ARTICLE
III

REDEMPTION

 

Section 3.1           
Notice to Trustee. The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series
of Securities or may covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such
time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated
to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall
notify the Trustee of the redemption date and the principal amount of Series of Securities to be redeemed. The Company shall give the
notice at least 45 calendar days before the redemption date (or such shorter notice as may be acceptable to the Trustee).

 

Section 3.2           
Selection of Securities to be Redeemed. Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental
indenture or an Officers’ Certificate, if less than all the Securities of any Series issued on the same day with the same terms
are to be redeemed, the particular Securities to be redeemed shall be selected not more than 45 calendar days prior to the redemption
date by the Trustee, from the outstanding Securities of such Series issued on such date with the same terms not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate, and, in the case of global Securities, in accordance with the
procedures of the depositary; provided that such method complies with the rules of any national securities exchange or quotation
system on which the Securities are listed, and may provide for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that Series or any integral multiple thereof) of the principal amount of Securities of such Series of a
denomination larger than the minimum authorized denomination for Securities of that Series; provided, however, that no such
partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than the minimum authorized denomination
for Securities of such Series (so long as the Trustee knows of such listing).

 

The Trustee shall promptly notify the Company and the
Registrar (if other than itself) in writing of the Securities selected for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

 

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Notwithstanding the foregoing, if any Security to be
redeemed is a Global Security then any partial redemption of that Series of Securities will be made in accordance with the Depository’s
applicable procedures among all Holders of such Series of Securities.

 

Section 3.3           
Notice of Redemption. Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto
or an Officers’ Certificate, at least 30 calendar days but not more than 60 calendar days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed.

 

The notice shall identify the Securities of the Series
to be redeemed and shall state:

 

		(a)	the redemption date;

 

		(b)	the redemption price and accrued interest, if any, to the redemption date payable as provided;

 

		(c)	the name and address of the Paying Agent;

 

		(d)	that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

 

		(e)	that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption
date;

 

		(f)	the CUSIP number, if any;

 

		(g)	any conditions precedent that must be satisfied prior to the redemption; and

 

		(h)	any other information as may be required by the terms of the particular Series or the Securities of a
Series being redeemed.

 

At the Company’s request given at least five
Business Days prior to the date such notice is given to Holders, the Trustee shall give the notice of redemption in the Company’s
name and at its expense.

 

Section 3.4           
Effect of Notice of Redemption. Once notice of redemption is mailed as provided in Section 3.3, Securities of a Series called
for redemption become due and payable on the redemption date and at the redemption price, subject to, with respect to any redemption that
is conditioned upon the satisfaction of any conditions precedent, (i) the delay of such redemption date until such time as any or all
of such conditions precedent have been satisfied or (ii) the revocation of such redemption if the Company determines that such conditions
precedent will not be satisfied. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued
interest to, but excluding, the redemption date; provided that installments of interest whose Stated Maturity is on or prior to
the redemption date shall be payable to the Holders of such Securities (or one or more predecessor Securities) registered at the close
of business on the relevant record date therefor according to their terms and the terms of this Indenture.

 

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Section 3.5           
Deposit of Redemption Price. On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient
to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date.

 

Section 3.6           
Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the
Holder a new Security of the same Series and the same maturity equal in principal amount to the unredeemed portion of the Security surrendered.

 

ARTICLE
IV

COVENANTS

 

Section 4.1           
Payment of Principal and Interest. The Company covenants and agrees for the benefit of the Holders of each Series of Securities
that it will duly and punctually pay the principal of and interest, if any, on the Securities of that Series in accordance with the terms
of such Securities and this Indenture.

 

Section 4.2           
SEC Reports. The Company shall deliver to the Trustee within 15 calendar days after it files them with the SEC copies of
the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. The Company also shall comply with the other provisions of TIA Section 314(a). Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained therein, including the Company’s compliance with any
of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).

 

Section 4.3           
Compliance Certificate. The Company shall deliver to the Trustee, within 120 calendar days after the end of each fiscal
year of the Company, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has
kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his/her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if
a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge).

 

The Company will, so long as any of the Securities
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any Default or Event of Default, an Officers’ Certificate
specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

 

Section 4.4           
Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture or the Securities
and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that
it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been enacted.

 

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Section 4.5           
Corporate Existence. Subject to Article V, the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the rights (charter and statutory), licenses and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such right, license or franchise if the Board
of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.

 

Section 4.6           
Taxes. The Company shall pay prior to delinquency all taxes, assessments and governmental levies, except as contested in
good faith and by appropriate proceedings.

 

ARTICLE
V

SUCCESSORS

 

Section 5.1           
When Company May Merge, Etc. The Company shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all of its properties and assets to, any person (a “successor person”), nor shall the Company permit
any other person to consolidate with or merge into it or convey, transfer or lease all or substantially all of its properties and assets
to it, in either case unless:

 

		(a)	the Company is the surviving corporation or the successor person (if other than the Company) is a corporation
organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes the Company’s obligations
on the Securities and under this Indenture; and

 

		(b)	immediately after giving effect to the transaction, and treating any indebtedness that becomes the obligation
of the Company or any of its Subsidiaries as having been incurred at the effective date of such transaction no Default or Event of Default
shall have occurred and be continuing.

 

The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers’ Certificate to the foregoing effect and an Opinion of Counsel stating that
the proposed transaction and any supplemental indenture comply with this Indenture.

 

Section 5.2           
Successor Corporation Substituted. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company in accordance with Section 5.1, the successor corporation formed by such consolidation
or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor
person has been named as the Company herein; provided, however, that the predecessor Company in the case of a sale, conveyance
or other disposition (other than a lease) shall be released from all obligations and covenants under this Indenture and the Securities.

 

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ARTICLE
VI

DEFAULTS AND REMEDIES

 

Section 6.1           
Events of Default. “Event of Default,” wherever used herein with respect to Securities of any Series, means
any one of the following events, unless in the establishing Board Resolution, supplemental indenture or Officers’ Certificate, it
is provided that such Series shall not have the benefit of said Event of Default:

 

		(a)	default in the payment of any interest on any Security of that Series when it becomes due and payable,
and continuance of such default for a period of 30 calendar days (unless the entire amount of such payment is deposited by the Company
with the Trustee or with a Paying Agent prior to the expiration of such period of 30 calendar days);

 

		(b)	default in the payment of principal of any Security of that Series at its Maturity;

 

		(c)	default in the deposit of any sinking fund payment, when and as due in respect of any Security of that
Series;

 

		(d)	default in the performance or breach of any covenant or warranty of the Company in this Indenture (other
than a covenant or warranty for which the consequences of nonperformance or breach are addressed elsewhere in this Section 6.1 and other
than a covenant or warranty that has been included in this Indenture solely for the benefit of Series of Securities other than that Series),
which default or breach continues uncured or unwaived in accordance with the provisions of this Indenture for a period of 90 calendar
days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of not less than 25.0% in aggregate principal amount of the outstanding Securities of that Series a written notice specifying
such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

		(e)	the Company pursuant to or within the meaning of any Bankruptcy Law:

 

		i.	commences a voluntary case,

 

		ii.	consents to the entry of an order for relief against it in an involuntary case,

 

		iii.	consents to the appointment of a Custodian of it or for all or substantially all of its property,

 

		iv.	makes a general assignment for the benefit of its creditors, or

 

		v.	generally is unable to pay its debts as the same become due; or

 

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		(f)	a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

		i.	is for relief against the Company in an involuntary case,

 

		ii.	appoints a Custodian of the Company or for all or substantially all of its property, or

 

		iii.	orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 60 calendar
days; or

 

		(g)	any other Event of Default provided with respect to Securities of that Series, which is specified in a
Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, in accordance with Section 2.2(n).

 

The term “Bankruptcy Law” means title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

 

Section 6.2           
Acceleration of Maturity; Rescission and Annulment. Except to the extent provided otherwise in the establishing Board Resolution,
supplemental indenture or Officers’ Certificate for such Series, if an Event of Default with respect to Securities of any Series
at the time outstanding occurs and is continuing (other than an Event of Default referred to in Section 6.1(e) or 6.1(f)), then in every
such case the Trustee or the Holders of not less than 25.0% in aggregate principal amount of the outstanding Securities of that Series
may declare the principal amount (or, if any Securities of that Series are Discount Securities, such portion of the principal amount as
may be specified in the terms of such Securities) of and accrued and unpaid interest, if any, on all of the Securities of that Series
to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or portion thereof) and accrued and unpaid interest, if any, shall become immediately due and payable. If an Event
of Default specified in Section 6.1(e) or 6.1(f) shall occur, the principal amount (or portion thereof) of and accrued and unpaid interest,
if any, on all outstanding Securities shall automatically become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.

 

At any time after such a declaration of acceleration
with respect to any Series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article VI provided, the Holders of a majority in principal amount of the outstanding Securities of that Series,
by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if all Events of Default
with respect to Securities of that Series, other than the non-payment of the principal and interest, if any, of Securities of that Series
which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

 

No such rescission shall affect any subsequent Default
or impair any right consequent thereon.

 

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Section 6.3           
Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if:

 

		(a)	default is made in the payment of any interest on any Security when such interest becomes due and payable
and such default continues for a period of 30 calendar days,

 

		(b)	default is made in the payment of principal of any Security at the Maturity thereof, or

 

		(c)	default is made in the deposit of any sinking fund payment when and as due by the terms of a Security,

 

then, the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest and, to
the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and any overdue interest at the
rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

 

If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection
of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company
or any other obligor upon such Securities and collect the moneys adjudged or deemed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever situated.

 

If an Event of Default with respect to any Securities
of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of
the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect
and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise
of any power granted herein, or to enforce any other proper remedy.

 

Section 6.4           
Trustee may File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise, (a) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims
and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

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Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.

 

Section 6.5           
Trustee may Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

 

Section 6.6           
Application of Money Collected. Any money collected by the Trustee pursuant to this Article VI shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

First: To the payment of all amounts due the Trustee
under Section 7.7; and

 

Second: To the payment of the amounts then due and
unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest,
respectively; and

 

Third: To the Company.

 

Section 6.7           
Limitation on Suits. No Holder of any Security of any Series shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

		(a)	such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect
to the Securities of that Series;

 

		(b)	the Holders of not less than 25.0% in aggregate principal amount of the outstanding Securities of that
Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

 

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		(c)	such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses
and liabilities to be incurred in compliance with such request;

 

		(d)	the Trustee for 60 calendar days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and

 

		(e)	no direction inconsistent with such written request has been given to the Trustee during such 60 calendar
day period by the Holders of a majority in principal amount of the outstanding Securities of that Series;

 

it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.

 

Section 6.8           
Unconditional Right of Holders to Receive Principal and Interest. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest,
if any, on such Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the
redemption date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent
of such Holder.

 

Section 6.9           
Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.

 

Section 6.10       
Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in Section 2.8, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not, to the extent permitted by law, prevent the concurrent assertion or employment
of any other appropriate right or remedy.

 

Section 6.11       
Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article VI or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

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Section 6.12       
Control by Holders. The Holders of a majority in principal amount of the outstanding Securities of any Series shall have
the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred on the Trustee, with respect to the Securities of such Series; provided that:

 

		(a)	such direction shall not be in conflict with any rule of law or with this Indenture;

 

		(b)	the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such
direction; and

 

		(c)	subject to the provisions of Section 6.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability.

 

Section 6.13       
Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the outstanding Securities of any
Series may on behalf of the Holders of all the Securities of such Series waive any past Default hereunder with respect to such Series
and its consequences, except a Default (a) in the payment of the principal of or interest on any Security of such Series (provided,
however, that the Holders of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration
and its consequences, including any related payment default that resulted from such acceleration) or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of each outstanding Security of such Series affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.14       
Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions of this Section 6.14 shall not apply to any suit instituted by the Company,
to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10%
in principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment
of the principal of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in such Security (or, in
the case of redemption, on the redemption date).

 

 

 

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ARTICLE
VII

TRUSTEE

 

Section 7.1           
Duties of Trustee.

 

		(a)	If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of their own affairs.

 

		(b)	Except during the continuance of an Event of Default:

 

		i.	The Trustee need perform only those duties that are specifically set forth in this Indenture and no others,
and no implied covenants or obligations shall be read into this Indenture against the Trustee. The Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. The Trustee is not required
to give any bond or surety with respect to the performance of its duties or the exercise of its powers under this Indenture. The permissive
right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do so.

 

		ii.	In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon Officers’ Certificates or Opinions of Counsel furnished to the Trustee
and conforming to the requirements of this Indenture; however, in the case of any such Officers’ Certificates or Opinions of Counsel
which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers’
Certificates and Opinions of Counsel to determine whether or not they conform to the requirements of this Indenture.

 

		(c)	The Trustee may not be relieved from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

 

		i.	This paragraph does not limit the effect of paragraph (b) of this Section 7.1.

 

		ii.	The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

 

		iii.	The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it
with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount
of the outstanding Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such
Series.

 

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		(d)	Every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.1
and Section 7.2.

 

		(e)	The Trustee may refuse to perform any duty or exercise any right or power at the request or direction
of any Holder unless it receives security or indemnity satisfactory to it against any loss, liability or expense.

 

		(f)	The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree
in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required
by law.

 

		(g)	No provision of this Indenture shall require the Trustee to risk its own funds or otherwise incur any
financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or satisfactory indemnity against such risk is not assured to it.

 

		(h)	The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections, immunities
and standard of care as are set forth in paragraphs (b) and (c) of this Section 7.1 with respect to the Trustee.

 

Section 7.2           
Rights of Trustee.

 

		(a)	The Trustee may rely on and shall be protected in acting or refraining from acting upon any document believed
by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated
in the document.

 

		(b)	Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate, an Opinion
of Counsel, or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’
Certificate and/or Opinion of Counsel.

 

		(c)	The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care. No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any
act or omission by any Depository.

 

		(d)	The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers, provided that the Trustee’s conduct does not constitute negligence or willful misconduct.

 

		(e)	The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders of Securities unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request
or direction.

 

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		(f)	The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder without
negligence and in good faith and in reliance thereon.

 

		(g)	The Trustee may conclusively rely upon and shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.

 

		(h)	The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities generally or the Securities of
a particular Series and this Indenture and states that it is a notice of Default or Event of Default.

 

		(i)	Delivery of reports, information and documents (including, without limitation, reports contemplated in
this Section 7.2) to the Trustee is for information purposes only, and the Trustee’s receipts thereof shall not constitute actual
or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s
compliance with covenants under the Indenture, Securities, and guarantees (if any), as to which the Trustee is entitled to rely exclusively
on Officers’ Certificates.

 

		(j)	The Trustee shall have no responsibility for monitoring the Company’s compliance with any of its
covenants under this Indenture.

 

		(k)	The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss
or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised
of the likelihood of such loss or damage and regardless of the form of actions.

 

		(l)	Any permissive right of the Trustee to take or refrain from taking actions enumerated in this Indenture
shall not be construed as a duty.

 

		(m)	The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations
under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions;
loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil
or military authorities and governmental action.

 

		(n)	The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding Securities of any Series, relating
to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities of such Series.

 

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Section 7.3           
Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate of the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee is also subject to Sections 7.10 and 7.11.

