Exhibits

NOTE AND WARRANT PURCHASE AGREEMENT

THIS NOTE AND WARRANT PURCHASE AGREEMENT (“Agreement”) is made as of February 21, 2023, by and among Gelesis Holdings, Inc. a Delaware corporation (the “Company”), Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), Gelesis 2012, Inc., a Delaware corporation (“Gelesis 2012”), and Gelesis, LLC, a Delaware limited liability company (“Gelesis LLC” and, together with Gelesis 2012 and any other grantors party to the Security Agreement from time to time, the “Guarantors” and together, with the Company and the Co-Issuer, the “Note Parties”), the investor listed on the Schedule of Investors attached (the “Schedule of Investors”) hereto under the heading “Initial Investor” (the “Initial Investor”) who became a party to this Agreement by executing and delivering this Agreement on the date hereof and the individuals and entities who become parties to this Agreement after the date hereof by executing and delivering to the Company a signature page in the form attached hereto as Exhibit A (the “Investor Signature Page”), in accordance with Section 2.3(b) hereof (the “Other Investors”). The Initial Investor and the Other Investors are collectively referred to herein as the “Investors.” The Initial Investor shall be afforded the additional rights set forth herein. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in Section 1 below.

WHEREAS, each Investor party hereto intends to provide certain Consideration to the Company as described for each Investor on the Schedule of Investors;

WHEREAS, the parties wish to provide for the sale and issuance of such Notes and Warrants in return for the provision by the Investors of the Consideration to the Company;

WHEREAS, the parties intend for the Company and the Co-Issuer to issue in return for the Consideration one or more Notes and Warrants to purchase shares of the Company’s Common Stock;

WHEREAS, the Notes shall be fully and unconditionally guaranteed by the Guarantors; and

WHEREAS, contemporaneously with the issuance and sale of the Notes, the parties hereto will execute and deliver a Security Agreement, in the form attached hereto as Exhibit B (the “Security Agreement”) between the Company, the Co-Issuer and Initial Investor, of even date herewith, pursuant to which the Company and its Subsidiaries will grant to the Initial Investor, for itself and on behalf of all Other Investors from time to time as their interests may appear, a security interest in the assets of the Company and the Co-Issuer described in the Security Agreement, including without limitation, the Company’s and the Co-Issuer’s intellectual property, to secure the Company’s and the Co-Issuer’s obligations under the Notes.

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1.            Definitions.

(a)           “Additional Notes Purchase Conditions” shall mean all of the following: (i) the Company and the Initial Investor, in its sole discretion, shall have agreed upon a satisfactory Operating Plan for the Company; (ii) the Company shall have successfully completed and submitted to the FDA a usability study with respect to the reclassification of the Company’s product Plenity from prescription to over-the-counter status by the FDA; (iii) the Company shall have received Stockholder Approval on or prior to July 31, 2023 and (iv) other commercially reasonable customary conditions, such as the bring-down of representations and warranties and the delivery of officers’ certificates with respect to customary matters, that are consistent with the Term Sheet.

(b)            “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Section 11.1 below, deemed to be issued) by the Company after the Original Issue Date, other than (1) shares of Common Stock issuable upon conversion of the Notes and exercise of Warrants issued pursuant to this Agreement and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”): (i) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Company or any of its Subsidiaries (including the Excluded Subsidiary) pursuant to a management incentive plan, agreement or arrangement approved by the Board of Directors; (ii) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities outstanding on the date of this Agreement, in each case provided such issuance is pursuant to the terms of such Option or Convertible Securities provided that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease the exercise price or conversion price of such securities; or (iii) shares of Common Stock issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company (to the extent such transactions are permitted hereunder), provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

(c)            “Adverse Disclosure” shall mean an public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or the Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or related prospectus in order for the applicable Registration Statement or related prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not independently be required to be made at such time but for the Registration Statement being filed, or declared effective or the prospectus included therein being used to effect offer or sales of securities, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.

(d)            “Applicable Law” shall mean, with respect to any Person, any federal, national, state, local, municipal, international, multinational or self-regulatory organization, statute, law, ordinance, secondary and subordinate legislation, directives, rule (including rules of common law), regulation, ordinance, treaty, order, permit, authorization or other requirement applicable to such Person, its assets, properties, operations or business.

(e)           “Board of Directors” shall mean the board of directors of the Company.

(f)            “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

(g)           “Closing” shall mean the Initial Closing, the Second Closing or the Subsequent Closing.

(h)           “Co-Issuer” shall mean Gelesis, Inc, a Delaware corporation.

(i)            “Collateral” shall have the meaning assigned to such term in the Security Agreement.

(j)            “Collateral Documents” shall have the meaning assigned to such term in the Security Agreement.

(k)           “Common Stock” shall mean the Company’s common stock, par value $0.0001 per share.

(l)            “Commission” shall mean the United States Securities and Exchange Commission.

(m)           “Company Conversion Conditions” shall mean (i) the Company’s receipt of Stockholder Approval on or prior to July 31, 2023, (ii) the consummation of a Qualified Financing, (iii) the average of the Last Reported Sale Price for the immediately preceding five Scheduled Trading Days being greater than or equal to 300% of the Conversion Price, (iv) the continued listing of the Common Stock on the New Yok Stock Exchange and (v) the registration statement registering for resale Conversion Shares pursuant to Section 12 below shall have been declared effective by the Securities Exchange Commission.

(n)           “Consideration” shall mean the amount of money paid by each Investor pursuant to this Agreement as shown on the Schedule of Investors.

(o)            “Conversion Price” shall mean with respect to each Note issued hereunder the average of the Last Reported Sale Price for the five Scheduled Trading Days immediately preceding the issuance of such Note, as adjusted from time to time in accordance with Section 11. The initial Conversion Price for the Initial Notes shall be $0.2744.

(p)           “Conversion Shares” shall mean the shares of Common Stock issuable upon conversion the Note pursuant to Section 2.10 or Section 2.11.

(q)           “Conversion Time” shall mean (i) with respect to any Holder Conversion, the close of business on the date of receipt by the Company of a Holder Conversion Notice, or (ii) with respect to Company Conversion, the date of conversion set forth in the Company Conversion Notice.

(r)            “Convertible Securities” shall mean any evidences of indebtedness, shares of capital stock or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

(s)            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(t)            “Excluded Subsidiary” shall mean Gelesis S.r.l., an Italian societa responsabilita limitata and subsidiary of the Co-Issuer.

(u)           “FDA” shall mean the Food and Drug Administration.

(v)           “FDA Approval” shall mean approval by the FDA of the reclassification of the Company’s product Plenity from prescription to over-the-counter status.

(w)            “GAAP” shall mean, as of any applicable date of determination, generally accepted accounting principles in the United States of America, as applicable on such date, consistently applied, as in effect from time to time.

(x)            “Governmental Authority” shall mean any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any central bank, stock exchange, regulatory body, arbitrator, public sector entity and any self-regulatory organization.

(y)           “Holder” shall mean any Person in whose name at the time a particular Note is registered on the Note Register.

(z)            “Indebtedness” means (a) indebtedness for borrowed money or the deferred price of property or services (other than trade payables in the ordinary course of business), including, without limitation, all earnout, deferred payment or similar obligations to the extent required to be reflected as a liability on the balance sheet in accordance with GAAP, (b) any reimbursement and other obligations for surety bonds and letters of credit, (c) obligations evidenced by notes, bonds, debentures or similar instruments, including intercompany indebtedness (excluding any intercompany indebtedness to which the Excluded Subsidiary is party, as lender, borrower or other party), and (d) capital lease obligations and other obligations secured by a lien on property owned or acquired by a person.

(aa)         “Initial Closing Date” shall mean February 21, 2023.

(bb)         “Last Reported Sale Price” of the Common Stock on any date shall mean the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price per share for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the midpoint of the last bid and ask prices per share for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. The “Last Reported Sale Price” shall be determined without regard to after-hours trading or any other trading outside of regular trading session hours.

(cc)          “Maturity Date” shall mean July 31, 2023, unless the maturity of the Notes is extended in accordance with Section 2.5, in which case it shall mean March 31, 2024.

(dd)         “Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or related prospectus or necessary to make the statements in a Registration Statement or related prospectus (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading.

(ee)          “Note Documents” shall this Agreement, the Notes, the Warrants, the Security Agreement and each other Collateral Document.

(ff)           “Notes” shall mean all Convertible Senior Secured Notes due July 31, 2023, unless the maturity of the Notes is extended in accordance with Section 2.5 below, issued to the Investors pursuant to Section 2.1 below, the form of which is attached hereto as Exhibit C, including the Initial Notes, the Additional Notes and the Other Investor Notes considered as a single series.

(gg)         “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(hh)         “Original Issue Date” shall mean the date the Initial Note was issued to the Initial Investor.

(ii)           “Other Investor Notes” shall have the meaning set forth in Section 2.3(a).

(jj)            “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

(kk)          “Preferred Stock” shall mean any shares of preferred stock of the Company.

(ll)            “Qualified Financing” shall mean the receipt by the Company from the Initial Closing Date prior to July 31, 2023 of aggregate gross proceeds equal to or exceeding $30,000,000 in any financing, or series of related financings, whether debt, equity or other (including, without limitation, the proceeds from the sale of Other Investor Notes).

(mm)        “Registrable Securities” shall mean (i) the Conversion Shares and the Warrant Shares, (ii) any other equity security (including warrants to purchase shares of Common Stock and shares of Common Stock issued or issuable upon the exercise or conversion of any other equity security) of the Company issuable to the holders of Notes; and (ii) any other equity security of the Company or any of its Subsidiaries issued or issuable with respect to any securities referenced in clause (i) or (ii) by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that as to any particular Registrable Security, such security shall cease to be a “Registrable Security” upon the earliest of:

(A) a Registration Statement with respect to the sale of such security shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable holder; or

(B) (I) such security shall have been otherwise transferred or been sold pursuant to Rule 144 (or any successor rule promulgated thereafter by the Commission) under the Securities Act, (II) a new certificated or uncertificated security not bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company, (III) such security shall have ceased to be outstanding, or (IV) such security is eligible to be resold without regard to the volume or public information requirements of Rule 144 under the Securities Act (or any successor rule promulgated thereafter by the Commission.

(nn)         “Registration Statement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement other than a registration statement (and related Prospectus) filed on Form S-4 or Form S-8 or any successor form thereto.

(oo)         “Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

(pp)         “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(qq)         “Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).

(rr)           “Stockholder Approval” shall have the meaning set forth in Section 10.2(b).

(ss)         “Subsidiary” shall mean corporation or other entity of which at least a majority of the securities or other ownership interests having ordinary voting power for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company or the Co-Issuer, as applicable, and/or any of their respective Subsidiaries; provided that, for purposes of this definition, the Excluded Subsidiary shall not be deemed a “Subsidiary” of the Company or of the Co-Issuer, except where specifically indicated as such in this Agreement.

(tt)           “Term Sheet” shall mean that certain Term Sheet, dated February 10, 2023, between the Initial Investor and the Company, which sets forth certain terms of the Notes.

(uu)         “Trading Day” shall mean a day on which (i) trading in the Common Stock generally occurs on the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded and (ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or market; provided that if the Common Stock is not so listed or traded, “Trading Day” means a Business Day.

(vv)         “Warrants” shall mean one or more warrants issued pursuant to Section 3 below, the form of which is attached hereto as Exhibit D.

(ww)        “Warrant Coverage Amount” shall mean, (i) with respect to the Warrant issued in connection with the sale of the Initial Note, warrants to purchase 23,688,047 shares of Common Stock, provided that if warrant coverage in excess of 1.3x is offered to purchasers of the Other Investor Notes, the Initial Investor shall receive additional Warrants so that the Initial Investor has the same level of warrant coverage on the Initial Notes and the Additional Notes; (ii) with respect to any Warrant issued in connection with the sale of any Additional Note, warrants to acquire a number of shares of Common Stock equal to the principal amount of such Additional Note multiplied by a factor of 1.75, divided by the initial Conversion Price (without giving effect to any adjustment pursuant to Section 11) for such Additional Note, or (iii) with respect to any Warrant issued in connection with the sale of any Other Investor Note, warrants to acquire a number of shares of Common Stock equal to the principal amount of such Other Investor Note multiplied by a factor between zero and 1.75 as shall be determined by the Company and the Other Investor purchasing such Other Investor Notes, as applicable, divided by the initial Conversion Price (without giving effect to any adjustment pursuant to Section 11) for such Other Investor Note.

(xx)           “Warrant Shares” shall mean the shares of Common Stock issuable upon exercise of the Warrants.

2.              Amount and Terms of the Secured Senior Notes.

2.1            Issuance of Initial Investor Notes. In return for Consideration in the amount of $5.0 million paid by the Initial Investor, the Company shall sell and issue to the Initial Investor, and the Initial Investor shall purchase Notes in aggregate principal amount of $5.0 million (the “Initial Notes”) on the Initial Closing Date.

2.2            Issuance of Additional Investor Notes. At the Company’s option at any time after the Additional Notes Purchase Conditions are first satisfied (unless otherwise waived by the Initial Investor), in return for Consideration in the amount of up to $5.0 million paid by the Initial Investor, the Company shall sell and issue to the Initial Investor, and the Initial Investor shall purchase from the Company Additional Notes in an aggregate principal amount of up to $5.0 million, as determined by the Company, at one or more closings scheduled for the third Trading Day following the date when the Company requests that the Initial Investor purchase Additional Notes.

2.3             Issuance of Other Investor Notes.

(a)            At any time prior to March 31, 2024, if any Initial Notes or Additional Notes are outstanding, the Company may, at its option from time to time, sell and issue to one or more Other Investors one or more Notes in a maximum aggregate principal amount of $40,000,000 (the “Other Investor Notes”) in return for Consideration paid by such Other Investors in an amount equal to the aggregate principal amount of Other Investor Notes purchased. Each Other Investor shall deliver a completed and executed Investor Signature Page to the Company with respect to each purchase of Other Investor Notes.

(b)            Upon each sale of Other Investor Notes to an Other Investor, the Initial Investor shall have the right, at its option, to purchase Other Investor Notes (that are incremental to the Notes sold to such Other Investors) in an aggregate principal amount that would ensure that the Initial Investor maintains a 23% pro forma ownership percentage of the total principal amount of the Initial Notes, the Additional Notes and all Other Investor Notes in return for Consideration paid by the Initial Investor in an amount equal to the aggregate principal amount of Other Investor Notes purchased by the Initial Investor pursuant to this Section 2.3(b).

2.4             Several Obligations; Maximum Principal Amount. The obligations of the Initial Investors and any other investor to purchase Notes are several and not joint. The aggregate principal amount for all Notes issued hereunder shall not exceed of the sum of (i) $5,000,000 aggregate principal amount of Initial Notes to be sold pursuant to Section 2.1 on the Initial Closing Date in accordance with Section 4.1 below, (ii) up to $5,000,000 aggregate principal amount of Additional Notes that may be sold to the Initial Investor pursuant to Section 2.2 at one or more Subsequent Closings (as defined below) in accordance with Section 4.2 below, (iii) (A) up to $40,00,000 aggregate principal amount of Other Investor Notes to be offered and sold to Other Investors pursuant to Section 2.3(a) and (B) up to such aggregate principal amount of Other Investor Notes to be offered and sold to the Initial Investor pursuant to Section 2.3(b), at one or more Subsequent Closings (as defined below) in accordance with Section 4.3.

2.5             Maturity. The maturity date of the Notes shall be July 31, 2023, unless the Notes are earlier converted or redeemed; provided that if the Company (i) receives Stockholder Approval prior to July 31, 2023, and (ii) receives gross proceeds from the sale of Other Investor Notes of at least $10 million prior to July 31, 2023, the maturity date of the Notes shall be March 31, 2024.

2.6             Interest; Interest Rate; Interest Payment Date. The Notes shall bear interest on the outstanding principal thereof at a rate equal to twelve percent (12%) per annum (the “Interest Rate”). Interest on each Note shall accrue commencing on, and including, the day on which such Note is issued pursuant to this Agreement. Unless earlier converted into Conversion Shares pursuant to Sections 2.10 or 2.11 hereof or redeemed by the Company pursuant to Section 2.15  hereof, accrued and unpaid interest on, and the unpaid principal of the Notes, shall be due and payable on the Maturity Date.

2.7             Payments. All payments to Holders with respect to the Notes shall be made in lawful money of the United States of America, or to the extent provided for herein, in shares of Common Stock, and delivered to the address or bank account for such purpose specified on each Investor’s Investor Signature Page, or at such other address, bank account, or in such other manner, as an Investor or other registered Holder may from time to time direct the Company in writing. Except as provided under Section 2.15, prepayment of principal, together with accrued interest, may not be made without the applicable Holder’s prior written consent. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

2.8             Security. The obligations hereunder evidenced by the Notes shall be secured under the Security Agreement. Reference is hereby made to the Security Agreement for a description of the nature and extent of the Collateral and the rights of the holders of the Notes with respect to the Collateral.

2.9             Priority. All Notes, including Additional Notes and Other Investor Notes, shall rank pari passu in right of payment with (x) all other Notes and (y) other senior Indebtedness of the Note Parties, now existing (as set forth on Schedule 2.9) or hereafter incurred. All Notes shall be senior in lien priority to all Indebtedness of the Note Parties now existing (as set forth on Schedule 2.9) or hereafter incurred (other than Additional Notes and Other Investor Notes) to the extent of the value of the Collateral.

2.10             Holder Conversion of Notes.

(a)            Holder Conversion. Subject to the Company’s prior receipt of Stockholder Approval, the outstanding principal amount of each Note shall be convertible at any time, from time to time, at the option of the holder (“Holder Conversion”), into a number of Conversion Shares equal to (x) the outstanding principal amount of such Note plus accrued and unpaid interest divided by (y) the Conversion Price.

(b)            Delivery of Holder Conversion Shares. Each holder may exercise its option to convert all or a portion the outstanding principal amount of its Notes pursuant to the delivery of a Holder optional conversion notice in the form attached to the Form of Note as Exhibit A (the “Holder Conversion Notice”). As promptly as practicable after date of delivery of a Holder Conversion Notice, the Company shall, provided it is DWAC Eligible at such time and Conversion Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated by the converting Holder on its Investor Signature Page. If Company is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC, it shall deliver to such Holder at the mailing address designated by the converting Holder on its Investor Signature Page, via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which such Holder shall be entitled, registered in the name of such Holder or its designee.

