Facility Agreement, dated as of September 25, 2021, by and among Intersect ENT, Inc., certain of Intersect ENT, Inc.s subsidiaries from time to time party thereto as guarantors and Medtronic, Inc

THIS INSTRUMENT, AS WELL AS THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY, ARE AND SHALL AT ALL TIMES BE AND REMAIN SUBORDINATED IN RIGHT AND TIME OF PAYMENT TO THE EXTENT AND IN THE MANNER SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED, SUPPLEMENTED, RESTATED, OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE “SUBORDINATION AGREEMENT”) DATED AS OF SEPTEMBER 25, 2021, EXECUTED AND DELIVERED BY MEDTRONIC, INC., AS THE SUBORDINATED CREDITOR (AS DEFINED THEREIN), TO THE PRIOR DISCHARGE OF THE SENIOR DEBT, AND EACH HOLDER OF THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

This FACILITY AGREEMENT (this “Agreement”), dated as of September 25, 2021 is entered into by and among INTERSECT ENT, INC., a Delaware corporation (the “Borrower”), the other Loan Parties (as defined below) party hereto from time to time, Medtronic, Inc., a Minnesota corporation (the “Lender” and, together with the Borrower and the other Loan Parties party hereto, the “Parties”).

WHEREAS, the Borrower desires that the Lender extend certain term loans to the Borrower to (i) provide funds for the Borrower’s working capital and general corporate purposes, and (ii) pay a portion of the costs and expenses related to entering into this Agreement and obtaining the Loans contemplated hereby, in each case subject to the terms and conditions set forth in this Agreement; and

WHEREAS, each of the Loan Parties is willing to Guarantee all of the Obligations;

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the Parties hereby agree as follows:

Section 1.1.      General Definitions.  Wherever used in this Agreement, the Exhibits or the Schedules attached hereto, unless the context otherwise requires, the following terms have the following meanings:

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business, business line, unit of operation or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the equity interests of any Person or otherwise causing any Person to become a Subsidiary of a Loan Party, (c) a merger or consolidation or any other combination with another Person or (d) the acquisition (including through licensing) of any product, product line or Intellectual Property of or from any other Person.

“Additional Amounts” has the meaning set forth in Section 2.4(a).

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly (a) controls, or is controlled by, or is under common control with, such Person; or (b) is a general partner, manager or managing member of such Person.  Without limiting the foregoing, a Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, the power to vote ten percent (10%) or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.  Unless expressly stated otherwise herein, the Lender shall not, for the purposes of this Agreement or any of the other Facility Documents, be deemed an Affiliate of the Borrower, any other Loan Party or any of their respective Subsidiaries.  With respect to the Lender, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Lender shall, for purposes hereof, be deemed to be an Affiliate of the Lender.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Anti-Corruption Laws” has the meaning set forth in Section 3.23(c).

“Anti-Money Laundering Laws” has the meaning set forth in Section 3.23(b).

“Applicable Laws” means, with respect to any Person, the common law and any federal, provincial, state, territorial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees or settlement agreements (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, including all Health Care Laws, in each case whether or not having the force of law and, in each case, that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Assignment and Assumption” means an assignment and assumption agreement entered into by the Lender and an assignee, substantially in the form of Exhibit A or any other form reasonably approved by the Lender.

“Authorizations” means, with respect to any Person, any permits, approvals, authorizations, licenses, registrations, certificates, clearances, concessions, grants, franchises, variances or permissions from, and any other contractual obligations with, any Governmental Authority, in each case whether or not having the force of law, and, in each case, and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject (including all Health Care Permits), and any supplements or amendments with respect to the foregoing.

“Authorized Officer” means the chief executive officer, the president or the chief financial officer of the Borrower or any other officer having substantially the same authority and responsibility.

“Availability Period” means the period commencing on the Closing Date and ending on the earlier of (i) the date the Merger Agreement is terminated for any reason other than the closing of the merger transaction contemplated therein and (ii) the closing of the merger transaction contemplated therein.

“Bankruptcy Code” means Title 11 of the United States Code, as in effect from time to time.

“Borrower” has the meaning set forth in the preamble to this Agreement.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Applicable Laws of, or are in fact closed in, New York, New York.

“Capital Lease” means, with respect to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person (subject to Section 1.5).

“Capital Lease Obligations” means, at the time any determination thereof is to be made, the amount of the liability of a Person in respect of a Capitalized Lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP (subject to Section 1.5).

“CFC” means a “controlled foreign corporation” as defined in Section 957 of the Code.

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of the Department of Veterans Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veterans Affairs, and all Applicable Laws, rules, regulations, manuals, orders or requirements pertaining to such program.

“Change of Control” means (a) a consolidation, merger, exchange of shares, tender or exchange offer, recapitalization, reorganization, business combination, purchase or sale of shares or other similar event, following which the holders of Common Stock, or of the voting power of voting stock immediately preceding such consolidation, merger, exchange, recapitalization, reorganization, business combination, sale of shares or other event either (i) no longer hold a majority of the outstanding shares of Common Stock or of the shares or voting power of voting stock of the Company, or (ii) no longer have the ability to elect a majority of the Board of Directors of the Company; (b) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, files any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner” as defined in Rule 13d-3 under the Exchange Act of the Company’s Capital Stock representing beneficial ownership of more than 50% of the outstanding shares of Common Stock or the shares or voting power of the Company’s voting stock; or (c) the occurrence of a “change of control,” however so defined in any document, agreement or instrument governing or evidencing any Indebtedness with a principal amount in excess of $5,000,000 or, in each case, any term of similar effect, excluding the Merger (as defined in the Merger Agreement).

“Closing Date” means the date of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations promulgated thereunder.

“Common Stock” means the common stock, $0.001 par value per share of the Borrower.

“Convertible Securities” means any securities (other than Options) directly or indirectly convertible into or exchangeable or exercisable for shares of Common Stock.

“Copyrights” means, collectively, all of the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, unregistered copyright rights, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including damages or payments for past, present or future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“Default” means any event that, with the giving of notice, lapse of time or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.

“Deerfield Convertible Indebtedness” means the Indebtedness outstanding under that certain Facility Agreement, dated as of May 11, 2020, by and among the Borrower, the other Loan Parties party thereto from time to time, the lenders set forth on the signature page thereto, and Deerfield Partners, L.P., as agent for itself and the other lenders party thereto.

“Deerfield Facility Agreement” means Facility Agreement, dated as of July 22, 2021, by and among the Borrower the other Loan Parties party thereto from time to time, the lenders set forth on the signature page thereto, and Deerfield Partners, L.P., as agent for itself and the other secured parties thereto.

“Deerfield Indebtedness” means the Indebtedness outstanding under the Deerfield Facility Agreement.

“Deerfield Subordination Agreement” means that certain Subordination Agreement, dated as of the date hereof, by and among the Lender, and Deerfield Partners, L.P., as agent for the Secured Parties (as defined in the Deerfield Facility Agreement), and acknowledged by the Loan Parties, in form and substance acceptable to Deerfield Partners, L.P.

“Disbursement Date” means each date on which Loans are made.

“Disbursement Request” means a written notice substantially in the form of Exhibit B hereto.

“Disqualified Lender” means (a) each Person (other than the Lender and its Subsidiaries) that is a direct competitor of the Borrower or any of its Subsidiaries, in each case, that is separately identified in writing by the Borrower from time to time to the Lender, (b) any controlling Affiliate (other than with respect to such Affiliate at which sufficient customary barriers are in place at such entities to prevent the sharing confidential information with respect to the Borrower with the controlled direct competitor of the Borrower) or controlled Affiliate of any such Person that is either (i) identified in writing to the Lender by the Borrower from time to time or (ii) clearly identifiable on the basis of such Affiliate’s name; provided that, in the case of clauses (a) and (b) above, (i) no identification of a Person as a competitor or a controlling or controlled Affiliate of a competitor shall be effective to retroactively disqualify any Person that is, at the time of such identification, already a Lender, and (x) no Person that operates as a brokerage, insurance business, pension fund (or other benefit fund), hedge fund, private equity fund, other investment fund, or investment banking, investment management, investment advisory, lobbying or publishing business, or (y) any non-profit research or non-profit enterprise, shall constitute a Disqualified Lender, whether or not such Person owns an interest in a competitor or a controlled Affiliate of a competitor.  Notwithstanding anything to the contrary contained in this Agreement, the Borrower (on behalf of itself and the other Loan Parties) and the Lender acknowledge and agree that no Secured Party shall have any responsibility or obligation to determine whether any Lender or potential Lender is a competitor (it being understood and agreed, however, that each potential Lender shall be required to represent and warrant in the related Assignment and Assumption Agreement that such potential Lender is not a Disqualified Lender).