 

Section 7.4           
Trustee’s Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible
for any statement in the Securities other than its authentication.

 

Section 7.5           
Notice of Defaults. If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series
and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series
notice of a Default or Event of Default within 90 calendar days after it occurs or, if later, after a Responsible Officer of the Trustee
has knowledge of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest
on any Security of any Series, the Trustee may withhold the notice if and so long as it in good faith determines that withholding the
notice is in the interests of Securityholders of that Series.

 

Section 7.6           
Reports by Trustee to Holders. Within 60 calendar days after October 15 in each year, the Trustee shall transmit by mail
a report to all Securityholders, as their names and addresses appear on the register kept by the Registrar in accordance with, and to
the extent required under, TIA Section 313.

 

A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock exchange, if any, on which the Securities of that Series are
listed. The Company shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange.

 

Section 7.7           
Compensation and Indemnity. The Company shall pay to the Trustee from time to time compensation for its services as the
Company and the Trustee shall from time to time agree upon in writing. The Trustee’s compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable expenses incurred
by it. Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify and hold harmless each
of the Trustee and any predecessor Trustee (including the cost of defending itself) against any loss, liability, claim (including any
between the parties to this Indenture and including any fees or expenses incurred with respect to enforcement of its right to indemnity
hereunder), suit or expense, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred
by it except as set forth in the next paragraph in the performance of its duties under this Indenture as Trustee or Agent. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld. This indemnification shall apply to officers, directors, employees, shareholders and agents
of the Trustee.

 

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The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee to the
extent of its negligence or willful misconduct.

 

To secure the Company’s payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the
Trustee, except that held in trust to pay principal of and interest on particular Securities of that Series.

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.1(e) or 6.1(f) occurs, the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy Law.

 

The provisions of this Section 7.7 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.

 

Section 7.8           
Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.8.

 

The Trustee may resign with respect to the Securities
of one or more Series by so notifying the Company at least 30 calendar days prior to the date of the proposed resignation. The Holders
of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the
Trustee and the Company. The Company may remove the Trustee with respect to Securities of one or more Series if:

 

		(a)	the Trustee fails to comply with Section 7.10;

 

		(b)	the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;

 

		(c)	a Custodian or public officer takes charge of the Trustee or its property; or

 

		(d)	the Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.

 

If a successor Trustee with respect to the Securities
of any one or more Series does not take office within 60 calendar days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least a majority in principal amount of the Securities of the applicable Series may petition
any court of competent jurisdiction for the appointment of a successor Trustee.

 

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A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee with respect to
each Series of Securities for which it is acting as Trustee under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company’s
obligations under Section 7.7 shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred
by it prior to such replacement.

 

Section 7.9           
Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another person, the successor person without any further act shall be the successor Trustee.

 

Section 7.10       
Eligibility; Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections
310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall always have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b).

 

Section 7.11       
Referential Collection of Claims Against Company. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

 

ARTICLE
VIII

SATISFACTION AND DISCHARGE; DEFEASANCE

 

Section 8.1           
Satisfaction and Discharge of Indenture. This Indenture shall upon Company Order cease to be of further effect (except as
hereinafter provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:

 

		(a)	either:

 

		i.	all Securities theretofore authenticated and delivered (other than Securities that have been destroyed,
lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or

 

		ii.	all such Securities not theretofore delivered to the Trustee for cancellation

 

		(1)	have become due and payable, or

 

		(2)	will become due and payable at their Stated Maturity within one year, or

 

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		(3)	are to be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

 

		(4)	are deemed paid and discharged pursuant to Section 8.3, as applicable; and the Company, in the case of
clauses (1), (2) and (3) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount
sufficient for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable
on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be;

 

		(b)	the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

		(c)	the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied
with.

 

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee pursuant
to clause (a) of this Section 8.1, the provisions of Sections 2.4, 2.7, 2.8, 8.1, 8.2 and 8.5 shall survive.

 

Section 8.2           
Application of Trust Funds; Indemnification.

 

		(a)	Subject to the provisions of Section 8.5, all money deposited with the Trustee pursuant to Section 8.1,
all money and U.S. Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money received by the Trustee
in respect of U.S. Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in trust and applied
by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent
(other than the Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal
and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments
or analogous payments as contemplated by Section 8.3 or 8.4.

 

		(b)	The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against U.S. Government Obligations deposited pursuant to Section 8.3 or 8.4 or the interest and principal received in respect
of such obligations other than any payable by or on behalf of Holders.

 

		(c)	The Trustee shall deliver or pay to the Company from time to time upon Company Request any U.S. Government
Obligations or money held by it as provided in Section 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof
which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or money were deposited
or received. This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations held under this Indenture.

 

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Section 8.3           
Legal Defeasance of Securities of any Series. Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2(p),
to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and discharged the entire indebtedness on all
the outstanding Securities of any Series on the 90th calendar day after the date of the deposit referred to in subparagraph (c) hereof,
and the provisions of this Indenture, as it relates to such outstanding Securities of such Series, shall no longer be in effect (and the
Trustee, at the expense of the Company, shall, at Company Request, execute proper instruments acknowledging the same), except as to:

 

		(a)	the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph
(c) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series
on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments
applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this
Indenture and the Securities of such Series;

 

		(b)	the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

 

		(c)	the rights, powers, trust and immunities of the Trustee hereunder; provided that, the following
conditions shall have been satisfied:

 

		i.	the Company shall have deposited or caused to be irrevocably deposited (except as provided in Section
8.2(c)) with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for
and dedicated solely to the benefit of the Holders of such Securities, cash in Dollars and/or U.S. Government Obligations, which through
the payment of interest and principal in respect thereof in accordance with their terms, will provide (and without reinvestment and assuming
no tax liability will be imposed on such Trustee), not later than one calendar day before the due date of any payment of money, an amount
in cash, sufficient, in the opinion of a regionally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of principal of and interest, if any, on and any mandatory sinking
fund payments in respect of all the Securities of such Series on the dates such installments of interest or principal and such sinking
fund payments are due;

 

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		ii.	such deposit will not result in a breach or violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which the Company is a party or by which it is bound;

 

		iii.	no Default or Event of Default with respect to the Securities of such Series shall have occurred and be
continuing on the date of such deposit or during the period ending on the 90th calendar day after such date;

 

		iv.	the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel
to the effect that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (B) since
the date of execution of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income
tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge
had not occurred;

 

		v.	the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

		vi.	the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for relating to the defeasance contemplated by this Section 8.3 have been complied
with.

 

Section 8.4           
Covenant Defeasance. Unless this Section 8.4 is otherwise specified pursuant to Section 2.2(p) to be inapplicable to Securities
of any Series, on and after the 91st calendar day after the date of the deposit referred to in subparagraph (a) hereof, the Company may
omit to comply with respect to the Securities of any Series with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4,
4.6, and 5.1 as well as any additional covenants specified in a supplemental indenture for such Series of Securities or a Board Resolution
or an Officers’ Certificate delivered pursuant to Section 2.2(p) (and the failure to comply with any such covenants shall not constitute
a Default or Event of Default with respect to such Series under Section 6.1) and the occurrence of any event specified in a supplemental
indenture for such Series of Securities or a Board Resolution or an Officers’ Certificate delivered pursuant to Section 2.2(n) and
designated as an Event of Default shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such
Series; provided that the following conditions shall have been satisfied:

 

		(a)	With reference to this Section 8.4, the Company has deposited or caused to be irrevocably deposited (except
as provided in Section 8.2(c)) with the Trustee as trust funds in trust for the purpose of making the following payments specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, cash in Dollars and/or U.S. Government
Obligations, which through the payment of interest and principal in respect thereof in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than one calendar day before the due date
of any payment of money, an amount in cash, sufficient, in the opinion of a regionally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal
of and interest, if any, on and any mandatory sinking fund payments in respect of the Securities of such Series on the dates such installments
of interest or principal and such sinking fund payments are due;

 

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		(b)	Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which the Company is a party or by which it is bound;

 

		(c)	No Default or Event of Default with respect to the Securities of such Series shall have occurred and be
continuing on the date of such deposit or during the period ending on the 90th calendar day after such date;

 

		(d)	The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that Holders of the
Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been
the case if such deposit and covenant defeasance had not occurred; and

 

		(e)	The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the covenant defeasance contemplated by this Section 8.4 have
been complied with.

 

Section 8.5           
Repayment to Company. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal and interest that remains unclaimed for six months. After that, Securityholders entitled to the money must look
to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

 

ARTICLE
IX

AMENDMENTS AND WAIVERS

 

Section 9.1           
Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of one
or more Series without the consent of any Securityholder by indentures supplemental hereto:

 

		(a)	to cure any ambiguity, defect or inconsistency;

 

		(b)	to comply with Article V;

 

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		(c)	to evidence the succession of another corporation to the Company, or successive successions, pursuant
to Article XI, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company herein and
in the Securities;

 

		(d)	to add to the covenants of the Company such further covenants, restrictions, conditions or provisions
as its Board of Directors shall consider to be for the protection of the holders of Securities, and to make the occurrence, or the occurrence
and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions an Event of Default permitting
the enforcement of all or any of the several remedies provided in this Indenture as herein set forth, with such period of grace, if any,
and subject to such conditions as such supplemental indenture may provide;

 

		(e)	[Reserved];

 

		(f)	to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the TIA, or under any similar federal statute hereafter enacted, and to add to this Indenture
such other provisions as may be expressly permitted by the TIA, excluding however, the provisions referred to in TIA Section 316(a)(2)
or any corresponding provision in any similar federal statute hereafter enacted;

 

		(g)	to add any additional Events of Default (and if such Events of Default are to be for the benefit of less
than all Series of Securities, stating that such are expressly being included solely for the benefit of such Series);

 

		(h)	to modify, eliminate or add to any of the provisions of this Indenture; provided that any such
change or elimination (i) shall become effective only when there is no Security of any Series outstanding and created prior to the execution
of such supplemental indenture that is entitled to the benefit of such provision or (ii) shall not apply to any Security outstanding;

 

		(i)	to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

		(j)	to make any change that does not adversely affect the rights of any Securityholder;

 

		(k)	to provide for the issuance of and establish the form and terms and conditions of Securities of any Series
as permitted by this Indenture;

 

		(l)	to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect
to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one Trustee; or

 

		(m)	to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture
under the TIA.

 

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Section 9.2           
With Consent of Holders. The Company and the Trustee may enter into a supplemental indenture with the written consent of
the Holders of at least a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture
(including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture
or of modifying in any manner the rights of the Securityholders of each such Series. Except as provided in Section 6.13, the Holders of
at least a majority in principal amount of the outstanding Securities of any Series by notice to the Trustee (including consents obtained
in connection with a tender offer or exchange offer for the Securities of such Series) may waive compliance by the Company with any provision
of this Indenture or the Securities with respect to such Series.

 

It shall not be necessary for the consent of the Holders
of Securities under this Section 9.2 to approve the particular form of any proposed supplemental indenture or waiver, but it shall be
sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this Section 9.2 becomes effective,
the Company shall mail to the Holders of Securities affected thereby a notice briefly describing the supplemental indenture or waiver.
Any failure by the Company to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture or waiver.

 

Section 9.3           
Limitations. Without the consent of each Securityholder affected, an amendment or waiver may not:

 

		(a)	reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver;

 

		(b)	reduce the rate of or extend the time for payment of interest (including default interest) on any Security;

 

		(c)	reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone
the date fixed for, the payment of any sinking fund or analogous obligation;

 

		(d)	reduce the principal amount of Discount Securities payable upon acceleration of the maturity thereof;

 

		(e)	waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Security
(except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the
outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration);

 

		(f)	make the principal of or interest, if any, on any Security payable in any currency other than that stated
in the Security;

 

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		(g)	make any change in Section 6.8, 6.13, or 9.3 (this sentence); or

 

		(h)	waive a redemption payment with respect to any Security.

 

Section 9.4           
Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities of one or more Series shall be
set forth in a supplemental indenture hereto that complies with the TIA as then in effect.

 

Section 9.5           
Revocation and Effect of Consents. Until an amendment is set forth in a supplemental indenture or a waiver becomes effective,
a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of
a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee
receives the notice of revocation before the date of the supplemental indenture or the date the waiver becomes effective.

 

Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses (a) through (h)
of Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security.

 

Section 9.6           
Notation on or Exchange of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any
Security of any Series thereafter authenticated. The Company in exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the amendment or waiver.

 

Section 9.7           
Trustee Protected. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by
this Article IX or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject
to Section 7.1) shall be fully protected in relying upon, an Officers’ Certificate and Opinion of Counsel stating that all conditions
precedent have been satisfied, the execution of such supplemental indenture is authorized or permitted by this Indenture and that such
supplemental indenture is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its
terms. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely
affects it.

 

ARTICLE
X

MISCELLANEOUS

 

Section 10.1       
Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies, or conflicts with another provision
which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

 

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Section 10.2       
Notices. Any notice or communication by the Company or the Trustee to the other, or by a Holder to the Company or the Trustee,
is duly given if in writing and delivered in person or mailed by first-class mail:

 

if to the Company:

 

The Community Financial Corporation

3035 Leonardtown Road

Waldorf, Maryland 20601

Attention: [•]

 

if to the Trustee:

 

[•]

[•]

[•]

Attention: [•]

 

The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.

 

Any notice or communication to a Securityholder shall
be mailed by first-class mail to his address shown on the register kept by the Registrar. Failure to mail a notice or communication to
a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any
other Series.

 

If a notice or communication is mailed or published
in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it.

 

If the Company mails a notice or communication to Securityholders,
it shall mail a copy to the Trustee and each Agent at the same time. Notwithstanding any other provision of the Indenture or any Security,
where the Indenture or any Security provides for notice of any event or any other communication (including any notice of redemption or
repurchase) to a Securityholder of a Security (whether by mail or otherwise), such notice shall be sufficiently given if given to Depository
(or its designee) pursuant to the applicable procedures from Depository or its designee, including by electronic mail in accordance with
accepted practices at Depository.

 

Notwithstanding any other provisions of this Indenture
or any Security, where this Indenture or any Security provides for notice of any event (including notice of redemption) to a Holder of
a Global Security (whether by mail or otherwise), such notice shall be sufficiently given when delivered to the depositary for such Security
(or its designee) pursuant to the customary procedures of such depositary.

 

Section 10.3       
Communication by Holders with Other Holders. Securityholders of any Series may communicate pursuant to TIA Section 312(b)
with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that
Series or all Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

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Section 10.4       
Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

 

		(a)	an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

		(b)	an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have
been complied with.

 

Section 10.5       
Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions
of TIA Section 314(e) and shall include:

 

		(a)	a statement that the person making such certificate or opinion has read such covenant or condition;

 

		(b)	a brief statement as to the nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based;

 

		(c)	a statement that, in the opinion of such person, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

		(d)	a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied
with.

 

Section 10.6       
Rules by Trustee and Agents. The Trustee may make reasonable rules for action by, or a meeting of, Securityholders of one
or more Series. Any Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 10.7       
Legal Holidays. Unless otherwise provided by Board Resolution, Officers’ Certificate or supplemental indenture hereto
for a particular Series, a “Legal Holiday” is any day that is not a Business Day. If a payment date is a Legal Holiday at
a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.