2.11            Company Conversion of Notes.

(a)            Company Conversion. The outstanding principal amount of all Notes shall be convertible at any time, at the option of the Company, following the satisfaction of the Company Conversion Conditions (including in particular condition (iii) with respect to each Note as applicable) (“Company Conversion”). Upon a Company Conversion, the Notes shall be convertible into to a number of Conversion Shares equal to (x) the outstanding principal amount of the Notes plus accrued and unpaid interest divided by (y) the Conversion Price; provided, however, that with respect to Notes held by the Initial Investor, the Conversion Price for Company Conversion of the Initial Note and the Additional Notes shall be the lower of the Conversion Price applicable in case of Holder Conversion of the Initial Note and the Conversion Price applicable in case of Holder Conversion of the Additional Notes. The Company shall provide written notice to the holders of the Notes of the Company Conversion in the form attached to the Form of Note as Exhibit B (the “Company Conversion Notice”) at least 20 calendar days in advance of a Company Conversion; provided, however that so long as the Company Conversion Conditions are satisfied on the date of the Company’s Conversion Notice, no change in the facts and circumstances following such notice shall affect the consummation of the Company Conversion, provided further that the Holders may elect to convert the Notes pursuant to Section 2.10 after receipt of a Company Conversion Notice and prior to the date of a Company Conversion.

2.12            Delivery of Conversion Shares. As promptly as practicable after date of delivery of an Company Conversion Notice, Company shall, provided it is DWAC Eligible at such time and Conversion Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated by the converting holder on its Investor Signature Page via DWAC, it shall deliver to such holder at the mailing address designated by the converting holder on its Investor Signature Page, via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which such holder shall be entitled, registered in the name of such holder or its designee.

2.13            No Fractional Shares; Surrender of Notes. Upon the conversion of a Note into Conversion Shares, in lieu of any fractional shares to which a holder would otherwise be entitled, the Company shall pay the holder cash equal to such fraction multiplied by the Conversion Price. The Company shall not be required to issue or deliver the Conversion Shares until the holder has surrendered the applicable Note to the Company at its principal executive office at 501 Boylston Street, Suite 6102, Boston, Massachusetts 02116.

2.14            Effect of Conversion. All Notes which shall have been converted, at the option of the holder or automatically, as applicable, as herein provided shall no longer be deemed to be outstanding and all rights with respect to such Notes shall immediately cease and terminate at the Conversion Time, except only the right of the Holders thereof to receive shares of Common Stock in exchange therefor.

2.15            Optional Redemption.

(a)            Redemption Price. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically. Upon at least twenty (20) days’ notice, the Company may, at its option, redeem for cash (“Optional Redemption”) (i) all but not less than all of the then-outstanding Initial Notes and Additional Notes and (ii) all or any portion of the then-outstanding Other Investor Notes, at a redemption price equal to (i) 120% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date (as defined below), if the Redemption Date is on or prior to June 30, 2023 and (ii) 130% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date, if the Redemption Date is after June 30, 2023 (the “Redemption Price”). The Company shall provide written notice to each Holder of its election to redeem the Notes in the form attached to the Form of Note as Exhibit C (the “Redemption Notice”).

(b)            Payment of Notes Called for Redemption. If any Redemption Notice has been given, the applicable Notes shall become due and payable on the date fixed by the Company for the redemption (the “Redemption Date”) at the place or places stated in the Redemption Notice and at the applicable Redemption Price unless earlier converted by the holder at its option pursuant to Section 2.10 or by the Company at its option pursuant to Section 2.11. Interest shall stop accruing on Notes called for redemption as of the applicable redemption date and on presentation and surrender of the Notes at the place or places stated in the Redemption Notice, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price.

(c)            Restrictions on Redemption. The Company may not redeem any Notes on any date if the principal amount of the Notes has been accelerated in accordance with the terms of this Agreement, and such acceleration has not been rescinded, on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Notes).

2.16         Note Register. The Company shall keep, or cause to be kept, a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time.

2.17         Use of Proceeds. The Company shall use the net proceeds from the sale of the Initial Notes in accordance with a 10-week cash flow budget in substantially the form attached hereto as Exhibit E, including payments with respect to the Company and/or its Subsidiaries (including the Excluded Subsidiary) of (i) employee salaries, (ii) taxes, (iii) D&O tail insurance premia, (iv) reasonable expenses incurred in connection with the sale of Other Investor Notes and related financings and other transactions and (v) operating expenses. The Company shall use the net proceeds from the sale of Additional Notes and Other Investor Notes for general corporate purposes, including, without limitation, the pursuit of FDA approval, sales and marketing of Plenity and related matters.

2.18         Most Favored Investor. If any Note Party incurs any indebtedness or issues debt instruments, including convertible debt securities or equity-linked debt securities, with terms more favorable to the investors than those set forth in the Notes, including Warrant Coverage, (including, without limitation, a valuation cap and/or discount) prior to conversion, redemption or repayment of the initial Notes and the Additional Notes, the Company shall promptly provide the Initial Investor with written notice thereof, together with a copy of such subsequent security and a description of the terms of such indebtedness or securities (the “MFI Notice”). In the event the Initial Investor determines that the terms of such subsequent security or indebtedness are preferable to the terms of Initial Notes or the Additional Notes or the Warrants (including Warrant Coverage), the Initial Investor shall notify the Company in writing within fifteen (15) days of the receipt of the MFI Notice to the extent the Initial Investor elects to receive the benefit of any such provisions. Promptly after receipt of such written notice from the Initial Investor, the Company agrees to amend the Notes, the Additional Notes and/or the Warrants and/or issue additional Warrants (as contemplated by the definition of “Warrant Coverage”), as applicable, to include the terms set forth in the MFI Notice. For the avoidance of doubt, this Section 2.18 shall not apply with respect to the issuance of warrants on a standalone basis or other than in connection with debt financings by the Company while any Notes are outstanding, and in particular will not include a repricing of the exercise price of the Warrants based on the exercise price of newly issued warrants in such a financing.

3.             Warrants.

3.1           Delivery of Warrants. Upon an Investor’s purchase of Notes, and in return for the Company’s receipt of the Consideration for such Notes, at the Closing for such purchase, the Company shall deliver to such Investor a Warrant to purchase Common Stock in the applicable Warrant Coverage Amount for each Note. The exercise price for the Warrants shall be: (i) with respect to Warrants issued in connection with the sale and purchase of the Initial Note, the average of the Last Reported Sale Price for the five Scheduled Trading Days immediately preceding the Initial Closing Date; (ii) with respect to Warrants issued in connection with the sale and purchase of Additional Notes, the average of the Last Reported Sale Price for the five Scheduled Trading Days immediately preceding the applicable Second Closing Date; and (iii) with respect to Warrants issued in connection with a sale and purchase of the Other Investor Notes, such exercise price as the Company and the applicable Investor shall mutually determine, but in no event shall such exercise price be less than the average of the Last Reported Sale Price for the five Scheduled Trading Days immediately preceding the applicable Subsequent Closing Date for such the sale and purchase of Other Investor Notes.

3.2           Adjustments to Initial Investor Warrant Coverage. For the avoidance of doubt, if the Warrant Coverage Amount with respect to Other Investor Notes exceeds the Warrant Coverage Amount with respect to the Initial Note, the Initial Investor shall receive additional Warrants so that the Initial Investor has the same Warrant Coverage Amount with respect to the Initial Note.

3.3           No Exercise Prior to Stockholder Approval. No Warrant may be exercised prior to the Company’s receipt of Stockholder Approval.

4.             Closing Mechanics.

4.1           Initial Closing. The Closing of the purchase of the Initial Note (the “First Closing”) in return for the Consideration therefor paid by the Initial Investor shall take place at 9:30 a.m. Eastern Time on the Initial Closing Date at the offices of Goodwin Procter, 100 Northern Avenue, Boston MA 02210, or at such other time and place as the Company and Initial Investor agree upon orally or in writing. At the First Closing, the Investor shall deliver the Consideration to the Company and the Company shall deliver to the Initial Investor the Initial Note.

4.2           Second Closing. The Closing or Closings of the purchase of any Additional Notes (each a “Second Closing”) in return for the Consideration therefor paid by the Initial Investor shall take on such date or dates (each a “Second Closing Date”) and at such location as shall be mutually agreed upon orally or in writing by the Company and the Initial Investor. At each Second Closing, the Investor shall deliver such Consideration for the Additional Notes to the Company has elected to sell to the Initial Investor at such Closing and the Company shall deliver to the Initial Investor the Additional Notes in return for such Consideration.

4.3           Subsequent Closings. At one or more subsequent closing (a “Subsequent Closing”), the Company may, at its option and without the approval of Holders, sell up to an aggregate principal amount of $40,000,0000 of Other Investor Notes to one or more Other Investors; provided that the warrant coverage with respect to the Other Investor Notes shall not exceed the Warrant Coverage Amount with respect to the Additional Notes. Other Investor Notes may be purchased at any time between the Initial Closing Date and March 31, 2024. Any purchasers of Other Investor Notes shall become a party to, and shall be entitled to receive Notes (and Warrants) in accordance with this Agreement. Each Subsequent Closing shall take place on the date (the “Subsequent Closing Date”) at such locations as shall be mutually agreed upon orally or in writing by the Company and the Other Investor (or Other Investors) purchasing a majority in interest of the aggregate principal amount of the Other Investor Notes sold at such Subsequent Closing. Except for the foregoing, the Other Investor Notes will be pari passu in all respects with all other Notes and have all the same terms as all other Notes, including with respect to the Collateral.

5.             Representations and Warranties of the Note Parties. In connection with the transactions provided for herein, the Note Parties hereby represent and warrant to the Investors that:

5.1           Organization, Good Standing and Qualification. Each of the Company and the Co-Issuer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority (i) to carry on its respective business as now conducted, (ii) to execute, deliver and perform its obligations under this Agreement, the Notes, the Warrants, the Security Agreement and (iii) to issue, sell and deliver the Notes and to issue and deliver the Conversion Shares. Each of the Company’s and the Co-Issuer’s Subsidiaries (including the Excluded Subsidiary) is duly organized, validly existing, and in good standing in their respective jurisdictions of formation and has all requisite power and authority to carry on its business as now conducted. Each of the Company, the Co-Issuer and their respective Subsidiaries (including the Excluded Subsidiary) is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

5.2           Authorization. Except for the Stockholder Approval and authorization and issuance of the shares of Common Stock issuable in connection with future Qualified Financings, all corporate action has been taken on the part of the Note Parties and their respective officers, directors and stockholders necessary for the authorization, execution and delivery of each of the Note Documents and the sale, issuance and delivery of the Warrants Shares and the Conversion Shares. The Note Parties have taken all corporate action required to make all of the obligations of the Company reflected in the provisions of the Note Documents, the valid and enforceable obligations they purport to be, except as the enforcement thereof may be limited by (i) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors’ rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies (collectively, the “Bankruptcy Exceptions”).

5.3           Collateral Documents. Each of the Collateral Documents when duly executed and delivered in accordance with its terms by the Note Parties will be effective to grant a valid and enforceable first priority security interest, in favor of the holders of Notes in each grantor’s right, title and interest in the Collateral described therein, except as the enforcement thereof may be limited by the Bankruptcy Exceptions, and in the case of Article 9 collateral, when financing statements are filed in the appropriate officers for filing, shall constitute fully perfected first priority liens on the Collateral described therein, subject to no liens other than the liens permitted hereunder.

5.4           Compliance with Other Instruments. Neither the authorization, execution and delivery of this Agreement, nor the issuance and delivery of the Notes and the Warrants, will constitute or result in a material default or violation of any law or regulation applicable to the Note Parties or any material term or provision of their respective current Certificates of Incorporation or bylaws or limited liability company agreement, or any material agreement or instrument by which they are bound or to which their respective properties or assets are subject.

5.5           Capitalization. Immediately prior to the Initial Closing, the capital stock of the Company will consist of 900,000,000 shares of Common Stock, of which 73,330,066 shares are issued and outstanding, 250,000,000 shares of undesignated Preferred Stock, none of which are issued and outstanding. The Co-Issuer is a wholly-owned Subsidiary of the Company. Each of Gelesis 2012 and Gelesis LLC is a direct subsidiary of the Co-Issuer.

(a)            All issued and outstanding shares of Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable, and (ii) were issued in compliance with the law.

(b)            Subject to the Stockholder Approval, the Conversion Shares and the Warrant Shares have been duly authorized and, when issued in compliance with the provisions of this Agreement, and the terms of Notes or Warrants, as applicable, will be validly issued, fully paid and nonassessable and, based in part upon the representations and warranties of the holders of Notes in this Agreement, will be issued in compliance with all applicable federal and state securities laws.

(c)            Except as set forth on the Schedule 5.5(c) there are not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock.

5.6           Governmental Consents and Filings. Assuming the accuracy of the representations made by the holders of Notes in Section 6 below, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any U.S. federal, state or local governmental authority is required on the part of the Note Parties in connection with the consummation of the transactions contemplated by this Agreement, except for filings pursuant to Regulation D of the Securities Act, and applicable state securities laws, which have been made or will be made in a timely manner.

5.7           Margin Stock. The Company, the Co-Issuer and their respective Subsidiaries are not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock, as defined in Regulation T, U or X of the Board of Governors of the Federal Reserve System (“Margin Stock”). No portion of the obligations is secured directly or indirectly by Margin Stock. No Note Party will use the proceeds of the Notes to purchase or carry Margin Stock.

5.8           Information. To the knowledge of each Note Party, all written information furnished by the Note Parties to any Holder pursuant hereto or in connection herewith (excluding any “forward-looking” information) is, and all written information hereafter furnished by, or on behalf of, the Note Parties to any Holder pursuant hereto or in connection herewith (excluding any “forward-looking” information) will be, when taken as a whole, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or when furnished will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made.

5.9           Investment Company Act. Neither the Company, the Co-Issuer nor any of their respective Subsidiaries is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company”, within the meaning of the Investment Company Act of 1940.

6.             Representations and Warranties of the Holders of Notes. In connection with the transactions provided for herein, each purchaser of Notes hereby represents and warrants to the Company and the Co-Issuer that:

6.1           Authorization. This Agreement constitutes such purchaser’s valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by the Bankruptcy Exceptions. Each purchaser represents that it has full power and authority to enter into this Agreement.

6.2           Purchase Entirely for Own Account. Each purchaser acknowledges that this Agreement is made by the Company, the Co-Issuer and each other purchaser in reliance upon such purchaser’s representation to the Company that the Notes, the Warrants, the Conversion Shares, and Warrant Shares (collectively, the “Securities”) will be acquired for investment for purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, each purchaser further represents that such purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Securities.

6.3           Disclosure of Information. Each purchaser acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Securities. Each purchaser further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and the business, properties, prospects and financial condition of the Company.

6.4           Investment Experience. Each purchaser is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities. If other than an individual, each purchaser also represents it has not been organized solely for the purpose of acquiring the Securities.

6.5           Accredited Investor. Each purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Commission, as presently in effect.

6.6           Restricted Securities. Each purchaser understands that the Securities are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Act only in certain limited circumstances. Each Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act.

6.7           Further Limitations on Disposition. Without in any way limiting the representations and warranties set forth above, each purchaser further agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 6, Section 11.1 and:

(a)            There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(b)            such disposition is pursuant to a valid exemption from the registration requirements of the Securities Act and the purchaser has notified the Company of the proposed disposition and has furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition.

6.8           Legends. It is understood that the Securities may bear the following legends:

(a)            “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO A VALID EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.”; and

(b)            Any legend required by applicable state “blue sky” securities laws, rules and regulations.

6.9           Further Representations by Foreign Investors. If the purchaser is not a United States person, such purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (a) the legal requirements within its jurisdiction for the purchase of the Securities, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Such purchaser’s subscription and payment for, and its continued beneficial ownership of the Securities, will not violate any applicable securities or other laws of its jurisdiction.

6.10            “Bad Actor” Status. Each purchaser hereby represents that neither it nor any of its Rule 506(d) Related Parties is a “bad actor” within the meaning of Rule 506(d). For purposes of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor disqualification” provision of Rule 506(d).

7.             Conditions to Purchaser’s Obligations at Closing.

7.1           Conditions to each Purchaser’s Obligations at Closing. The obligations of each purchaser to purchase Notes at any Closing are subject to the fulfillment, on or before such Closing, of each of the following conditions, unless otherwise waived:

7.2           Representations and Warranties. The representations and warranties of the Note Parties contained in Section 5 shall be true and correct in all respects as of such Closing.

7.3           Performance. The Note Parties shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Note Parties on or before such Closing.

7.4           Qualifications. Except for the Stockholder Approval, all authorizations, approvals or permits, if any, of any Governmental Authority that are required in connection with the lawful issuance and sale of the Notes pursuant to this Agreement shall be obtained and effective as of such Closing.

7.5           Security Agreement. The Note Parties and the Initial Investor shall have executed and delivered the Security Agreement. The Initial Investor shall have received any and all certificates, notes and instruments and transfer powers evidencing Collateral pledged pursuant to the Security Agreement and the Initial Investor shall have received appropriately filed copies of UCC financing statements naming the Note Parties as debtors and the Initial Investor as a secured party.

7.6           Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at such Closing, and all documents incident thereto shall be reasonably satisfactory in form and substance to each purchaser, and each purchaser (or its counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates.

8.            Conditions to the Note Parties’ Obligations at Each Closing.

8.1           Conditions of the Company’s Obligations at Closing. The obligations of the Company to sell the Notes to the Investors at any Closing are subject to the fulfillment, on or before such Closing, of each of the following conditions, unless otherwise waived:

8.2           Representations and Warranties. The representations and warranties of each purchaser contained in Section 6 shall be true and correct in all respects as of such Closing.

8.3           Performance. Each purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before such Closing.

8.4           Qualifications. Except for the Stockholder Approval, all authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of such Closing.

8.5           Security Agreement. The Note Parties and the Initial Investor shall have executed and delivered the Security Agreement.

8.6           Payment of Purchase Price. Each purchaser shall have delivered to the Company such purchaser’s respective Consideration in respect of its Notes, as set forth in opposite its name under “Total Consideration” in the Schedule of Investors. All payments to the Company under this Agreement shall be made in lawful money of the United States of America, via wire transfer of immediately available funds to the Company account set forth in the Company’s wire instructions provided to you.