“Disqualified Stock” means any Stock that, by its terms (or by the terms of any security or other Stock into that it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is one year and one day following the Maturity Date (excluding any provisions requiring redemption upon a “change of control,” “fundamental change” or similar event that constitutes a Change of Control), (b) is convertible into or exchangeable for (i) debt securities or (ii) any Stock referred to in clause (a) above, in each case, at any time on or prior to the date that is one year and one day following the Maturity Date at the time such Stock is issued, or (c) is entitled to receive scheduled dividends or distributions in cash prior to the date that is one year and one day following the Maturity Date; provided that, if such Stock is issued pursuant to a plan for the benefit of employees of the Borrower or any Subsidiary or by any such plan to such employees, such Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

“Division/Series Transaction” means, with respect to the Loan Parties and their Subsidiaries, that any such Person (a) divides into two or more Persons (whether or not the original Loan Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case as contemplated under the laws of any jurisdiction.

“Dollars” and the “$” sign mean the lawful currency of the United States of America.

“EDGAR” has the meaning set forth in Section 3.12.

“Employee Benefit Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA, and any stock purchase, stock option, stock‑based severance, employment, change‑in‑control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and any other employee benefit plan, agreement, program, policy or other arrangement, whether or not subject to ERISA, under which (A) any current or former employee, director or independent contractor of the Borrower or any of its Subsidiaries has any present or future right to benefits and that is contributed to, sponsored by or maintained by the Borrower or any of its respective Subsidiaries or (B) the Borrower or any of its Subsidiaries has had or has or would reasonably be expected to have any present or future obligation or liability.

“Environmental Laws” means all Applicable Laws and Authorizations relating to (a) pollution or protection of the environment, (b) any Hazardous Materials activity, or (c) occupational safety and health, industrial hygiene (as they relate to exposure to Hazardous Materials), or the protection of human health or welfare from exposure to Hazardous Materials.

“ERISA” means the US Employee Retirement Income Security Act of 1974 (or any successor legislation thereto) and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means, collectively, any Loan Party, any Subsidiary of a Loan Party, and any Person under common control or treated as a single employer with, any Loan Party or any Subsidiary of a Loan Party, within the meaning of Section 414(b) or (c) of the Code, and solely with respect to Section 412 of the Code (and other provisions of the Code significantly related thereto (e.g., Sections 430 through 436 of the Code)), under Section 414(m) or (o) of the Code.

“ERISA Event” means any of the following: (a) a “reportable event” described in Section 4043(b) or (c) of ERISA (or, unless the thirty (30)-day notice requirement has been duly waived under the applicable regulations) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, has the meaning set forth in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination, or treatment of a plan amendment as termination, under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan, or treatment of a plan amendment as termination, under Section 4041 of ERISA; (f) the institution of Proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Laws to qualify thereunder; (j) a Title IV plan is in “at risk” status within the meaning of Code Section 430(i); (k) a Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Section 432(b) of the Code; or (l) any other event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any liability upon any ERISA Affiliate under Title IV of ERISA other than for contributions to Title IV Plans and Multiemployer Plans in the ordinary course and PBGC premiums due but not delinquent.

“Event of Default” has the meaning set forth in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

“Excluded Subsidiary” means (a) any Subsidiary that is prohibited by any applicable law or by any contractual obligation existing on the Closing Date (or, if later, the date of acquisition of such Subsidiary) from Guaranteeing the Obligations (provided that such contractual obligation was not entered into in order to satisfy the conditions of this definition) or any Subsidiary that would require consent, approval, license or authorization of any Governmental Authority in order to Guarantee the Obligations unless such consent, approval, license or authorization has been received or can be obtained by the Subsidiary through the use of commercially reasonable efforts, (b) any Subsidiary that is a CFC, FSHCO or a direct or indirect subsidiary of any CFC or FSHCO, in each case only if the Borrower demonstrates to the satisfaction of the Lender (exercised reasonably and in good faith) that the inclusion of such Subsidiary as an Excluded Subsidiary is necessary in order to prevent the Borrower’s inclusion of income in the current or immediately succeeding taxable year (if such succeeding year is within the term of the Loans) in an amount materially greater than the income inclusion that would result for such taxable year absent such Subsidiary’s inclusion as an Excluded Subsidiary; and (c) any Immaterial Subsidiary; provided that no Subsidiary shall constitute an Excluded Subsidiary if it (x) Guarantees any Indebtedness of a Loan Party or (y) owns or exclusively licenses any Intellectual Property that is material to the business of the Borrower and its Subsidiaries, taken as a whole.

“Excluded Taxes” means with respect to any Secured Party, (a) Taxes imposed on (or measured by) net income (however denominated), franchise Taxes and branch profits Taxes, in each case (i) imposed as a result of such Lender being organized under the laws of, or having its principal office or applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any withholding Tax imposed on amounts payable to or for the account of such Lender with respect to its interest in a Loan under a law in effect at the time such Lender becomes a party to this Agreement or changes its lending office, except to the extent such Lender acquired its interest in the Loans from a transferor that was entitled, immediately before such transfer, to receive Additional Amounts with respect to such withholding Tax pursuant to Section 2.4(a) or was itself a Lender so entitled immediately before changing its lending office, (c) in the case of a Lender, any withholding Taxes attributable to such Lender’s failure to comply with Section 2.4(d), or (d) any withholding Tax imposed under FATCA.

“Facility Documents” means this Agreement, the Deerfield Subordination Agreement, any Guaranty, any written notices from the Borrower with respect to the request of Loans under Section 2.1, any Disbursement Requests, and all other documents, agreements and instruments delivered in connection with any of the foregoing, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“Fiagon Reorganization” means the merger of Intersect ENT GmbH, Duesseldorf into Fiagon GmbH, Hennigsdorf, and the latter changing its name to “Intersect ENT GmbH.”

“FCPA” has the meaning set forth in Section 3.23(c).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any entity succeeding to any of its principal functions.

“Foreign Lender” has the meaning set forth in Section 2.4(e).

“FSHCO” means a Subsidiary that owns (directly or indirectly) no material assets other than equity interests (or equity interests and debt interests) of one or more CFCs.

“GAAP” means generally accepted accounting principles in the United States consistently applied.

“Governmental Authority” means any federal, state, foreign or international government, regulatory or administrative agency, any state or other political subdivision thereof having jurisdiction over any Loan Party or any Subsidiary of any Loan Party, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.  For the avoidance of doubt, Governmental Authority shall include the SEC, the Principal Market, the Financial Industry Regulatory Authority and any agency, branch or other governmental body, entity or panel charged with the responsibility and/or vested with the authority to administer and/or enforce any Health Care Laws, including any Medicare or Medicaid administrators, contractors, intermediaries or carriers.

“Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb has a corresponding meaning.

“Guarantor” means each Subsidiary of the Borrower (other than any Excluded Subsidiary) and each other Person who provides a guaranty of any of the Obligations under this Agreement pursuant to a Guaranty or any other Facility Document, including pursuant to a joinder agreement thereto.

“Guaranty” means a Guaranty made by a Guarantors in favor of the Lender in form and substance reasonably acceptable to the Lender.

“Hazardous Material” means (a) any radioactive materials, asbestos-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, radon gas, petroleum and petroleum by-products and derivatives and (b) any other chemical, material or substance, waste, pollutant or contaminant that is prohibited, limited or subject to regulation, investigation, control or remediation by or pursuant to any Environmental Law, in each case because of its dangerous or deleterious properties or characteristics.