 

Section 10.8       
No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.

 

Section 10.9       
Counterparts. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
The exchange of copies of this Indenture and of signature pages by facsimile or electronic format (e.g., “.pdf” or
“.tif”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may
be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format
(e.g., “.pdf” or “.tif”) shall be deemed to be their original signatures for all purposes.

 

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Section 10.10   
Governing Laws. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Section 10.11   
No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary of the Company. Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.

 

Section 10.12   
Successors. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements
of the Trustee in this Indenture shall bind its successor.

 

Section 10.13   
Severability. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 10.14   
Table of Contents, Headings, Etc. The Table of Contents, Cross Reference Table, and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.

 

Section 10.15   
Waiver of Trial by Jury. EACH OF THE COMPANY, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE,
THE NOTES OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

Section 10.16   
Consent to Jurisdiction.

 

		(a)	The Company hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of any New York State court or federal court in the United States sitting in the State and City of New York, County, and
Borough of Manhattan, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Indenture
or the Securities, or for the recognition or enforcement of any judgment, and each of the parties hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in such state court sitting in the State
and City of New York, County and Borough of Manhattan or, to the extent permitted by law, in such federal court sitting in the State and
City of New York, County and Borough of Manhattan.

 

		(b)	The Company hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Indenture or the Securities in any New York State or federal court. Each of the parties hereto irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

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Section 10.17   
USA Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee,
like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify
and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.
The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee
to satisfy the requirements of the USA PATRIOT Act.

 

ARTICLE
XI

SINKING FUNDS

 

Section 11.1       
Applicability of Article. The provisions of this Article XI shall be applicable to any sinking fund for the retirement of
the Securities of a Series, except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture.

 

The minimum amount of any sinking fund payment provided
for by the terms of the Securities of any Series is herein referred to as a “mandatory sinking fund payment” and any other
amount provided for by the terms of Securities of such Series is herein referred to as an “optional sinking fund payment.”
If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 11.2. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms
of the Securities of such Series.

 

Section 11.2       
Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (a) deliver outstanding
Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory
sinking fund redemption) and (b) apply as credit Securities of such Series to which such sinking fund payment is applicable and which
have been repurchased by the Company or redeemed either at the election of the Company pursuant to the terms of such Series of Securities
(except pursuant to any mandatory sinking fund) or through the application of permitted optional sinking fund payments or other optional
redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities
shall be received by the Trustee, together with an Officers’ Certificate with respect thereto, not later than 15 calendar days prior
to the date on which the Trustee begins the process of selecting Securities for redemption, and shall be credited for such purpose by
the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to
this Section 11.2, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall
be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that
such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking
fund payment; provided, however, that the Trustee or such Paying Agent shall from time to time upon receipt of a Company
Order pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required
to be released to the Company.

 

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Section 11.3       
Redemption of Securities for Sinking Fund. Not less than 45 calendar days (unless otherwise indicated in the Board Resolution,
supplemental indenture or Officers’ Certificate in respect of a particular Series of Securities) prior to each sinking fund payment
date for any Series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the
next ensuing mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities
of that Series pursuant to Section 11.2, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 calendar days (unless otherwise
indicated in the Board Resolution, Officers’ Certificate or supplemental indenture in respect of a particular Series of Securities)
before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.3. Such notice having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 3.4, 3.5 and 3.6.

 

ARTICLE
XII

SUBORDINATION OF SECURITIES

 

Section 12.1       
Agreement of Subordination. The Company covenants and agrees, and each Holder of Securities issued hereunder by accepting
a Security likewise covenants and agrees, that all Securities shall be issued subject to the provisions of this Article XII; and each
person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound
by such provisions.

 

The payment of the principal of and interest on all
Securities (including, but not limited to, the redemption price with respect to the Securities called for redemption in accordance with
Article III as provided in the Indenture) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all Senior Indebtedness, whether outstanding at the date of this Indenture
or thereafter incurred.

 

No provision of this Article XII shall prevent the
occurrence of any Default or Event of Default hereunder.

 

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Section 12.2       
Payments to Holders. Except as otherwise provided in a supplemental indenture, no payment shall be made with respect to
the principal of or interest on the Securities (including, but not limited to, the redemption price with respect to the Securities to
be called for redemption in accordance with Article III as provided in the Indenture), except payments and distributions made by the Trustee
as permitted by the first or second paragraph of Section 12.5, if:

 

		(a)	a default in the payment of principal, premium, interest, rent or other obligations due on any Senior
Indebtedness occurs and is continuing (or, in the case of Senior Indebtedness for which there is a period of grace, in the event of such
a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Indebtedness),
unless and until such default shall have been cured or waived or shall have ceased to exist; or

 

		(b)	a default, other than a payment default, on a Designated Senior Indebtedness occurs and is continuing
that then permits holders of such Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of the default
(a “Payment Blockage Notice”) from a Representative or the Company.

 

If the Trustee receives any Payment Blockage Notice
pursuant to clause (b) above, no subsequent Payment Blockage Notice shall be effective for purposes of this Section 12.2 unless and until
(A) at least 365 calendar days shall have elapsed since the initial effectiveness of the immediately prior Payment Blockage Notice, and
(B) all scheduled payments of principal, premium, if any, and interest on the Securities that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice.

 

The Company may and shall resume payments on and distributions
in respect of the Securities upon the earlier of:

 

		(1)	the date upon which the default is cured or waived or ceases to exist, or

 

		(2)	in the case of a default referred to in clause (b) above, 179 calendar days pass after notice is received
if the maturity of such Designated Senior Indebtedness has not been accelerated, unless this Article XII otherwise prohibits the payment
or distribution at the time of such payment or distribution.

 

Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up
or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due or to become due upon all Senior Indebtedness shall first be paid in full in cash or other payment satisfactory
to the holders of such Senior Indebtedness, or payment thereof in accordance with its terms provided for in cash or other payment satisfactory
to the holders of such Senior Indebtedness, before any payment is made on account of the principal of or interest on the Securities (except
payments made pursuant to Article VI from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for
such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization
of the Company or bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would
be entitled, except for the provision of this Article XII, shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the Holders of the Securities or
by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness (pro rata to such holders
on the basis of the respective amounts of Senior Indebtedness held by such holders, or as otherwise required by law or a court order)
or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing
any Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Indebtedness
in full, in cash or other payment satisfactory to the holders of such Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness, before any payment or distribution or provision therefor is made to the
Holders of the Securities or to the Trustee.

 

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For purposes of this Article XII, the words, “cash,
property or securities” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities
of the Company or any other person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article XII with respect to the Securities to the payment of all Senior Indebtedness which may at the time
be outstanding; provided that (i) the Senior Indebtedness is assumed by the new person, if any, resulting from any reorganization
or readjustment, and (ii) the rights of the holders of Senior Indebtedness (other than leases which are not assumed by the Company or
the new person, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another person upon the terms
and conditions provided for in Article V shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 12.2 if such other person shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article V.

 

In the event of the acceleration of the Securities
because of an Event of Default, no payment or distribution shall be made to the Trustee or any Holder of Securities in respect of the
principal of or interest on the Securities (including, but not limited to, the redemption price with respect to the Securities called
for redemption in accordance with Article III as provided in the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 12.5, until all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness
of the acceleration at the address set forth in the notice from the Agent (or successor agent) to the Trustee as being the address to
which the Trustee should send its notice pursuant to this Section 12.2, unless there are no payment obligations of the Company thereunder
and all obligations thereunder to extend credit have been terminated or expired.

 

In the event that, notwithstanding the foregoing provisions,
any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without
limitation, by way of setoff or otherwise), prohibited by the foregoing, shall be received by the Trustee or the Holders of the Securities
before all Senior Indebtedness is paid in full in cash or other payment satisfactory to the holders of such Senior Indebtedness, or provision
is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to the holders of such Senior Indebtedness,
such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing
any Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or other
payment satisfactory to the holders of such Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.

 

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Nothing in this Section 12.2 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.7. This Section 12.2 shall be subject to the further provisions of Section
12.5.

 

Section 12.3       
Subrogation of Securities. Subject to the payment in full of all Senior Indebtedness, the rights of the Holders of the Securities
shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions
of this Article XII (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated
to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled to like rights
of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Indebtedness until the principal and interest on the Securities shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities
to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article XII, and no payment
over pursuant to the provisions of this Article XII, to or for the benefit of the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities,
be deemed to be a payment by the Company to or on account of the Senior Indebtedness; and no payments or distributions of cash, property
or securities to or for the benefit of the Holders of the Securities pursuant to the subrogation provisions of this Article XII, which
would otherwise have been paid to the holders of Senior Indebtedness shall be deemed to be a payment by the Company to or for the account
of the Securities. It is understood that the provisions of this Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Indebtedness, on the other hand.

 

Nothing contained in this Article XII or elsewhere
in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders
of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the Holder
of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights,
if any, under this Article XII of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.

 

    45

     

    

 

Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of Section 7.1, and the Holders of the Securities shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation
or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company,
the amount thereof or payable thereon and all other facts pertinent thereto or to this Article XII.

 

Section 12.4       
Authorization to Effect Subordination. Each Holder of a Security by the holder’s acceptance thereof authorizes and
directs the Trustee on the holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination
as provided in this Article XII and appoints the Trustee to act as the holder’s attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.3
hereof at least 30 calendar days before the expiration of the time to file such claim, the holders of any Senior Indebtedness or their
representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities.

 

Section 12.5       
Notice to Trustee. The Company shall give prompt written notice in the form of an Officers’ Certificate to a Responsible
Officer of the Trustee and to any paying agent of any fact known to the Company which would prohibit the making of any payment of monies
to or by the Trustee or any paying agent in respect of the Securities pursuant to the provisions of this Article XII. Notwithstanding
the provisions of this Article XII or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XII, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the
Corporate Trust Office from the Company (in the form of an Officers’ Certificate) or a Representative or a holder or holders of
Senior Indebtedness or from any trustee thereof; and before the receipt of any such written notice, the Trustee, subject to the provisions
of Section 7.1, shall be entitled in all respects to assume that no such facts exist; provided that if on a date not fewer than
two Business Days prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on any Security) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 12.5, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received by it on or after such prior date.

 

    46

     

    

 

Notwithstanding anything in this Article XII to the
contrary, nothing shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Section 8.1, and any
such payment shall not be subject to the provisions of Section 12.1 or 12.2.

 

The Trustee, subject to the provisions of Section 7.1,
shall be entitled to rely on the delivery to it of a written notice by a Representative or a person representing himself to be a holder
of Senior Indebtedness (or a trustee on behalf of such holder) to establish that such notice has been given by a Representative or a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment
or distribution pursuant to this Article XII, the Trustee may request such person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of such person under this Article XII, and if such evidence is
not furnished the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive
such payment.

 

Section 12.6       
Trustee’s Relation to Senior Indebtedness. The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 7.11 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article XII shall apply to the Company’s obligations to the Trustee under Section 7.7.

 

With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article
XII, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the provisions
of Section 7.1, the Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay over or deliver to Holders of Securities,
the Company or any other person money or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article
XII or otherwise.

 

Section 12.7       
No Impairment of Subordination. No right of any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by
any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.

 

Section 12.8       
Article Applicable to Paying Agents. If at any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term “Trustee” as used in this Article XII shall (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article XII in addition to or in place of the Trustee; provided, however, that the
first paragraph of Section 12.5 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.

 

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Section 12.9       
Senior Indebtedness Entitled to Rely. The holders of Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article XII, and no amendment or modification of the provisions contained herein
shall diminish the rights of such holders unless such holders shall have agreed in writing thereto.

 

 

 

[Remainder of page intentionally blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.

 

	 	THE COMMUNITY FINANCIAL CORPORATION	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:  [•]	 
	 	 	Title: [•]	 
	 	 	 	 
	 	 	 	 
	 	[•], as Trustee	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

 

49scyx-ex101_47.htm

Exhibit 10.1

 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of May 13, 2021 (the “Effective Date”), among (a) HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent and collateral agent (“Agent”), (b) SILICON VALLEY BANK, a California corporation, as a lender (“SVB”), (c) HERCULES CAPITAL, INC., a Maryland corporation (“Hercules”), as a lender (SVB and Hercules and each of the other “Lenders” from time to time a party hereto are referred to herein collectively as the “Lenders” and each individually as a “Lender”), and (d) SCYNEXIS, INC., a Delaware corporation (“Borrower”), provides the terms on which Agent and the Lenders shall lend to Borrower, and Borrower shall repay Agent and the Lenders.  The parties agree as follows:

1ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed following GAAP.  Calculations and determinations must be made following GAAP, provided that if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either Borrower, Agent or the Lenders shall so request, Borrower, Agent and the Lenders shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided further, that until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Borrower shall provide Agent and the Lenders with financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.  Notwithstanding the foregoing, any obligations of a Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions, calculations and covenants for purposes of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in accordance with GAAP.  Notwithstanding the foregoing, all financial covenant and other financial calculations shall be computed with respect to Borrower only, and not on a consolidated basis.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13 of this Agreement.  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.

2LOAN AND TERMS OF PAYMENT

2.1Promise to Pay.  Borrower hereby unconditionally promises to pay to each Lender the outstanding principal amount of all Credit Extensions advanced to Borrower by such Lender and accrued and unpaid interest thereon, together with any fees as and when due in accordance with this Agreement.

2.2Term Loan Advances.

(a)Availability.  Subject to the terms and conditions of this Agreement, Borrower shall request on the Effective Date and the Lenders, severally and not jointly, shall make one (1) term loan advance to Borrower on or about the Effective Date in an original principal amount of Twenty Million Dollars ($20,000,000.00) according to each Lender’s Term Loan A Commitment as set forth on Schedule 1 hereto (the “Term Loan A Advance”).  Subject to the terms and conditions of this Agreement, upon Borrower’s request, during the Term Loan B Draw Period, the Lenders, severally and not jointly, shall make term loan advances available to Borrower in an aggregate original principal amount of up to Ten Million Dollars ($10,000,000.00) according to each Lender’s Term Loan B Commitment as set forth on Schedule 1 hereto (each such advance is referred to herein as a “Term Loan B Advance” and, collectively, as the “Term Loan B Advances”).  Subject to the terms and conditions of this Agreement, upon Borrower’s request, during the Term Loan C Draw Period, the Lenders, severally and not jointly, shall make one (1) term loan advance available to Borrower in an original principal amount of Five Million Dollars ($5,000,000.00) (the Term Loan C Advance”), provided, however, that, at any time after a Term Loan D Advance has been made to Borrower, the Lenders shall have no obligation to make the Term Loan C Advance if the outstanding principal amount of all Term Loan Advances would exceed the Revenue-Based Availability Amount immediately following the funding of the Term Loan C Advance.  Subject to the terms and conditions of this Agreement, upon Borrower’s request, during 

 

1

 

the Term Loan D Draw Period, the Lenders, severally and not jointly, shall make term loan advances available to Borrower in an aggregate original principal amount of up to Twenty Five Million Dollars ($25,000,000.00) (each such advance is referred to herein as a “Term Loan D Advance” and, collectively, as the “Term Loan D Advances”), provided, however, that the Lenders shall have no obligation to make a Term Loan D Advance if (i) the Term Loan B Draw Period has commenced and has not expired and there remains any amount to be drawn pursuant to the second sentence of this Section 2.2(a), (ii) the Term Loan C Draw Period has commenced and has not expired and there remains any amount to be drawn pursuant to the third sentence of this Section 2.2(a) or (iii) the outstanding principal amount of all Term Loan Advances would exceed the Revenue-Based Availability Amount immediately following the funding of such Term Loan D Advance.  Each Term Loan B Advance and each Term Loan D Advance must be in an amount equal to at least Five Million Dollars ($5,000,000.00).  The Term Loan A Advance, each Term Loan B Advance, the Term Loan C Advance and each Term Loan D Advance are hereinafter referred to singly as a “Term Loan Advance” and collectively as the “Term Loan Advances”.  After repayment, no Term Loan Advance (or any portion thereof) may be reborrowed.