9.             Defaults and Remedies.

9.1           Events of Default. The following events shall be considered Events of Default with respect to each Note:

(a)            Any Note Party shall default in the payment of any part of the principal or unpaid accrued interest on the Note after the Maturity Date or at a date fixed by acceleration or otherwise;

(b)            The Company or the Co-Issuer or any of their respective Subsidiaries shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a voluntary petition for bankruptcy, or shall file any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or shall file any answer admitting the material allegations of a petition filed against the Company or the Co-Issuer or any of their respective Subsidiaries in any such proceeding, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the Company or the Co-Issuer or any of their respective Subsidiaries, or of all or any substantial part of the properties of the Company or the Co-Issuer or any of their respective Subsidiaries, or the Company, the Co-Issuer or any of their respective Subsidiaries or their respective directors or majority stockholders shall take any action looking to the dissolution or liquidation of the Company or the Co-Issuer or any of their respective Subsidiaries;

(c)            Within thirty (30) days after the commencement of any proceeding against the Company or the Co-Issuer or any of their respective Subsidiaries seeking any bankruptcy reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or within thirty (30) days after the appointment without the consent or acquiescence of the Company or the Co-Issuer or any of their respective Subsidiaries of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company or the Co-Issuer or any of their respective Subsidiaries, such appointment shall not have been vacated;

(d)            Within thirty (30) days after the Company or the Co-Issuer or any of their respective Subsidiaries becomes involved in litigation that threatens to materially and adversely affect the Company’s or the Co-Issuer’s or any of their respective Subsidiaries’ business, operations, assets, results of operations or prospects, if the Company’s or the Co-Issuer’s or any of their respective Subsidiaries’ involvement has not terminated by such date in a manner that does not and could not reasonably be expected to materially and adversely affect the Company’s or the Co-Issuer’s or any of their respective Subsidiaries’ business, operations, assets, results of operations or prospects;

(e)            Any default or defined event of default that has not otherwise been cured or forgiven shall occur under any agreement to which the Company, the Co-Issuer or any of their respective Subsidiaries is a party that evidences Indebtedness of $7.5 million or more;

(f)            The Note Parties shall fail to observe or perform any other obligation to be observed or performed by it under this Agreement, the Notes or the Warrants within 30 days after written notice from a majority of the holder of all Notes then outstanding to perform or observe the obligation;

(g)            Any representation or warranty made or deemed to be made by any Note Party in any Note Document is or shall be incorrect in any material respect on or as of the date when made or deemed to have been made (except for the representation and warranty set forth in Section 5.3, which shall be true, correct and complete in all respects); or

(h)            At any time after the execution and delivery thereof, (i) any Note Document or any material provision thereof, for any reason other than the satisfaction in full of all Secured Obligations (as defined in the Security Agreement), shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared by a court of competent jurisdiction to be null and void, (ii) Initial Holder shall not have or shall cease to have a valid and perfected (subject to the qualifications with respect to perfection contained in the Note Documents) security interest in any material portion of the Collateral purported to be covered, and with the level of priority purported to be provided, by the Collateral Documents, to the extent required by the Collateral Documents (except to the extent that any such loss of perfection or priority results solely from the failure of Initial Holder to take action within their control), or (iii) any Note Party shall contest the validity or enforceability of any Note Document or any provision thereof in writing or deny in writing that it has any further liability.

9.2           Remedies. Upon the occurrence of an Event of Default under Sections 9.1(a), 9.1(d), 9.1(e), 9.1(f) 9.1(g) and 9.1(h), hereof, at the option and upon the declaration of a majority of the holder of all Notes then outstanding, the entire unpaid principal and accrued and unpaid interest on the Notes shall, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, and the holders may, immediately and without expiration of any period of grace, enforce payment of all amounts due and owing under their Notes and exercise any and all other remedies granted to it at law, in equity or otherwise. Upon the occurrence of an Event of Default under Sections 9.1(b) and 9.1(c) hereof, the entire unpaid principal and accrued and unpaid interest on the Notes shall, be automatically due and payable, without presentment, demand, protest, or notice of any kind, and without any action by any Holder, all of which are hereby expressly waived by the Note Parties.

10.           Covenants.

10.1         Negative Covenants. Except (i) for the issuance of Notes, including any Additional Notes and any Other Investor Notes, which may be issued from time to time pursuant to this Agreement up to the maximum aggregate principal amount set forth in Section 2.4, (ii) the performance of any and all obligations of the Company or any of its Subsidiaries (including the Excluded Subsidiary) pursuant to any existing agreement to which any of them is a party (including, without limitation, the obligations to provide working capital, reimburse expenses, and fulfill other funding obligations for the benefit of the Excluded Subsidiary set forth on Schedule 10) and (iii) to the extent the following covenants and provisions of this Section 10 are waived in any instance by a majority of the holder of all Notes then outstanding, each Note Party covenants and agrees that until the Notes are paid in full or converted into equity securities of the Company, it shall not, and it shall not permit its Subsidiaries to, directly or indirectly:

(a)            Create, incur, assume or suffer to exist, or permit any Subsidiary to incur, assume or suffer to exist, any liability with respect to Indebtedness or create or authorize the creation of, or permit any Subsidiary to create or authorize the creation of, any debt security, other than the Notes, including any Additional Notes and any Other Investor Notes, which may be issued from time to time pursuant to this Agreement up to the maximum aggregate principal amount set forth in Section 2.4, and equipment leases or trade payables incurred in the ordinary course of business.

(b)            Create, incur, assume or otherwise cause or suffer to exist or become effective, or permit any Subsidiary to create, incur, assume or otherwise cause or suffer to exist of become effective, any Lien (as defined in the Security Agreement) of any kind securing Indebtedness upon any of its or their property or assets, or the property or assets of their Subsidiaries now owned or hereafter acquired (including on the assets of the Excluded Subsidiary).

(c)            Make any transfer of its assets (other than intellectual property or cash) to any of its Subsidiaries other than to any Note Party, except for any such transfer for which the book value of the assets subject to such transfer, when added to the book value of all other assets (other than intellectual property or cash) transferred from the Company to a Subsidiary during the period of 12 consecutive months ending on the date of such transfer (such aggregate amount, the “LTM Transferred Amount”), does not exceed 5% of the Company’s consolidated total assets for the most recently ended fiscal quarter; provided that an amount equal to the net proceeds received by the Company from any such transfer shall be deducted from the calculation of the LTM Transferred Amount if, within 365 days of such transfer, the proceeds of such transfer are used, in any combination to make capital expenditures or acquire assets that are used or useful in the Company’s businesses and provided further that no Event of Default has occurred and shall result therefrom. In addition, the Company will be permitted to transfer securities to any Massachusetts securities corporation, and any such transfer will not be included in the calculation of the LTM Transferred Amount.

(d)            Transfer, or permit any Subsidiary to transfer, ownership of, or exclusively license or grant exclusive rights to use, any of the Company’s or its Subsidiaries’ material intellectual property, other than exclusive licenses of intellectual property rights limited to territories outside the United States in connection with commercial agreements for the sale or distribution of the Company’s or any of its Subsidiaries’ products outside the United States.

(e)            Except in the ordinary course of business consistent with past practice, sell, transfer, mortgage, encumber, subject to any Lien or otherwise dispose of any of its tangible or intangible assets or properties or businesses, except for sales, transfers, mortgages, encumbrances or other dispositions in the ordinary course of business consistent with past practice (including dispositions of inventory or of obsolete equipment in the ordinary course of business consistent with past practice);

(f)            (i) cease doing business, or liquidate or dissolve; (ii) permit or suffer a change in control (except as otherwise permitted under this agreement); (iii) sell all or substantially all of the Company or its Subsidiary’s assets; (iv) merge or consolidate with any other Person, provided that (A) a Subsidiary may merge or consolidate into another Subsidiary or into the Company, and (ii) a Subsidiary may liquidate or dissolve so long as the assets of such Subsidiary are transferred to the Company or the Co-Issuer.

10.2         Additional Covenants. Except to the extent the following covenants and provisions of this Section 10.2 are waived in any instance by a majority of the holder of all Notes then outstanding, the Company covenants and agrees that:

(a)            Operating Plan. The Company shall collaborate with the Initial Investor regarding development and implementation of an operating plan that is satisfactory to the Initial Investor in its sole discretion (the “Operating Plan”) for the Company with respect to obtaining FDA Approval and the commercial launch of Plenity after receipt of such approval.

(b)            Stockholder Approval.

(i)            At the Company’s first annual general meeting of stockholders of the Company (the “Company Stockholders”) following the date of this Note (the “First Annual General Meeting”) which shall be held as soon as practical after the date of this Note, but not later than July 31 2023, the Company will use its reasonable best effort to obtain approval from the Company’s stockholders for (i) the conversion features of the Notes, the issuance of the Conversion Shares, the issuance of the Warrants and the Warrant Shares, and (ii) the conversion features of the Short Term Promissory Note issued to the Holder on July 25, 2022 and the issuance of the related warrants, as required by, and in conformity, with applicable New York Stock Exchange Continuing Listing Rules (“Stockholder Approval”); provided that the parties acknowledge that such First Annual General Meeting may be postponed or adjourned in accordance with the Company’s bylaws or as otherwise required by Applicable Law if (x) there is an insufficient number of shares of Common Stock present or represented by a proxy at the First Annual General Meeting to conduct business at the Company Stockholder Meeting, (y) the Company is required to postpone or adjourn the First Annual General Meeting by Applicable Law or a request from the Commission or its staff, or (z) the Company determines in good faith that it is necessary or appropriate to postpone or adjourn First Annual General Meeting in order to give the Company Stockholders sufficient time to evaluate any information or disclosure that the Company has sent or otherwise made available to them. If, despite the Company’s reasonable best efforts the Requisite Stockholder Approval is not obtained at or prior to the First Annual General Meeting, the Company shall seek to obtain such Stockholder Approval at a meeting of the stockholders of the Company semi-annually until such Stockholder Approval is obtained or the Notes are no longer outstanding. The Company shall notify Holder in writing when Stockholder Approval has been obtained.

(ii)            The Company shall use its reasonable best efforts to obtain the Stockholder Approval. Without limiting the foregoing, the Board shall (x) recommend that the Company’s stockholders vote in favor of the Stockholder Approval (the “Company Board Recommendation”) (and not withdraw or modify in any adverse respect such Company Board Recommendation unless the Board determines in good faith (after consultation with outside legal counsel and financial advisors) that the failure to take such action would be inconsistent with its fiduciary duties to the holders of Common Stock under Applicable Law, (y) solicit proxies in favor of the Stockholder Approval in accordance with this Section 10.2(b)(ii), and (z) obtain commitments from each of the directors and executive officers of the Company to vote in favor of the Stockholder Approval. In connection with the First Annual General Meeting, the Company shall promptly prepare (and the holders of Notes shall reasonably cooperate with the Company to prepare) and file with the Commission a preliminary proxy statement, shall use its commercially reasonable efforts to respond to any comments of the Commission or its staff and to cause a definitive proxy statement related to such meeting to be mailed to the Company Stockholders as promptly as practicable after clearance thereof by the Commission. The Commission shall notify the holders of Notes promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information and shall supply the holders of Notes with copies of all correspondence between the Company or any of its representatives, on the one hand, and the Commission or its staff, on the other hand, with respect to such proxy statement. If at any time prior to the First Annual General Meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as reasonably practicable prepare and mail to the Company’s stockholders such an amendment or supplement. Each of the parties shall promptly correct any information provided by it or on its behalf for use in the proxy statement if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall as promptly as reasonably practicable prepare and furnish to the Company’s stockholders an amendment or supplement to correct such information to the extent required by Applicable Laws. The Company shall consult with the holders of Notes prior to filing any proxy statement, or any amendment or supplement thereto, or responding to any comments from the Commission or its staff with respect thereto, and provide the holders of Notes with a reasonable opportunity to comment thereon, and consider in good faith any comments proposed by the holders of Notes.

(iii)            Each holder of Notes shall furnish the Company all information reasonably requested by the Company concerning itself, its affiliates, directors, officers, stockholders and such other matters as may be reasonably necessary or advisable in connection with the proxy statement in connection with the First Annual General Meeting.

(c)            The Company shall pay all costs and expenses of the issuance of the Initial Notes and the Additional Notes and the related Warrants, including the reasonable fees and expenses of counsel for the Initial Investor.

10.3          Tax Matters

(a)            Tax Reporting. For U.S. federal and state income tax purposes, the Company and the Investors hereby agree (i) that each Note and each Warrant issued in connection with such Note, shall be treated as an investment unit within the meaning of Section 1273(c)(2) of the Code, and the purchase price of the investment unit shall equal the total purchase price paid by the Investor for the Note (with the purchase price allocated to the Warrants to be determined as promptly as possible after the closing) comprising such investment unit and (ii) to treat (x) each Note as a debt instrument that is not a contingent payment debt instrument subject to the rules of Treasury Regulation Section 1.1275-4 and (y) the conversion of each Note pursuant to the terms of this Agreement as a non-taxable transaction. The parties agree not to take any tax position (including any tax Return, tax filing, tax audit or tax proceeding) that is inconsistent with this Section 10.3(a) unless otherwise required by a final determination within the meaning of Section 1313 of the Internal Revenue Code.

(b)           Tax Forms. On or prior to the Closing Date, and throughout the term of this Agreement whenever required by law or reasonably requested by the Company in order for the Company to have on file an accurate and valid IRS Form W-9, each Investor (including any successor or assign thereof) shall deliver to the Company a complete and valid IRS Form W-9.

11.           Adjustment of Conversion Price.

11.1         Deemed Issue of Options or Convertible Securities.

(a)            If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

(b)           If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price pursuant to the terms of Section 11.2, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Company upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (ii) shall have the effect of increasing the Conversion Price then in effect.

(c)            If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price pursuant to the terms of Section 11.2 (either because the consideration per share (determined pursuant to Section 11.3) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price then in effect, or because such Option or Convertible Security was issued before the Original Issue Date), are revised after the Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Company upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Section 11.1(a) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

(d)           Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Conversion Price pursuant to the terms of Section 11.2, the Conversion Price shall be readjusted to such Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

(e)            If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Conversion Price provided for in this Section 11.1 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Section 11.1). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Conversion Price that would result under the terms of this Section 11.1 the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

11.2         Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 11.1), for a consideration per share less than the applicable Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Conversion Price shall be reduced, concurrently with such issuance or deemed issuance, to the consideration per share received by the Company for such issue or deemed issue of the Additional Shares of Common Stock.

11.3         Determination of Consideration. For purposes of this Section 11, the consideration received by the Company for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:

(a)            Cash and Property. Such consideration shall:

(i)            insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company, excluding amounts paid or payable for accrued interest;

(ii)            insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

(iii)            in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board of Directors.

(b)           Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to Section 11.1, relating to Options and Convertible Securities, shall be determined by dividing:

(i)            The total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

(ii)            the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

11.4         Multiple Closing Dates. In the event the Company shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Conversion Price pursuant to the terms of Section 11.2 then, upon the final such issuance, the Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

11.5         Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section shall become effective at the close of business on the date the subdivision or combination becomes effective.

11.6         Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

(a)            the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

(b)           the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this Section as of the time of actual payment of such dividends or distributions; and (ii) that no such adjustment shall be made if the holders of Notes simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Notes had been converted into Common Stock on the date of such event.

11.7         Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Company (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 11.6 do not apply to such dividend or distribution, then and in each such event the holders of Notes shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding Notes had been converted into Common Stock on the date of such event.

11.8         Adjustment for Merger or Reorganization, etc.. Subject to the provisions of Section 11.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Company in which the Common Stock is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 11.2, 11.4 or 11.5), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each Note shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Company issuable upon conversion of each Note outstanding immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in this Section 11.1 with respect to the rights and interests thereafter of the holders of Notes, to the end that the provisions set forth in this Section 11 (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Notes.

11.9         Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 11, the Company at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Notes a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which each Note is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, as promptly as reasonably practicable after the written request at any time of any holder of Notes (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of $1,000 principal amount of Notes.

Notwithstanding anything to the contrary in this Section 11, the Conversion Price shall not be adjusted upon the issuance of (i) any equity securities, Indebtedness, or any option, warrant or other right to purchase equity securities or Indebtedness, of the Excluded Subsidiary, (ii) any dividend or other distribution made by the Excluded Subsidiary, or (iii) upon the investment by the Excluded Subsidiary in any Person.

12.           Registration Rights. The Company covenants and agrees as follows:

12.1         Shelf Registration. Within sixty (60) calendar days following the applicable Closing Date, the Company shall submit to or file with the Commission a Registration Statement for a Shelf Registration on Form S-3 (or if the Company is not then eligible to use Form S-3 for resales, on Form S-1) (or a post-effective amendment to a previously file Registration Statement) covering the resale of all the Registrable Securities (determined as of two (2) business days prior to such submission or filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf Registration declared effective as soon as practicable after the filing thereof. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available (the “Plan of Distribution”) to, and requested by, any holder named therein. The Company shall maintain the Shelf Registration in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf Registration continuously effective, available for use to permit the holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as they are no longer Registrable Securities. The Company’s obligation under this Section 12.1 shall, for the avoidance of doubt, be subject to Section 12.4.

12.2         Additional Registrable Securities. Subject to Section 12.4, in the event that any holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of such holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, any then available Shelf (including by means of a post-effective amendment) or by filing a subsequent Shelf Registration and cause the same to become effective as soon as practicable after such filing and such subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such additional Registrable Securities to be so covered once per calendar year for all holders of Registrable Securities.

12.3         Underwriting Requirements. If a holder of Registrable Securities intends to distribute Registrable Securities with a value in excess of $5,000,000 by means of an underwriting, they shall so advise the Company and the underwriter(s) shall be subject to the reasonable approval of the Company. In such event, the right of any holder to include such holder’s Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. All holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 12.3, if the managing underwriter(s) advise(s) the holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the number of Registrable Securities that may be included in the underwriting shall be allocated among such holders of Registrable Securities in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

12.4         Obligations of the Company. Whenever required under this Section 12 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a)            prepare and file with the Commission a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and keep such registration statement effective until the distribution contemplated in the registration statement has been completed or until there are no Registrable Securities;

(b)           prepare and file with the Commission such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

(c)            furnish to the selling holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

(d)           use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(e)            in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

(f)            use its commercially reasonable efforts to cause all Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

(g)           provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(h)           promptly make available for inspection by the selling holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

(i)             notify each selling holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

(j)             after such registration statement becomes effective, notify each selling holder of any request by the Commission that the Company amend or supplement such registration statement or prospectus.

12.5         Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 12 with respect to the Registrable Securities of any selling holder that such holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such holder’s Registrable Securities.

12.6         Expenses of Registration. All expenses (other than selling expenses such as underwriting or brokerage commissions and similar) incurred in connection with registrations, filings, or qualifications pursuant to Section 12, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for each selling holder of the Registrable Securities to be registered (“Selling Holder Counsel”), shall be borne and paid by the Company. All selling expenses relating to Registrable Securities registered pursuant to this Section 12 shall be borne and paid by the applicable selling holder(s).

12.7         Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.

(a)           (i) Upon receipt of written notice from the Company to holders of Registrable Securities that a Registration Statement or related prospectus contains a Misstatement; or (ii) upon written notice from the Company that the Commission has requested an amendment or supplement to a Registration Statement or related prospectus or additional information, or an event has occurred that requires the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such Registration Statement and related prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the relevant holder(s) shall forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement covering such Registrable Securities until it has received copies of a supplemented or amended prospectus (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until it is advised in writing by the Company that the use of the prospectus may be resumed.