“Health Care Laws” means all Applicable Laws relating to the provision and/or administration of, and/or payment for, health care services, items and supplies including, without limitation, including without limitation Applicable Laws related to: (a) fraud and abuse, including, without limitation, the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Eliminating Kickbacks in Recovery Act of 2018 (18 U.S.C. § 220), the Stark Law (42 U.S.C. §1395nn), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal False Claims Act 18 U.S.C. § 287, the False Statements Relating to Health Care Matters Act (18 U.S.C. § 1035), the Health Care Fraud Act (18 U.S.C. § 1347), the Program Fraud Civil Remedies Act (31 U.S.C. §§ 3801-3812), the Anti-Kickback Act of 1986 (41 U.S.C. §§ 51-58), the Laws regarding Exclusion and Civil Monetary Penalties (42 U.S.C. §§ 1320a-7, 1320a-7a and 1320a-7b), the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. No. 108-173), and any state, commonwealth or local laws similar to any of the foregoing; (b) the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub. L. No. 111-152); (c) Medicare, Medicaid, CHAMPVA, TRICARE, the State Children’s Health Insurance Program (Title XXI of the Social Security Act), and any other Third Party Payor Programs; (d) the licensure, permitting, registration or regulation of healthcare providers, suppliers, professionals, facilities or payors; (e) patient health care; (f) quality, safety certification and accreditation standards and requirements; (g) billing, coding or the submission or payment of claims or collection of accounts receivable or refund of overpayments; (h) HIPAA; (i) the practice of medicine and other health care professions or the organization of medical or professional entities; (j) state kickback, fee-splitting, false claims, or self-referral prohibitions; (k) the Federal Controlled Substances Act (21 U.S.C. 801 § et. seq., and all rules and regulations of the United States Drug Enforcement Administration), the federal Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.), including current Good Manufacturing Practices, and similar standards of the United States Food and Drug Administration, and any related state laws and regulations; (l) the Clinical Laboratory Improvement Amendments and the regulations promulgated thereunder and similar state laws; (m) the provision of free or discounted care or services; (n) laws and regulations regulating the generation, transportation, treatment, storage, disposal and other handling of medical or radioactive waste, and (o) any and all other applicable health care laws, regulations, and manual provisions, policies and administrative guidance, each of clauses (a) through (o) as may be amended, modified or supplemented from time to time and any successor statutes thereto and regulations promulgated thereunder from time to time.

“HIPAA” means the (a) Health Insurance Portability and Accountability Act of 1996; (b) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and (c) any federal, state and local laws regulating the privacy and/or security of individually identifiable health information, including, without limitation, state laws providing for notification of breach of privacy or security of individually identifiable health information, in each case with respect to the Applicable Laws described in clauses (a), (b) and (c) of this definition, as the same may be amended, modified or supplemented from time to time, any successor statutes thereto, any and all rules or regulations promulgated from time to time thereunder.

“Immaterial Subsidiary” means, at any date of determination, a Subsidiary of the Borrower (a) whose total assets as of the most recent available quarterly or year-end financial statements were less than 5% of the consolidated total assets of the Borrower and its Subsidiaries at such date and (b) whose gross revenues as of the most recent available quarterly or year-end financial statements were less than 5% of the consolidated gross revenues of the Borrower and its Subsidiaries for such period, in each case determined in accordance with GAAP; provided that, in no event shall (i) the total assets of all Immaterial Subsidiaries in the aggregate as of the most recent available quarterly or year-end financial statements exceed 7.5% of the total assets of the Borrower and its Subsidiaries at such date or (ii) the gross revenues of all Immaterial Subsidiaries in the aggregate as of the most recent available quarterly or year-end financial statements exceed 7.5% of the consolidated gross revenues of the Borrower and its Subsidiaries for such period, in each case determined in accordance with GAAP; provided, further, that no Subsidiary shall constitute an Immaterial Subsidiary if it (x) Guarantees any Indebtedness of a Loan Party or (y) owns or exclusively licenses any assets that are material to the business of the Borrower and its Subsidiaries, taken as a whole.

“Indebtedness” means, with respect to any Person, (a) all indebtedness for borrowed money of such Person; (b) the deferred purchase price of assets or services of such Person (other than (i) trade payables entered into in the ordinary course of business and that are not more than ninety (90) days past due, (ii) deferred compensation and severance, pension, health and welfare retirement and equivalent benefits to current or former employees, directors or managers of such Person and its Subsidiaries, and (iii) any earn-outs, purchase price adjustments, milestones or other deferred acquisition consideration, except, in each case, to the extent, in accordance with GAAP, that such earn-outs, purchase price adjustments, milestones or other deferred acquisition consideration should be shown to be a liability on the balance sheet); (c) all Guarantees of Indebtedness by such Person; (d) the face amount of all letters of credit issued or acceptance facilities established for the account of such Person (or for which such Person is liable), including without duplication, all drafts drawn thereunder; (e) all Capital Lease Obligations of such Person; (f) all indebtedness secured by any Lien on any assets or property of such Person, whether or not such indebtedness has been assumed or is recourse (with the amount thereof, in the case of any such indebtedness that has not been assumed by such Person, being measured as the lower of (x) fair market value of such property and (y) the amount of the indebtedness secured); (g) indebtedness created or arising under any conditional sale or title retention agreement, or incurred as financing, in either case with respect to assets or property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such assets or property); (h) all obligations of such Persons evidenced by notes, bonds, debentures or similar instruments; (i) all obligations of such Person, whether or not contingent, in respect of Disqualified Stock, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends; (j) all direct or indirect liability, contingent or otherwise, of such Person with respect to any other Indebtedness of another Person if the primary purpose or intent of the Person incurring such Indebtedness, or the primary effect thereof, is to provide assurance to the obligee of such liability that such Indebtedness will be paid; (k) all direct or indirect liability, contingent or otherwise, of such Person under Swap Contracts (other than with respect to Permitted Equity Swaps that are classified as equity in accordance with GAAP) and (l) royalty and revenue interest financing obligations.

“Indemnified Person” has the meaning set forth in Section 9.10(a).

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

“Indemnity” has the meaning set forth in Section 9.10(a).

“Intellectual Property” means all rights, title and interests in or relating to (a) intellectual property and industrial property arising under any Applicable Law, including all Copyrights, Patents, Software, Trademarks, Internet Domain Names, Trade Secrets, (b) all IP Ancillary Rights relating thereto and (c) IP Licenses.

“Interest Rate” means 5.00% per annum.

“Internet Domain Name” means all right, title and interest (and all related IP Ancillary Rights) arising under any Law in or relating to internet domain names.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IP Ancillary Rights” means, with respect to any Intellectual Property of the type described in clauses (a) and (c) of the definition of “Intellectual Property,” as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

“IP License” means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property of the type described in clause (a) of the definition of Intellectual Property.

“IRS” means the United States Internal Revenue Service.

“Lender” has the meaning set forth in the preamble to this Agreement.

“Liabilities” means all claims, actions, suits, judgments, damages, losses, liabilities, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereof and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, and whether direct, indirect, contingent, consequential, actual, punitive, treble or otherwise.

“License” has the meaning set forth in the definition of “Permitted License.”

“Lien” means any lien, pledge, preferential arrangement, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention or other encumbrance on or with respect to property or interest in property having the practical effect of constituting a security interest.

“Loan” means any loan or other credit extension made available or provided from time to time by the Lender to the Borrower pursuant to this Agreement or any other Facility Document or, as the context may require, the principal amount thereof from time to time outstanding.

“Loan Parties” means the collective reference to the Borrower and all of the Guarantors.

“Loss” has the meaning set forth in Section 9.10(a).

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, results of operations, condition (financial or otherwise) or assets of any Loan Party or its Subsidiaries, (b) the legality, validity, binding effect or enforceability of any provision of any Facility Document, (c) the ability of any Loan Party to perform its obligations under any Facility Document, or (d) the rights and remedies of the Lender Parties under any Facility Document.

“Material Agreements” has the meaning set forth in Section 3.18.