(b)Interest Payments. With respect to each Term Loan Advance, commencing on the first (1st) Payment Date following the Funding Date of such Term Loan Advance and continuing on the Payment Date of each month thereafter, Borrower shall make monthly payments of interest to the Lenders in arrears, on the principal amount of each Term Loan Advance, at the rate set forth in Section 2.3(a).

(c)Repayment of the Term Loan Advances.  Borrower shall repay the aggregate principal balance of the Term Loan Advances that is outstanding on the day immediately preceding the Amortization Date, in equal monthly installments of principal and interest (mortgage style) beginning on the Amortization Date and continuing on the Payment Date of each month thereafter until the Obligations under the Term Loan Advances (other than inchoate indemnity obligations) are repaid.  The periodic installments set forth herein include interest, and such installments are based upon the original principal amount of the Term Loan Advances, an assumed fixed rate of interest, and an assumed amortization term, notwithstanding the fact that the interest rate applicable to the Term Loan Advances may change from time to time.  In the event that the applicable interest rate changes at any time as a result of any changes in the Prime Rate, the Lenders may, in their sole discretion, but shall not be required to, recalculate the installments of principal and interest, and Borrower shall pay such installments as they may be recalculated by the Lenders.  Borrower acknowledges and agrees that any such recalculation shall not affect the Term Loan Maturity Date or any other terms or provisions in this Agreement or any other Loan Document, and that if a Lender elects not to recalculate such installments, the Term Loan Advances may not fully amortize on the Term Loan Maturity Date.  All outstanding principal and accrued and unpaid interest with respect to the Term Loan Advances, and all other outstanding Obligations under the Term Loan Advances, are due and payable in full on the Term Loan Maturity Date.

(d)Permitted Prepayment.  Borrower shall have the option to prepay all or a portion of the Term Loan Advances, provided (i) any partial prepayments shall be in increments of at least Five Million Dollars ($5,000,000.00), (ii) Borrower delivers written notice to Agent of its election to prepay all or such portion of the Term Loan Advances at least five (5) Business Days prior to such prepayment, and (iii) pays to the Lenders on the date of such prepayment (A) the outstanding principal plus accrued and unpaid interest with respect to the prepaid portion of Term Loan Advances, in accordance with each Lender’s Pro Rata Share, (B) the Prepayment Fee with respect to the prepaid portion of the Term Loan Advances, (C) the applicable Final Payment and (D) all other sums, if any, that shall have become due and payable with respect to the Term Loan Advances, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts.  Any partial prepayments of principal with respect to the Term Loan Advances made under this Section 2.2(d) will be applied to the principal balance of the Term Loan Advances in the inverse order of maturity.

(e)Mandatory Prepayment Upon an Acceleration.  If the Term Loan Advances are accelerated by Agent, following the occurrence of an Event of Default, Borrower shall immediately pay to the Lenders an amount equal to the sum of (i) all outstanding principal plus accrued and unpaid interest with respect to the Term Loan Advances, in accordance with each Lender’s Pro Rata Share,  (ii) the Prepayment Fee, (iii) the applicable Final Payment and (iv) all other sums, if any, that shall have become due and payable with respect to the Term Loan Advances, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts.

 

2

 

2.3Payment of Interest on the Credit Extensions.

(a)Interest Rate.  Subject to Section 2.3(b), the principal amount outstanding under each Term Loan Advance shall accrue interest at a floating per annum rate equal to the greater of (i) nine and five hundredths of one percent (9.05%) and (ii) five and eight-tenths of one percent (5.80%) above the Prime Rate, which interest, in each case, shall be payable monthly in accordance with Section 2.3(d) below.

(b)Default Rate.  Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percent (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”).  Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Lenders’ Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations.  Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Agent or any Lender.

(c)Adjustment to Interest Rate.  Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change.

(d)Payment; Interest Computation.  Interest is payable monthly on the Payment Date of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed.  In computing interest, (i) all payments received after 12:00 p.m. Eastern time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.

2.4Fees.  Borrower shall pay to the Lenders:

(a)Commitment Fee.  On the Effective Date, a fully earned, non-refundable facility fee of Four Hundred Fifty Thousand Dollars ($450,000.00), to be paid to the Lenders pursuant to their respective Term Loan Commitment Percentages;

(b)Final Payment.  Each Final Payment, when due hereunder, to be paid to  the Lenders pursuant to their respective Term Loan Commitment Percentages; 

(c)Prepayment Fee.  The Prepayment Fee, when due hereunder, to be paid to the Lenders pursuant to their respective Term Loan Commitment Percentages;

(d)Due Diligence Fee.  Borrower has paid to the Lenders a due diligence fee of Thirty-Five Thousand Dollars ($35,000) prior to the Effective Date and shall be deemed fully earned on such date regardless of the early termination of this Agreement, and shall be shared between the Lenders pursuant to their respective Term Loan Commitment Percentages; and

(e)Lenders’ Expenses.  All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Agent).

Unless otherwise provided in this Agreement or in a separate writing by Agent, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Agent or any Lender pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of any Lender’s obligation to make loans and advances hereunder.  SVB may deduct amounts owing by Borrower to SVB under the clauses of this Section 2.4 pursuant to the terms of Section 2.5(e)(ii).  SVB shall provide Borrower written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.4.

 

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2.5Payments; Pro Rata Treatment; Application of Payments; Debit of Accounts.

(a)All payments (including prepayments) to be made by Borrower under any Loan Document shall be made to the Lenders in immediately available funds in Dollars, without setoff or counterclaim, before 12:00 p.m. Eastern time on the date when due.   Payments of principal and/or interest received after 12:00 p.m. Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

(b)Each borrowing by Borrower from Lenders hereunder shall be made according to the respective Term Loan Commitment Percentages of the relevant Lenders.

(c)Except as otherwise provided herein, each payment (including each prepayment) by Borrower on account of principal or interest on the Term Loan Advances shall be applied according to each Lender’s Pro Rata Share of the outstanding principal amount of the Term Loan Advances.  The amount of each principal prepayment of the Term Loan Advances shall be applied to reduce the then remaining installments of the Term Loan Advances based upon each Pro Rata Share of Term Loan Advances.

(d)The Lenders have the exclusive right to determine the order and manner in which all payments with respect to the Obligations may be applied.  Borrower shall have no right to specify the order or the accounts to which the Lenders shall allocate or apply any payments required to be made by Borrower to Agent or the Lenders or otherwise received by Agent or any Lender under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.

(e)(i)The Lenders will initiate debit entries to Borrower’s account as authorized on the ACH Authorization (A) on each payment date of all periodic obligations payable to a Lender and (B) for Lenders’ Expenses; provided that, with respect to clause (A) above, in the event that a Lender informs Borrower that the Lender will not initiate a debit entry to Borrower’s account for a certain amount of the periodic obligations due to such Lender on a specific payment date, Borrower shall pay to the Lender such amount of periodic obligations in full in immediately available funds on such payment date; provided, further, that, with respect to clause (A) above, if a Lender informs Borrower that the Lender will not initiate a debit entry as described above later than the date that is three (3) Business Days prior to such payment date, Borrower shall pay to the Lender such amount of periodic obligations due to such Lender in full in immediately available funds on the date that is three (3) Business Days after the date on which the Lender notifies Borrower of such; provided, further, that, with respect to clause (B) above, in the event that a Lender informs Borrower that such Lender will not initiate a debit entry to Borrower’s account for a certain amount of such Lenders’ Expenses owed to such Lender, Borrower shall pay to the Lender such amount in full in immediately available funds within three (3) Business Days.  

(ii)At SVB’s discretion, in lieu of a debit entry to Borrower’s account as described in clause (i), SVB may elect to debit any of Borrower’s deposit accounts, including the Designated Deposit Account, directly for principal and interest payments or any other amounts Borrower owes SVB when due. These debits shall not constitute a set-off.  

2.6Settlement Procedures.  If Agent receives any payment for the account of Lenders and such payment is received on or prior to 12:00 p.m. (Eastern time) on any Business Day, Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on such Business Day. If Agent receives any payment for the account of Lenders and such payment is received after 12:00 p.m. (Eastern time) on any Business Day, Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on the next Business Day.

2.7Tax Documentation and Withholding.  

(a)Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Loan Document shall deliver to Borrower and Agent (at the time or times reasonably requested by Borrower or Agent), such properly completed and executed documentation reasonably 

 

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requested by Borrower or Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  Without limiting the generality of the foregoing, each Lender that is a U.S. Person shall deliver to Borrower and Agent on or about the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Agent) executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.  

(b)Payments received by Agent or a Lender from Borrower under this Agreement will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto), except as required by any Governmental Authority, applicable law, regulation or international agreement.  Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable with respect to the Obligations to Agent or a Lender, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Agent or the Lender, as applicable, receives a net sum equal to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority.  Borrower will, upon request, furnish Agent and the Lenders with proof reasonably satisfactory to Agent and the Lenders indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower.  The agreements and obligations contained in this Section 2.7 shall survive the termination of this Agreement. 

2.8Treatment of Prepayment Fee and Final Payment.  Except as otherwise required by applicable tax law, Borrower agrees that any Prepayment Fee and any Final Payment payable shall be presumed to be the liquidated damages sustained by each Lender as the result of the early termination, and Borrower agrees that it is reasonable under the circumstances currently existing and existing as of the Effective Date.  The Prepayment Fee and the Final Payment shall also be payable in the event the Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure, or by any other means.  Borrower expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future statute or law that prohibits or may prohibit the collection of the foregoing Prepayment Fee and Final Payment in connection with any such acceleration.  Borrower agrees (to the fullest extent that each may lawfully do so): (a) each of the Prepayment Fee and the Final Payment is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (b) each of the Prepayment Fee and the Final Payment shall be payable notwithstanding the then prevailing market rates at the time payment is made; (c) there has been a course of conduct between the Lenders and Borrower giving specific consideration in this transaction for such agreement to pay the Prepayment Fee and the Final Payment as a charge (and not interest) in the event of prepayment or acceleration; and (d) Borrower shall be estopped from claiming differently than as agreed to in this paragraph.  Borrower expressly acknowledges that their agreement to pay each of the Prepayment Fee and the Final Payment to the Lenders as herein described was on the Effective Date and continues to be a material inducement to the Lenders to provide the Term Loans Advances.

3CONDITIONS OF LOANS

3.1Conditions Precedent to Initial Credit Extension.  Each Lender’s obligation to make the initial Credit Extension hereunder is subject to the condition precedent that Agent shall have received, in form and substance satisfactory to Agent and the Lenders, such documents, and completion of such other matters, as Agent may reasonably deem necessary or appropriate, including, without limitation:

(a)duly executed signatures to the Loan Documents;

(b)duly executed signatures to the Warrant, together with a capitalization table of Borrower;

(c)duly executed signatures to the Control Agreements;

 

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(d) the Operating Documents and long-form good standing certificates of Borrower certified by the Secretary of State (or equivalent agency) of Delaware and each other state in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date;

(e)a secretary’s corporate borrowing certificate of Borrower with respect to Borrower’s Operating Documents, incumbency, specimen signatures and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(f)duly executed signatures to the completed Borrowing Resolutions for Borrower;

(g)a subordination agreement by Puissance Life Science Opportunities Fund VI in favor of Agent and the Lenders, together with the duly executed signatures thereto and copies of the underlying documents evidencing Borrower’s Indebtedness with such Person;

(h)a subordination agreement by Amplity, Inc. in favor of Agent and the Lenders, together with the duly executed signatures thereto and copies of the underlying documents evidencing Borrower’s Indebtedness with such Person;

(i)certified copies, dated as of a recent date, of financing statement searches, as Agent may request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

(j)the Perfection Certificate of Borrower, together with the duly executed signatures thereto;

(k)a legal opinion (authority and enforceability) of Borrower’s counsel dated as of the Effective Date together with the duly executed signature thereto;

(l)evidence satisfactory to the Lenders and Agent that the insurance policies and endorsements required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Agent; and

(m)payment of the fees and Lenders’ Expenses then due as specified in Section 2.4 hereof.

3.2Conditions Precedent to all Credit Extensions.  Each Lender’s obligation to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:

(a)timely receipt by the Lenders of (i) an executed Disbursement Letter; and (ii) an executed Payment/Advance Form and any materials and documents required by Section 3.4;

(b)the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Disbursement Letter (and the Payment/Advance Form) and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

(c)Agent and each Lender determine to their reasonable satisfaction that there has not been a Material Adverse Change.

 

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3.3Covenant to Deliver.  Borrower agrees to deliver to Agent and each Lender each item required to be delivered to Agent and each Lender under this Agreement as a condition precedent to any Credit Extension.  Borrower expressly agrees that a Credit Extension made prior to the receipt by Agent and each Lender of any such item shall not constitute a waiver by Agent or Lenders 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 each Lender’s sole discretion.

3.4Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to the making of a Credit Extension set forth in this Agreement, to obtain a Credit Extension, Borrower shall notify Agent (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Eastern time at least five (5) Business Days (provided that such period shall be one (1) Business Day with respect to the Term Loan A Advance) before the proposed Funding Date of such Credit Extension.  Together with any such electronic or facsimile notification, Borrower shall deliver to Agent by electronic mail or facsimile a completed Disbursement Letter (and Payment/Advance Form) executed by an Authorized Signer.  Agent may rely on any telephone notice given by a person whom Agent believes is an Authorized Signer.  On the Funding Date, the Lenders shall credit the Credit Extensions to the Designated Deposit Account.  The Lenders may make Credit Extensions under this Agreement based on instructions from an Authorized Signer or without instructions if the Credit Extensions are necessary to meet Obligations which have become due.

4CREATION OF SECURITY INTEREST

4.1Grant of Security Interest.  Borrower hereby grants Agent, for the ratable benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Agent, for the ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.  For clarity, any reference to “Agent’s Lien” or any granting of collateral to Agent in this Agreement or any Loan Document means the Lien granted to Agent for the ratable benefit of the Lenders.

Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with SVB.  Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes SVB thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and SVB to have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Agent’s Lien in this Agreement), and by any and all other security agreements, mortgages, or other collateral granted to Agent by Borrower as security for the Obligations, now or in the future.

If this Agreement is terminated, Agent’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 (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.  In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Agent shall terminate the security interest granted herein upon Borrower providing to SVB cash collateral acceptable to SVB in its good faith business judgment for Bank Services, if any.  In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to SVB cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by SVB in its business judgment), to secure all of the Obligations relating  to such  Letters of Credit.