(b)           If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Shelf Registration at any time would (i) require the Company to make an Adverse Disclosure, (ii) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, (iii) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; or (iv) in the good faith judgment of the majority of the Board of Directors of the Company such registration be seriously detrimental to the Company and the majority of the Board of Directors of the Company concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to the holders of Registrable Securities (which notice shall not specify the nature of the event giving rise to such delay or suspension), delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under this Section 12.7, the holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the prospectus relating to any registration in connection with any sale or offer to sell Registrable Securities until such holder receives written notice from the Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice and its contents; provided, however, that the right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to this Section 12.7(b) shall be exercised by the Company, in the aggregate, for not more than sixty (60) consecutive calendar days or more than one hundred and twenty (120) total calendar days, in each case, during any period of twelve (12) consecutive months.

12.8         Reporting Obligations. As long as any holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to EDGAR shall be deemed to have been furnished or delivered to the holders pursuant to this Section 12.8. The Company further covenants that it shall take such further action as any holder may reasonably request, all to the extent required from time to time to enable such holder to sell shares of Common Stock held by such holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule then in effect) including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s transfer agent as may be reasonably requested from time to time by the holder and otherwise use commercially reasonable efforts to fully cooperate with the holder and the holder’s broker to effect such sale of securities pursuant to Rule 144. Upon the request of any holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

12.9         Indemnification. If any Registrable Securities are included in a registration statement under this Section 12:

(a)           To the extent permitted by law, the Company will indemnify and hold harmless each selling holder, and the partners, members, officers, directors, and stockholders of each such holder; legal counsel and accountants for each such holder; any underwriter (as defined in the Securities Act) for each such holder; and each Person, if any, who controls such holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, liabilities and out-of-pocket expenses (including, without limitation, reasonable and documented outside attorneys’ fees) (“Indemnifiable Damages”) resulting from any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement and related prospectus or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading and the Company will pay to the each such selling holder and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Indemnifiable Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 12.9(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Indemnifiable Damages to the extent that it arises out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

(b)           To the extent permitted by law, each selling holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, against any Indemnifiable Damages resulting from any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement and related prospectus or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case only to the extent that such Indemnifiable Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling holder expressly for use in connection with such registration; and each such selling holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Indemnifiable Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 12.9(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of such holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any holder by way of indemnity or contribution under Section 12.7(b) exceed the proceeds from the offering received by such holder (net of any selling expenses paid by such holder), except in the case of fraud or willful misconduct by such holder.

(c)            Promptly after receipt by an indemnified party under this Section 12.9 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 12.9, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 12.9 only to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 12.9.

(d)           To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 12.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 12.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 12.9, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Section 12.9, when combined with the amounts paid or payable by such Holder pursuant to Section 12.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

(e)            The obligations of the Company and holders under this Section 12.9 shall survive the completion of any offering of Registrable Securities in a registration under this Section 12, and otherwise shall survive the termination of this Agreement or any provision(s) of this Agreement.

12.10       “Market Stand-off” Agreement. Each holder of Registrable Securities hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company for its own behalf of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1 or Form S-3, and ending on the date specified by the Company and the managing underwriter (such period not to exceed ninety (90) days), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 12.10 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or to the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period, or the transfer of any shares to any trust for the direct or indirect benefit of a holder or the immediate family of a holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the holders only if all officers and directors of the Company are subject to the same restrictions. The underwriters in connection with such registration are intended third-party beneficiaries of this Section 12.10 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each holder of Registrable Securities further agrees to execute such customary lock-up agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 12.10 or that are necessary to give further effect thereto. 

12.11       Restrictions on Transfer.

(a)           The Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring holder will cause any proposed purchaser, pledgee, or transferee of the Registrable Securities held by such holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement. Notwithstanding the foregoing, the Company shall not require any transferee of shares pursuant to an effective registration statement or Rule 144 of the Securities Act or to be bound by the terms of this Agreement.

(b)            Each certificate, instrument, or book entry representing (i) the Registrable Securities, and (ii) any other securities issued in respect of the securities referenced in clause (i), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall be notated with a legend substantially in the form set forth in Section 6.8(a). The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions set forth in such legend.

(c)            The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 12. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the holder thereof shall give notice to the Company of such holder’s intention to effect such sale, pledge, or transfer, provided that no such notice shall be required in connection if the intended sale, pledge or transfer complies with Rule 144. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such holder’s expense by evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. 

13.           Guaranty.

13.1         Guaranty. To induce the Initial Holder and the Holders to purchase the Notes, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Note Document, of all the Secured Obligations of the Company and Co-Issuer whether existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.

13.2         Limitation of Guaranty. Any term or provision of this Guaranty or any other Note Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guaranty or any other Note Document, as it relates to such Guarantor, subject to avoidance under applicable Laws relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Laws) (collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established herein and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty.

13.3         Contribution. To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Notes and other Secured Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Company and Co-Issuer) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.

13.4         Authorization; Other Agreements. The Initial Holder is hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:

(a)            (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Note Document;

(b)           apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Note Documents;

(c)            refund at any time any payment received by any Holder in respect of any Guaranteed Obligation;

(d)           (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral (as defined in the Security Agreement) for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral (as defined in the Security Agreement) to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Company, the Co-Issuer or any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and

(e)           settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.

13.5         Guaranty Absolute and Unconditional. Each Guarantor hereby waives and agrees not to assert any defense (other than defense of payment), whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by Initial Holder):

(a)           the invalidity or unenforceability of any obligation of the Company, Co-Issuer or any Guarantor under any Note Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;

(b)           the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Company, Co-Issuer or any Guarantor or other action to enforce the same or (ii) any action to enforce any Note Document or any lien thereunder;

(c)            the failure by any Person to take any steps to perfect and maintain any lien on, or to preserve any rights with respect to, any Collateral (as defined in the Security Agreement);

(d)           any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Company, Co-Issuer, any Guarantor or any of the Company’s or Co-Issuer’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;

(e)            any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral (as defined in the Security Agreement) or any election during the occurrence of an Event of Default by Initial Holder to proceed separately against any Collateral (as defined in the Security Agreement) in accordance with Initial Holder’s rights under any applicable law; or

(f)            any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Company, Co-Issuer, any Guarantor or any of the Company’s or Co-Issuer’s other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations (other than contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted).

13.6         Waivers. Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Company, Co-Issuer or any other Guarantor. Until the occurrence of the Maturity Date, each Guarantor further unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Company, Co-Issuer or any other Guarantor by reason of any Note Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other party thereto or set off any of its obligations to such other party against obligations of such party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance. Each Guarantor further waives, to the extent permitted by applicable law, any right such Guarantor may have under any applicable Law to require Initial Holder to seek recourse first against the Company, Co-Issuer or any other Person, or to realize upon any Collateral for any of the Secured Obligations, as a condition precedent to enforcing such Guarantor’s liability and obligations under this Guaranty..

13.7         Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Company, Co-Issuer, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that Initial Holder shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event Initial Holder, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, Initial Holder shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor

14.           Miscellaneous.

14.1         Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties, provided, however, that the Company may not assign its obligations under this Agreement without the written consent (i) of the Initial Investor and (ii) the Investor may not assign its rights or obligations under this Agreement without the prior written consent of the Company (other than to an Affiliate) and any transfer or assignment in violation of this section shall be void ab initio. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

14.2         Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters (including contract law, tort law and matters of fraud) shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York.

14.3         Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

14.4         Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

14.5         Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not so confirmed, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 14.5):

If to the Company:

Gelesis Holdings, Inc.
501 Boylston Street, Suite 6102
Boston, MA 02116
Attention:     Elliot Maltz, Chief Financial Officer
Email:  emaltz@gelesis.com

with a copy (which shall not constitute notice) to:

Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Attention:     Jim Barrett
Ettore Santucci
Email:  JBarrett@goodwinlaw.com
Email:  ESantucci@goodwinlaw.com

If to Investors:

At the respective addresses shown on the signature pages hereto.

14.6         Finder’s Fee. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. Each purchaser of Notes agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which such purchaser or any of its officers, partners, employees or representatives is responsible. The Company agrees to indemnify and hold harmless Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

14.7         Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. The Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

14.8         Entire Agreement; Amendments and Waivers. This Agreement, the Notes, the Guaranty, the Security Agreement and the Warrants and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. The Company’s agreements with each of the purchasers of Notes are separate agreements, and the sales of the Notes and Warrants to each of the purchasers thereof are separate sales. Nonetheless, any term of this Agreement, the Notes, the Guaranty or the Security Agreement may be amended and the observance of any term of this Agreement, the Notes, the Guaranty or the Security Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of a majority in principal amount of Notes outstanding from time to time; provided that, that no such amendment, waiver or consent shall, without consent of each holder of Notes directly and adversely affected thereby: (i) reduce the principal amount of or extend the Maturity Date of any Note; (ii) reduce the rate of interest or postpone the stated time for payment of principal or interest of any Note (except as otherwise permitted under this Agreement); (iii) impair the right of any holder to receive payment on, or with respect to, any Note or impair the right to initiate suit for the enforcement of any delivery or payment on, or with respect to, any Note; (iv) change the ranking of any Note in any manner adverse to the rights of the affected holder; (v) grant any Lien senior to the Lien securing the Notes except as expressly provided for in the Security Agreement; (vi) release the guaranty; (vii) subordinate or release the Lien securing the Notes except as expressly provided for in the Security Agreement; (viii) change the conversion price or any other terms of conversion of the Notes or the redemption price or any other terms of redemption of the Notes; or (ix) waive compliance with or modify this Section 14.8 in a manner adverse to any Investor.

Any waiver or amendment effected in accordance with this Section 14.8 shall be binding upon each party to this Agreement and any holder of any Note or Warrant purchased under this Agreement at the time outstanding and each future holder of all such Notes or Warrants.

14.9         Severability. If one or more provisions of this Agreement are held to be unenforceable under Applicable Law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

14.10       Additional Agreements. Each holder of Notes understands and agrees that the conversion of the Notes into Conversion Shares and exercise of the Warrants for Warrant Shares may require such holder’s execution of certain agreements (in form reasonably agreeable to the holder) relating to the purchase and sale or registration of such securities.

14.11       Exculpation Among Purchasers of Notes. Each purchaser of Notes acknowledges that it is not relying upon any person, firm, corporation or stockholder, other than the Company and its officers and directors in their capacities as such, in making its investment or decision to invest in the Company. Each purchaser agrees that no other purchaser nor the respective controlling persons, officers, directors, partners, agents, stockholders or employees of any other Investor shall be liable for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase and sale of the Securities.

14.12       Further Assurance. From time to time, the Company shall execute and deliver to the Investors such additional documents and shall provide such additional information to the holders of Notes as any holder may reasonably require to carry out the terms of this Agreement and the Notes and any agreements executed in connection herewith or therewith, or to be informed of the financial and business conditions and prospects of the Company.

14.13       Waiver of Jury Trial. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[Signature Page to Note and Warrant Purchase Agreement]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[Signature Page to Note and Warrant Purchase Agreement]

Address for Notices: 

PureTech Health LLC 

6 Tide Street, Suite 400 

Boston, MA 02210 

Attention: Legal Department

Exhibit 10.2

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

CONVERTIBLE SENIOR SECURED PROMISSORY NOTE

$

FOR VALUE RECEIVED, Gelesis Holdings, Inc. a Delaware corporation (the “Company”) and Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), hereby promises to pay to the order of [______________] as nominee (the “Holder”), the principal sum of [______________] DOLLARS ($[______________]) (or so much thereof as shall not have been converted, redeemed or prepaid), together with interest, which shall accrue at a rate of twelve percent (12%) per annum, compounded annually, on the Maturity Date.

This Note is one of a series of Notes issued pursuant to that certain Note and Warrant Purchase Agreement, dated February 21, 2023, by and among the Company, the Co-Issuer, the Guarantors, and the Investors named therein (the “Purchase Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement.

1.            Payments. All payments shall be made in lawful money of the United States of America, at the principal office of the Company, via wire transfer of immediately available funds to the Holder, or at such other place as the holder hereof may from time to time designate in writing to the Company. Prepayment of principal, together with accrued interest, may not be made without the Holder’s consent. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

2.            Guarantee. This Note is guaranteed by the Guarantors to the extent provided in Section 13 of the Purchase Agreement. Reference is hereby made to Section 13 of the Purchase Agreement for a description of the nature and extent of such guaranty of this Note and the rights with respect to such guaranty of the Holder.

2.            Security. This Note is secured under that certain Security Agreement (the “Security Agreement”) between the Company and Holder, of even date herewith, attached hereto as Exhibit A. Reference is hereby made to the Security Agreement for a description of the nature and extent of the security for this Note and the rights with respect to such security of the Holder.

4.            Priority. This Note shall be senior in all respects (including right of payment) to all other Indebtedness of the Company, now existing or hereafter.

5.            Conversion of Note. This Note and any amounts due hereunder shall be convertible into Conversion Shares in accordance with Sections 2.10 and 2.11 of the Purchase Agreement.

6.            Optional Redemption. The Notes shall be redeemable at the Company’s option in accordance Section 2.15 of the Purchase Agreement. No sinking fund is provided for the Notes.

7.            Amendments and Waivers; Resolutions of Dispute; Notice. This Note may be amended and the observance of any term of this this Note may be waived pursuant to Section 14.8 of the Purchase Agreement.

8.            Successors and Assigns. This Note applies to, inures to the benefit of, and binds the successors and assigns of the parties hereto; provided, however, that the Company may not assign its obligations under this Note without the written consent of the Holder.

9.            Officers and Directors not Liable. In no event shall any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.

10.           Governing Law. This Note and any controversy arising out of or relating to this Note shall be governed by, and construed in accordance with, the Uniform Commercial Code of the State of Delaware as to matters within the scope thereof, and as to all other matters (including contract law, tort law and matters of fraud) shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to any conflicts or choice of laws provisions thereof that would cause the application of the domestic substantive laws of any other jurisdiction).

IN WITNESS WHEREOF, Company has caused this Note to be duly executed as of date first set forth above.

ACKNOWLEDGED, ACCEPTED
AND AGREED:

HOLDER:

[•]

EXHIBIT A TO PROMISSORY NOTE

HOLDER CONVERSION NOTICE

Gelesis Holdings, Inc.
Gelesis, Inc.
Secured Senior Convertible Promissory Note

[_____], 20[__]

Gelesis Holdings, Inc.
Gelesis, Inc.
501 Boylston Street, Suite 6102
Boston, MA 02116
Attention:        Elliot Maltz, Chief Financial Officer

The above-captioned Holder hereby gives notice to Gelesis Holdings, Inc., a Delaware corporation (the “Company”), and Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), pursuant to that certain Secured Senior Convertible Promissory Note made by the Company and the Co-Issuer in favor of Holder on February [•], 2023 (the “Note”), that Holder elects to convert the portion of its Note balance set forth below into fully paid and non-assessable shares of Common Stock of Company as of the Conversion Date specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of a conflict between this Holder Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Holder in its sole discretion, Holder may provide a new form of Holder Conversion Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

E. Conversion Shares: ___________________________ (per $1,000 principal amount of Notes; fractional shares will be paid in cash.

F. Remaining Outstanding Balance of Note (after this Conversion):

Please transfer the Conversion Shares electronically (via DWAC) to the account set forth on the Holder’s signature page to the Purchase Agreement:

To the extent the Conversion Shares are not able to be delivered to Holder electronically via the DWAC system, deliver all such certificated shares to Holder via reputable overnight courier after receipt of this Holder Conversion Notice (by facsimile transmission or otherwise) shall be made to the mailing address set forth on the Holder’s signature page to the Purchase Agreement.

Sincerely,

Holder: [Insert Name of Holder]

EXHIBIT B TO PROMISSORY NOTE

COMPANY CONVERSION NOTICE

Gelesis Holdings, Inc.
Gelesis, Inc.
Secured Senior Convertible Promissory Note

[_____], 20[__]

Gelesis Holdings, Inc. (the “Company”) and Gelesis, Inc. (the “Co-Issuer”) hereby give notice to you pursuant to that certain Secured Senior Convertible Promissory Note made by the Company and the Co-Issuer in favor of you, as a Holder, on February [•], 2023 (the “Note”), that all outstanding Notes are called for conversion into fully paid and non-assessable shares of Common Stock of Company as of the Company Conversion Date specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of a conflict between this Company Conversion Notice and the Note, the Note shall govern. The Company and the Co-Issuer hereby confirms that the Notes are eligible for Company Conversion because each of the Company Conversion Conditions has occurred. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

E. Conversion Shares: ___________________________ (per $1,000 principal amount of Notes; fractional shares will be paid in cash.

Conversion Shares will be delivered to you electronically (via DWAC) to the account set forth on your signature page to the Purchase Agreement:

To the extent the Conversion Shares are not able to be delivered to you electronically via the DWAC system, we will deliver certificated shares to you via reputable overnight courier to the mailing address set forth on your signature page to the Purchase Agreement.

Sincerely,

Gelesis Holdings, Inc.

EXHIBIT C TO PROMISSORY NOTE

OPTIONAL REDEMPTION NOTICE

Gelesis Holdings, Inc.
Gelesis, Inc.
Secured Senior Convertible Promissory Note

[_____], 20[__]

Gelesis Holdings, Inc. (the “Company”) and Gelesis, Inc. (the “Co-Issuer”) hereby give notice to you pursuant to that certain Secured Senior Convertible Promissory Note made by the Company and the Co-Issuer in favor of you, as a Holder, on February [•], 2023 (the “Note”), that all your outstanding Notes are called for redemption on the Redemption Date specified below. Said redemption shall be based on the Redemption Price set forth below. In the event of a conflict between this Holder Conversion Notice and the Note, the Note shall govern. The Company and the Co-Issuer hereby confirms that the Notes are eligible for Company Conversion because each of the Company Conversion Conditions has occurred. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

The Redemption Price payable to you will be delivered to you via wire transfer of immediately available funds via the wire instructions you provided in your signature page to the Purchase Agreement:

Sincerely,

Exhibit 10.3

THIS WARRANT AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

WARRANT TO PURCHASE COMMON STOCK

OF

GELESIS HOLDINGS, INC.

Gelesis Holdings, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received and pursuant to the Note and Warrant Purchase Agreement, dated as of February [__], 2023, by and among the Company and the Investors named therein (the “Purchase Agreement”), [Name of Holder] (together with its successors and assigns and any transferee of this Warrant, and its successors and assigns, the “Holder”), is entitled, subject to the terms and conditions set forth in this warrant (this “Warrant”), to purchase from the Company, at any time or times on or after the Stockholder Approval Date, but not after 5:00 P.M., New York City time on the fifth anniversary of the Stockholder Approval Date (the “Expiration Date”), [_______]¹ duly authorized, validly issued, fully paid, nonassessable shares of Common Stock (as defined below), which shall be adjusted or readjusted from time to time as provided in this Warrant (as adjusted, (the “Warrant Shares”), at a purchase price per share equal to $[___]², which shall be adjusted from time to time as provided in this Warrant (as adjusted, (the “Warrant Price”).