“Maturity Date” means the earlier to occur of: (i) the declaration of acceleration upon an Event of Default; and (ii) one hundred eighty (180) days following the earlier of (x) the Maturity Date (as defined in the Deerfield Facility Agreement) and (y) the date on which the Deerfield Facility Agreement has been fully paid in cash and is terminated.¹

“Medicaid” means, collectively, the health care assistance program established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and any statutes succeeding thereto, and all Applicable Laws, rules, regulations, manuals, orders or requirements pertaining to such program, including (a) all federal statutes affecting such program; (b) all state statutes and plans for medical assistance enacted in connection with such program and federal rules and regulations promulgated in connection with such program; and (c) all applicable provisions of all rules, regulations, manuals, orders and administrative guidance, reimbursement, and requirements of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Medicare” means, collectively, the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and any statutes succeeding thereto, and all Applicable Laws, rules, regulations, manuals, orders or requirements pertaining to such program including (a) all federal statutes (whether set forth in Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) or elsewhere) affecting such program; and (b) all applicable provisions of all rules, regulations, manuals, orders, administrative guidance, reimbursement and requirements of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of August 6, 2021, by and among the Borrower, Lender, and Project Kraken Merger Sub, Inc., a Delaware corporation, as amended, supplemented, or otherwise modified from time to time.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any Loan Party or ERISA Affiliate incurs or otherwise has, or would reasonably be expected to have, any obligation or Liabilities (including under Section 4212 of ERISA).

“Obligations” means all Loans, any interests, fees, expenses, costs, liabilities, indebtedness and other obligations (monetary (including post-petition interest, costs, fees, expenses and other amounts, whether allowed or not) or otherwise) of (or owed by) the Borrower and the other Loan Parties under or in connection with the Facility Documents, in each case howsoever created, arising or evidenced, whether direct or indirect (including those acquired by assignment), absolute or contingent, now or hereafter existing, or due or to become due.

“OFAC” has the meaning set forth in Section 3.23(a).

“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

“Organizational Documents” means (a) for any corporation, the certificate or articles of incorporation, the bylaws, the constitution, any certificate of designation or instrument relating to the rights of holders or preferred stock of such corporation, and any shareholder agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating or limited liability company agreement and articles or certificate of formation or (d) for any other entity, any other document setting forth the manner of election or duties of the officers, directors, managers or other similar or equivalent persons or Persons, or the designation, amount or relative rights, limitations and preference of the Stock of such entity.

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

“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes arising from any payment made hereunder or from the execution, issuance, delivery, registration, enforcement or transfer of, or otherwise with respect to, any Facility Document, except such Taxes that are Other Connection Taxes imposed by a jurisdiction other than the United States.

“Parties” has the meaning set forth in the preamble to this Agreement.

“Patents” means, collectively, all of the following: (a) all patents and patent applications and the inventions and improvements described and claimed therein, and patentable inventions; (b) the reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“PBGC” means the United States Pension Benefit Guaranty Corporation or any successor thereto.

“Permitted Acquisition” means any Acquisition by a Loan Party, in each case, to the extent that each of the following conditions shall have been satisfied:

(a)     the Borrower shall have delivered each of the following to the Lender, subject to Section 6.12, as soon as available, executed copies of the Acquisition agreement and all material agreements (other than any exhibits or schedules thereto) pursuant to which such Acquisition is to be consummated (excluding for the avoidance of doubt, any fee letters relating to any financing for such Acquisition); provided that, no later than the first (1^st) Business Day following the date of such Acquisition documents, the Borrower shall file a current report on Form 8-K with the SEC describing the terms of the transaction contemplated by such Acquisition documents, including such Acquisition documents (other than any exhibits or schedules) as exhibits thereto;

(b)     the Loan Parties (including any new Subsidiary to the extent required by Section 6.10) shall have executed and delivered the agreements, instruments and other documents to the extent required by Section 6.10 hereof;

(c)    (i) at the time of the execution of the definitive acquisition agreement for such Acquisition, no Default or Event of Default shall have occurred and be continuing, and (ii) at the time of consummation of such Acquisition, no Event of Default shall have occurred and be continuing or would occur as a result thereof;

(d)     all transactions in connection with such Acquisition shall be consummated in all material respects in accordance with Applicable Laws and in conformity with all material applicable Authorizations, and all material applicable Authorizations shall have been obtained;

(e)      the assets acquired in such Acquisition are for use in a business permitted under Section 7.5; and

(f)      such Acquisition shall be on an arm’s-length basis and shall not be hostile and, if required by the Organizational Documents of such Person or by Applicable Laws, shall have been approved by the board of directors (or other similar body) and/or the stockholders or other equity holders of any Person being acquired in such Acquisition.

“Permitted Acquisition Debt” means Indebtedness of any Subsidiaries of the Borrower that is assumed in connection with, a Permitted Acquisition of such Subsidiaries (including for the purpose of refinancing or replacing all or a portion of any pre-existing Indebtedness of the Person(s) or assets to be acquired); provided that, (i) at the time the definitive acquisition agreement for such Permitted Acquisition is executed, no Default or Event of Default has occurred and is continuing, (ii) such Indebtedness is not guaranteed by or required to be guaranteed by, any Person other than the Persons guaranteeing such Indebtedness immediately prior to consummating such Permitted Acquisition, and (iii) such Indebtedness shall not be secured by any Stock or assets of any Person other than the Stock and assets and any accessions, attachments, additions to, substitutions and replacements of, products, and proceeds thereof, if any, securing such Indebtedness immediately prior to consummating such Permitted Acquisition, and any accessions, attachments, and additions to, substitutions and replacements thereof, and proceeds of any of the foregoing, and (iv) such Indebtedness shall not have been incurred in connection with, or in anticipation of, such Permitted Acquisition.

“Permitted Earn-Outs” means obligations of the Borrower or any of its Subsidiaries consisting of earn-outs or deferred purchase price obligations in connection with a Permitted Acquisition, in each case calculated in accordance with GAAP; provided that such obligations are unsecured and not represented by any note or other similar instrument.

“Permitted Equity Swap” means any forward purchase, accelerated share purchase, call option, warrant transaction or other equity derivative transactions relating to the Stock of the Borrower.

“Permitted Exclusive License” means any exclusive License other than any exclusive License to commercialize within the United States and/or Canada, (a) the Borrower’s current Propel® family of products (i.e. Propel®, Propel® Mini and Propel® Contour), (b) Sinuva®, (c) Fiagon ENT Navigation System, FlexPointer, GuideWire, VenSure™ Nav Balloon and PointerShell, or (d) Virtu family of products (i.e. VirtuDrive® Cube4D, VirtuLite®, VirtuView®, VirtuLink®, VirtuTrac®, and VirtuSuite®).

“Permitted License” any license of Intellectual Property, or covenant not to sue, granted by the Borrower or its Subsidiaries for contract manufacturing and production and any other license of Intellectual Property, or covenant not to sue, granted by the Borrower or its Subsidiaries (each, a “License”) so long as such License does not result in a legal transfer of title to the licensed property and has been granted in exchange for fair consideration and, in each case (a) is either (i) a non-exclusive License or (ii) a Permitted Exclusive License, (b) is entered into when no Default or Event of Default has occurred and is continuing or would result therefrom, and (c) is (or is pursuant to) an arm’s-length transaction.

“Permitted Liens” means Liens permitted under Section 7.2.

“Person” means and includes any natural person, individual, partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated organization, government entity or any political subdivision or agency thereof, or any other entity.

“Portfolio Interest Certificate” has the meaning set forth in Section 2.4(d).

“Proceeding” means any investigation, inquiry, litigation, review, hearing, suit, claim, audit, arbitration, proceeding or action (in each case, whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

“Product” means any item or service that is designed, developed, created, manufactured, sold or otherwise used by or on behalf of the Loan Parties or any of their Subsidiaries.

“Principal Market” means the Nasdaq Global Market (or successor thereto), subject to Section 6.11.

“Qualifying Secured Debt” means, collectively, Qualifying Secured Non-Royalty Financing Debt and Qualifying Secured Royalty Obligations.

“Qualifying Secured Debt Cap” means, at any time of determination, the lesser of (x) $85,000,000 and (y) the positive difference, if any, between (i) $200,000,000 and (ii) the aggregate outstanding amount of Qualifying Unsecured Debt at such time.