4.2 Priority of Security Interest.  Borrower represents, warrants, and covenants that the security interests granted herein are and shall at all times continue to be first priority perfected security interests in the Collateral (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Agent’s Lien under this Agreement).  If Borrower shall acquire a commercial tort claim with a value in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), Borrower shall promptly notify Agent in a writing signed by Borrower of the general details thereof and grant to Agent, for the ratable benefit of the Lenders, in such writing a 

 

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security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Agent.

4.3Authorization to File Financing Statements.  Borrower hereby authorizes Agent, on behalf of the Lenders, to file financing statements and other similar forms, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Agent’s and Lenders’ interest or rights hereunder, including a notice that any disposition of the Collateral, by Borrower or any other Person, shall be deemed to violate the rights of Agent under the Code.  Such financing statements and other similar forms may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Agent’s discretion.

5REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

5.1Due Organization, Authorization; Power and Authority.  Borrower is duly organized, validly existing and in good standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property and other assets or business which it is engaged in requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business.  In connection with this Agreement, Borrower has delivered to Agent and each Lender a completed certificate signed by Borrower, entitled “Perfection Certificate” (the “Perfection Certificate”).  Borrower represents and warrants to Agent and each Lender that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized or incorporated in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete in all material respects (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement and provided that the Perfection Certificate shall be deemed to be updated to reflect the information provided in any notice that is required to be delivered by Borrower pursuant to Section 7.2).  If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Agent of such occurrence and provide Agent with Borrower’s organizational identification number.

The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict with or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound.  Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

5.2Collateral.  Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under this Agreement and the other Loan Documents, free and clear of any and all Liens except Permitted Liens.  Borrower has no Collateral Accounts at or with any bank or financial institution other than SVB or SVB’s Affiliates except for the Collateral Accounts described in the Perfection Certificate delivered to Agent and each Lender in connection herewith and which Borrower has given Agent notice and taken such actions as are necessary to give Agent, for the ratable benefit of the Lenders, a perfected security interest therein, pursuant to the terms of Section 6.6(b).  The Accounts are bona fide, existing obligations of the Account Debtors.  

 

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The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate or as permitted pursuant to Section 7.2.  None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. 

All Inventory is in all material respects of good and marketable quality, free from material defects.  

Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States , (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate (as may be updated from time to time by notice to Agent).  To the best of Borrower’s knowledge, each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part.  To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business.

Except as noted on the Perfection Certificate or as notified to Agent pursuant to Section 6.8(b), Borrower is not a party to, nor is it bound by, any Restricted License.

5.3Litigation.  There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000.00) or more.

5.4Financial Statements; Financial Condition.  All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Agent and the Lenders by submission to the Financial Statement Repository or otherwise submitted to Agent or either Lender fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations as of the dates and for the periods presented.  There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to the Financial Statement Repository or otherwise submitted to Agent or either Lender.

5.5Solvency.  The fair salable value of Borrower’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

5.6Regulatory Compliance.  Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act.  Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005.  Neither Borrower’s nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws.  Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted, except to the extent such failure to so obtain, make or give such consents, approvals, authorizations, declarations, filings or notices could not reasonably be expected to have a material adverse effect on Borrower’s or any Subsidiary’s business.  Borrower (a) has complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation of which could reasonably be expected to have a material adverse effect on its business. 

 

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None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.  None of Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.  None of the funds to be provided under this Agreement will be used, directly or indirectly, (a) for any activities in violation of any applicable anti-money laundering, economic sanctions and anti-bribery laws and regulations laws and regulations or (b) for any payment to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. 

5.7Subsidiaries; Investments.  Borrower does not own any stock, partnership, or other ownership interest or other equity securities except for Permitted Investments.  

5.8Tax Returns and Payments; Pension Contributions.  Borrower has timely filed all required income and other material tax returns and reports or extensions thereof, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor (such taxes, “Contested Taxes”), or (b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Fifty Thousand Dollars ($50,000.00).

To the extent Borrower defers payment of any Contested Taxes, Borrower shall (i) notify Agent in writing of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the Governmental Authority levying such Contested Taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.”  Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower in excess of Fifty Thousand Dollars ($50,000.00).  Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

5.9Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes.

5.10Full Disclosure.  No written representation, warranty or other statement of Borrower in any certificate or written statement submitted to the Financial Statement Repository or otherwise submitted to Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements submitted to the Financial Statement Repository or otherwise submitted to Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Agent and each Lender that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

5.11Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer.

 

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6AFFIRMATIVE COVENANTS

Borrower shall do all of the following:

6.1Government Compliance.

(a)Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations.  Borrower shall comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which it is subject.

(b)Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Agent, for the ratable benefit of the Lenders, in the Collateral.  Borrower shall promptly provide copies of any such obtained Governmental Approvals to Agent.

6.2Financial Statements, Reports.  Provide Agent and each Lender with the following by submitting to the Financial Statement Repository: 

(a)Monthly Financial Statements.  As soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations for such month in a form reasonably acceptable to Agent and the Lenders;

 

(b)10-Q.  As soon as available, and in any event within forty-five (45) days following the end of each of the first three (3) fiscal quarters of Borrower in each fiscal year, Borrower’s 10-Q for such fiscal quarter as filed with the SEC;

(c)10-K.  As soon as available, and in any event within ninety (90) days following the end of Borrower’s fiscal year, Borrower’s 10-K for such fiscal year as filed with the SEC, together with audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (other than a “going concern” qualification typical for venture-backed companies similar to Borrower or a “going concern” qualification based on Borrower having negative profits or based on a determination that Borrower has fewer than twelve (12) months of liquidity) on the financial statements from an independent certified public accounting firm reasonably acceptable to Agent and the Lenders (it being understood that Deloitte & Touche LLP shall be deemed acceptable to Agent and the Lenders);

(d)Compliance Statement.  Within thirty (30) days after the last day of each month, a completed Compliance Statement confirming that, as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Agent or the Lenders may reasonably request, including, without limitation, a statement that at the end of such month there were no held checks; 

(e)Annual Operating Budget and Financial Projections.  As soon as available, at least annually, and in any event no later than within sixty (60) days after the end of each fiscal year of Borrower, and promptly upon any updates or amendments thereto, (i) annual operating budgets (including income statements, balance sheets and cash flow statements, by month), and (ii) annual financial projections (on a quarterly basis), in each case as approved by the Board, together with any related business forecasts used in the preparation of such annual financial projections, in each case in a form acceptable to Agent and each of the Lenders;

(f)Other Statements.  Within five (5) days of delivery, copies of all material statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt;

 

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(g)SEC Filings.  Within five (5) days of filing, copies of all periodic and other reports (other than Borrower’s 10-Q and 10-K), proxy statements and other materials filed by Borrower and/or any Guarantor with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be;

(h)Legal Action Notice.  A prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000.00) or more;

(i)OFAC Notice.  Immediately upon Borrower’s or any Subsidiary’s knowledge, a written notice that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering;

(j)Beneficial Ownership Information.  Prompt written notice of any changes to the beneficial ownership information set out in Section 14 of the Perfection Certificate.  Borrower understands and acknowledges that each Lender relies on such true, accurate and up-to-date beneficial ownership information to meet such Lender’s regulatory obligations to obtain, verify and record information about the beneficial owners of its legal entity customers;

(k)Subordinated Debt Default.  Prompt written notice of the occurrence of any default or event of default under any document, instrument or agreement evidencing or relating to any Subordinated Debt; and

(l)Other Financial Information.  Other financial information reasonably requested by Agent or any Lender. 

Notwithstanding the foregoing, documents required to be delivered under clauses (b), (c) or (g) of this Section 6.2 may be delivered electronically and if so delivered (which, for clarity, with respect to the delivery of 10-Ks, must include the accounting firm opinion required pursuant to clause (c)), shall be deemed to have been delivered on the date on which Borrower files such documents with the SEC and such documents are publicly available on the SEC’s EDGAR filing system or any successor thereto.

Any submission by Borrower of a Compliance Statement or any other financial statement submitted to the Financial Statement Repository pursuant to this Section 6.2 or otherwise submitted to Agent or either Lender shall be deemed to be a representation by Borrower that (i) as of the date of such Compliance Statement or other financial statement, the information and calculations set forth therein are true, accurate and correct, (ii) as of the end of the compliance period set forth in such submission, Borrower is in complete compliance with all required covenants except as noted in such Certificate Statement or other financial statement, as applicable, (iii) as of the date of such submission, no Events of Default have occurred or are continuing, (iv) all representations and warranties other than any representations or warranties that are made as of a specific date in Section 5 remain true and correct in all material respects as of the date of such submission except as noted in such Compliance Statement or other financial statement, as applicable, (v) as of the date of such submission, Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8, and (vi) as of the date of such submission, no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Agent or either Lender.

6.3Taxes; Pensions.  Timely file and require each of its Subsidiaries to timely file, all required income and other material tax returns and reports or extensions thereof and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except (i) for deferred payment of any Contested Taxes and (ii) to the extent such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Fifty Thousand Dollars ($50,000.00), and shall deliver to Agent, on reasonable written request, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

 

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6.4Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material defects.  Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date.  Borrower must promptly notify Agent and the Lenders of all returns, recoveries, disputes and claims that involve Inventory with a replacement value of more than Two Hundred Fifty Thousand Dollars ($250,000.00).

6.5Insurance.

(a)Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Agent may reasonably request.  Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Agent in its reasonable discretion.  Without limiting the foregoing, (i) Borrower must maintain a minimum of $2,000,000 of commercial general liability insurance for each occurrence and (ii) Borrower has and agrees to maintain a minimum of Two Million Dollars ($2,000,000.00) of directors’ and officers’ insurance for each occurrence and Five Million Dollars ($5,000,000.00) in the aggregate.  All property policies shall have a lender’s loss payable endorsement showing Agent as lender loss payee.  All commercial general liability and umbrella liability policies shall show, or have endorsements showing, Agent as an additional insured.  Agent shall be named as the sole lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral.

(b)Ensure that proceeds payable under any property policy are, at Agent’s option, payable to Agent for the ratable benefit of the Lenders on account of the Obligations.   Notwithstanding the foregoing, (i) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Five Hundred Thousand Dollars ($500,000.00) 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 (A) shall be of equal or like value as the replaced or repaired Collateral and (B) shall be deemed Collateral in which Agent, for the ratable benefit of the Lenders, has been granted a first priority security interest, and (ii) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of the Lenders, be payable to the Lenders on account of the Obligations.

(c)At Agent’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments.  Each provider of any such insurance required under this Section 6.5 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Agent, that it will give Agent thirty (30) days prior written notice (or ten (10) days prior written notice for cancellation due to non-payment of premium) before any such policy or policies shall be canceled.  If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Agent, Agent may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Agent deems prudent.

6.6Operating Accounts.

(a)Maintain all of Borrower’s, any of its Subsidiaries’, and any Guarantor’s operating accounts, depository accounts and excess cash with SVB and SVB’s Affiliates, which accounts (other than Excluded Accounts) are required to be subject to Control Agreements in favor of Agent, provided, however, that (i) Australian Subsidiary may maintain accounts in Australia with financial institutions other than SVB and SVB’s Affiliates and (ii) if SVB and SVB’s Affiliates are unable to provide a particular type of banking services to any other Subsidiary of Borrower or any Guarantor in a country or countries outside of the United States, such Subsidiaries and Guarantors may maintain accounts in such country and countries with financial institutions other than SVB and SVB’s Affiliates containing an aggregate amount (for all such accounts together) not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) at any time (so long as such accounts are exclusively used for banking services SVB and its Affiliates are unable to provide).  In addition to the foregoing, except as permitted pursuant to subsection (m) of the definition of Permitted Indebtedness, Borrower, any Subsidiary of Borrower and any Guarantor, shall obtain any business credit card and any letter of credit exclusively from SVB.

 

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(b)In addition to and without limiting the restrictions in (a), Borrower shall provide Agent five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution. For each Collateral Account that Borrower at any time maintains. Borrower shall cause the applicable bank or financial institution at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Agent’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of the Lenders. The provisions of the previous sentence shall not apply to (i) Excluded Accounts and (ii) deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Agent and the Lenders by Borrower as such.

6.7Financial Covenant – Net Product Revenue.  Commencing June 30, 2022, to be tested each month (as of the last day of the immediately preceding month) at the time of the delivery or due date of financial statements pursuant to Section 6.2(a), maintain Net Product Revenue for the trailing three (3) month period ending with the month of such financial reporting in an amount equal to at least fifty percent (50.0%) of the projected Net Product Revenue for such period based upon the Forecast.  Notwithstanding the foregoing, required compliance with the Net Product Revenue covenant set forth in this Section 6.7 shall not be required at any time in which Borrower maintains unrestricted and unencumbered cash in accounts maintained with SVB which are subject to a Control Agreement in favor of Agent in an amount equal to at least fifty percent (50.0%) of the aggregate principal amount of all outstanding Term Loan Advances (for the avoidance of doubt, this waiver provision is a daily condition and if it was not being satisfied at any point in time, compliance with the Net Product Revenue covenant would need to be demonstrated as of the most recent financial reporting period).

6.8Protection of Intellectual Property Rights.

(a)(i) Use commercially reasonable efforts to protect, defend and maintain the validity and enforceability of any Intellectual Property; (ii) promptly advise Agent in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value 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 Agent’s written consent.

(b)Provide written notice to Agent within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public).  Borrower shall take such commercially reasonable steps as Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Agent to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Agent’s and the Lenders’ rights and remedies under this Agreement and the other Loan Documents.

6.9Litigation Cooperation.  From the date hereof and continuing through the termination of this Agreement, make available to Agent, without expense to Agent or any Lender, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Agent and/or the Lenders may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Agent and/or any Lender with respect to any Collateral or relating to Borrower.

6.10Further Assurances.  Execute any further instruments and take further action as Agent and the Lenders reasonably request to perfect or continue Agent’s Lien in the Collateral or to effect the purposes of this Agreement.  Deliver to Agent and the Lenders, within five (5) days after the same are sent or received, copies of all material correspondence, reports, documents and other material filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.

 

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6.11Management Rights.  Borrower shall permit any representative that Agent or any Lender authorizes, including its attorneys and accountants, to inspect the Collateral and examine and make copies and abstracts of the books of account and records of Borrower at reasonable times and upon reasonable notice during normal business hours; provided, however, that so long as no Event of Default has occurred and is continuing, such examinations shall be limited to no more often than once per fiscal year.  In addition, any such representative shall have the right to meet with management and officers of Borrower to discuss such books of account and records.  In addition, Agent and each Lender shall be entitled at reasonable times and intervals to consult with and advise the management and officers of Borrower concerning significant business issues affecting Borrower.  Such consultations shall not unreasonably interfere with Borrower’s business operations.  The parties intend that the rights granted Agent and the Lenders shall constitute “management rights” within the meaning of 29 C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Agent or the Lenders with respect to any business issues shall not be deemed to give Agent or the Lenders, nor be deemed an exercise by Agent or the Lenders of, control over Borrower’s management or policies.