This Warrant is one of the warrants to purchase Common Stock (collectively, the “Warrants,” such term to include any warrants issued in substitution therefor) issued pursuant to the Purchase Agreement, and the holders of the Warrants shall be collectively referred to herein as the “Holders.” The Warrants evidence rights to purchase an aggregate of [_______] shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), subject to adjustment as provided herein and therein. All capitalized terms used herein and not otherwise defined herein, either within the text in which it first appears or in Section 5.17, shall have the meanings set forth in the Purchase Agreement.

¹           Insert a number of shares that represents (i) 130% warrant coverage for the Initial Notes, (i) 175% warrant coverage for the Additional Notes, (iii) up to 175% warrant coverage for Other Investor Notes, as determined by the Company and the Other Investors or (iv) if Other Investor Notes are issued, the difference between the warrant coverage for the Other Investor Notes and 130%, for the additional Initial Notes.

²      Insert an exercise price equal to the average official closing price for the Common Stock during the five trading days immediately preceding the date of issuance.

Section 1.      Exercise of Warrant

(a)            Exercise The Holder may exercise this Warrant, in whole or in part (except as to a fractional share), at any time and from time to time during normal business hours on any Business Day on or after the Stockholder Approval Date and on or prior to the Expiration Date, by (i) delivering to the Company a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), duly executed by the Holder, specifying the number of Warrant Shares as to which the Warrant is being exercised, (ii) surrendering this Warrant to the Company, properly endorsed by the Holder (or if this Warrant has been destroyed, stolen or has otherwise been misplaced, by delivering to the Company an affidavit of loss duly executed by the Holder), and (iii) by tendering payment for the shares of Common Stock designated by the Exercise Notice in lawful money of the United States in the form of cash, bank or certified check made payable to the order of the Company, or by wire transfer of immediately available funds, or by the cancellation of Indebtedness of the Company owed to the Holder, or in any combination thereof, of an amount equal to the product of (A) the Warrant Price and (B) the number of Warrant Shares as to which this Warrant is being exercised.

(b)            Net Exercise The Holder may, in lieu of exercising or converting this Warrant pursuant to the terms of Section 1.1(a), elect to net exercise this Warrant, in whole or in part (except as to a fractional share), at any time and from time to time during normal business hours on any Business Day on or after the Stockholder Approval Date and on or prior to the Expiration Date by (i) delivering to the Company a written notice, in the form attached hereto as Exhibit B (the “Net Exercise Notice”), duly executed by the Holder, specifying the number of Warrant Shares for which the Warrant is being net exercised, and (ii) surrendering this Warrant to the Company, properly endorsed by the Holder (or if this Warrant has been destroyed, stolen or has otherwise been misplaced, by delivering to the Company an affidavit of loss duly executed by the Holder), and the Holder shall thereupon been entitled to receive the number of Warrant Shares equal to the product of (i) the number of Warrant Shares issuable upon exercise of this Warrant (or, if only a portion of this Warrant is being exercised, issuable upon the exercise of such portion) for cash, determined as provided in Section 2, and (ii) a fraction, the numerator of which is the Fair Market Value per share of Common Stock at the time of such exercise minus the Warrant Price in effect at the time of such exercise, and the denominator of which is the Fair Market Value per share of Common Stock at the time of such exercise, such number of shares so issuable upon such net exercise to be rounded up or down to the nearest whole number of shares of Common Stock.

(c)            The “net exercise” of this Warrant pursuant to Section 1.1(b) is intended to qualify as a recapitalization within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended.

(d)            For all purposes of this Warrant (other than this Section 1.1), any reference herein to the “exercise” of this Warrant shall be deemed to include a reference to the net exercise of this Warrant into Common Stock in accordance with the terms of Section 1.1(b), and any reference to an “Exercise Notice” shall be deemed to include a reference to a Net Exercise in accordance with the terms of Section 1.1(b).

1.2.         When Exercise Effective Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the Business Day on which this Warrant shall be deemed to have been surrendered to the Company as provided in Section 1.1, and at such time the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such exercise as provided in Section 1.3 shall be deemed to have become the Holder or Holders of record thereof.

1.3.         Delivery of Stock Certificates Upon Exercise As soon as practicable after exercise of this Warrant in accordance with this Section 1, but in no event later than five (5) Business Days after such exercise, the Company shall at its expense cause to be issued in the name of and delivered to the Holder or, subject to Section 5 of this Warrant, as the Holder may direct: (a) a certificate or certificates for the number of Warrant Shares, determined as provided in Section 2 of this Warrant, to which the Holder shall be entitled upon such exercise and, (b) unless this Warrant has expired or has been exercised in full, a new Warrant (or Warrants) substantially in the form of, and on the terms in, this Warrant, for the number of Warrant Shares remaining following such exercise, and shall be subject to adjustment as provided for in this Warrant as of the date hereof.

Section 2. Adjustments to Warrant Price and Warrant Shares

(a)            Subdivision or Combination of Common Stock If the Company shall at any time after the date hereof subdivide its outstanding shares of Common Stock into a greater number of shares (by any stock split, stock dividend or otherwise), then the Warrant Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares for which the Warrant is then exercisable will be proportionately increased, and, conversely, if the Company shall at any time after the date hereof combine its outstanding shares of Common Stock into a smaller number of shares (by any reverse stock split or otherwise), then the Warrant Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares for which the Warrant is then exercisable will be proportionately reduced.

(b)            Reorganization or Reclassification If any capital reorganization or reclassification of the capital stock of the Company other than a transaction described in Section 2(d) below shall be effected in such a way that Holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock, then, as a condition of such reorganization or reclassification, lawful and adequate provisions shall be made whereby the Holder shall thereupon have the right to receive, upon the basis and upon the terms and conditions specified herein and in lieu of the Warrant Shares immediately theretofore receivable upon the exercise of this Warrant in full, as the case may be, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock immediately theretofore receivable upon such exercise of this Warrant in full had such reorganization or reclassification not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Warrant Price) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights.

(c)             Dividends and Distributions. If the Company at any time or from time to time after the date hereof makes or issues, or fixes a record date for the determination of Holders of capital stock of the Company entitled to receive, a dividend or other distribution payable in:

(i)            securities or other property of the Company other than shares of Common Stock, Options or Convertible Securities then the Holder shall receive such dividend or distribution as if the Holders had exercised all of the Warrants in full on the date such record is taken; and

(ii)            Common Stock, Options or Convertible Securities, then the Warrant Price in effect immediately prior to such dividend or distribution shall be proportionately reduced and the number of Warrant Shares for which the Warrant is then exercisable will be proportionately increased.

(d)            Adjustment for Merger or Consolidation, etc.; Fundamental Change. In the event that the Company shall effect any change of control, merger or consolidation of the Company with or into another corporation (or other legal entity), or any sale of all or substantially all of the assets of the Company to another corporation (or other legal entity) (a “Fundamental Change”), this Warrant shall be exchanged for the kind and amount of shares of stock or other securities or property (including cash, if applicable) to which a Holder of the number of shares of Common Stock of the Company deliverable upon the exercise of this Warrant in full would have been entitled upon such Fundamental Change (and any distribution of assets to stockholders following such Fundamental Change).

(e)            Record Date. If the Company takes a record of the Holders of its Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities, or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

Section 3. Covenants of the Company

3.1.         The Company covenants and agrees that:

(a)            all shares of Common Stock that may be issued upon the exercise of the rights represented by this Warrant shall have been duly authorized, and shall, upon issuance, be validly issued, fully paid and nonassessable;

(b)            during the period within which this Warrant may be exercised, it will at all times have authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of rights represented by this Warrant;

(c)            if any shares of Common Stock reserved or to be reserved to provide for the exercise of this Warrant require registration with or approval of any governmental or self-regulatory authority under any federal or state law or stock exchange rule before such shares may be validly issued, then it shall in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be;

(d)            it shall comply with the reporting requirements of Sections 13 and 15(d) of Securities and Exchange Act of 1934, as amended, and will comply with all other public information reporting requirements the Securities and Exchange Commission (including Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”)) from time to time in effect and relating to the availability of an exemption from the Securities Act for the sale of any restricted securities; and

(e)            it shall not, by amendment to its certificate of incorporation (whether by way of merger, operation of law, or otherwise) or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, agreement or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company and shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders against impairment as if the Holder was a stockholder of the Company entitled to the benefit of fiduciary duties afforded to stockholders under Delaware law. Any successor to the Company shall agree in writing, as a condition to such succession, to carry out and observe the obligations of the Company hereunder with respect to the Warrants.

Section 4. Reserved

Section 5. Miscellaneous

5.1.            Notice of Adjustments. In each case of any adjustment or readjustment in the Warrant Price and the Warrant Shares issuable upon exercise of this Warrant, the Company shall promptly thereafter compute such adjustment or readjustment in accordance with the terms of this Warrant and provide written report thereof certified by an officer of the Company to the Holder stating the number of Warrant Shares and the Warrant Price, after giving effect to such adjustment or readjustment, and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

5.2.         Notice of Certain Events In case at any time:

(a)            the Company shall pay any dividend upon, or make any distribution in respect of, its stock;

(b)            the Company shall propose to register any of its equity securities under the Securities Act in connection with a public offering;

(c)            there shall be a Fundamental Change; or

(d)            there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

then, in any one or more of said cases, the Company shall give notice to Holder of the date on which (i) the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or (ii) such public offering, Fundamental Change, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall be given not less than ten (10) days prior to the record date or the date on which the transfer books of the Company are to be closed in respect thereto in the case of an action specified in clause (i) and at least twenty (20) days prior to the action in question in the case of an action specified in clause (ii).

5.3.         Notices All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, if not so confirmed, then on the next business day if sent after normal business hours of the recipient, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 5.3):

 If to the Company:

 Gelesis Holdings, Inc.

 501 Boylston Street, Suite 6102

 Boston, MA 02116

 Attention:      Elliot Maltz, Chief Financial Officer

 Email: emaltz@gelesis.com

 with a copy (which shall not constitute notice) to:

 Goodwin Procter LLP

 100 Northern Avenue

 Boston, MA 02210

 Attention:      Jim Barrett

 Ettore Santucci

 Email: JBarrett@goodwinlaw.com

 Email: ESantucci@goodwinlaw.com

If to the Holder:

  [Holder Name]

 [Address]

 [Address]

 Attn: [Title]

 Facsimile: [Number]

5.4.         No Change in Warrant Terms on Adjustment Irrespective of any adjustment in the Warrant Price or the number of shares of Common Stock, this Warrant, whether theretofore or thereafter issued or reissued, may continue to express the same price and number of shares of Common Stock as are stated herein and the Warrant Price and such number of Common Stock shares specified herein shall be deemed to have been so adjusted.

5.5.         Issuance and Transfer Taxes The issuance of certificates for shares of Common Stock upon any exercise of this Warrant shall be made without charge to Holder for any issuance tax in respect thereto; provided, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of Holder or upon any transfer of this Warrant.

5.7.         Exchange of Warrant This Warrant is exchangeable at no cost to the Holder upon the surrender hereof by Holder at such office or agency of the Company, for a new warrant of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares that may be subscribed for and purchased hereunder from time to time after giving effect to all the provisions hereof, each of such new warrants to represent the right to subscribe for and purchase such number of shares as shall be designated by said Holder hereof at the time of such surrender.

5.8.         Lost, Stolen, Mutilated or Destroyed Warrant If this Warrant is lost, stolen, mutilated or destroyed, the Company shall at no cost to the Holder, on such terms as to indemnity or otherwise as it may in its discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

5.9.         Successors and Assigns Except as otherwise provided herein, the terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective successors and assigns of the parties; provided, however, that the parties may not assign their rights or obligations under this Warrant without the written consent of the Company and the Holder. Nothing in this Warrant, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Warrant, except as expressly provided in this Warrant.

5.10.       Governing Law This Warrant shall be governed by and interpreted and determined in accordance with the laws of the State of Delaware (excluding the laws and rules of law applicable to conflicts or choice of law).

5.11.       Titles and Subtitles The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.

5.12.       Severability If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5.13.       Entire Agreement This Warrant, the Purchase Agreement and the other documents delivered pursuant hereto and thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

5.14.       No Rights or Liabilities as Stockholder. Except as expressly set forth herein, nothing contained in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company or as imposing any obligation on Holder to purchase any securities or as imposing any liabilities on Holder as a stockholder of the Company, whether such obligation or liabilities are asserted by the Company or creditors of the Company.

5.15.       Amendments and Waivers.

5.16.       Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. Certain Definitions. The following terms as used in this Warrant shall have the following meanings:

(a)            “Board” means the Board of Directors of the Company.

(b)            “Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

(c)            “Convertible Securities” means any stock or security convertible into or exercisable or exchangeable for Common Stock.

(d)            “Fair Market Value” means (i) the average closing price of Common Stock for the five (5) trading days ending on the trading day prior to the date on which Net Exercise Notice is sent to the Company pursuant to Section 1.1(b), or (ii) fair market value of a share of Common Stock as determined in good faith by the Board if (i) is not applicable.

(e)            “Options” means any warrants or other rights to subscribe for or to purchase, or any options to purchase, shares of Common Stock.

(f)             “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

(g)            “Stockholder Approval Date” shall mean the date the Company has received Stockholder Approval (as defined in the Purchase Agreement”).

(Signature Page Follows)

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized as of the date first written above.

[Signature Page to Warrant]

EXHIBIT A

FORM OF EXERCISE NOTICE

[To be executed only upon exercise of Warrant pursuant to Section 1.1(a)]

The undersigned registered Holder of the within Warrant hereby irrevocably exercises such Warrant for, and purchases thereunder, ____³ shares of the Common Stock and herewith makes payment of $__________ therefor, and requests that the certificates for such shares or certificateless shares be issued in the name of, and delivered to _____________________, whose address is_____________________________________.

 ³           Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised). In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered in accordance with the terms of the Warrant, representing the unexercised portion of the Warrant, to the Holder surrendering the Warrant.

EXHIBIT B

FORM OF NET EXERCISE NOTICE

[To be executed only upon net exercise of the Warrant pursuant to Section 1.1(b)]

The undersigned registered Holder of the within Warrant hereby irrevocably net exercises such Warrant with respect to _________⁴ shares of the Common Stock pursuant to the net exercise provisions of Section 1.1(b), and requests that the certificates for such shares be issued in the name of, and delivered to _____________________, whose address is _________________________.

 ⁴           Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised). In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered in accordance with the terms of the Warrant, representing the unexercised portion of the Warrant, to the Holder surrendering the Warrant.

Exhibit 10.4

SECURITY AND PLEDGE AGREEMENT

Dated as of February 21, 2023

among

Each Grantor From Time to Time Party Hereto

and

PureTech Health LLC

in its Capacity as the Secured Party for the Holders

12.0% Convertible Senior Secured Notes due 2023

TABLE OF CONTENTS

This SECURITY AND PLEDGE AGREEMENT is dated as of February 21, 2023, by and among (i) Gelesis Holdings, Inc., a Delaware corporation (the “Company”), Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), Gelesis 2012, Inc., a Delaware corporation, Gelesis, LLC, a Delaware limited liability company, and those additional Persons that hereafter become parties hereto by executing a joinder agreement (the “Grantors,” as more fully set forth in Section 1), and (ii) PureTech Health LLC, a Delaware limited liability company (in its individual capacity, “Initial Holder”), as agent for all of the Holders (the “Secured Party”).

W I T N E S S E T H:

WHEREAS, reference is made to that certain Note and Warrant Purchase Agreement, dated as of the date hereof (the “Issue Date”) (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “NPA”) by and among the Company, the Co-Issuer, the Initial Holder and the other the individuals and entities who become parties thereto from time to time (together with the Initial Holder, the “Holders”);

WHEREAS, pursuant to the NPA, the Company has issued $5,000,000 principal amount of its 12.0% Convertible Senior Secured Notes due 2023 (together with any additional notes issued pursuant to Section 2.3 of the NPA, the “Notes”) upon the terms and subject to the conditions set forth therein to the Initial Holder;

WHEREAS, this Agreement is made by the Grantors in favor of the Secured Party to secure the payment and performance in full when due of the Secured Obligations (as defined below).

NOW, THEREFORE, for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.            Defined Terms. All initially capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the NPA. Any terms (whether capitalized or lower case) used in this Agreement that are defined in the Code (as defined below) (including, without limitation, Account, Account Debtor, Chattel Paper, Commercial Tort Claims, Deposit Account, Drafts, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Inventory, Instruments, Letters of Credit, Letter of Credit Rights, Promissory Notes, Proceeds, Securities Account and Supporting Obligations) shall be construed and defined as set forth in the Code unless otherwise defined herein or in the NPA; provided, that to the extent that the Code is used to define any term used herein and if such term is defined differently in different articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. The terms defined in this Section 1 include the plural as well as the singular. In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:

“Account” means an account (as that term is defined in Article 9 of the Code).

“Account Control Agreement” means, with respect to any deposit account, commodity account or securities account maintained by any Grantor (other than any Excluded Account), an account control agreement in form and substance reasonably satisfactory to the Secured Party, duly executed and delivered by such Grantor and the depositary bank, commodity intermediary or the securities intermediary, as the case may be, with which such account is maintained, effective to grant “control” (within the meaning of Articles 8 and 9 under the applicable UCC) over such account to the Secured Party.

“Acquisition Documents” means the agreements, instruments and documents evidencing or entered into in connection with an acquisition permitted under the Note Documents by a Grantor.

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting stock or by contract or otherwise; provided, that the Secured Party shall not be deemed to be an Affiliate of any Grantor or of any Subsidiary of any Grantor solely by reason of the provisions of the Note Documents.

“Agreement” means this agreement as originally executed or, if amended, restated or otherwise modified from time to time as herein provided, as so amended, restated or modified.

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

“Books” means books, records (including each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s goods or General Intangibles related to such information), files, correspondence, customer lists, supplier lists and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

“Captive Insurance Subsidiary” means any Subsidiary of any Grantor that is subject to regulation as an insurance company (or any Subsidiary thereof).

“Code” means the New York Uniform Commercial Code, as in effect from time to time; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to the Secured Party’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” means the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

“Collateral” has the meaning specified therefor in Section 2.

“Collateral Documents” means, collectively, this Agreement, any Mortgages, each Account Control Agreement, each Copyright Security Agreement, each Patent Security Agreement, each Trademark Security Agreement and all supplements to any of the foregoing and other instruments or documents or delivered by any Grantor or any other Person pledging or granting a lien on Collateral or guarantying the payment and performance of the Secured Obligations pursuant to the NPA or any of the other Note Documents in order to grant to the Secured Party, on behalf of the Holders, a Lien on any real, personal or mixed property of that Grantor as security for the Secured Obligations, as any of the foregoing may be amended, restated and/or modified from time to time.

“Collateral Support” means all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds).

“Commercial Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 2.

“Company” shall have the meaning specified in the first paragraph of this Agreement, and subject to the provisions of Section 13.1 of the NPA, shall include its successors and assigns.