“Qualifying Secured Non-Royalty Financing Debt” means Indebtedness of the Borrower that is pari passu in right of payment with the Obligations and secured by Liens on some or all of the assets of the Borrower in an aggregate outstanding principal amount, together with all Qualifying Secured Royalty Obligations then outstanding, not to exceed at any time the Qualifying Secured Debt Cap; provided that, (a) such Indebtedness does not constitute Qualifying Secured Royalty Financing Obligations, (b) at the time such Qualifying Secured Non-Royalty Financing Debt is incurred, no Default or Event of Default has occurred and is continuing or would occur as a result of such incurrence (provided that, in the case of any such Indebtedness incurred to finance a Permitted Acquisition, such condition, other than with respect to any Event of Default pursuant to Section 8.1(a) or 8.1(d), shall be measured solely as of the date of the execution of the definitive documentation for such Permitted Acquisition), (c) such Indebtedness is not guaranteed by any Person that is not a Guarantor, and (d) such Indebtedness shall not prohibit (i) the incurrence or regularly scheduled payment of principal, interest and charges under this Agreement or the repayment of the Obligations upon the occurrence of (A) an Event of Default and an acceleration under Section 8.2 or (B) a Change of Control (although the definitive loan, credit or other primary agreement governing such Indebtedness may require prior repayment thereof), (ii) any payment, indemnity or reimbursement contemplated by Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or the other Facility Documents (other than an amendment or modification that would be adverse in any material respect to the interests of the Persons providing such Indebtedness).  For purposes hereof, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will be excluded from the determination of the outstanding principal amount of any such Indebtedness.

“Qualifying Secured Royalty Financing Obligations” means Indebtedness arising from one or more financing transactions in respect of royalties on net sales of Products, or revenue interests in respect of Products, of the Borrower that is pari passu in right of payment with the Obligations and secured by Liens on the Products that are the subject of such financing transaction and/or due or payable prior to the date that is one hundred eighty-one (181) days after the Maturity Date and the aggregate potential cash payments in respect of which (whether in the form of milestone payments, fees or any other consideration, but excluding royalties permitted pursuant to clause (c) below), together with the principal amount of all Qualifying Secured Non-Royalty Financing Debt then outstanding, do not exceed at any time the Qualifying Secured Debt Cap; provided that (a) at the time such Qualifying Secured Royalty Obligations are incurred, no Default or Event of Default has occurred or would occur as a result of such incurrence (provided that, in the case of any such Indebtedness incurred to finance a Permitted Acquisition, such condition, other than with respect to any Event of Default pursuant to Section 8.1(a) or 8.1(d), shall be measured solely as of the date of the execution of the definitive documentation for such Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person that is not a Guarantor, (c) the maximum royalty or revenue interest amount payable in connection with any such transaction shall not exceed 7.00% of net sales of (or net revenues attributable to) Product(s) the development of which is financed by such transaction, and (d) such Indebtedness shall not prohibit (i) the incurrence or regularly scheduled payment of principal, interest and charges under this Agreement or the repayment of the Obligations upon the occurrence of (A) an Event of Default and an acceleration under Section 8.2 or (B) a Change of Control (although the definitive loan, credit or other primary agreement governing such Indebtedness may require prior repayment thereof), (ii) any payment, indemnity or reimbursement contemplated by Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or the other Facility Documents (other than an amendment or modification that would be adverse in any material respect to the interests of the Persons providing such Indebtedness).

“Qualifying Unsecured Debt” means, collectively, Qualifying Unsecured Non-Royalty Financing Debt and Qualifying Unsecured Royalty Financing Obligations.

“Qualifying Unsecured Non-Royalty Financing Debt” means Indebtedness of the Borrower that is pari passu with or junior to the Obligations in right of payment and not secured by any Lien on any assets or property of the Borrower or any of its Subsidiaries in an aggregate outstanding amount, together with all Qualifying Unsecured Royalty Financing Obligations then outstanding, not to exceed at any time the positive difference between (x) $200,000,000 and (y) the aggregate amount of Qualifying Secured Debt outstanding at such time; provided that, (a) at the time such Qualifying Unsecured Non-Royalty Financing Debt is incurred, no Default or Event of Default has occurred or would occur as a result of such incurrence (provided that, in the case of any such Indebtedness incurred to finance a Permitted Acquisition, such condition, other than with respect to any Event of Default pursuant to Section 8.1(a) or Section 8.1(d), shall be measured solely as of the date of the execution of the definitive documentation for such Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person that is not a Guarantor, (c) such Indebtedness shall not mature or be mandatorily redeemable or prepayable, in whole or in part, prior to the date that is one hundred eighty-one (181) days after the Maturity Date (it being understood that acceleration or mandatory repayment, prepayment, redemption or repurchase of such Indebtedness upon the occurrence of an event of default, asset sale, fundamental change or a change in control shall not be prohibited by this clause (c)), and (d) such Indebtedness shall not prohibit (i) the incurrence, regularly scheduled payment or mandatory prepayment (including at maturity, by acceleration or otherwise) of principal, interest and charges under this Agreement, (ii) any payment, indemnity or reimbursement contemplated by Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or the other Facility Documents (other than an amendment or modification that would alter the alter the repayment or prepayment requirements of this Agreement in a manner that would be materially adverse to the interests of the Persons providing such Qualifying Secured Non-Royalty Financing Debt).  For purposes hereof, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will be excluded from the determination of the outstanding principal amount of any such Indebtedness.

“Qualifying Unsecured Royalty Financing Obligations” means Indebtedness arising from one or more financing transactions in respect of royalties on net sales of Products, or revenue interests in respect of Products, of the Borrower that is pari passu with or junior to the Obligations in right of payment, that is not secured by Liens on any assets of the Borrower or any of its Subsidiaries and the aggregate potential cash payments in respect of which (whether in the form of milestone payments, fees or any other consideration, but excluding royalties permitted pursuant to clause (d) below), together with all Qualifying Unsecured Non-Royalty Financing Debt then outstanding, do not exceed at any time the positive difference between (x) $200,000,000 and the aggregate amount of Qualifying Secured Debt outstanding at such time; provided that (a) at the time such Qualifying Unsecured Royalty Financing Obligations are incurred, no Default or Event of Default has occurred or would occur as a result of such incurrence (provided that, in the case of any such Indebtedness incurred to finance a Permitted Acquisition, such condition, other than with respect to any Event of Default pursuant to Section 8.1(a) or Section 8.1(d), shall be measured solely as of the date of the execution of the definitive documentation for such Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person that is not a Guarantor, (c) such Indebtedness shall not prohibit (i) the incurrence, regularly scheduled payment or mandatory prepayment (including at maturity, by acceleration or otherwise) of principal, interest and charges under this Agreement, (ii) any payment, indemnity or reimbursement contemplated by Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or the other Facility Documents (other than an amendment or modification that would alter the alter the repayment or prepayment requirements of this Agreement in a manner that would be materially adverse to the interests of the Persons providing such Qualifying Secured Non-Royalty Financing Debt), (d) the maximum royalty or revenue interest amount payable in connection with any such transaction shall not exceed 7.00% of net sales of (or net revenues attributable to) Product(s) the development of which is financed by such transaction, and (e) such Indebtedness shall not be mandatorily redeemable or prepayable, in whole or in part, prior to the date that one hundred eighty-one (181) days after the Maturity Date (it being understood that acceleration or mandatory repayment, prepayment, redemption or repurchase of such Indebtedness upon the occurrence of an event of default, asset sale, fundamental change or a change in control shall not be prohibited by this clause (e)).

“Real Estate” means any real property owned, leased, subleased or otherwise operated or occupied by any Loan Party or any Subsidiary of any Loan Party.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time and any successor to all or a portion thereof establishing reserve requirements.

“Release” means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

“Reporting Period” has the meaning set forth in Section 6.8.

“Required Authorizations” has the meaning set forth in Section 3.7.

“Restricted Payments” means, with respect to any Person, (a) the declaration or making of any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any of its Stock or (b) the purchasing, redemption or other acquisition for value of any of its Stock now or hereafter outstanding.

“Sanctioned Country” has the meaning set forth in Section 3.23(b).