6.12Post-Closing Requirement.  Deliver to Agent, each in form and substance satisfactory to Agent and the Lenders, within ten (10) Business Days of the Effective Date, Control Agreements with respect to each of Borrower’s Deposit Accounts and Securities Accounts maintained with SVB.

7NEGATIVE COVENANTS

Borrower shall not do any of the following without the prior written consent of the Lenders:

7.1Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (including, without limitation, pursuant to a Division) (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted Investments; (d) consisting of Borrower’s or its Subsidiaries’ use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; (e) consisting of licenses and similar arrangements for the use of Intellectual Property in the ordinary course of business that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory or may be exclusive as to territory but only as to discrete geographical areas outside of the United States of America in the ordinary course of business; (f) consisting of the sale or issuance of any stock of Borrower provided that any such sale or issuance does not result in a Change in Control; (g) consisting of sales or discounting of delinquent accounts in the ordinary course of business pursuant to transactions not prohibited by this Agreement; (h) consisting of sales of net operating or tax losses through any government sponsored program; (i) of Intellectual Property that is not material to Borrower’s business, as determined in consultation with Agent; and (j) of other property not otherwise permitted by this Section 7.1 in an aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in any twelve (12) month period.

7.2Changes in Business, Management, Control, or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; (c) fail to provide notice to Agent and Lenders of any Key Person departing from or ceasing to be employed by Borrower within five (5) Business Days after such Key Person’s departure from Borrower; or (d) permit or suffer any Change in Control, unless prior to or simultaneously with the closing of any such Change in Control transaction, the Loan Documents are terminated an all Obligations are paid in full in cash.

Borrower shall not, without at least ten (10) days prior written notice to Agent: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000.00) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Two Hundred Fifty Thousand Dollars ($250,000.00)  to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, excluding contract manufacturers, locations outside of the United States, clinical sites and third-party logistics and/or distribution centers, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.  If Borrower 

 

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intends to add any new offices or business locations, including warehouses, containing in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) of Borrower’s assets or property, then Borrower will first notify Agent, and the landlord of any such new offices or business locations, including warehouses, shall execute and deliver a landlord consent in form and substance reasonably satisfactory to Agent.  If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Two Hundred Fifty Thousand Dollars ($250,000.00)  to a bailee (excluding any contract manufacturer, clinical site, bailee location outside of the United States or third-party logistics and/or distribution center), and Agent and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first notify Agent, and such bailee shall execute and deliver a bailee agreement in form and substance reasonably satisfactory to Agent.  

7.3Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, (i) all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary or pursuant to a Division) or (ii) any product, product line or Intellectual Property (including the right to use, develop or sell the same) of or from any other Person (in each case, including through licensing), except for Permitted Acquisitions, unless prior to or simultaneously with the closing of any such transaction, the Loan Documents are terminated and all Obligations are paid in full in cash.  A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

7.4Indebtedness.  Create, incur, assume, guarantee or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness , or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except as otherwise permitted hereunder or approved in writing by Agent.

7.5Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Agent’s Lien under this Agreement), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

7.6Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

7.7Distributions; Investments.  (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock, provided that Borrower may (i)  convert any of its convertible securities into other securities (including Borrower’s common stock) pursuant to the terms of such convertible securities or otherwise in exchange thereof, including the conversion or exchange of any outstanding 6.0% Senior Convertible Notes due 2025 issued by Borrower to Puissance Life Science Opportunities Fund VI into Borrower's common stock pursuant to the terms of the Senior Convertible Note Purchase Agreement, dated as of March 7, 2019, by and between Borrower and Puissance Life Science Opportunities Fund VI or otherwise, (ii)  pay dividends solely in common stock, (iii) distribute equity securities to former or current employees, officers, consultants or directors pursuant to the exercise of employee stock options approved by the Board, (iv) conduct Permitted Repurchases so long as an Event of Default does not exist at the time of any such Permitted Repurchase and would not exist after giving effect to any such Permitted Repurchase, provided that the aggregate amount of all Permitted Repurchases does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) per fiscal year, and (v) redeem or repurchase capital stock, provided that concurrently with any such redemption or repurchase, Borrower receives proceeds from the sale of Borrower’s equity securities equal to or greater than the value of such redemption or repurchase; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.

 

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7.8Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for (a) 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, (b) reasonable and customary compensation arrangements and benefit plans for officers and other employees of Borrower entered into or maintained in the ordinary course of business, (c) reasonable and customary fees paid to members of the Board in the ordinary course of business, and (d) Investments of the type described in and permitted under clause (c) of the definition of “Permitted Investments” herein.

7.9Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof (except as expressly permitted under the terms of the subordination, intercreditor or other similar arrangement to which such Subordinated Debt is subject), provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Agent and the Lenders.

7.10Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or non-exempt Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; or withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

Borrower shall not, nor shall Borrower permit any of its Subsidiaries, Affiliates or Affiliates of Subsidiaries to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists.  Borrower shall not, nor shall Borrower permit any of its Subsidiaries, Affiliates or Affiliates of Subsidiaries to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

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

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

8EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

 

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8.1Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Term Loan Maturity Date).  During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);

8.2Covenant Default.  

(a)Borrower fails or neglects to perform any obligation in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.11, or 6.12 or violates any covenant in Section 7; or

(b)Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Cure periods provided under this section shall not apply, among other things, to financial covenants or any other covenants set forth in clause (a) above;

8.3Material Adverse Change.  A circumstance has occurred that could reasonably be expected to cause a Material Adverse Change;

8.4Attachment; Levy; Restraint on Business.

(a)(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or 

(b)(i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business;

8.5Insolvency.  (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);

8.6Other Agreements.  There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000.00); or (b) any breach or default by Borrower or Guarantor, the result of which could have a material adverse effect on Borrower’s or any Guarantor’s business; provided, however, that the Event of Default under this Section 8.6 caused by the occurrence of a breach or default under such other agreement shall be cured or waived for purposes of this Agreement upon the Lenders receiving written notice from the party asserting such breach or default of such cure or waiver of the breach or default under such other agreement, if at the time of such cure or waiver under such other agreement (x) the Lenders have not declared an Event of Default under this Agreement and/or exercised any rights with respect thereto; (y) any such cure or waiver does not result in an Event of Default under any other provision of this Agreement or any Loan Document; and (z) in connection with any such cure or waiver under such other agreement, the terms of any agreement with such third party are not modified or amended in any manner which could in the good faith business judgment of the Lenders be materially less advantageous to Borrower or any Guarantor;

 

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8.7Judgments; Penalties.  One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000.00) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or decree);

8.8Misrepresentations.  Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Agent or any Lender or to induce Agent or any Lender to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

8.9Subordinated Debt.  Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or any applicable subordination or intercreditor agreement;

8.10Guaranty.  (a) Any guaranty of any Obligations terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any guaranty of the Obligations; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.6, 8.7, or 8.8 of this Agreement occurs with respect to any Guarantor, (d) the death, liquidation, winding up, or termination of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Agent’s Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations occurs with respect to any Guarantor;

8.11Governmental Approvals.  Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) causes, or could reasonably be expected to cause a Material Adverse Change, or (ii) materially adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to materially adversely affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction; or

8.12Australian Subsidiary Property.  Australian Subsidiary acquires, receives, owns or holds any assets or property with an aggregate value of greater than One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) at any time. 

9Lenders’ RIGHTS AND REMEDIES

9.1Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default, (i) Agent, as directed by each Lender in accordance with the Lender Intercreditor Agreement or, if such rights and remedies are not addressed in the Lender Intercreditor Agreement, as directed by a majority of the Lenders, may and (ii) with respect to clauses (c), (d), (g) and (i) Agent and/or any Lender may, without notice or demand, do any or all of the following:

(a)declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Agent or any Lender);

 

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(b)stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement among Borrower, Agent, and/or any Lenders;

(c)demand that Borrower (i) deposit cash with SVB in an amount equal to at least (A) one hundred five percent (105.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in Dollars remaining undrawn, and (B) one hundred ten percent (110.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in a Foreign Currency remaining undrawn (plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by SVB in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;

(d)terminate any FX Contracts;

(e)verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Agent and/or the Lenders consider advisable, and notify any Person owing Borrower money of Agent’s security interest in such funds.  Borrower shall collect all payments in trust for Agent, for the ratable benefit of the Lenders and, if requested by Agent, immediately deliver the payments to Agent, for the ratable benefit of the Lenders in the form received from the Account Debtor, with proper endorsements for deposit;

(f)make any payments and do any acts Agent or any Lender considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Agent requests and make it available as Agent designates.  Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred.  Borrower grants Agent a license to enter and occupy any of its premises, without charge, to exercise any of Agent’s rights or remedies;

(g)apply to the Obligations (i) any balances and deposits of Borrower it holds, or (ii) any amount held by Agent owing to or for the credit or the account of Borrower;

(h)ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral.  Agent, for the benefit of the Lenders is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Agent’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements inure to Agent, for the ratable benefit of the Lenders;

(i)place a “hold” on any account maintained with Agent or Lenders 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;

(j)demand and receive possession of Borrower’s Books; and

(k)exercise all rights and remedies available to Agent and the Lenders 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).

9.2Power of Attorney.  Borrower hereby irrevocably appoints Agent, for the benefit of the Lenders as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to:  (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Agent determines reasonable; (d) make, 

 

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settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Agent or a third party as the Code permits.  Borrower hereby appoints Agent, for the benefit of the Lenders as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and the Lenders are under no further obligation to make Credit Extensions hereunder.  Agent’s foregoing appointment as Borrower’s attorney in fact, and all of Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and the Lenders’ obligation to provide Credit Extensions terminates.

9.3Protective Payments.  If Borrower fails to obtain the insurance called for by Section 6.5 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 or which may be required to preserve the Collateral, Agent may obtain such insurance or make such payment, and all amounts so paid by Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Agent will make reasonable efforts to provide Borrower with notice of Agent obtaining such insurance at the time it is obtained or within a reasonable time thereafter.  No payments by Agent are deemed an agreement to make similar payments in the future or Agent’s and/or Lender’s waiver of any Event of Default.

9.4Application of Payments and Proceeds Upon Default.  If an Event of Default has occurred and is continuing, Agent shall have the right to apply in any order any funds in its possession, whether from Borrower’s account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations.  Agent shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Agent and the Lenders for any deficiency.  If Agent, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Agent shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Agent of cash therefor.

9.5Liability for Collateral.  So long as Agent and Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in their possession or under the control of Agent and/or Lenders, Agent and Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

9.6No Waiver; Remedies Cumulative.  Agent’s and any Lender’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 Agent or any Lender 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.  Agent’s and each Lender’s rights and remedies under this Agreement and the other Loan Documents are cumulative.  Agent and each Lender have all rights and remedies provided under the Code, by law, or in equity.  Agent’s or any Lender’s exercise of one right or remedy is not an election and shall not preclude Agent or any Lender from exercising any other remedy under this Agreement or any other Loan Document or other remedy available at law or in equity, and Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver.  Agent’s or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.  

9.7Demand Waiver.  Borrower waives demand, 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 held by Agent on which Borrower is liable.

 

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10NOTICES

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.  Agent 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:
	
 
	
Scynexis, Inc.

1 Evertrust Plaza, 13th Floor

Jersey City, New Jersey 07302

Attn: Legal Department

Phone: 

Email: 
	
 

	
 
	
 
	
 
	
 

	
with a copy to:
	
 
	
Cooley LLP

101 California Street, 5th Floor

San Francisco, California 94114

Attn: Maricel Mojares-Moore

Email: 
	
 

	
 
	
 
	
 
	
 

	
If to SVB:
	
 
	
Silicon Valley Bank

275 Grove Street

Suite 2-200

Newton, Massachusetts 02466

Attn: Mr. Michael McMahon

Email:  
	
 

	
 
	
 
	
 
	
 

	
with a copy to:
	
 
	
Morrison & Foerster LLP
200 Clarendon Street, 20th Floor
Boston, Massachusetts 02116
Attn:  David A. Ephraim, Esquire
Email: 
	
 

	
 
	
 
	
 
	
 

	
If to Agent or Hercules:
	
 
	
Hercules Capital, Inc.

Legal Department

Attention:  Chief Legal Officer, Bryan Jadot and Michael Dutra

400 Hamilton Avenue, Suite 310

Palo Alto, California 94301

email: 

 

11CHOICE OF LAW, VENUE, JURY TRIAL WAIVER and judicial reference

Except as otherwise expressly provided in any of the Loan Documents, California law governs the Loan Documents without regard to principles of conflicts of law.  Borrower, Agent, and Lenders each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Agent or Lenders from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Agent or any Lender.  Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower hereby 

 

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waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND EACH LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

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 Section 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 Sections 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 Section 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.

This Section 11 shall survive the termination of this Agreement.

12GENERAL PROVISIONS

12.1Termination Prior to Term Loan Maturity Date; Survival.  All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement) have been satisfied.  So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Term Loan Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Agent.  Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination.  No termination of this Agreement or any Bank Services Agreement shall in any way affect or impair any right or remedy of Agent or any Lender, nor shall any such termination relieve Borrower of any Obligation to any Lender, until all of the Obligations have been paid and performed in full. Those Obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination and payment in full of the Obligations then outstanding. 

 

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12.2Successors and Assigns.  

(a)This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not assign this Agreement or any rights or obligations under it without Agent and Lenders’ prior written consent (which may be granted or withheld in Agent’s and Lenders’ discretion).  Agent and each Lender has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, such Lender’s obligations, rights, and benefits under this Agreement and the other Loan Documents (other than the Warrant, as to which assignment, transfer and other such actions are governed by the terms thereof).

(b)Agent, acting solely for this purpose as an agent of Borrower, shall maintain at one of its offices in the United States a copy of each assignment and assumption pursuant to Section 12.2(a) delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Term Loan Commitments of, and principal amounts (and stated interest) of the Term Loan Advances owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and Borrower, Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(c)Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Term Loan Advances or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in any commitments, loans, or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.  Borrower agrees that each participant shall be entitled to the benefits of the provisions of Section 2.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 12.2; provided that such participant shall not be entitled to receive any greater payment pursuant to Section 2.7, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a change in law that occurs after the participant acquired the applicable participation.

12.3Indemnification.  Borrower agrees to indemnify, defend and hold Agent, each Lender and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Agent or any Lender (each, an “Indemnified Person”) harmless against:  (i) all obligations, demands, claims, and liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Lenders’ Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Agent, Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.  This Section 12.3 shall not apply with respect to taxes other than any taxes that represent losses, claims, damages, etc. arising from any non-tax claim.  

This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.

12.4Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.

12.5Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

 

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12.6Correction of Loan Documents.  Agent may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties.

12.7Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, or release, or subordinate Lenders’ security interest in, or consent to the transfer of, any Collateral shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by Agent, with the consent of the Lenders in accordance with the Lender Intercreditor Agreement or, if such item is not addressed in the Lender Intercreditor Agreement, as consented to by a majority of the Lenders, and Borrower.  Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document.  Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver.  The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.  In the event any provision of any other Loan Document is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall exclusively control.