“Controlled Foreign Corporation” means a “controlled foreign corporation” within the meaning of Section 957 of the U.S. Internal Revenue Code of 1986, as amended.

“Copyright Security Agreement” means each Copyright Security Agreement executed and delivered by Grantors, or any of them, and the Secured Party, in substantially the form of Exhibit A.

“Copyrights” means any and all rights in any works of authorship and derivative works, whether published or unpublished, including (i) copyrights and moral rights, (ii) copyright registrations and recordings thereof and all applications in connection therewith including those listed on Schedule 3, (iii) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements, misappropriations, and violations thereof, (iv) the right to sue for past, present, and future infringements, misappropriations, and violations thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

“Excluded Account” means any deposit, commodities or securities account (i) that is used solely for payroll, payroll taxes and other employee wage and benefit payments; (ii) that solely functions as a trust, fiduciary, escrow, withholding or tax payment account; (iii) that is a deposit account subject to a zero balance; or (iv) that does not as of the end of any Business Day have cash, investment property, or other amounts, including Cash Equivalents, on deposit therein in excess of (i) $100,000 individually, or $250,000 in the aggregate, for all such accounts.

“Excluded Subsidiary” means each of Gelesis Securities Corporation, One S.r.l, Gelesis S.r.l., and Fondo per la Ricerca e l’Innovazione SRL.

“Excluded Property” means any of the following:

(a)            any general intangible or authorization, permit, lease, license, franchise, charter, contract, Intellectual Property, property right or agreement to which any Grantor is a party or any of its rights, title or interests thereunder if and only to the extent that the grant of a security interest hereunder shall constitute or result in a breach of a term or provision of, or the termination of the abandonment, invalidation or unenforceability or a default under the terms of, such authorization, permit, lease, license, contract, franchise, charter, Intellectual Property, property right or agreement (other than to the extent that any such law, rule, regulation, term or provision would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code of any relevant jurisdiction or any other applicable law (including any debtor relief law or principle of equity)); provided, however, that the Collateral shall include (and such Security Interest shall attach and the definition of Excluded Property shall not then include) immediately at such time as the contractual or legal provisions referred to above shall no longer be applicable and to the extent severable, and shall attach immediately to any portion of such permit, lease, license, contract or agreement not subject to the provisions specified above;

(b)            any letter-of-credit rights to the extent any Grantor is required by applicable law to apply the proceeds of a drawing of such letter of credit for a specified purpose;

(c)            Capital stock in (i) in any joint venture with a third party that is not an Affiliate, to the extent a pledge of such capital stock is prohibited by the documents covering such joint venture; or (ii) any Excluded Subsidiary;

(d)            Excluded Accounts;

(e)            (i) with respect to any Trademarks, applications in the PTO to register Trademarks on the basis of any of Grantor’s “intent to use” such Trademarks will not be deemed to be Collateral unless and until a “statement of use” or “amendment to allege use” has been filed and accepted in the PTO, whereupon such application shall be automatically subject to the Security Interest granted herein and deemed to be included in the Collateral, and (ii) with respect to any other Trademark or any Patents or Copyrights, such Trademarks, Patents or Copyrights will not be deemed to be Collateral if the creation of a Security Interest therein will constitute or result in the abandonment, impairment, invalidation or unenforceability thereof any assets to the extent and for so long as the pledge of such assets is prohibited by law and such prohibition is not overridden by the Code or other applicable law;

(f)            margin stock (within the meaning of Regulation U issued by the Federal Reserve Board) to the extent the creation of a Security Interest therein in favor of the Secured Party will result in a violation of Regulation U issued by the Federal Reserve Board;

(g)            any property subject to a purchase money arrangement or capital lease obligation constituting Permitted Debt to the extent that a grant of a Security Interest therein would violate or invalidate such purchase money arrangement or capital lease obligation or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the Code as in effect in the relevant state or any other applicable law governing such prohibition;

(h)            assets to the extent as to which pledges thereof of Security Interest therein are prohibited or restricted by applicable law (including any requirement to obtain the consent of (i) any governmental authority or (ii) similar regulatory third party, in each case, except to the extent such consent has been obtained).

“Federal Reserve Board” means the United States Federal Reserve Board of Governors.

“Foreign Subsidiary Holding Company” means any direct or indirect subsidiary of a Grantor that has no material assets other than equity and/or indebtedness of one or more Controlled Foreign Corporations.

“General Intangibles” means general intangibles (as that term is defined in the Code), and includes payment intangibles, software, contract rights, rights to payment, rights under hedge agreements (including the right to receive payment on account of the termination (voluntarily or involuntarily) of such hedge agreements), rights arising under common law, statutes, or regulations, choses or things in action, goodwill, Intellectual Property, Intellectual Property Licenses, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under Acquisition Documents, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Property, Negotiable Collateral, and oil, gas, or other minerals before extraction.

“Grantors” shall have the meaning specified in the first paragraph of this Agreement, and subject to the provisions of Section 13.1 of the NPA, shall include its successors and assigns.

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

“Intellectual Property” means any and all (i) Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, operating manuals, blueprints, drawings, data, customer lists, URLs and domain names, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof, (ii) all copies and embodiments of any of the foregoing (in whatever form or medium), (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements, misappropriations, violations thereof, (iv) the right to sue for past, present, and future infringements, misappropriations, and violations thereof, and (v) all rights corresponding thereto throughout the world.

“Intellectual Property Licenses” means, with respect to any Grantor (the “Specified Party”), (i) any licenses or other similar rights provided to the Specified Party in or with respect to Intellectual Property owned or controlled by any other Person, (ii) any licenses or other similar rights provided to any other Person in or with respect to Intellectual Property owned or controlled by the Specified Party, in each case, including (A) any software license agreements (other than license agreements for commercially available off-the-shelf software that is generally available to the public which have been licensed to a Grantor pursuant to end-user licenses), (B) the license agreements listed on Schedule 3, and (C) the right to use any of the licenses or other similar rights described in this definition in connection with the enforcement of the Secured Party’s rights under the Note Documents, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect to clause (i) and (ii) above, including payments there under and damages and payments for past, present, or future infringements, misappropriations, and violations thereof, (iv) the right to sue for past, present, and future breach or violations thereof, and (v) all rights corresponding thereto throughout the world.

“Investment Property” means (i) any and all investment property (as that term is defined in the Code), and (ii) any and all of the following (regardless of whether classified as investment property under the Code): all Pledged Interests, including all Pledged Operating Agreements and Pledged Partnership Agreements.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Mortgage” means any deed of trust, mortgage, deed to secure debt or other document creating a Lien on Real Estate or any interest in Real Estate made by any Grantor in favor of, or for the benefit of, the Secured Party, in form and substance reasonably satisfactory to the Secured Party (taking into account the law of the jurisdiction in which such deed of trust, mortgage, deed to secure debt or other document is to be recorded).

“Negotiable Collateral” means letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), instruments, promissory notes, drafts and documents (as each such term is defined in the Code) and Pledged Notes.

“Note Documents” means the Notes, the NPA and the Collateral Documents.

“NPA” has the meaning set forth in the preamble hereto.

“Patent Security Agreement” means each Patent Security Agreement executed and delivered by Grantors, or any of them, and the Secured Party, in substantially the form of Exhibit B.

“Patents” means patents and patent applications, including (i) the patents and patent applications listed on Schedule 3, (ii) all continuations, divisionals, continuations-in- part, re-examinations, reissues, and renewals thereof and improvements thereon, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements, misappropriations, or violations thereof, (iv) the right to sue for past, present, and future infringements, misappropriations, or violations thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

“Permitted Lien” means any Lien permitted pursuant to Section 10(b) of the NPA.

“Pledged Companies” means each Person listed on Schedule 4 as a “Pledged Company”, together with each other Person, all or a portion of whose capital stock is acquired or otherwise owned by a Grantor after the Issue Date (in each case, other than a Person where all of the capital stock in such Person owned by a Grantor is Excluded Property).

“Pledged Interests” means all of each Grantor’s right, title and interest in and to all of the capital stock listed on Schedule 4 and all other capital stock now owned or hereafter acquired by such Grantor, regardless of class or designation, including on each of the Pledged Companies, and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing the capital stock, the right to receive any certificates representing any of the capital stock, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and the right to receive all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and all cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing, in each case other than Excluded Property.

“Pledged Interests Addendum” means a Pledged Interests Addendum substantially in the form of Exhibit D.

“Pledged Notes” means all of each Grantor’s right, title and interest in and to all of the promissory notes listed on Schedule 4 and all other promissory notes now owned or hereafter acquired by such Grantor, and all substitutions therefor and replacements thereof and all proceeds thereof and all rights relating thereto, in each case other than Excluded Property.

“Pledged Operating Agreements” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements of each of the Pledged Companies that are limited liability companies, in each case other than Excluded Property.

“Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships, in each case other than Excluded Property.

“Proceeds” has the meaning specified therefor in Section 2.

“PTO” means the United States Patent and Trademark Office.

“Real Estate” means any real property owned, leased, subleased or otherwise operated or occupied by any Grantor.

“Records” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

“Secured Obligations” means the obligations of any Grantor and any other obligor under the Note Documents (i) to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings) when due and payable, and all other amounts due or to become due, in each case, under or in connection with the NPA, the Notes and any other Note Document, and (ii) to perform all of their other respective obligations to the Initial Holder and the Holders under the Note Documents, in each case, according to the respective terms thereof.

“Security Interest” has the meaning specified therefor in Section 2.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person or a combination thereof; provided that in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

“Supporting Obligations” means supporting obligations (as such term is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Property.

“Trademark Security Agreement” means each Trademark Security Agreement executed and delivered by Grantors, or any of them, and the Secured Party, in substantially the form of Exhibit C.

“Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, trade styles, service marks, registered service marks and service mark applications, including (i) the trade names, registered trademarks, trademark applications, registered service marks and service mark applications listed on Schedule 3, (ii) all renewals thereof, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements, misappropriations, violations, or dilutions thereof, (iv) the right to sue for past, present and future infringements and dilutions thereof, (v) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (vi) all of each Grantor’s rights corresponding thereto throughout the world.

“URL” means “uniform resource locator,” an internet web address.

“Vehicles” means motor vehicles and other assets subject to a certificate of title statute.

2.            Grant of Security.

(a)            Each Grantor hereby unconditionally grants to the Secured Party to secure the Secured Obligations, a continuing security interest (hereinafter referred to as the “Security Interest”) in all of such Grantor’s right, title, and interest in and to the following, whether now owned or hereafter acquired or arising and wherever located (the “Collateral”):

 (i)            all of such Grantor’s Accounts;

 (ii)           all of such Grantor’s Books;

 (iii)          all of such Grantor’s Chattel Paper;

 (iv)          all of such Grantor’s Deposit Accounts and Securities Accounts (including any escrow accounts);

 (v)           all of such Grantor’s Goods, Equipment and Fixtures;

 (vi)          all of such Grantor’s General Intangibles;

 (vii)         all of such Grantor’s Intellectual Property and Intellectual Property Licenses;

 (viii)        all of such Grantor’s Documents;

 (ix)          all of such Grantor’s Inventory;

 (x)           all of such Grantor’s Investment Property;

 (xi)          all of such Grantor’s Negotiable Collateral;

 (xii)         all of such Grantor’s Supporting Obligations;

 (xiii)        all of such Grantor’s Commercial Tort Claims;

 (xiv)        all of such Grantor’s Pledged Interests (including all of such Grantor’s Pledged Operating Agreements and Pledged Partnership Agreements);

 (xv)         all of such Grantor’s money or cash equivalents or other assets of such Grantor that now or hereafter come into existence, whether or not in the possession, custody, or control of the Secured Party (or its agent or designee) or the Secured Party; and

 (xvi)        all of the Proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Collateral Support, Deposit Accounts, Securities Accounts, Equipment, Fixtures, General Intangibles, Goods, Intellectual Property, Intellectual Property Licenses, Inventory, Pledged Interests, Investment Property, Negotiable Collateral, Supporting Obligations, Vehicles, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing (the “Proceeds”). Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Secured Party from time to time with respect to any of the Investment Property.

Notwithstanding anything contained in this Agreement to the contrary the term “Collateral” shall not include any Excluded Property, no security interest shall be granted on any such Excluded Property, and no perfection action required under this Agreement shall be required with respect to any Excluded Property.

3.            Security for Secured Obligations. The Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement also secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by the Grantors, or any of them, to the Secured Party, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving any Grantor due to the existence of such Insolvency Proceeding. Further, the Security Interest created hereby encumbers each Grantor’s right, title, and interest in all Collateral, whether now owned by such Grantor or hereafter acquired, obtained, developed, or created by such Grantor and wherever located.

4.            Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Party of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement, the NPA or any other Note Document, Grantors shall have the right to possession and enjoyment of the Collateral for the purpose of conducting the ordinary course of their respective businesses, subject to and upon the terms hereof and of the NPA and the other Note Documents. Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, dividend, and distribution rights, shall remain in the applicable Grantor until the occurrence and continuance of an Event of Default.

5.            Representations and Warranties. Each Grantor hereby represents and warrants to the Secured Party that as of the Issue Date:

(a)            The exact legal name (within the meaning of Section 9-503 of the Code) of each Grantor, type of entity of each Grantor, its jurisdiction of organization, the organizational number issued to it by its jurisdiction of organization and its federal employer or tax identification number are set forth on Schedule 1.

(b)            Each Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Schedule 1; each grantor has no other places of business except those set forth on Schedule 1. As of the Issue Date, all of each Grantor’s locations where Collateral is located are listed on Schedule 1. All of said locations are owned by such Grantor except for locations (i) which are leased by such Grantor as lessee and set forth on Schedule 1 and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as set forth on Schedule 1.

(c)            Schedule 2 sets forth all Commercial Tort Claims of any Grantor for which the expected amount recoverable exceeds $500,000.

(d)            Schedule 3 provides a complete and correct list of (i) all registered Copyrights owned by any Grantor and all applications for registration of Copyrights owned by any Grantor, (ii) all Intellectual Property Licenses entered into by any Grantor pursuant to which (A) any Grantor has provided any license or other rights in Intellectual Property that is material to the business of such Grantor owned or controlled by such Grantor to any other Person other than non-exclusive licenses granted in the ordinary course of business or (B) any Person has granted to any Grantor any exclusive license or other rights in Intellectual Property owned or controlled by such Person that is material to the business of such Grantor, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Grantor, other than licenses of commercially-available software, (iii) all Patents owned by any Grantor and all applications for Patents owned by any Grantor, and (iv) all registered Trademarks owned by any Grantor, all applications for registration of Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor and material to the conduct of the business of any Grantor.

(e)            This Agreement creates a valid security interest in the Collateral of each Grantor, to the extent a security interest therein can be created under the Code, securing the payment of the Secured Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor, as a debtor, and the Secured Party, as secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 5. Upon the making of such filings, the Secured Party shall have a perfected security interest in and upon the Collateral (subordinate only to Permitted Liens) to the extent such security interest can be perfected by the filing of a financing statement. Upon filing of the Copyright Security Agreement with the United States Copyright Office, filing of the Patent Security Agreement and the Trademark Security Agreement with the PTO, and the filing of appropriate financing statements in the jurisdictions listed on Schedule 5, all action necessary to protect and perfect the Security Interest in the United States in and on each Grantor’s Patents, Trademarks, or Copyrights has been taken and such perfected Security Interest is enforceable as such as against any and all creditors of and purchasers from any Grantor.

(f)            Schedule 4 provides a complete and correct list of all capital stock owned by any Grantor and all other investment property owned by any Grantor.

(g)            (i) Except for the Security Interest created hereby, each Grantor is the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule 4 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the Issue Date, (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid, nonassessable, and, to the extent that (x) such Pledged Interests are “securities” for purposes of Articles 8 and 9 of the Code or (y) the applicable Pledged Company has elected to have such Pledged Interests treated as “securities” for such purposes, certificated and the Pledged Interests constitute or will constitute the percentage of the issued and outstanding capital stock of the Pledged Companies of such Grantor identified on Schedule 4 as supplemented or modified by any Pledged Interests Addendum, (iii) such Grantor has the right and requisite authority to pledge, the Investment Property pledged by such Grantor to the Secured Party as provided herein, (iv) all actions necessary to perfect and establish, or otherwise protect, the Secured Party’s Liens in the Investment Property, and the proceeds thereof, will have been duly taken (provided that no perfection actions shall be required with respect to any Investment Property in any jurisdiction outside of the United States of America), upon (A) the execution and delivery of this Agreement, (B) the taking of possession by the Secured Party (or its agent or designee) of any certificates representing the Pledged Interests, together with undated powers (or other documents of transfer acceptable to the Secured Party) endorsed in blank by the applicable Grantor, and (C) the filing of financing statements in the applicable jurisdiction set forth on Schedule 5 for such Grantor with respect to the Pledged Interests of such Grantor that are not represented by certificates, and (v) each Grantor has delivered to and deposited with the Secured Party all certificates representing the Pledged Interests owned by such Grantor to the extent such Pledged Interests are represented by certificates, and undated powers (or other documents of transfer acceptable to the Secured Party) endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.

(h)            No consent, approval, authorization, or other order or other action by, and no notice to or filing with, any governmental authority or any other Person is required (i) for the grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by the Secured Party of the voting or other rights provided for in this Agreement with respect to the Investment Property or the remedies in respect of the Collateral pursuant to this Agreement, except as may be required (x) in connection with such disposition of Investment Property by laws affecting the offering and sale of securities generally and (y) in connection with the voting or disposition of Pledged Interests or any other Collateral in order to comply with applicable law. No Intellectual Property License of any Grantor that is necessary to the conduct of such Grantor’s business requires any consent of any other Person in order for such Grantor to grant the security interest granted hereunder in such Grantor’s right, title or interest in or to such Intellectual Property License.

(i)            Schedule 6 provides a complete and correct list of all of the Deposit Accounts and Securities Accounts owned by any Grantor as of the Issue Date.

(j)            To each Grantor’s knowledge, there is no default, breach, violation, or event of acceleration existing under any Pledged Note and no event has occurred or circumstance exists which, with the passage of time or the giving of notice, or both, would constitute a default, breach, violation, or event of acceleration under any Pledged Note. No Grantor that is an obligee under a Pledged Note has waived any default, breach, violation, or event of acceleration under such Pledged Note.

(k)            Schedule 7 provides a complete and correct list of all of the Negotiable Collateral owned by any Grantor.

(l)            As to all limited liability company or partnership interests, issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents and warrants that the Pledged Interests issued pursuant to such agreement (i) are not dealt in or traded on securities exchanges or in securities markets, (ii) do not constitute investment company securities, and (iii) are not held by such Grantor in a Securities Account. In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provides that such Pledged Interests are securities governed by Article 8 of the Code as in effect in any relevant jurisdiction.