“Sanctions” has the meaning set forth in Section 3.23(a).

“SDN List” has the meaning set forth in Section 3.23(b).

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

“SEC Documents” means all reports, schedules, forms, statements and other documents filed by any Loan Party or any of its Subsidiaries with the SEC pursuant to the Securities Act or the Exchange Act (including all financial statements and schedules included therein, all exhibits thereto and all documents incorporated by reference therein).

“Securities Act” means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.

“Solvent” means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital in relation to such Person’s business as contemplated as of such date.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Software” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.

“Stock” means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests (or units thereof), joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting; and (b) all securities convertible into or exchangeable for any other Stock and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any other Stock, whether or not presently convertible, exchangeable or exercisable.

“Subject Financials” has the meaning set forth in Section 3.13.

“Subsidiary,” with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than fifty percent (50%) of the voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person.

“Swap Contract” means any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Tax Affiliate” means (a) the Borrower and its Subsidiaries and (b) any Affiliate of any Loan Party with which any Loan Party files or is required to file consolidated, combined or unitary tax returns.

“Tax Returns” has the meaning set forth in Section 3.10.

“Taxes” means all present or future taxes, levies, imposts, stamp or other duties, deductions, charges or withholdings imposed by a Governmental Authority, together with any interest, additions to tax, penalties or other liabilities with respect thereto.

“Term Loan Commitment” means $75,000,000.

“Title IV Plan” means an Employee Benefit Plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has or would reasonably be expected to have any obligation or Liabilities (including under Section 4069 of ERISA).

“Trademarks” means, collectively, all of the following: (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other business identifiers, prints and labels on which any of the foregoing have appeared or appear, all registrations and recordings thereof, and all applications in connection therewith including; (b) all renewals thereof; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing including damages and payments for past, present and future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; (e) all rights corresponding to any of the foregoing throughout the world; and (f) all goodwill associated with and symbolized by any of the foregoing.

“Trade Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any Law in or relating to trade secrets.

“Transactions” means (a) the funding of the Loans and (b) the payment of fees, commissions, costs and expenses in connection with each of the foregoing.

“TRICARE” means, collectively, a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, and all Applicable Laws applicable to such programs.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.

“United States” and “U.S.” each means the United States of America.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended from time to time.

Section 1.2.      Interpretation.  The division of this Agreement and the other Facility Documents into Articles and Sections and the use of headings and captions is for convenience of reference only and shall not modify or affect the interpretation or construction of this Agreement or any of its provisions.  The words “herein,” “hereof,” “hereunder,” “hereinafter” and “hereto” and words of similar import refer to this Agreement (or other applicable Facility Document).  The term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The term “documents” and “agreements” include any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.  The use in any of the Facility Documents of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.  References to a specified Article, Exhibit, Section or Schedule shall be construed as a reference to that specified Article, Exhibit, Section or Schedule of this Agreement (or other applicable Facility Document).  Unless specifically stated otherwise, any reference to any of the Facility Documents means such document as the same shall be amended, restated, supplemented or otherwise modified and from time to time in effect in accordance with the terms hereof or thereof, as applicable.  The references to “assets” and “properties” in the Facility Documents are meant to be mean the same and are used throughout the Facility Documents interchangeably, and such words shall be deemed to refer to any and all tangible and intangible assets and properties, including cash, securities, Stock, accounts and contract rights.  Terms (including uncapitalized terms) not otherwise defined herein and that are defined in the UCC shall have the meanings therein described.  The payment, prepayment, or repayment of any principal, interest, charges, amounts and/or other Obligations under this Agreement or the other Facility Documents shall be made in cash in Dollars unless expressly stated otherwise herein or therein.  Any reference to “payment in full,” “payment in full in cash,” “paid in full,” “paid in full in cash,” “repaid in full,” “repaid in full in cash,” “prepaid in full,” “prepaid in full in cash,” “redeemed in full,” “redeemed in full in cash” or any other term or word of similar effect used in this Agreement or any other Facility Document with respect to the Loans or the Obligations shall mean all Obligations (excluding (y) unasserted contingent indemnification obligations and (z) those Obligations under any Facility Document that are not due or payable at the time when all other Obligations are paid in full in cash) have been repaid in full in cash and have been fully performed.

Section 1.3.     Business Day Adjustment.  Except as otherwise expressly stated herein or in any other Facility Document (and except on the Maturity Date or any date of acceleration of any of the Obligations, in which case, such payment or performance shall be due on or prior to such day regardless of whether such day is a Business Day), if the day by which any payment or other performance is due to be made is not a Business Day, that payment or performance shall be made by the next succeeding Business Day unless that next succeeding Business Day falls in a different calendar month, in which case that payment or other performance shall be made by the Business Day immediately preceding the day by which such payment or other performance is due to be made; provided that interest will continue to accrue for each additional day in connection therewith.

Section 1.4.      Loan Records.

(a)     The Borrower shall record on its books and records the amount of the Loans, the interest rate applicable thereto, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding.

(b)    The Loans made by the Lender are evidenced by this Agreement. Additionally, the Borrower shall execute and deliver to the Lender (and/or, if applicable and if so requested by any assignee Lender pursuant to the assignment provisions of Section 9.4) on the Closing Date (or, if such assignment is made after the Closing Date, promptly (and, in any event, within three (3) Business Days thereof) after the Lender’s request) a Note, payable to the Lender in an amount equal to the unpaid principal amount of applicable Loans held by the Lender (which, at the request of the Lender, may provide separate Notes for separate or different parts of the Loans). Notwithstanding anything to the contrary contained in this Agreement, the Loans (including any Notes evidencing the Loans) are registered obligations, the right, title and interest of the Lender and its successors and assignees in and to the Loans shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein. This Section 1.4 shall be construed so that the Loan is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(e)(2) of the Code.

(c)    The Borrower and the Lender shall treat each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement. Information contained in the Register with respect to the Lender shall be available for access by the Borrower or the Lender at any reasonable time and from time to time upon reasonable prior written notice.

Section 1.5.      Accounting Terms and Principles.  All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to Accounting Standards Codification 842, Leases (or any other Accounting Standards Codification having similar result or effect) (and related interpretations) to the extent any lease (or similar arrangement) would be required to be treated as a capital lease thereunder where such lease (or arrangement) would have been treated as an operating lease under GAAP as in effect immediately prior to the effectiveness of such Accounting Standards Codification.  No change in the accounting principles used in the preparation of any financial statement hereafter adopted by any Loan Party or any of its Subsidiaries shall be given effect for purposes of measuring compliance with any provision of this Agreement or otherwise determining any relevant ratios and baskets which govern whether any action is permitted hereunder unless the Borrower and the Lender agree to modify such provisions to reflect such changes in GAAP, and unless such provisions are modified, all financial statements and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP.

Section 1.6.     Officers.  Any document, agreement or instrument delivered under the Loan Documents that is signed by an Authorized Officer or another officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership, limited liability company and/or other action on the part of such Loan Party, and such Authorized Officer or other officer shall be conclusively presumed to have acted on behalf of such Loan Party in such person’s capacity as an officer of such Loan Party and not in any individual capacity.

Section 2.1.     Disbursement of the Loans.  On the terms and subject to the conditions set forth herein, the Lender agrees to lend to the Borrower during the Availability Period from time to time upon submission of an executed Disbursement Request, the principal amount of the term loans in an amount equal to $15,000,000 (the “Loans”) each fiscal quarter up to an aggregate principal amount not to exceed the Term Loan Commitment.  Upon receipt of a Disbursement Request, the Lender shall make the proceeds of the Disbursement available to the Borrower within three (3) business days of the Disbursement Request by wiring such amounts to an account or accounts designated in writing by the Borrower in the Disbursement Request, not to exceed $15,000,000 per fiscal quarter within three (3) business days of the Disbursement Request. Amounts borrowed hereunder that are paid, repaid, and/or prepaid may not be re-borrowed under any circumstance.  Each borrowing shall be made by delivery of a fully executed Disbursement Request by an Authorized Officer delivered to the Lender.  Within three (3) business days of Lender’s receipt of the Disbursement Request, Lender shall make proceeds available to the Borrower on the applicable Disbursement Date by transferring immediately available funds equal to the amount requested in the Disbursement Request to the account designated by Borrower.