12.8Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

12.9Confidentiality Agent and the Lenders agree to maintain the confidentiality of Information (as defined below), except that Information may be disclosed (a) to Agent and/or any Lender’s subsidiaries or Affiliates, and their respective employees, directors, officers, investors and potential investors (and each of their respective Affiliates or clients), partners, lenders, agents, attorneys, accountants and other professional advisors (collectively, “Representatives” and, together with Agent and the Lenders, collectively, “Lender Entities”); (b) to prospective transferees, assignees, credit providers or purchasers of any of  the Lenders’ or Agent’s interests under or in connection with this Agreement and their Representatives (provided, however, Agent and the Lenders shall use their best efforts to obtain any such prospective transferee’s, assignee’s, credit provider’s, purchaser’s or their Representatives’ agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Agent’s or any Lender’s regulators or as otherwise required in connection with Agent’s or any Lender’s examination or audit; (e) as Agent or any Lender considers appropriate in exercising remedies under the Loan Documents; (f) to third-party service providers of Agent and/or any Lender so long as such service providers have executed a confidentiality agreement with Agent or the Lenders, as applicable, with terms no less restrictive than those contained herein; and (g) to the extent consisting of general portfolio information that does not identify Borrower.  The term “Information” means all information received from Borrower regarding Borrower or its business, in each case other than information that is either: (i) in the public domain or in Agent’s or any Lender’s possession when disclosed to Agent or such Lender, or becomes part of the public domain (other than as a result of its disclosure by Agent or a Lender in violation of this Agreement) after disclosure to Agent and/or the Lenders; or (ii) disclosed to Agent and/or a Lender by a third party, if Agent or such Lender, as applicable, does not know that the third party is prohibited from disclosing the information.

Lender Entities may use anonymous forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses not expressly prohibited in writing by Borrower. The provisions of the immediately preceding sentence shall survive the termination of this Agreement.

12.10Attorneys’ Fees, Costs and Expenses.  In any action or proceeding between Borrower and Agent or any Lender arising out of or relating to the Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled.

12.11Right of Setoff.  Borrower hereby grants to Agent, for the ratable benefit of the Lenders a Lien and a right of setoff as security for all Obligations to Agent and the Lenders, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping 

 

25

 

or control of Agent or any entity under the control of Agent (including a subsidiary of Agent) 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, Agent or any Lender may setoff 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 AGENT OR ANY LENDER 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.

12.12Electronic Execution of Documents.  The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.

12.13Captions.  The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

12.14Construction of Agreement.  The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

12.15Relationship.  The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.

12.16Third 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.

12.17Patriot Act.  Each Lender hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies Borrower and each of its Subsidiaries, which information includes the names and addresses of each Borrower and each of its Subsidiaries and other information that will allow Lender, as applicable, to identify Borrower and each of its Subsidiaries in accordance with the USA PATRIOT Act.

13DEFINITIONS

13.1Definitions.  As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative.  As used in this Agreement, the following capitalized terms have the following meanings:

“Account” is 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 Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

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

 

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“Affiliate” is, with respect to any Person, each other 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, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“Agent” is defined in the preamble hereof.

“Agreement” is defined in the preamble hereof.

“Amortization Date” is:

	
 
	
(a)
	
if the Performance Milestone I does not occur, December 1, 2023;

	
 
	
(b)
	
if the Performance Milestone I occurs, June 3, 2024, provided, however, that: 

(i)if, prior to June 3, 2024, Borrower provides Agent and the Lenders with evidence, satisfactory to Agent and each Lender in their reasonable discretion, that Borrower had Net Product Revenue in an amount equal to at least the amount required pursuant to the financial covenant in Section 6.7 hereof (not taking into account any waiver of compliance with such covenant under the terms of Section 6.7) at all times prior to June 3, 2024, the Amortization Date will be September 2, 2024;

(ii)if the Amortization Date is extended as set forth in subsection (i) and, prior to September 2, 2024, Borrower provides Agent and the Lenders with evidence, satisfactory to Agent and each Lender in their reasonable discretion, that Borrower had Net Product Revenue in an amount equal to at least the amount required pursuant to the financial covenant in Section 6.7 hereof (not taking into account any waiver of compliance with such covenant under the terms of Section 6.7) at all times prior to September 2, 2024, the Amortization Date will be December 2, 2024;

(iii)if the Amortization Date is extended as set forth in subsection (ii) and, prior to December 2, 2024, Borrower provides Agent and the Lenders with evidence, satisfactory to Agent and each Lender in their reasonable discretion, that Borrower had Net Product Revenue in an amount equal to at least the amount required pursuant to the financial covenant in Section 6.7 hereof (not taking into account any waiver of compliance with such covenant under the terms of Section 6.7) at all times prior to December 2, 2024, the Amortization Date will be March 3, 2025; and

(iv)if the Amortization Date is extended as set forth in subsection (iii) and, prior to March 3, 2025, Borrower provides Agent and the Lenders with evidence, satisfactory to Agent and each Lender in their reasonable discretion, that Borrower had Net Product Revenue in an amount equal to at least the amount required pursuant to the financial covenant in Section 6.7 hereof (not taking into account any waiver of compliance with such covenant under the terms of Section 6.7) at all times prior to March 3, 2025, the Amortization Date will be the Term Loan Maturity Date.

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

“ASU” is defined in Section 1.

“Australian Subsidiary” is SCYNEXIS Pacific Pty Ltd, Borrower’s wholly-owned Subsidiary formed under the laws of Australia.

“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of Borrower.

 

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“Bank Services”  are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by SVB or any SVB Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in SVB’s various agreements related thereto (each, a “Bank Services Agreement”).

“Bank Services Agreement” is defined in the definition of Bank Services.

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

“Board” means Borrower’s board of directors.

“Borrower” is defined in the preamble hereof.

“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Agent approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Agent and the Lenders may conclusively rely on such certificate unless and until such Person shall have delivered to Agent and the Lenders a further certificate canceling or amending such prior certificate.

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

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) SVB’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

“Change in Control” means (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)‐5 under the Exchange Act), directly or indirectly, of forty-nine percent (49.0%) or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted basis); (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause 

 

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(i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (c) at any time, Borrower shall cease to own and control, of record and beneficially, directly or indirectly, one hundred percent (100.0%) of each class of outstanding capital stock of each Subsidiary of Borrower free and clear of all Liens (except Liens created by this Agreement).

“Claims” is defined in Section 12.3.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

“Commitment” and “Commitments” means the Term Loan Commitment(s).

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“Compliance Statement” is that certain statement in the form attached hereto as Exhibit B.

“Contested Taxes” is defined in Section 5.8.

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Agent pursuant to which Agent obtains control (within the meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account.

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

 

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“Credit Extension” is any Term Loan Advance, or any other extension of credit by any Lender for Borrower’s benefit.

“Default Rate” is defined in Section 2.3(b).

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

“Designated Deposit Account” is the account number ending 027 (last three digits) maintained by Borrower with SVB.

“Disbursement Letter” is that certain form attached hereto as Exhibit D.

“Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, or any analogous action taken pursuant to any other applicable law with respect to any corporation, limited liability company, partnership or other entity.

“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.

“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Agent at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

“Effective Date” is defined in the preamble hereof.

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

“Event of Default” is defined in Section 8.

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

“Excluded Accounts” means restricted cash accounts maintained with SVB as security for outstanding Letters of Credit issued by SVB on behalf of Borrower or any of its Subsidiaries.

“FDA” means the Food and Drug Administration.

“Final Payment” is a payment or payments (in addition to and not in substitution for the regular monthly payments of principal plus accrued interest) equal to the Final Payment Amount, due on the earliest to occur of (a) the Term Loan Maturity Date, (b) the repayment of the Term Loan Advances, (c) as required pursuant to Section 2.2(d) or 2.2(e), or (d) the termination of this Agreement.  

“Final Payment Amount” is (a) if the Final Payment becomes due pursuant to Section 2.2(d) in connection with a prepayment of less than all of the Term Loan Advances, an amount equal to the amount of the Term Loan Advances being prepaid multiplied by three and ninety five-hundredths of one percent (3.95%) and (b) in all cases other than a prepayment of less than all of the Term Loan Advances pursuant to Section 2.2(d), an amount equal to (i) the original aggregate principal amount of all Term Loan Advances extended by the Lenders to Borrower hereunder multiplied by three and ninety five-hundredths of one percent (3.95%) less (ii) the amount of any Final Payment previously paid pursuant to (a) with respect to any portion of the Term Loan Advances.

 

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 “Financial Statement Repository” are Agent’s and the Lenders’ e-mail addresses specified in Section 10 or such other means of collecting information approved and designated by Agent after providing notice thereof to Borrower from time to time.

“Forecast” means the projections for Borrower as delivered and accepted by Agent and Lenders on March 26, 2021, provided that Borrower may from time to time update the Forecast with a forecast approved by the Board, subject to the consent and approval in writing of Agent and Lenders in their reasonable discretion.

“Foreign Currency” means lawful money of a country other than the United States.

“Foreign Subsidiary” means any Subsidiary which is not a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia.

“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.

“FX Contract” is any foreign exchange contract by and between Borrower and SVB under which Borrower commits to purchase from or sell to SVB a specific amount of Foreign Currency on a specified date.

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

“Guarantor” is any Person providing a Guaranty in favor of Agent or any Lender.

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.

“Hercules” is defined in the preamble hereof.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

“Indemnified Person” is defined in Section 12.3.

“Information” is defined in Section 12.9.

 

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

“Intellectual Property” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:

(c)its Copyrights, Trademarks and Patents; 

(d)any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how and operating manuals;

(e)any and all source code;

(f)any and all design rights which may be available to such Person;

(g)any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

(h)all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

“Intercompany Note” means that certain Secured Promissory Note, dated as of July 4, 2019, executed by Australian Subsidiary in favor of Borrower, as amended through the Effective Date.

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

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

“IRC” is the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder.

“Key Person” is Borrower’s President and Chief Executive Officer.

“Lender” and “Lenders” is defined in the preamble.

“Lender Entities” is defined in Section 12.9. 

“Lender Intercreditor Agreement” is that certain Intercreditor Agreement dated as of the Effective Date by and between Hercules and SVB, as may be amended from time to time in accordance with the provisions thereof.

“Lenders’ Expenses” are all of Agent’s and the Lenders’ audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.

“Letter of Credit” is a standby or commercial letter of credit issued by SVB upon request of Borrower based upon an application, guarantee, indemnity, or similar agreement.

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

 

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“Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the Warrant, the Perfection Certificate, the Lender Intercreditor Agreement, each Disbursement Letter, the ACH Authorization, any Bank Services Agreement, any Control Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or Guarantor, and any other present or future agreement by Borrower and/or Guarantor with or for the benefit of Agent and the Lenders in connection with this Agreement, all as amended, restated, or otherwise modified.  

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Agent’s, for the ratable benefit of the Lenders, Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

“Net Product Revenue” means net product revenue recognized by Borrower (as determined in accordance with GAAP) solely from the sale of ibrexafungerp (which shall not include any revenue under business development or licensing transactions). For the avoidance of doubt, without limiting the foregoing, Net Product Revenue shall not include any of the following to the extent not recognizable as revenue in accordance with GAAP (a) trade, quantity and cash discounts allowed by Borrower, (b) discounts, refunds, rebates, charge backs, retroactive price adjustment and any other allowances which effectively reduce net selling price, (c) product returns and allowances, (d) allowances for shipping or other distribution expenses, (e) set-offs and counterclaims, and (f) any other similar and customary deductions that are typically deducted from gross revenue and not included in net revenue in accordance with GAAP.

“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Lenders’ Expenses, the Final Payment, the Prepayment Fee and other amounts Borrower owes Agent or any Lender now or later, whether under this Agreement, the other Loan Documents (other than the Warrant), or otherwise, including, without limitation, all obligations relating to Bank Services, if any, and including any interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Agent and/or the Lenders, and to perform Borrower’s duties under the Loan Documents (other than the Warrant).

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

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

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

“Participant Register” is defined in Section 12.2(c).

“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.

“Payment/Advance Form” is that certain form attached hereto as Exhibit C.

“Payment Date” is the first (1st) Business Day of each month.

“Perfection Certificate” is defined in Section 5.1.

 

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“Performance Milestone I” means Borrower has provided Agent and the Lenders with evidence, on or prior to June 30, 2022, satisfactory to Agent and each Lender in their reasonable discretion, that the FDA has approved Borrower’s new drug application for ibrexafungerp for the treatment of patients with vulvovaginal candidiasis with a label claim generally consistent with that sought in Borrower’s new drug application filing.

“Performance Milestone II” means both (a) the occurrence of Performance Milestone I and (b) Borrower has provided Agent and the Lenders with evidence, on or prior to June 30, 2022, satisfactory to Agent and each Lender in their reasonable discretion, that Borrower has received positive data (defined as achievement of the protocol-specified primary endpoint with statistical significance and an acceptable safety profile, which together support the filing of a supplemental new drug application as the next immediate step in development) from the Phase 3 study of ibrexafungerp in patients with recurrent vulvovaginal candidiasis.

“Permitted Acquisition” means a transaction whereby Borrower acquires, or permits any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, which satisfies each of the following conditions:

(a)        such transaction shall only involve assets located in the United States and entities organized in a jurisdiction in the United States, and the party or parties being acquired is in the same or a substantially similar line of business as Borrower;

(b)        no Event of Default has occurred and is continuing or would exist after giving effect to the transaction and the Lenders have received satisfactory evidence that Borrower is in compliance with all terms and conditions of this Agreement (and that it will be in compliance after giving effect to the transaction);

(c)           the acquisition is approved by the board of directors (or equivalent control group) of all parties to the transaction;

(d)          the total aggregate consideration to be paid by Borrower and its Subsidiaries (excluding the value of Borrower’s or its Subsidiaries’ stock issued by Borrower or its Subsidiaries in satisfaction of the purchase price) in connection with all such transactions in any fiscal year does not exceed Five Million Dollars ($5,000,000.00) in the aggregate;

(e)          Borrower provides the Lenders (i) written notice of the transaction at least fifteen (15) days before the closing of the transaction, and (ii) copies of the acquisition agreement and other material documents relative to the contemplated transaction and such other financial information, financial analysis, documentation or other information relating to such transaction as the Lenders shall reasonably request at least fifteen (15) days before the closing of the transaction;

(f)          Borrower provides the Lenders, at least fifteen (15) days before the closing of the contemplated transaction, financial statements and a written confirmation, supported by reasonably detailed calculations, that on a pro forma basis (after giving effect to such transaction) Borrower is projected to be in compliance with each of the financial covenants in Section 6.7 for the one (1) year period ending after the proposed date of consummation of such contemplated transaction;

(g)          Borrower is a surviving legal entity after completion of the contemplated transaction;

(h)          the contemplated transaction is consensual and non-hostile;

(i)          no Indebtedness will be incurred, assumed, or would exist with respect to Borrower  or its Subsidiaries as a result of the contemplated transaction, other than Permitted Indebtedness, and no Liens will be incurred, assumed, or would exist with respect to the assets of Borrower or its Subsidiaries as a result of the contemplated transaction, other than Permitted Liens; 

(j)          the acquisition and the company being acquired is accretive in all respects;

 

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(k)          any Person whose capital stock is acquired or any Subsidiary that acquires assets in such contemplated transaction shall, within forty-five (45) days of the consummation of the transaction, become a co-borrower or guarantor (as determined by the Lenders in their reasonable discretion) hereunder and shall grant a first priority Lien in all of its assets to Agent, for the ratable benefit of the Lenders, all on documentation acceptable to Agent in its reasonable discretion; and

(l)          Borrower shall have delivered to the Lenders, at least five (5) Business Days prior to the date on which any such acquisition is to be consummated (or such later date as is agreed by the Lenders in their sole discretion), a certificate of a Responsible Officer of Borrower, in form and substance reasonably satisfactory to the Lenders, certifying that all of the requirements set forth in this definition have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition.