6.            Covenants. Each Grantor, jointly and severally, covenants and agrees with the Secured Party that from and after the date of this Agreement and until the date of termination of this Agreement it shall comply with each of the following terms.

(a)            Possession of Collateral.

 (i)            In the event that any Collateral, including Proceeds, is evidenced by or consists of Negotiable Collateral, Investment Property, or Chattel Paper, in each case, having an aggregate value or face amount of $500,000 or more, the Grantors shall promptly (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion) after receipt thereof) notify the Secured Party in writing thereof, and if and to the extent that perfection or priority of the Secured Party’s Security Interest is dependent on or enhanced by possession, the applicable Grantor, promptly (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion)), shall endorse and deliver physical possession of such Negotiable Collateral, Investment Property, or Chattel Paper to the Secured Party, together with such undated powers (or other relevant document of transfer acceptable to the Secured Party) endorsed in blank and shall execute such other documents and instruments as shall be necessary to protect the Secured Party’s security interest therein.

 (ii)            Any limited liability company and any limited partnership controlled by any Grantor shall either (a) not include in its operative documents any provision that any capital stock in such limited liability company or such limited partnership be a “security” as defined under Article 8 of the Code or (b) certificate any capital stock in any such limited liability company or such limited partnership. To the extent an interest in any limited liability company or limited partnership controlled by any Grantor and pledged hereunder is certificated or becomes certificated, (i) each such certificate shall be delivered to the Secured Party and (ii) such Grantor shall fulfill all other requirements under Section 2 applicable in respect thereof.

 (iii)            Each Grantor hereby agrees that if any of the Pledged Interests is at any time not evidenced by certificates of ownership, then each applicable Grantor shall, to the extent permitted by applicable law, (i) if necessary to perfect a security interest in such Pledged Interests, cause such pledge to be recorded on the equityholder register or the books of the issuer, execute any customary pledge forms or other documents necessary or appropriate to complete the pledge and give the Secured Party the right to transfer such Pledged Interests under the terms hereof, (ii) after the occurrence and during the continuance of any Event of Default, it will without further consent by the applicable Grantor comply with instructions of the Secured Party or its nominee with respect to the Pledged Interests, including upon request, (A) cause the organization documents of each such issuer that is a Subsidiary of a Grantor to be amended to provide that such Pledged Interests shall be treated as “securities” for purposes of the Code and (B) cause such Pledged Interests to become certificated and delivered to the Secured Party, (iii) agree that the “issuer’s jurisdiction” (as defined in Section 8-110 of the Code) is the State of New York, (iv) agree to notify the Secured Party upon obtaining actual knowledge of any interest in favor of any person in the applicable Pledged Interests that is materially adverse to the interest of the Secured Party therein, other than any Permitted Liens and (v) waives any right or requirement at any time hereafter to receive a copy of this Agreement in connection with the registration of any Pledged Interests hereunder in the name of the Secured Party or its nominee or the exercise of voting rights by the Secured Party or its nominee to the extent permitted hereunder.

(b)            Chattel Paper.

 (i)            Promptly after acquiring any electronic Chattel Paper (except to the extent constituting Excluded Property) with an aggregate value or face amount equal to or in excess of $500,000 (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion) after receipt thereof) each Grantor shall notify the Secured Party in writing thereof, and shall promptly (and in any event within thirty (30) days) take all steps reasonably necessary to grant the Secured Party control of all electronic Chattel Paper in accordance with the Code and all “transferable records” as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the aggregate value or face amount of such electronic Chattel Paper equals or exceeds $500,000 (except to the extent constituting Excluded Property); and

 (ii)            If any Grantor retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent permitted hereby and by the NPA), promptly mark such Chattel Paper and instruments with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the Security Interest of PureTech Health LLC, as the Secured Party (as each such capitalized terms are defined in that certain Security and Pledge Agreement, dated as of February 21, 2023 (as amended, restated or otherwise modified from time to time), by and among Gelesis Holdings, Inc. and the other Grantors identified therein and PureTech Health LLC, as the Secured Party)” (except to the extent constituting Excluded Property).

(c)            [Reserved].

(d)            [Reserved].

(e)            Commercial Tort Claims. If the Grantors (or any of them) obtain Commercial Tort Claims having a value, or involving an asserted claim, in the amount of $500,000 or more in the aggregate for all Commercial Tort Claims, then the applicable Grantor or Grantors shall promptly (and in any event within thirty (30) days of obtaining such Commercial Tort Claim), notify the Secured Party, in writing, upon incurring or otherwise obtaining such Commercial Tort Claims and, promptly (and in any event within thirty (30) days of obtaining such Commercial Tort Claim (or such later date as may be agreed to by the Secured Party in its sole discretion) after delivery of notice to the Secured Party), amend Schedule 2 to describe such Commercial Tort Claims in a manner that reasonably identifies such Commercial Tort Claims, and file additional financing statements or amendments to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things reasonably necessary to protect the Secured Party’s security interest therein (except to the extent constituting Excluded Property).

(f)             Government Contracts. If any Account or Chattel Paper arises out of a contract or contracts constituting Collateral with the United States of America or any department, agency, or instrumentality thereof (other than with respect to Excluded Property), the Grantors shall promptly (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion) of the creation thereof) notify the Secured Party, in writing, thereof and, promptly (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion) after delivery of notice to the Secured Party), execute an assignment instrument, and take any steps reasonably required in order that all moneys due or to become due under such contract or contracts shall be assigned to the Secured Party (except to the extent constituting Excluded Property) to the extent permitted by applicable law.

(g)            Intellectual Property.

 (i)            In order to facilitate filings with the United States Patent and Trademark Office and the United States Copyright Office, each Grantor shall execute and deliver to the Secured Party one or more Copyright Security Agreements, Trademark Security Agreements, or Patent Security Agreements, or supplements thereto, to further evidence the Secured Party’s Lien on such Grantor’s Patents, Trademarks, or Copyrights, and the General Intangibles of such Grantor relating thereto or represented thereby (except in each case to the extent that any of the foregoing constitute Excluded Property), including, commencing on the six-month anniversary hereof and each six-month anniversary hereafter documentation sufficient to perfect the Secured Party’s Liens on such Intellectual Property or Intellectual Property License for all new Patents or Trademarks that are registered or the subject of pending applications¹ for registrations, and of all exclusive Intellectual Property Licenses that are material to the conduct of such Grantor’s business, in each case, which were entered into, acquired, registered, or for which applications for registration were filed by any Grantor during the immediately preceding six-month period and any statement of use or amendment to allege use was filed with respect to intent-to-use trademark applications. In the case of such registrations or applications therefor, which were acquired by any Grantor, each such Grantor shall file the necessary documents with the appropriate governmental authority identifying the applicable Grantor as the owner (or as a co-owner thereof, if such is the case) of such Intellectual Property.

 (ii)           Each Grantor shall have the duty, with respect to all Intellectual Property owned by such Grantor (whether now existing or hereafter required) that is material to and necessary in the conduct of such Grantor’s business, to take all reasonable and necessary measures to protect and diligently enforce and defend at such Grantor’s expense all of such Intellectual Property, in such Grantor’s reasonable business judgment, including (A) to diligently enforce and defend, including promptly suing for infringement, misappropriation, or dilution and to recover any and all damages for such infringement, misappropriation, or dilution, and filing for opposition, interference, and cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute diligently any trademark application or service mark application that is part of the Trademarks pending as of the date hereof or hereafter until the termination of this Agreement, (C) to prosecute diligently any patent application that is part of the Patents pending as of the date hereof or hereafter until the termination of this Agreement, and (D) to take all reasonable and necessary action to preserve and maintain all of such Grantor’s Trademarks, Patents, Copyrights, Intellectual Property Licenses, and its rights therein, including paying all maintenance fees and filing of applications for renewal, affidavits of use, and affidavits of non-contestability. Each Grantor further agrees not to abandon any Intellectual Property or terminate any Intellectual Property License that is material to and necessary in the conduct of such Grantor’s business. Each Grantor hereby agrees to take the steps described in this Section 6(g)(ii) with respect to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later becomes entitled that is material to and necessary in the conduct of such Grantor’s business.

 (iii)          Each Grantor acknowledges and agrees that the Secured Party shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Grantor. Without limiting the generality of this Section 6(g)(iii), each Grantor acknowledges and agrees that the Secured Party shall not be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but Secured Party may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including reasonable fees and expenses of attorneys, agents and other professionals) shall be for the sole account of such Grantor.

¹ Note to Goodwin: Do any of the Grantors have any pending registration applications? Please refer to IP schedules provided by the company. We will also provide IP search results once available.

 (iv)          Each Grantor shall take reasonable steps to maintain the confidentiality of, and otherwise protect and enforce its rights in, the Intellectual Property that is material to and necessary in the conduct of such Grantor’s business, including, as applicable (A) protecting the secrecy and confidentiality of its confidential information and trade secrets by having and enforcing a policy requiring all current employees, consultants, licensees, vendors and contractors with access to such information to execute appropriate confidentiality agreements, (B) taking actions reasonably necessary to ensure that no trade secret falls into the public domain, and (C) protecting the secrecy and confidentiality of the source code of all software programs and applications of which it is the owner or licensee by having and enforcing a policy requiring any licensees (or sublicensees) of such source code to enter into license agreements with commercially reasonable use and non-disclosure restrictions.

(h)            Investment Property.

 (i)            If any Grantor shall acquire, obtain, receive or become entitled to receive any Pledged Interests after the date hereof, it shall promptly (and in any event within thirty (30) days (or such later date as may be agreed to by the Secured Party in its sole discretion) of acquiring or obtaining such Collateral) deliver to the Secured Party a duly executed Pledged Interests Addendum identifying such Pledged Interests.

 (ii)           Upon the occurrence and during the continuance of an Event of Default, following the request of the Secured Party, all sums of money and property paid or distributed in respect of the Investment Property (except to the extent constituting Excluded Property) that are received by any Grantor shall be held by the Grantors in trust for the benefit of the Secured Party segregated from such Grantor’s other property, and such Grantor shall deliver it forthwith to the Secured Party in the exact form received.

 (iii)          No Grantor shall make or consent to any amendment or other modification or waiver with respect to any Pledged Interests, including any Pledged Operating Agreement or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests, including any Pledged Operating Agreement or Pledged Partnership Agreement, if the same is prohibited pursuant to the NPA.

 (iv)          Each Grantor agrees that it will cooperate with the Secured Party in obtaining all necessary and customary approvals and making all necessary and customary filings under federal, state, local, or foreign law to effect the perfection of the Security Interest on the Investment Property or to effect any sale or transfer thereof (except, in each case, to the extent constituting Excluded Property).

 (v)           As to all limited liability company or partnership interests owned by such Grantor and issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants that the Pledged Interests issued pursuant to such agreement (A) are not and shall not be dealt in or traded on securities exchanges or in securities markets, (B) do not and will not constitute investment company securities, and (C) are not and will not be held by such Grantor in a securities account.

(i)             [Reserved].

(j)             Transfers and Other Liens. No Grantor shall (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral, except as permitted by the NPA, or (ii) create or permit to exist any Lien upon or with respect to any of the Collateral of any Grantor, except for Permitted Liens. The inclusion of Proceeds in the Collateral shall not be deemed to constitute the Secured Party’s consent to any sale or other disposition of any of the Collateral except as permitted in this Agreement or the other Note Documents.

(k)            Pledged Notes. Upon the occurrence and during the continuance of an Event of Default, Grantors (i) without the prior written consent of the Secured Party, will not (A) waive or release any obligation of any Person that is obligated under any of the Pledged Notes, (B) take or omit to take any action or knowingly suffer or permit any action to be omitted or taken, the taking or omission of which would result in any right of offset against sums payable under the Pledged Notes, or (C) other than dispositions permitted under the NPA, assign or surrender their rights and interests under any of the Pledged Notes or terminate, cancel, modify, change, supplement or amend the Pledged Notes, and (ii) shall provide to the Secured Party copies of all material written notices (including notices of default) given or received with respect to the Pledged Notes promptly after giving or receiving such notice.

(l)             Accounts.

(i)             Each Grantor shall keep and maintain at its own cost and expense complete records of Accounts, in a manner consistent with prudent business practice, including records of all payments received, all credits granted thereon, all merchandise returned and all other documentation relating thereto. Each Grantor shall, at such Grantor’s sole cost and expense, upon the Secured Party’s demand made at any time after the occurrence and during the continuance of any Event of Default, deliver all tangible evidence of Accounts, including all documents evidencing Accounts and any books and records relating thereto to the Secured Party or to its representatives (copies of which evidence and books and records may be retained by such Grantor). Upon the occurrence and during the continuance of any Event of Default, the Secured Party may transfer a full and complete copy of any Grantor’s books, records, credit information, reports, memoranda and all other writings relating to the Accounts to and for the use by any person that has acquired or is contemplating acquisition of an interest in the Accounts or the Secured Party’s security interest therein without the consent of any Grantor. Upon the occurrence and during the continuance of any Event of Default, each Grantor shall legend, at the request of the Secured Party and in form and manner satisfactory to the Secured Party, the Accounts and the other books, records and documents of such Grantor evidencing or pertaining to the Accounts with an appropriate reference to the fact that the Accounts have been assigned to the Secured Party and that the Secured Party has a security interest therein.

 (ii)           So long as no Event of Default has occurred and is continuing, the Grantors may settle, adjust or compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default has occurred and is continuing, the Secured Party shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors or grant any credits, discounts or allowances.

 (iii)          The Secured Party shall have the right (but not the obligation) at any time or times, in the name of any applicable Grantor, in the Secured Party’s name or in the name of a nominee of the Secured Party, to verify the validity, amount or any other matter relating to any Accounts or other Collateral, by mail, telephone, facsimile transmission or otherwise, and each Grantor shall cooperate fully with the Secured Party in an effort to facilitate and promptly conclude any such verification process.

(m)            Inventory.

 (i)            Each Grantor shall at all times maintain inventory records by keeping correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory and such Grantor’s cost therefore and monthly withdrawals therefrom and additions thereto.

 (ii)           Except where the failure to do so could not reasonably be expected to result in a material adverse effect, the Grantors shall produce, use, store and maintain the Inventory with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with applicable laws.

 (iii)          Each Grantor assumes all responsibility and liability arising from or relating to the production, use, sale or other disposition of the Inventory.

(n)            Updated Collateral Information.

 (i)            Such Grantor shall furnish or cause to be furnished to the Secured Party, annually, not later than sixty days after the end of each calendar year, such updates to the information disclosed pursuant to this Agreement, including any of Schedules 1 through 7 hereto, such that such updated information and exhibits are true and correct as of the date so furnished.

 (ii)            Each Grantor agrees promptly (and in any event within thirty (30) calendar days (or such later date as may be agreed to by the Secured Party in its sole discretion) of such change) to notify the Secured Party in writing of any change in (A) legal name of any Grantor, (B) the type of organization of any Grantor, (C) the jurisdiction of organization of any Grantor, or (D) the chief executive office of any Grantor and take all actions necessary to continue the perfection of the security interest created hereunder following any such change with the same priority as immediately prior to such change.

7.            Relation to Other Note Documents. The provisions of this Agreement shall be read and construed with the other Note Documents referred to below in the manner so indicated.

(a)            NPA. In the event of any conflict between any provision in this Agreement and a provision in the NPA, such provisions of the NPA shall control.

(b)            Patent, Trademark, Copyright Security Agreements. The provisions of the Copyright Security Agreements, Trademark Security Agreements, and Patent Security Agreements are supplemental to the provisions of this Agreement, and nothing contained in the Copyright Security Agreements, Trademark Security Agreements, or the Patent Security Agreements shall limit any of the rights or remedies of the Secured Party hereunder. In the event of any conflict between any provision in this Agreement and a provision in a Copyright Security Agreement, Trademark Security Agreement or Patent Security Agreement, such provision of this Agreement shall control.

8.            Further Assurances.

(a)            Each Grantor agrees that, from time to time, at its own expense, such Grantor will promptly execute and deliver all further instruments and documents, and take all further actions (including the filing of UCC-3 continuation statements), that are necessary in order to perfect and protect the Security Interest granted hereby, to create, perfect or protect the Security Interest purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.

(b)            Each Grantor authorizes the filing by the Secured Party (with no obligation) of financing or continuation statements, or amendments thereto, and such Grantor will execute and deliver to the Secured Party such other instruments or notices, as the Secured Party may reasonably request, in order to perfect and preserve the Security Interest purported to be granted hereby.

(c)            Each Grantor authorizes the Secured Party (with no obligation) at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments (i) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance.

(d)            Notwithstanding anything to the contrary in this Section 8 or elsewhere in any Note Document, no perfection action shall be required consisting of (i) entering into any security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction, (ii) taking any actions to perfect a security interest in letters of credit or letter of credit rights other than the filing of a UCC-1 financing statement, (iii) perfecting any security interest in (x) any real property (whether fee owned or leasehold) or (y) any Vehicles, airplanes, vessels and other assets subject to certificates of title, (iv) obtaining any landlord waivers, bailee letters or waivers or the like, or (v) obtaining control agreements with respect to any Deposit Account or Securities Account.

9.            Secured Party’s Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence and during the continuance of an Event of Default, the Secured Party (or its designee), without obligation, (a) may (but shall not be obligated to) proceed to perform any and all of the obligations of any Grantor contained in any contract, lease, or other agreement and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could, (b) shall have the right to use any Grantor’s rights under Intellectual Property Licenses in connection with the enforcement of the Secured Party’s rights hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment now or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that any capital stock that is pledged hereunder be registered in the name of the Secured Party or any of its nominees.

10.          Secured Party Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints the Secured Party its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing under any Note Document, to take any action and to execute any instrument which may be necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:

(a)            to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Grantor;

(b)            to receive and open all mail addressed to such Grantor and to notify postal authorities to change the address for the delivery of mail to such Grantor to that of the Secured Party;

(c)            to receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

(d)            to file any claims or take any action or institute any proceedings which may be necessary to protect the Secured Party’s security interest;

(e)            to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;

(f)             to use any Intellectual Property or exercise any rights under Intellectual Property Licenses of such Grantor, including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and

(g)            the Secured Party shall have the right, but shall not be obligated, to bring suit in its own name to enforce the Intellectual Property and Intellectual Property Licenses and, if the Secured Party shall commence any such suit, the appropriate Grantor shall, at the request of the Secured Party, do any and all lawful acts and execute any and all proper documents reasonably required by the Secured Party in aid of such enforcement.

To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable until this Agreement is terminated.

11.          Secured Party May Perform. If any Grantor fails to perform any agreement contained herein, the Secured Party may, but shall not be obligated to, itself perform, or cause performance of, such agreement, and the reasonable expenses of the Secured Party incurred in connection therewith shall be payable, jointly and severally, by Grantors.