Section 2.2.      Payments; Prepayments.

 

(a)        The Borrower shall pay in cash to the Lender, the outstanding principal amount of the Loans and all other Obligations on the Maturity Date.

(b)       The Loans may be voluntarily prepaid, repaid, or paid in part or in full by any Loan Party prior to Maturity Date without any penalty or premium.  If any principal on Loans is prepaid, repaid, or paid at any time, for any reason (including as an acceleration of the Loans following the occurrence of an Event of Default, or an exercise of any Lender Party’s rights or remedies available under the Facility Documents), then in addition to the principal amount of the Loans so prepaid, repaid, or paid, the Borrower shall contemporaneously pay any accrued and unpaid interest owed on such principal.

(c)        Each payment, repayment, and prepayment by the Borrower or any other Loan Party shall be applied (i) first, to all fees, costs and expenses (including any attorneys’ fees) owed to Lender under the Facility Documents, (ii)  second, ratably to accrued and unpaid interest owed to the Lender under the Facility Documents, (iii) third, to the principal amount of the Loans owed to the Lender, and (iv) fourth, to all other Obligations owing to the Lender.

Section 2.3.     Payment Details.  All payments, prepayments, and repayments of the Obligations by the Borrower or any other Loan Party hereunder and under any of the other Facility Documents shall be made without setoff or counterclaim.  Payments, prepayments, and repayments of any amounts and other Obligations due to the Lender under this Agreement or the other Facility Documents shall be made in cash in Dollars in immediately available funds prior to 11:00 a.m. (New York City time) on the date that any such payment is due, using the wire information or address for the Lender that is set forth on Schedule 2.3 or at such other bank or place as the Lender shall from time to time designate in writing prior to the date such payment is due.  Any payment received by the Lender after such time may, in the Lender’s discretion, be deemed to have been made on the following Business Day.  The Borrower shall pay all and any fees, costs and expenses (administrative or otherwise) imposed by banks, clearing houses or any other financial institutions in connection with making any payments under any of the Facility Documents.

Section 2.4.      Taxes.

(a)        Any and all payments hereunder or pursuant to any other Facility Document shall be made free and clear of and without deduction for Taxes except as required by Applicable Law.  If any Loan Party shall be required by Applicable Law to deduct or withhold any Taxes from or in respect of any sum payable hereunder or pursuant to any other Facility Document, (i) such Loan Party shall make such deductions or withholding, (ii) such Loan Party shall pay the full amount deducted or withheld to the applicable Governmental Authority in accordance with Applicable Law, and (iii) to the extent that the deduction or withholding is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased by as much as shall be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional sums payable under this Section 2.4), the Lender shall receive an amount equal to the sum it would have received had no such deductions been made (any and all such additional amounts payable being hereinafter referred to as “Additional Amounts”).  As soon as practicable, but in any event within thirty (30) days, after the date of any payment of such Taxes, the applicable Loan Party shall furnish to the Lender the original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to the Lender.

(b)       In addition, the Loan Parties shall pay all Other Taxes to the applicable Governmental Authority in accordance with Applicable Law.  Within thirty (30) days after the date of any payment of Other Taxes by any Loan Party, the Borrower shall furnish to the Lender the original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to the Lender.

(c)        The Borrower shall indemnify, within ten (10) days after receipt of demand therefor, the Lender for all Indemnified Taxes (including all Indemnified Taxes imposed on amounts payable under this Section 2.4(c)) paid or payable by the Lender, and any reasonable expenses arising therefrom or relating thereto, whether or not such Indemnified Taxes were correctly or legally asserted.  A certificate of the Lender setting forth the amounts to be paid thereunder and delivered to the Borrower shall be absolute, conclusive and binding, absent manifest error.

(d)       The Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Facility Document shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, the Lender, if reasonably requested by the Borrower, shall deliver such other documentation reasonably requested by the Borrower as will enable the Borrower to determine whether or not the Lender is subject to backup withholding or information reporting requirements.  Notwithstanding the foregoing, except for the documentation required to be provided by the Lender pursuant to Section 2.4(e), the Lender shall not be required to provide any information or documentation with respect to its investors that the Lender determines to be confidential.

(e)          Without limiting the generality of the foregoing:

Section 2.5.      Costs, Expenses and Losses.  If, as a result of any failure by the Borrower or any other Loan Party to pay any sums or Obligations due under this Agreement or any other Facility Document on the due date therefor (after the expiration of any applicable grace periods, but without giving effect to any grace period after the occurrence of an Event of Default of the type set forth in Section 8.1(d)), a the Lender shall incur costs, expenses and/or losses, by reason of the liquidation or redeployment of deposits from third parties or in connection with obtaining funds to make or maintain the Loans, the Borrower shall pay to the Lender upon request by the Lender, the amount of such costs, expenses and/or losses within fifteen (15) days after receipt by the Borrower of a certificate from the Lender setting forth in reasonable detail such costs, expenses and/or losses, along with supporting documentation.  For the purposes of the preceding sentence, “costs, expenses and/or losses” shall include any interest paid or payable to carry any unpaid amount and any loss, premium, penalty or expense that may be incurred in obtaining, liquidating or employing deposits of or borrowings from third parties and/or third Persons in order to make, maintain or fund the Loans or any portion thereof.

Section 2.6.    Interest.  From and after the Closing Date, the outstanding principal amount of the Loans, any overdue interest and any other amounts and Obligations shall bear interest at the Interest Rate (calculated on the basis of the actual number of days elapsed in each month based on a year of 360 days).  All accrued and unpaid Interest shall be paid in cash on the Maturity Date.  Notwithstanding the foregoing or anything to the contrary contained herein, on the date any principal amount of the Loans is prepaid, repaid, reduced or paid, or required to be prepaid, repaid, reduced or paid, for any reason hereunder (on the Maturity Date or otherwise), all accrued but unpaid interest on such principal amount shall be payable in cash.

Section 2.7.      Interest on Late Payments.

(a)       Without limiting the remedies available to the Lender, the holders of other Obligations and the Indemnified Persons under the Facility Documents or otherwise, to the maximum extent permitted by Applicable Law, if the Borrower or any other Loan Party fails to make a required payment of principal or interest on any Loan or make a required payment of any other Obligation when due (in each case subject to any cure period provided for in Section 8.1(a)), the Borrower shall pay, in respect of such principal, interest and other Obligations, interest thereon at the rate per annum equal to the Interest Rate plus ten percent (10%) for so long as such payment remains outstanding.  Such interest shall be payable in cash on demand.

(b)         At the election of the Lender, while any Event of Default exists (or automatically while any Event of Default under Section 8.1(a) or 8.1(d) exists), the Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by Applicable Law) on the Obligations (other than Obligations on which interest is payable at the rate set forth in Section 2.2(a)), if any, from and after the date of occurrence of such Event of Default, at a rate per annum equal to the Interest Rate then in effect for the Loans, plus two percent (2.0%). Such interest shall be payable in cash on demand.

In order to induce the Lender to make the Loans pursuant to this Agreement and to induce the Lender to enter into this Agreement, the Loan Parties, jointly and severally, represent and warrant on (i) the Closing Date (ii) each Disbursement Date, and (iii) each date such representation or warranty is remade or deemed remade in any Facility Document, if any, in each case, that:

Section 3.1.      No Default.  No Default or Event of Default has occurred or will result from the transactions contemplated by the Facility Documents.

Section 3.2.      Solvency.  On the Closing Date (both before and after giving effect to the Transactions) and on each Disbursement Date (both immediately before and after giving effect to the funding of the Loans and the use of proceeds thereof), each Loan Party (a) is Solvent and (b) has not taken action, and, to the best of its knowledge, no action has been taken by a third party, for the winding up, dissolution or liquidation or similar executory or judicial proceeding in respect of, any Loan Party or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for any Loan Party or any or all of its assets or revenues.

Section 3.3.    Enforceability.  This Agreement and each other Facility Document constitutes, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as the enforcement hereof or thereof may be limited by insolvency, bankruptcy, reorganization, moratorium or other similar Applicable Laws affecting creditors rights generally or by general equitable principles (whether considered in a proceeding in equity or at law).