“Permitted Convertible Debt Financing” means issuance by Borrower after the Effective Date of convertible notes in an aggregate principal amount of not more than Two Hundred Fifty Million Dollars ($250,000,000.00); provided that such convertible notes shall (a) have a scheduled maturity no earlier than six (6) months after the Term Loan Maturity Date, (b) not be secured by a Lien on any of Borrower’s assets or property, (c) not be guaranteed by any Subsidiary of Borrower that is not a Borrower, (d) contain usual and customary subordination terms for underwritten offerings of senior subordinated convertible notes and (e) specifically designate this Agreement and all Obligations as “designated senior indebtedness” or a similar term so that the subordination terms referred to in clause (d) of this definition specifically refer to such notes as being subordinated to the Obligations pursuant to such subordination terms. 

“Permitted Indebtedness” is:

(a)Borrower’s Indebtedness to Agent and the Lenders under this Agreement and the other Loan Documents;

(b)Indebtedness existing on the Effective Date which is shown on the Perfection Certificate (other than Indebtedness in favor of Puissance Life Science Opportunities Fund VI);

(c)Subordinated Debt;

(d)unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

(e)Indebtedness consisting of Permitted Convertible Debt Financing in an aggregate principal amount not exceeding Two Hundred Fifty Million Dollars ($250,000,000.00);

(f)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;

(g)Contingent Obligations of any Subsidiary with respect to obligations of Borrower (provided that the primary obligations are not prohibited hereby) and Contingent Obligations of any Subsidiary that is not a Borrower hereunder with respect to obligations of any other Subsidiary (provided that the primary obligations are not prohibited hereby);

(h)Indebtedness secured by Liens permitted under clause (c) of the definition of “Permitted Liens” hereunder;

(i)Indebtedness in respect of guarantees, bank guarantees, surety or performance bonds and similar instruments issued for Borrower’s account in the ordinary course of Borrower’s business or the account of any Subsidiary of Borrower in the ordinary course of Borrower’s business in order to provide security for: (A) workers’ compensation claims, unemployment insurance and other types of social security and employee health and disability benefits, or casualty-liability insurance, payment obligations in connection with self-insurance or similar requirements; and (B) tenders, completion guarantees, statutory obligations, surety, environmental or appeal bonds, bids, leases, performance bonds or other obligations of a like nature;

 

35

 

(j)advances or deposits received in the ordinary course of business from customers, collaboration partners or vendors;

(k)to the extent constituting Indebtedness, Permitted Investments;

(l)Indebtedness owing as of the Effective Date pursuant to the Intercompany Note; 

(m)if SVB and SVB’s Affiliates are unable to provide a particular type of credit card or letter of credit banking service to any Subsidiary of Borrower or any Guarantor in a country or countries outside of the United States, unsecured Indebtedness in connection with such services in such country or countries in an aggregate amount not exceeding Fifty Thousand Dollars ($50,000.00);

(n)other unsecured Indebtedness (other than Indebtedness in connection with business credit cards or letters of credit) not otherwise permitted by Section 7.4 not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate outstanding at any time; and

(o)extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (n) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

“Permitted Investments” are:

(a)Investments (including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the Perfection Certificate (but specifically excluding any future Investments in any Subsidiaries unless otherwise permitted hereunder); 

(b)(i) Investments consisting of Cash Equivalents and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by the Lenders;

(c)Investments (i) in Borrower or any Subsidiary that is a Borrower or a Secured Guarantor, (ii) by any Subsidiary that is not a Borrower or Guarantor in any other such Subsidiary or (iii) by Borrower in Foreign Subsidiaries of Borrower formed after the Effective Date (which shall exclude, without limitation, Australian Subsidiary) for the ordinary and necessary current operating expenses of such Foreign Subsidiaries in an amount not to exceed Two Million Dollars ($2,000,000.00) in the aggregate in any fiscal year;

(d)Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;

(e)Investments consisting of deposit accounts (but only to the extent that Borrower is permitted to maintain such accounts pursuant to Section 6.6 of this Agreement) in which Agent, for the ratable benefit of the Lenders, has a first priority perfected security interest;

(f)Investments accepted in connection with Transfers permitted by Section 7.1;

(g)Investments in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by the Board;

(h)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

 

36

 

(i)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (i) shall not apply to Investments of Borrower in any Subsidiary;

(j)joint ventures or strategic alliances in the ordinary course of Borrower’s business, provided that (i) any licensing arrangement in connection with such joint ventures or strategic alliances shall be subject to Section 7.1 and (ii) any cash investments by Borrower do not exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate in any fiscal year;

(k)Investments constituting Permitted Acquisitions;

(l)Indebtedness of Australian Subsidiary owed to Borrower permitted under clause (l) of the definition of “Permitted Indebtedness” hereunder, to the extent constituting an Investment;

(m)other Investments not otherwise permitted by Section 7.7 not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate in any fiscal year.

 “Permitted Liens” are:

(a)Liens existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement or the other Loan Documents;

(b)Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s Books, provided that no notice of any such Lien has been filed or recorded under the IRC;

(c)purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;

(d)Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

(e)Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

(f)leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Agent, for the ratable benefit of the Lenders, a security interest therein;

(g)non-exclusive licenses of Intellectual Property granted to third parties in the ordinary course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States;

 

37

 

(h)easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property not likely to result in a material adverse effect on Borrower’s business;

(i)Liens arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections 8.4 and 8.7;

(j)Liens in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that (i) Agent, for the ratable benefit of the Lenders, has a first priority perfected security interest in the amounts held in such deposit and/or securities accounts (ii) such accounts are permitted to be maintained pursuant to Section 6.6 of this Agreement;

(k)Liens to secure the performance of bids, trade contracts (other than for borrowed money), contracts for the purchase of property permitted hereunder, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business, not representing an obligation for borrowed money;

(l)Liens consisting of security deposits with respect to Borrower's leased locations as security for Borrower's obligations under the lease agreements for such locations in an aggregate amount not to exceed Seven Hundred Fifty Thousand Dollars ($750,000.00) at any time;

(m)Liens in favor of SVB on Excluded Accounts;

(n)Liens on Australian Subsidiary’s assets in favor of Borrower pursuant to the Intercompany Note;

(o)Liens securing Subordinated Debt in favor of Amplity, Inc. so long as (i) such Liens are subordinated to Agent’s Liens on terms acceptable to the Lenders, and (ii) such Liens do not cover any property not subject to Agent’s Liens; and

(p)Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (o), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase.

“Permitted Repurchase” means each of the following: (a) the repurchase of the stock of former or current employees, officers, directors or consultants pursuant to stock repurchase agreements or termination of employment or service, (b) the purchase for value any rights distributed in connection with any stockholder rights plan, (c) the purchase of warrants or other agreements to acquire such capital stock that is in the money, (d) the purchase of capital stock pledged as collateral for loans to employees and (e) the purchase of fractional shares of capital stock arising out of stock dividends, splits or combinations or business combinations or in connection with exercises or conversions of options, warrants and other convertible securities.

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

“Prepayment Fee” shall be an additional fee, payable to the Lenders, with respect to the Term Loan Advances, upon the prepayment in full or in part of the Term Loan Advances, in an amount equal to (a) two and one-half of one percent (2.50%) of the principal amount of the prepaid portion of the Term Loan Advances if the prepayment is made on or prior to the first (1st) anniversary of the Effective Date, (b) one and one-half of one percent (1.50%) of the principal amount of the prepaid portion of the Term Loan Advances if the prepayment is made after the first (1st) anniversary of the Effective Date but on or prior to the second (2nd) anniversary of the Effective Date, (c) three-quarters of one percent (0.75%) of the principal amount of the prepaid portion of the Term Loan Advances if the prepayment is made after the second (2nd) anniversary of the Effective Date but on or prior to the third (3rd) anniversary of the Effective Date and (d) zero percent (0.0%) if the prepayment is made after the third (3rd) anniversary 

 

38

 

of the Effective Date.  Notwithstanding the foregoing, each Lender agrees to waive its Pro Rata Share of the Prepayment Fee if the Term Loan Advances are prepaid in full in accordance with Section 2.2(d) in connection and simultaneously with the refinancing of the Term Loan Advances by the Lenders in the Lenders’ sole and absolute discretion.

 “Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Agent, the “Prime Rate” shall mean the rate of interest per annum announced by SVB as its prime rate in effect at its principal office in the State of California (such SVB announced Prime Rate not being intended to be the lowest rate of interest charged by SVB in connection with extensions of credit to debtors); provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loan Advances held by such Lender by the aggregate outstanding principal amount of all Term Loan Advances.

“Puissance Note Documents” means (i) that certain Senior Convertible Note Purchase Agreement, dated as of March 7, 2019, by and between Borrower, as issuer, and Puissance Life Science Opportunities Fund VI, as the investor and (ii) that certain 6.0% Senior Convertible Note due 2025, dated as of March 7, 2019, executed by Borrower in favor of  Puissance Life Science Opportunities Fund VI, in each case as amended, modified, supplemented and/or restated from time to time.

“Register” is defined in Section 12.2(b).

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.

“Representatives” is defined in Section 12.9. 

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer, and Controller of Borrower.

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

“Revenue-Based Availability Amount” is (a) as of any date of determination during the period commencing on January 1, 2022 through and including December 31, 2022, an amount equal to Borrower’s Net Product Revenue for the three (3) month period ended on the last day of the immediately preceding month multiplied by five (5), (b) as of any date of determination during the period commencing on January 1, 2023 through and including June 30, 2023, an amount equal to Borrower’s Net Product Revenue for the three (3) month period ended on the last day of the immediately preceding month multiplied by four and one-quarter (4.25) and (c) as of any date of determination during the period commencing on July 1, 2023 through and including December 31, 2023, an amount equal to Borrower’s Net Product Revenue for the three (3) month period ended on the last day of the immediately preceding month multiplied by three and three-quarters (3.75).

 

39

 

“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

“Secured Guarantor” is a Guarantor which has granted Agent, for the ratable benefit of the Lenders, a first-priority Lien in such assets of the Guarantor consistent with the description of the Collateral hereunder (as if the Collateral were deemed to pertain to such Guarantor), and has executed and delivered to Agent and the Lenders such agreements, certificates and other documents in connection with the foregoing as required by Agent and the Lenders.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Agent and the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Agent and the Lenders entered into between Agent, the Lenders and the other creditor), on terms acceptable to Agent and the Lenders.

 

“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower or Guarantor.

“SVB” is defined in the preamble hereof.

“Term Loan A Advance” is defined in Section 2.2(a).

“Term Loan Advance” and “Term Loan Advances” are each defined in Section 2.2(a).

“Term Loan B Advance” and “Term Loan B Advances” are each defined in Section 2.2(a).

“Term Loan B Draw Period” is the period of time commencing upon the later to occur of (a) June 1, 2021 and (b) the occurrence of the Performance Milestone I and continuing through the earlier to occur of (i) June 30, 2022, and (ii) the occurrence of an Event of Default.

“Term Loan C Advance” is defined in Section 2.2(a).

 “Term Loan C Draw Period” is the period of time commencing upon the later to occur of (a) September 30, 2021 and (b) occurrence of the Performance Milestone II and continuing through the earlier to occur of (i) June 30, 2022, and (ii) the occurrence of an Event of Default.

“Term Loan Commitment” means, for any Lender, the obligation of such Lender to make a Term Loan Advance as and when available, up to the principal amount shown on Schedule 1.  “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

“Term Loan Commitment Percentage” means, as to any Lender at any time, the percentage (carried out to the fourth decimal place) of the Term Loan Commitments represented by such Lender’s Term Loan Commitment at such time.  The initial Term Loan Commitment Percentage of each Lender is set forth opposite the name of such Lender on Schedule 1.

“Term Loan D Advance” and “Term Loan D Advances” are each defined in Section 2.2(a).

 

40

 

 “Term Loan D Draw Period” is the period of time commencing upon the latest to occur of (a) the occurrence of the Performance Milestone I and (b) January 1, 2022 and continuing through the earlier to occur of (i) December 31, 2023, and (ii) the occurrence of an Event of Default.

“Term Loan Maturity Date” means March 3, 2025, provided, however, that if, prior to the foregoing date, Borrower provides evidence to Agent and the Lenders, satisfactory to the Lenders in their reasonable discretion, that (a) all Indebtedness of Borrower owed to Puissance Life Science Opportunities Fund VI (or its successors and permitted assigns) pursuant to the Puissance Note Documents has been paid in full with the prior written consent of Agent and the Lenders, (b) the full amount of Indebtedness of Borrower owed to Puissance Life Science Opportunities Fund VI (or its successors and permitted assigns) pursuant to the Puissance Note Documents has been converted to equity securities of Borrower or (c) the Puissance Note Documents have been amended to provide that the earliest scheduled maturity date with respect to such Indebtedness is no earlier than June 1, 2025, the Term Loan Maturity Date will be May 1, 2025.

“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” is defined in Section 7.1.

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

“Warrant” is, collectively, (a) that certain Warrant to Purchase Stock dated as of the Effective Date between Borrower and Hercules and (b) that certain Warrant to Purchase Stock dated as of the Effective Date between Borrower and SVB, in each case as amended, modified, supplemented and/or restated from time to time.

 

[Signature Page Follows.]

 

 

 

41

 

 

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

 

		
	
BORROWER:

 

SCYNEXIS, INC.

	
 

	
 
	
 

	
By 
	
/s/ Eric Francois

	
 
	
 

	
Name: 
	
Eric Francois

	
 
	
 

	
Title: 
	
Chief Financial Officer

 

		
	
AGENT:

 

HERCULES CAPITAL, INC., as Agent

	
 

	
 
	
 

	
By 
	
/s/ Jennifer Choe

	
 
	
 

	
Name: 
	
Jennifer Choe

	
 
	
 

	
Title: 
	
Associate General Counsel

 

		
	
LENDERS:

 

SILICON VALLEY BANK

	
 

	
 
	
 

	
By 
	
/s/ Michael McMahon

	
 
	
 

	
Name: 
	
Michael McMahon

	
 
	
 

	
Title: 
	
Director

 

		
	
HERCULES CAPITAL, INC.

	
 

	
 
	
 

	
By 
	
/s/ Jennifer Choe

	
 
	
 

	
Name: 
	
Jennifer Choe

	
 
	
 

	
Title: 
	
Associate General Counsel

 

 

 

 

[Signature Page to Loan and Security Agreement]

 

 

List of Exhibits

 

Schedule 1: Lends and Commitments Term Loan Commitments

Exhibit A: Collateral Description

Exhibit B: Compliance Statement

Schedule 1 to Compliance Statement Financial Covenants of Borrower

Exhibit C: Loan Payment/Advance Request Form

Exhibit D: Form of Disbursement Letter

Exhibit E: ACH Debit Authorization Agreement

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