12.          Secured Party’s Duties. The powers conferred on the Secured Party hereunder are solely to protect the Secured Party’s interest in the Collateral and shall not impose any duty upon the Secured Party to exercise any such powers. Except for the safe custody of any Collateral in its actual possession and the accounting for moneys actually received by it hereunder, the Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially equal to that which the Secured Party accords its own property.

13.          Collection of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuance of an Event of Default, the Secured Party or the Secured Party’s designee may (a) notify Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been assigned to the Secured Party or that the Secured Party has a security interest therein, and (b) collect the Accounts, General Intangibles and Negotiable Collateral of any Grantor directly, and any collection costs and expenses shall constitute part of such Grantor’s Secured Obligations under the applicable Note Documents.

14.          Disposition of Pledged Interests by the Secured Party. None of the Pledged Interests existing as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the date of acquisition thereof are expected to be, registered or qualified under the various federal or state securities laws of the United States and disposition thereof after an Event of Default may be restricted to one or more private (instead of public) sales in view of the lack of such registration. Each Grantor understands that in connection with such disposition, the Secured Party may approach only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests were registered and qualified pursuant to federal and state securities laws and sold on the open market. Each Grantor hereby waives, to the fullest extent permitted by law, any claims against the Secured Party arising by reason of the fact that the price at which the Pledged Interests or any part thereof may have been sold, assigned or licensed at such a private sale was less than the price which might have been obtained at a public sale, even if the Secured Party accepts the first offer received and does not offer such Pledged Interests to more than one offeree.

15.          Voting and Other Rights in Respect of Pledged Interests.

(a)            Upon the occurrence and during the continuation of an Event of Default, (i) the Secured Party shall have the right, at its option, and in addition to all rights and remedies available to the Secured Party hereunder or under any other agreement, at law, in equity, or otherwise, exercise all voting rights, or any other ownership or consensual rights (including any dividend or distribution rights) in respect of the Pledged Interests owned by such Grantor, but under no circumstances is the Secured Party obligated by the terms of this Agreement to exercise such rights, and (ii) if the Secured Party duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints the Secured Party, such Grantor’s true and lawful attorney-in-fact and irrevocable proxy to vote such Pledged Interests in any manner the Secured Party deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders, partners or members, as the case may be. The power-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable.

(b)            For so long as any Grantor shall have the right to vote the Pledged Interests owned by it, such Grantor covenants and agrees that it will not vote or take any consensual action with respect to such Pledged Interests which would materially adversely affect the rights of the Secured Party or the value of the Pledged Interests.

16.           Remedies. Upon the occurrence and during the continuance of an Event of Default:

(a)            the Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Note Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law. Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event, the Secured Party without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon any Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense and upon request of the Secured Party forthwith, assemble all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party at one or more locations where such Grantor regularly maintains Collateral, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Party’s offices or elsewhere, for cash, on credit, and upon such other terms as the Secured Party may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10) calendar days’ notice to the applicable Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such notice shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611 of the Code. The Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that (A) the internet shall constitute a “place” for purposes of Section 9-610(b) of the Code, and (B) to the extent notification of sale shall be required by law, notification by mail of the URL where a sale will occur and the time when a sale will commence at least ten days prior to the sale shall constitute a reasonable notification for purposes of Section 9- 611(b) of the Code. Each Grantor agrees that any sale of Collateral to a licensor pursuant to the terms of a license agreement between such licensor and a Grantor is sufficient to constitute a commercially reasonable disposition (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code.

(b)            The Secured Party is hereby granted a license or other right to use, without liability for royalties or any other charge, each Grantor’s Intellectual Property, including but not limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, and advertising matter, whether owned by any Grantor or with respect to which any Grantor has rights under license, sublicense, or other agreements (including any Intellectual Property License), as it pertains to the Collateral, in preparing for sale, advertising for sale and selling any Collateral, and each Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of the Secured Party.

(c)            [Reserved].

(d)            Any cash held by the Secured Party as Collateral and all cash proceeds received by the Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Secured Obligations pursuant to the terms of the NPA. In the event the proceeds of Collateral are insufficient to satisfy all of the Secured Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency.

(e)            Each Grantor hereby acknowledges that the Secured Obligations arise out of a commercial transaction, and agrees that if an Event of Default shall occur and be continuing the Secured Party shall have the right to an immediate writ of possession without notice of a hearing. The Secured Party shall have the right to the appointment of a receiver for the properties and assets of each Grantor, and each Grantor hereby consents to such rights and such appointment and hereby waives any objection such Grantor may have thereto or the right to have a bond or other security posted by the Secured Party.

17.          Remedies Cumulative. Each right, power, and remedy of the Secured Party as provided for in this Agreement or in the other Note Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Agreement or in the other Note Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Secured Party, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Secured Party of any or all such other rights, powers, or remedies.

18.          Application of Proceeds. (a) The proceeds received by the Secured Party in respect of any sale of, collection from or other realization upon all or any part of the Secured Obligations pursuant to the exercise by the Secured Party of its remedies shall be applied, together with any other sums then held by the Secured Party pursuant to this Agreement, as follows: (i) first, to amounts, if any, owing to the Secured Party in its capacity as agent for the Holders; (ii) second, ratably to amounts owing to holders of the Secured Obligations in accordance with the terms of the NPA; and (iii) third, to the applicable Grantor and/or other persons entitled thereto. (b) If, despite the provisions of this Agreement, any Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the Secured Obligations to which it is then entitled in accordance with this Agreement, such Secured Party shall hold such payment or other recovery for distribution in accordance with this Section 15.

19.          Impairment. None of the Grantors will be permitted to take any action, or knowingly or negligently omit to take any action, which action or omission might or would have the result of materially impairing the security interest with respect to the Collateral.

20.          Marshaling. The Secured Party shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Secured Party’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

21.           Indemnity and Expenses.

(a)            Each Grantor agrees to indemnify the Secured Party from and against all claims, lawsuits and liabilities (including attorneys’ fees) arising out of or resulting from this Agreement (including the enforcement of this Agreement) or any other Note Documents to which such Grantor is a party in accordance with and to the extent set forth in the NPA. This provision shall survive the termination of this Agreement and the NPA, the resignation or removal of the Secured Party and the repayment of the Secured Obligations.

(b)            Grantors, jointly and severally, shall, upon written demand therefore and with reasonable detailed documentation thereof, pay to the Secured Party all the expenses which the Secured Party may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Note Documents, (iii) the exercise or enforcement of any of the rights of the Secured Party hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

22.           Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER NOTE DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Secured Party and each Grantor to which such amendment applies. The Secured Party shall not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by the Secured Party and then only to the extent therein set forth. A waiver by the Secured Party of any right or remedy which the Secured Party would otherwise have had on any other occasion. Any waivers, amendments or otherwise occurring under this Agreement or any Collateral Document must occur in compliance with the NPA.

23.          Addresses for Notices. All notices and other communications provided for hereunder shall be given in the form and manner and delivered to the Secured Party at its address specified in the NPA, and to any of the Grantors at their respective addresses specified in the NPA, as applicable, or, as to any party, at such other address as shall be designated by such party in a written notice to the other party.

24.          Continuing Security Interest; Releases and Assignments.

(a)            This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until all Secured Obligations have been paid in full in accordance with the provisions of the Note Documents, (ii) be binding upon each Grantor, and their respective successors and assigns, and (iii) inure to the benefit of, and be enforceable by, the Secured Party, and its successors, transferees and assigns.

(b)            The Security Interests securing the Secured Obligations shall be released with respect to any Collateral, (i) in whole or in part, to the extent the release of such Security Interests in such Collateral is provided for, or permitted by, and in accordance with, the terms of the NPA and any other Note Document (other than this Agreement) governing such Secured Obligations, or (ii) as otherwise authorized by the prior written consent of the Secured Party.

(c)            At the time of any release pursuant to clause (b) above, all rights to the Collateral released shall revert to the Grantors or any other Person entitled thereto, and the Secured Party shall return to the Grantors any such released Collateral in its possession. The Secured Party will provide evidence of such release, if reasonably requested by the Grantors, at the expense of the Grantors.

(d)            No transfer or renewal, extension, assignment, or termination of this Agreement or of the NPA or any other Note Document or any other instrument or document executed and delivered by any Grantor to the Secured Party nor the taking of further security, nor the retaking or re-delivery of the Collateral to any Grantor by the Secured Party, nor any other act of the Secured Party shall release any Grantor from any obligation, except a release in accordance with this Section 24.

25.          Governing Law.

(a)            THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(b)            Each Grantor (i) agrees that any suit, action or proceeding against it arising out of or relating to this Agreement may be instituted in any U.S. federal court with applicable subject matter jurisdiction sitting in The City of New York, (ii) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum, and (iii) submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.

26.          Reserved.

27.          Miscellaneous.

(a)            This Agreement is a Note Document. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Note Document mutatis mutandis.

(b)            Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

(c)            Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

(d)            Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any the Secured Party or any Grantor, whether under any rule of construction or otherwise. This Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e)            The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(f)             Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to the satisfaction, repayment, or payment in full of the Secured Obligations shall mean the repayment in full in cash of all Secured Obligations other than unasserted contingent indemnification Secured Obligations. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

(g)            All of the annexes, schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

28.          Post-Closing Matters.

(a)            The Grantors hereby agree to deliver to the Secured Party, on or prior to the date that is twenty (20) calendar days (or such longer time as agreed by Secured Party in its sole discretion) after the Issue Date, all documents representing all Pledged Interests and Pledged Notes and related undated powers or endorsements duly executed in blank; and

(b)            The Grantors hereby agree to deliver to the Secured Party, on or prior to the date that is sixty (60) calendar days (or such longer time as agreed by Secured Party in its sole discretion) after the Issue Date, insurance certificates and applicable endorsements, naming the Secured Party as an additional insured or mortgagee/loss payee thereunder, as applicable, under any insurance maintained by the Grantors;

(c)            The Grantors hereby agree enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Account Control Agreements with respect to each deposit, securities, commodity or similar account maintained by such Person (other than any Excluded Accounts); provided, it is agreed and understood that the Grantors shall have until the date that is forty-five (45) days following the Issue Date (or such longer time as agreed by Secured Party in its sole discretion) to comply with the provisions of this Section 28(c) with regard to accounts (other than Excluded Accounts).

[signature pages follow]

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

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

Exhibit 10.5

PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this 21 day of February, 2023, by and among the Grantors listed on the signature pages hereof (each a “Grantor”, and collectively, jointly and severally, the “Grantors”), and PureTech Health LLC, a Delaware limited liability company (the “Initial Holder”) and as Secured Party for all of the Holders (the “Secured Party”).

WITNESSETH:

WHEREAS, pursuant to that certain Note and Warrant Purchase Agreement, dated as of February 21, 2023, by and among Gelesis Holdings, Inc., a Delaware corporation (the “Company”), Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), the Initial Holder, and such additional holders from party thereto from time to time (each a “Holder” and together with the Initial Holder, the “Holders”) (as it may be amended, supplemented, extended, renewed, replaced, refunded or modified from time to time, the “NPA”), the Company and the Co-Issuer, have issued to the Holders the 12.0% Convertible Senior Secured Notes due 2023 (the “Notes”). Each Grantor is entering into this Patent Security Agreement in order to induce the Holders to purchase the Notes and to secure the Secured Obligations;

WHEREAS, the Holders are willing to enter into the NPA and the Holders are willing to purchase the Notes, but only upon the condition, among others, that Grantors shall have executed and delivered to the Secured Party that certain Security and Pledge Agreement, dated as of February 21, 2023, by and among the Secured Party, the Company, the Co-Issuer, Gelesis 2012, Inc., a Delaware corporation, Gelesis, LLC, a Delaware limited liability company, and the other parties thereto from time to time (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security and Pledge Agreement”); and

WHEREAS, pursuant to the Security and Pledge Agreement, Grantors are required to execute and deliver to the Secured Party this Patent Security Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:

1.           DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security and Pledge Agreement or, if not defined therein, in the NPA.

2.          GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby unconditionally grants to the Secured Party to secure the Secured Obligations, a continuing security interest (referred to in this Patent Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Patent Collateral”):

(a)          all of its Patents and Patent Intellectual Property Licenses to which it is a party including those referred to on Schedule I;

(b)          all divisionals, continuations, continuations-in-part, reissues, reexaminations, or extensions of the foregoing; and

(c)          all products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future infringement of any Patent or any Patent exclusively licensed under any Intellectual Property License, including the right to receive damages, or right to receive license fees, royalties, and other compensation under any Patent Intellectual Property License.

In each case, other than any of the foregoing constituting Excluded Property.

3.            SECURITY FOR SECURED OBLIGATIONS. This Patent Security Agreement and the Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Patent Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to the Secured Party, whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4.            SECURITY AND PLEDGE AGREEMENT. The Security Interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interests granted to the Secured Party pursuant to the Security and Pledge Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of the Secured Party with respect to the Security Interest in the Patent Collateral made and granted hereby are more fully set forth in the Security and Pledge Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Patent Security Agreement and the Security and Pledge Agreement, the Security and Pledge Agreement shall control.

5.            AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new patent application or issued patent or become entitled to the benefit of any patent application or patent for any divisional, continuation, continuation-in-part, reissue, or reexamination of any existing patent or patent application, the provisions of this Patent Security Agreement shall automatically apply thereto. Without limiting the Grantors’ obligations under the Note Documents, each Grantor hereby authorizes the Secured Party to unilaterally modify this Patent Security Agreement by amending Schedule I to include any new patent rights of each Grantor. Notwithstanding the foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from the Secured Party’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6.            COUNTERPARTS. This Patent Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Patent Security Agreement. Delivery of an executed counterpart of this Patent Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Patent Security Agreement. Any party delivering an executed counterpart of this Patent Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Patent Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Patent Security Agreement.

7.            CONSTRUCTION. This Patent Security Agreement is a Note Document. Unless the context of this Patent Security Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Patent Security Agreement refer to this Patent Security Agreement as a whole and not to any particular provision of this Patent Security Agreement. Section, subsection, clause, schedule, and exhibit references herein are to this Patent Security Agreement unless otherwise specified. Any reference in this Patent Security Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to the satisfaction, repayment, or payment in full of the Secured Obligations shall mean the repayment in full in cash of all Secured Obligations other than unasserted contingent indemnification Secured Obligations. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

8.            THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.            Each Grantor (i) agrees that any suit, action or proceeding against it arising out of or relating to this Agreement may be instituted in any U.S. federal court with applicable subject matter jurisdiction sitting in The City of New York; (ii) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum; and (iii) submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Patent Security Agreement to be executed and delivered as of the day and year first above written.

IN WITNESS WHEREOF, the parties hereto have caused this Patent Security Agreement to be executed and delivered as of the day and year first above written.

Exhibit 10.6

TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made this 21 day of February, 2023, by and among the Grantors listed on the signature pages hereof (each a “Grantor”, and collectively, jointly and severally, the “Grantors”), and PureTech Health LLC, a Delaware limited liability company (the “Initial Holder”) and as Secured Party for all of the Holders (the “Secured Party”).

WITNESSETH:

WHEREAS, pursuant to that certain Note and Warrant Purchase Agreement, dated as of February 21, 2023, by and among Gelesis Holdings, Inc., a Delaware corporation (the “Company”), Gelesis, Inc., a Delaware corporation (the “Co-Issuer”), the Initial Holder, and such additional holders from party thereto from time to time (each a “Holder” and together with the Initial Holder, the “Holders”) (as it may be amended, supplemented, extended, renewed, replaced, refunded or modified from time to time, the “NPA”), the Company and the Co-Issuer, have issued to the Holders the 12.0% Convertible Senior Secured Notes due 2023 (the “Notes”). Each Grantor is entering into this Trademark Security Agreement in order to induce the Holders to purchase the Notes and to secure the Secured Obligations;

WHEREAS, the Holders are willing to enter into the NPA and the Holders are willing to purchase the Notes, but only upon the condition, among others, that Grantors shall have executed and delivered to the Secured Party that certain Security and Pledge Agreement, dated as of February 21, 2023, by and among the Secured Party, the Company, the Co-Issuer, Gelesis 2012, Inc., a Delaware corporation, Gelesis, LLC, a Delaware limited liability company, and the other parties thereto from time to time (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security and Pledge Agreement”); and

WHEREAS, pursuant to the Security and Pledge Agreement, Grantors are required to execute and deliver to the Secured Party this Trademark Security Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:

1.            DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security and Pledge Agreement or, if not defined therein, in the NPA.

2.            GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby unconditionally grants to the Secured Party, for the benefit of each Secured Party, to secure the Secured Obligations, a continuing security interest (referred to in this Trademark Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Trademark Collateral”):

(a)           all of its Trademarks and Trademark Intellectual Property Licenses to which it is a party including those referred to on Schedule I;

(b)           all goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark Intellectual Property License; and

(c)           all products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future (i) infringement or dilution of any Trademark or any Trademarks exclusively licensed under any Intellectual Property License, including right to receive any damages, (ii) injury to the goodwill associated with any Trademark, or (iii) right to receive license fees, royalties, and other compensation under any Trademark Intellectual Property License.

In each case, other than any of the foregoing constituting Excluded Property.

3.            SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement and the Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Trademark Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to the Secured Party whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4.            SECURITY AND PLEDGE AGREEMENT. The Security Interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interests granted to the Secured Party pursuant to the Security and Pledge Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of the Secured Party with respect to the Security Interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security and Pledge Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Trademark Security Agreement and the Security and Pledge Agreement, the Security and Pledge Agreement shall control.

5.            AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new trademarks, the provisions of this Trademark Security Agreement shall automatically apply thereto. Each Grantor shall give prompt notice in writing to the Secured Party with respect to any such new trademarks or renewal or extension of any trademark registration. Without limiting the Grantors’ obligations under the Note Documents, each Grantor hereby authorizes the Secured Party to unilaterally modify this Trademark Security Agreement by amending Schedule I to include any such new trademark rights of each Grantor. Notwithstanding the foregoing, no failure to so modify this Trademark Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from the Secured Party’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6.            COUNTERPARTS. This Trademark Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Trademark Security Agreement. Delivery of an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Trademark Security Agreement. Any party delivering an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Trademark Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Trademark Security Agreement.

7.            CONSTRUCTION. This Trademark Security Agreement is a Note Document. Unless the context of this Trademark Security Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Trademark Security Agreement refer to this Trademark Security Agreement as a whole and not to any particular provision of this Trademark Security Agreement. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Trademark Security Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to the satisfaction, repayment, or payment in full of the Secured Obligations shall mean the repayment in full in cash of all Secured Obligations other than unasserted contingent indemnification Secured Obligations. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in any other Note Document shall be satisfied by the transmission of a Record.

8.            THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.            Each Grantor (i) agrees that any suit, action or proceeding against it arising out of or relating to this Agreement may be instituted in any U.S. federal court with applicable subject matter jurisdiction sitting in The City of New York; (ii) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum; and (iii) submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security Agreement to be executed and delivered as of the day and year first above written.

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security Agreement to be executed and delivered as of the day and year first above written.