Section 3.4.     Existence, Qualification and Power.  Each Loan Party is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation, organization or formation, as applicable.  Each Loan Party (a) has full power and authority to (i) own its assets and conduct its business and (ii) to (A) enter into, execute, deliver and perform its obligations under, the Facility Documents, and (B) consummate the transactions contemplated under the Facility Documents, and (b) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except, in each case of this clause (b), where the failure to be so qualified, licensed or in good standing would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 3.5.    Litigation.  No Proceeding is pending before any Governmental Authority or, to the knowledge of the Loan Parties, threatened by any Governmental Authority (a) to which any Loan Party is a party, (b) that purports to affect or pertain to the Facility Documents, the Transactions or the other transaction contemplated hereby or thereby or (c) that has as the subject thereof any assets owned by any Loan Party or any of its Subsidiaries, in each case, that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.  No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Facility Document or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.  As of the Closing Date, none of the Loan Parties or any of the directors (or equivalent persons) or officers of any Loan Party or any of its Subsidiaries has been the subject of any investigation by the SEC or any other Governmental Authority regarding securities law matters during the past five (5) years.

Section 3.6.     Corporate Authorization; Conflicts.  This Agreement and the other Facility Documents have been duly authorized, executed and delivered by each Loan Party.  The execution, delivery and performance of the Facility Documents by each Loan Party that is a party thereto and the consummation of the transactions contemplated herein and therein will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any assets of any such Loan Party pursuant to, any agreement, document or instrument to which such Loan Party is a party or by which any Loan Party is bound or to which any of the assets or property of any Loan Party is subject, except, with respect to this clause (a), as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (b) result in any material violation of, or conflict in any material respect with, any of the provisions of the Organizational Documents, (c) result in the material violation of any Applicable Law, or (d) result in the material violation of any judgment, order, rule, corporate integrity agreement, regulation, determination or decree of any Governmental Authority.

Section 3.7.    Governmental Authorizations.  (a) Each Loan Party holds, and is operating in compliance in all material respects with, all franchises, grants, Authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority (collectively, “Required Authorizations”) required for the conduct of its business as currently conducted, and all material Required Authorizations are valid and in full force and effect, and (b) no Authorization of, or registration, notice or filing with, any Governmental Authority is required for (i) the execution, delivery and performance of any of the Facility Documents, and (ii) the consummation by any Loan Party of the Transactions or the other transactions contemplated hereby or thereby, except for (A) such as have already been obtained or made prior to the Closing Date that are in full force and effect, (B) other filings the failure of which to obtain or make, individually or in the aggregate, has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and (C) pursuant to applicable federal and state securities laws, rules and regulations that are expressly contemplated by Section 6.8.

Section 3.8.     Ownership of Real Estate and Personal Property. Each Loan Party has good and marketable title to all of its material assets and property free and clear of all Liens, except Permitted Liens.  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, the property held under lease by each Loan Party is held under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of such Loan Party.

Section 3.9.      Intellectual Property.  To the knowledge of each Loan Party, each Loan Party and its Subsidiaries owns, licenses or otherwise has the right to use all Intellectual Property that is necessary and material for the operation of its businesses as currently conducted.  To the knowledge of each Loan Party, (a) the conduct and operations of the businesses of each Loan Party and its Subsidiaries do not infringe any Intellectual Property owned by any other Person in a manner that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect and (b) except as set forth on Schedule 3.9, as of the Closing Date, no other Person has contested any right, title or interest of any Loan Party or any of its Subsidiaries in, or relating to, any Intellectual Property owned by such Loan Party or Subsidiary, other than as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.  Except as set forth on Schedule 3.9, as of the Closing Date, (x) there are no material Proceedings pending (or, to the knowledge of any Loan Party, threatened in writing) affecting any Loan Party or any of its Subsidiaries with respect to, (y) no judgment or order regarding any such claim has been rendered by any competent Governmental Authority and (z) no settlement agreement or similar agreement has been entered into by any Loan Party or any of its Subsidiaries (that would limit, cancel or challenge the validity of any Loan Party’s or any of its Subsidiaries’ rights in any Intellectual Property owned by such Loan Party or Subsidiary) with respect to any such infringement, other than as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 3.10.   Taxes.  All U.S. federal, state and local income and franchise and other material Tax returns, reports and statements (collectively, the “Tax Returns”) required to be filed by any Tax Affiliates have been filed with the appropriate Governmental Authorities, all such Tax Returns are true and correct in all material respects, and all Taxes, assessments and other governmental charges and impositions reflected therein or otherwise due and payable (including in such Person’s capacity as a withholding agent) have been paid prior to the date on which any material Liability may be added thereto for non-payment thereof except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP.  There is no current or proposed Tax assessment, deficiency or other Tax claim against the Tax Affiliates (or any of them) that, alone or in the aggregate, is material.

Section 3.11.   Compliance with Laws.  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Loan Party is in compliance with all Applicable Laws (including Health Care Laws) and Authorizations.

Section 3.12.    Reserved.

Section 3.13.    Financial Statements.  As of their respective dates, the consolidated financial statements of the Borrower and its Subsidiaries included in the most recently filed annual report on Form 10-K and quarterly report on Form 10-Q (the “Subject Financials”) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC (including Regulation S-X) with respect thereto. The Subject Financials have been prepared in accordance with GAAP (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments that are not material individually or in the aggregate), and fairly present in all material respects the consolidated financial position of the Borrower and its Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders equity for the periods specified.

Section 3.14.  Accounting Controls.  Each Loan Party and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations, (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (c) access to assets or incurrence of liability is permitted only in accordance with management’s general or specific authorization and (d) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences.  The Borrower and its Subsidiaries have (i) timely filed and made publicly available on EDGAR all certifications, statements and documents required by (1) Rule 13a-14 or Rule 15d-14 under the Exchange Act.  The Borrower and its Subsidiaries maintain disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are effective to ensure that the information required to be disclosed by the Borrower and its Subsidiaries in the reports that they file with or submit to the SEC (A) is recorded, processed, summarized and reported accurately within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to the Borrower’s (and, to the extent applicable, its Subsidiaries’) management, including its or their principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.  The Borrower and its Subsidiaries maintain internal control over financial reporting required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such internal control over financial reporting is effective and does not contain any material weaknesses.

Section 3.15.    ERISA.  Except as set forth on Schedule 3.15, as of the Closing Date, no Loan Party or any of their respective Subsidiaries maintains, contributes to, has an obligation to contribute to or has any present intention to contribute to, any Title IV Plan or Multiemployer Plan; nor has any Loan Party or any of their Subsidiaries taken any steps towards adopting or amending any Title IV Plan or contributing to or incurring liability under a Multiemployer Plan.  Except for those that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (a) each Benefit Plan, and each trust thereunder, intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Laws so qualifies, (b) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Laws, (c) there are no existing or pending (or to the knowledge of any Loan Party or any Subsidiary of a Loan Party, threatened) Proceedings (other than routine claims for benefits in the normal course) or investigation involving any Benefit Plan to which any Loan Party or any Subsidiary of a Loan Party incurs or otherwise has or would reasonably be expected to have an obligation or any Liability and (d) no ERISA Event has occurred or is reasonably expected to occur.  On the Closing Date, no ERISA Event has occurred in connection with which material obligations or material Liabilities of a Loan Party or a Subsidiary of a Loan Party remain outstanding.

Section 3.16.    Subsidiaries.  All outstanding Stock of each Subsidiary of the Borrower is owned beneficially and of record by a Loan Party or a Subsidiary of a Loan Party, free and clear of all Liens other than Permitted Liens. Set forth on Schedule 3.16, as of the Closing Date, is a list of each Subsidiary of the Borrower and its jurisdiction of incorporation, organization or formation, as applicable.

Section 3.17.    Shares of Stock.  All of the issued and outstanding shares of capital stock of the Borrower and its Subsidiaries are duly authorized and duly and validly issued, fully paid and non-assessable, have been issued in compliance with all federal and state and foreign securities laws and were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing.