Exhibit 10.1

CREDIT AGREEMENT AND GUARANTY

dated as of May 29, 2015

by and among

ALLIQUA BIOMEDICAL, INC.,

as the Borrower,

THE GUARANTORS PARTY HERETO,

and

PERCEPTIVE CREDIT OPPORTUNITIES FUND, LP,
as the Lender

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CREDIT AGREEMENT AND GUARANTY

THIS CREDIT AGREEMENT AND GUARANTY dated as of May 29, 2015 (as amended, supplemented or otherwise modified from time to time, this “ Agreement ”), is by and among ALLIQUA BIOMEDICAL, INC., a Delaware corporation (the “ Borrower ”), each Guarantor (as defined below) party hereto and PERCEPTIVE CREDIT OPPORTUNITIES FUND, LP (together with its Affiliates, successors, permitted transferees and permitted assignees, the “ Lender ”).

WITNESSETH :

WHEREAS, the Borrower has requested that the Lender provide a senior term loan facility to the Borrower in an aggregate principal amount of $15,500,000 on the Closing Date; and

WHEREAS, the Lender is willing, on the terms and subject to the conditions hereinafter set forth, to extend the Commitment and make the Loan to the Borrower.

NOW, THEREFORE, the parties hereto agree as follows:

Article I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.1 Defined Terms . The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“ 510(k) ” is defined within the definition of “ Device Clearance Application ”.

“ Affiliate ” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. “ Control ” (and its correlatives) by any Person means the power of such Person, directly or indirectly, (i) to vote 10% or more of the Capital Securities (on a fully diluted basis) of another Person which Capital Securities have ordinary voting power for the election of directors, managing members or general partners (as applicable), or (ii) to direct or cause the direction of the management and policies of such other Person (whether by contract or otherwise).

“ Agreement ” is defined in the preamble.

“ Applicable Margin ” means 9.75%, as such percentage may be increased pursuant to Section 3.6 .

“ Ancillary Documents ” has the meaning provided in the Merger Agreement.

“ Authorized Officer ” means, relative to each Loan Party, those of its officers, general partners or managing members (as applicable) whose signatures and incumbency shall have been certified to the Lender pursuant to Section 5.1.1 .

“ BLA ” means (i) (x) a biologics license application (as defined in the FD&C Act) to introduce, or deliver for introduction, a biologic product, including vaccines into commerce in the U.S., or any successor application or procedure and (y) any similar application or functional equivalent relating to biologics licensing applicable to or required by any country, jurisdiction or Governmental Authority other than the U.S. and (ii) all supplements and amendments that may be filed with respect to the foregoing.

“ Borrower ” is defined in the preamble .

“ Borrower Material Contract ” means any material contract of any Loan Party required to be filed on a Current Report on Form 8-K, a Quarterly Report on Form 10-Q, or an Annual Report on Form 10-K, in each case pursuant to Item 601(a) and Item 601(b)(10) of Regulation S-K promulgated by the Securities and Exchange Commission.

“ Business Day ” means any day which is neither a Saturday nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York.

“ Calculation Date ” is defined in Section 8.4(a) .

“ Capital Securities ” means, with respect to any Person, all shares of, interests or participations in, or other equivalents in respect of (in each case however designated, whether voting or non-voting), such Person’s capital stock, whether now outstanding or issued after the Closing Date.

“ Capitalized Lease Liabilities ” means, with respect to any Person, all monetary obligations of such Person and its Subsidiaries under any leasing or similar arrangement which have been (or, in accordance with GAAP, should be) classified as capitalized leases, and for purposes of each Loan Document the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a premium or a penalty.

“ Cash Equivalent Investment ” means, at any time:

(a) any direct obligation of (or unconditionally guaranteed by) the United States or a state thereof (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States or a state thereof) maturing not more than one year after such time;

(b) commercial paper maturing not more than 270 days from the date of issue, which is issued by a corporation (other than an Affiliate of the Borrower or any of its Subsidiaries) organized under the laws of any state of the United States or of the District of Columbia and rated A-1 or higher by S&P or P-1 or higher by Moody’s;

(c) any certificate of deposit, time deposit or bankers acceptance, maturing not more than one year after its date of issuance, which is issued by any bank organized under the laws of the United States (or any state thereof) and which has (x) a credit rating of A2 or higher from Moody’s or A or higher from S&P and (y) a combined capital and surplus greater than $1,000,000,000; or

(d) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (c) above.

“ Celgene License Agreement ” means the License, Marketing and Development Agreement dated as of November 2013, between the Borrower and Anthrogenesis Corporation, d/b/a Celgene Cellular Therapeutics, as amended or otherwise modified.

“ Celleration ” means Celleration, Inc., a Delaware corporation.

“ Celleration Material Contract ” means any Material Contract as that term is defined in the Merger Agreement.

“ Change in Control ” means and shall be deemed to have occurred if (i) any “person” or “group” (within the meaning of Rule 13d-5 of the Exchange Act as in effect on the date hereof) shall own, directly or indirectly, beneficially or of record, determined on a fully diluted basis, more than 30% of the Voting Securities of the Borrower, (ii) a majority of the seats (other than vacant seats) on the board of directors (or equivalent) of the Borrower shall at any time be occupied by persons who were neither (x) nominated by the board of directors of the Borrower nor (y) appointed by directors so nominated, (iii) the Borrower shall cease to directly own, beneficially and of record, 100% of the issued and outstanding Capital Securities of its Subsidiaries or (iv) the sale, lease, transfer, conveyance or other disposition, in one or more related transactions, of properties or assets of the Loan Parties having an aggregate value in excess of 30% of all properties and assets of such Persons determined, as of any relevant time, by reference to the Borrower’s most recent audited, consolidated balance sheet.

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“ Closing Date ” means the date of the making of the Loan hereunder, which shall coincide with the “Closing Date” as defined in the Merger Agreement.

“ Closing Date Certificate ” is defined in Section 5.1.2 .

“ Closing Date Material Adverse Effect ” means any event, occurrence, fact, condition, circumstance or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to the business, results of operations or financial condition of (x) the Borrower and its Subsidiaries taken as a whole or (y) Celleration and its Subsidiaries taken as a whole, as the case may be, but shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Borrower, Celleration or any of its respective Subsidiaries, as the case may be, operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action expressly required by the Merger Agreement (other than pursuant to Section 3.03 and Section 5.08 thereof), the Commitment Letter, and/or the Loan Documents; (vi) any changes in applicable laws or accounting rules, including GAAP in the United States; or (viii) any decline in the NASDAQ listed price for any Loan Party’s equity securities following the announcement of the Merger Transaction; provided further , however , that any event, occurrence, fact, condition or change referred to in clauses (i) through (iv) and/or (vi) immediately above shall be taken into account in determining whether a Closing Date Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Borrower and its Subsidiaries taken as a whole, or Celleration and its Subsidiaries taken as a whole, as the case may be, compared to other participants in the industries in which the Borrower and its Subsidiaries taken as a whole, or Celleration and its Subsidiaries taken as a whole, as the case may be, conducts its businesses.

“ Code ” means the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time.

“ Collateral ” has the meaning provided in the Pledge and Security Agreement.

“ Commitment ” means the Lender’s obligation (if any) to make the Loan hereunder.

“ Commitment Amount ” means $15,500,000.

“ Commitment Letter ” means, collectively, the Commitment Letter dated as of February 2, 2015 between the Lender and the Borrower regarding the transactions contemplated hereby, and the outline of the proposed terms and conditions attached thereto.

“ Compliance Certificate ” means a certificate duly completed and executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit C hereto, together with such changes thereto as the Lender may from time to time request for the purpose of monitoring the Borrower’s compliance with the financial covenants contained herein.

“ Consolidated Total Revenue ” means, for any applicable period, the gross revenue of the Borrower and its Subsidiaries from the sale of Products during such period, determined on a consolidated basis in accordance with GAAP.

“ Contingent Liability ” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Securities of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

“ Control ” is defined within the definition of “ Affiliate ”.

“ Controlled Account ” is defined in Section 7.13(a) .

“ Copyrights ” means all copyrights, whether statutory or common law, and all exclusive and nonexclusive licenses from third parties or rights to use copyrights owned by such third parties, along with any and all (i) renewals, revisions, extensions, derivative works, enhancements, modifications, updates and new releases thereof, (ii) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iii) rights to sue for past, present and future infringements thereof, and (iv) foreign copyrights and any other rights corresponding thereto throughout the world.

“ Copyright Security Agreement ” means any Copyright Security Agreement executed and delivered by each Loan Party substantially in the form of Exhibit E to the Pledge and Security Agreement, as amended or otherwise modified from time to time.

“ Default ” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“ Designated Jurisdiction ” means any country or territory to the extent that such country or territory is the subject of any Sanction.

“ Device ” means any instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or (iii) intended to affect the structure or any function of the body of man or other animals; and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

“ Device Clearance Application ” means a premarket approval application submitted under Section 515 of the FD&C Act (21 U.S.C. § 360e), a de novo request submitted under Section 516(f) of the FD&C Act (21 U.S.C. § 360c(f)), or any premarket notification submitted under Section 510(k) of the FD&C Act (21 U.S.C. § 360(k)) seeking clearance from FDA for a Device that is substantially equivalent to a legally marketed predicate device (“ 510(k) ”), as defined in the FD&C Act, or any corresponding foreign application in any other jurisdiction.

“ Disposition ” (or similar words such as “ Dispose ”) means any sale, transfer, lease, contribution or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any Loan Party’s assets (including accounts receivable and Capital Securities of Subsidiaries) to any other Person (other than to the Borrower or one of its wholly owned Subsidiaries) in a single transaction or series of transactions.

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

“ Early Prepayment Fee ” means (i) with respect to any prepayment of the Loan during the period from the Closing Date up to (and including) the first anniversary of the Closing Date, an amount equal to 5.00% of the principal amount of the Loan being prepaid, (ii) with respect to any prepayment of the Loan during the period from the day following the first anniversary of the Closing Date up to (and including) the second anniversary of the Closing Date, an amount equal to 3.00% of the principal amount of the Loan being prepaid, and (iii) with respect to any prepayment of the Loan during the period from the day following the second anniversary of the Closing Date up to (and including) the third anniversary of the Closing Date, an amount equal to 2.00% of the principal amount of the Loan being prepaid.

“ Earn-Out Payments ” means, collectively, the Earn-Out Consideration and the MIST Payments, as such terms are defined in the Merger Agreement.

“ Environmental Laws ” means all federal, state, local or international laws, statutes, rules, regulations, codes, directives, treaties, requirements, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, natural resources, Hazardous Material or health and safety matters.

“ Environmental Liability ” means any liability, loss, claim, suit, action, investigation, proceeding, damage, commitment or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of or affecting any Loan Party directly or indirectly arising from, in connection with or based upon (i) any Environmental Law or Environmental Permit, (ii) the generation, use, handling, transportation, storage, treatment, recycling, presence, disposal, Release or threatened Release of, or exposure to, any Hazardous Materials or (iii) any contract, agreement, penalty, order, decree, settlement, injunction or other arrangement (including operation of law) pursuant to which liability is assumed, entered into, inherited or imposed with respect to any of the foregoing.

“ Environmental Permit ” is defined in Section 6.7(c) .

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to Sections of ERISA also refer to any successor Sections thereto.

“ ERISA Affiliate ” means any person that for purposes of Title I and Title IV of ERISA and Section 412 of the Code would be deemed to be a single employer with the Borrower, pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

“ ERISA Event ” means (a) any reportable event, as defined in Section 4043 of ERISA, with respect to a Pension Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified of such event, (b) the filing of a notice of intent to terminate any Pension Plan, if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Pension Plan or the termination of any Pension Plan under Section 4041(c) of ERISA, (c) the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment of a trustee to administer, any Pension Plan, (d) any failure by any Pension Plan to satisfy the minimum funding requirements of Sections 412 and 430 of the Code or Section 302 of ERISA applicable to such Pension Plan, whether or not waived, (e) the failure to make a required contribution to any Pension Plan that would result in the imposition of a Lien on any Loan Party or any ERISA Affiliate under Section 303(k) of ERISA or Section 430(k) of the Code, or at any time prior to date hereof, a filing under Section 412 of the Code or Section 302 of ERISA of any request for a minimum funding variance with respect to any Pension Plan or Multiemployer Plan, (f) an engagement in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to which a Loan Party would incur liability which would reasonably be expected to have a Material Adverse Effect, (g) the complete or partial withdrawal of any Loan Party or any material ERISA Affiliate from a Multiemployer Plan, (h) any Loan Party or an ERISA Affiliate incurring any material liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA) and (i) a determination that any Pension Plan is, or is expected to be, in “at risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code).

“ Event of Default ” is defined in Section 9.1 .

“ Event of Loss ” means, with respect to any asset of any Loan Party , any of the following: (i) any loss, destruction or damage of such asset, (ii) any pending or threatened institution of any proceedings for the condemnation or seizure of such asset or of any right of eminent domain, or (iii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such asset, or confiscation of such asset or requisition of the use of such asset.

“ Excluded Business ” means any business the Borrower and the Lender may mutually agree upon in writing on or prior to the Closing Date.

“ Excluded Business Disposition ” means the Disposal of the Excluded Business, in whole or in part, in one or more transactions.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to the Lender or required to be withheld or deducted from a payment to the Lender: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case: (i) imposed as a result of the Lender being organized under the Laws of, or having its principal office or, in the case of the Lender, its lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof); or (ii) that are Other Connection Taxes; (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of the Lender with respect to an applicable interest in the Loan pursuant to a Law in effect on the date on which: (i) the Lender acquires such interest in the Loan; or (ii) the Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.3(a) , amounts with respect to such Taxes were payable either to the Lender's assignor immediately before the Lender became a party hereto or to the Lender immediately before it changed its lending office; (c) Taxes attributable to the Lender’s failure to comply with Section 4.3(e) ; and (d) any Taxes imposed pursuant to FATCA.

“ Exchange Act ” means the Securities Exchange Act of 1934.

“ Expense Deposit ” means an amount equal to $50,000 deposited by the Borrower with the Lender to be applied to the expenses of the Lender pursuant to Section 11.3 .

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement entered into in connection with the implementation of such sections of the Code and any U.S. or non-U.S. fiscal or regulatory legislation, rules or official practices which facilitate the implementation of the foregoing.

“ FDA ” means the U.S. Food and Drug Administration and any successor entity.

“ FD&C Act ” means the U.S. Food, Drug and Cosmetic Act of 1938 (or any successor thereto), as amended from time to time, and the rules and regulations promulgated thereunder.

“ Fiscal Quarter ” means a quarter ending on the last day of March, June, September or December.

“ Fiscal Year ” means any period of twelve consecutive calendar months ending on December 31; references to a Fiscal Year with a number corresponding to any calendar year ( e.g. , the “2014 Fiscal Year”) refer to the Fiscal Year ending on December 31 of such calendar year.

“ Foreign Lender ” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“ F.R.S. Board ” means the Board of Governors of the Federal Reserve System or any successor thereto.

“ GAAP ” is defined in Section 1.4 .

“ Governmental Authority ” means any national, supranational, federal, state, county, provincial, local, municipal or other government or political subdivision thereof (including any Regulatory Authority), whether domestic or foreign, and any agency, authority, commission, ministry, instrumentality, regulatory body, court, tribunal, arbitrator, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to any such government.

“ Guarantors ” means, collectively, each Subsidiary of the Borrower, including Celleration and its Subsidiaries.

“ Hazardous Material ” means any material, substance, chemical, mixture or waste which is capable of damaging or causing harm to any living organism, the environment or natural resources, including all explosive, special, hazardous, polluting, toxic, industrial, dangerous, biohazardous, medical, infectious or radioactive substances, materials or wastes, noise, odor, electricity or heat, and including petroleum or petroleum products, byproducts or distillates, asbestos or asbestos-containing materials, urea formaldehyde, polychlorinated biphenyls, radon gas, ozone-depleting substances, greenhouse gases, and all other substances or wastes of any nature regulated pursuant to any Environmental Law or as to which any Governmental Authority requires investigation, reporting or remedial action.

“ Hedging Agreement ” means any interest rate, foreign currency, commodity, credit or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

“ Hedging Obligations ” means, with respect to any Person, all liabilities of such Person under currency exchange agreements, interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

“ herein ”, “ hereof ”, “ hereto ”, “ hereunder ” and similar terms contained in any Loan Document refer to such Loan Document as a whole and not to any particular Section, paragraph or provision of such Loan Document.

“ Impermissible Qualification ” means any qualification or exception to the opinion or certification of any independent public accountant as to any financial statement of the Loan Parties (i) which is of a “going concern” or similar nature, (ii) which relates to the limited scope of examination of matters relevant to such financial statement or (iii) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Borrower to be in Default.

“ including ” and “ include ” means including without limiting the generality of any description preceding such term, and, for purposes of each Loan Document, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned.

“ IDE ” means an application, including an application filed with any Governmental Authority, for authorization to commence human clinical studies, including (i) an Investigational Device Exemption as defined in the FD&C Act or any successor application or procedure filed with the FDA, (ii) an abbreviated IDE as specified in FDA regulations in 21 C.F.R. § 812.2(b), (iii) any equivalent of a United States IDE in other countries or regulatory jurisdictions, (iv) all amendments, variations, extensions and renewals thereof that may be filed with respect to the foregoing and (v) all related documents and correspondence thereto, including documents and correspondence with Institutional Review Boards (IRBs).

“ IND ” means (i) (x) an investigational new drug application (as defined in the FD&C Act) that is required to be filed with the FDA before beginning clinical testing in human subjects, or any successor application or procedure and (y) any similar application or functional equivalent relating to any investigational new drug application applicable to or required by any country, jurisdiction or Governmental Authority other than the U.S. and (ii) all supplements and amendments that may be filed with respect to the foregoing.

“ Indebtedness ” of any Person means:

(a) all obligations of such Person for borrowed money or advances and all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;

(b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued for the account of such Person;

(c) all Capitalized Lease Liabilities of such Person;

(d) net Hedging Obligations of such Person and all obligations of such Person arising under Synthetic Leases;

(e) all obligations issued, undertaken or assumed as the deferred purchase price of property or services, including earnouts payable in cash, purchase price adjustments and seller notes in connection with acquisitions permitted hereunder (to the extent due and payable and included as a liability on the balance sheet in accordance with GAAP) (other than trade payables entered into in the ordinary course of business);

(f) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course of business which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Person), and indebtedness secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on property owned or being acquired by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(g) all obligations for any Earn-Out Payments; and

(h) all Contingent Liabilities of such Person in respect of any of the foregoing.

The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“ Indemnified Liabilities ” is defined in Section 11.4 .

“ Indemnified Parties ” is defined in Section 11.4 .

“ Indemnified Taxes ” means (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (ii) to the extent not otherwise described in (i), Other Taxes.

“ Infringement ” and “ Infringes ” mean the misappropriation of know-how, trade secrets and/or confidential information.

“ Intellectual Property ” means all (i) Patents, (ii) Trademarks, (iii) Copyrights and other works of authorship (registered or unregistered), and all applications, registrations and renewals therefor, (iv) Product Authorizations, (v) Product Agreements, (vi) computer software, databases, data and documentation, (vii) trade secrets and confidential business information, whether patentable or unpatentable and whether or not reduced to practice, know-how, inventions, manufacturing processes and techniques, research and development information, data and other information included in or supporting Product Authorizations, (viii) financial, marketing and business data, pricing and cost information, business, finance and marketing plans, customer and prospective customer lists and information, and supplier and prospective supplier lists and information, (ix) other intellectual property or similar proprietary rights, (x) copies and tangible embodiments of any of the foregoing (in whatever form or medium) and (xi) any and all improvements to any of the foregoing.

“ Interest Period ” means, (i) initially, for the Loan made hereunder, the period beginning on (and including) the date on which the Loan is made hereunder pursuant to Section 2.2 and ending on (and including) the last day of the calendar month in which the Loan was made, and (ii) thereafter, the period beginning on (and including) the first day of each succeeding calendar month and ending on the earlier of (and including) (x) the last day of such calendar month and (y) the Maturity Date.

“ Investment ” means, relative to any Person, (i) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such Person of any bonds, notes, debentures or other debt securities of any other Person, (ii) Contingent Liabilities in favor of any other Person and (iii) any Capital Securities held by such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such Investment.

“ Key Permits ” means all material Permits relating to the Products (including all Product Authorizations) set forth on Schedule 1.1(a) .

“ Lender ” is defined in the preamble .

“ LIBO Rate ” means, with respect to any applicable Interest Period hereunder, the one-month London Interbank Offered Rate for deposits in Dollars at approximately 11:00 a.m. (London, England time), as determined by the Lender from the appropriate Bloomberg or Telerate page selected by the Lender (or any successor thereto or similar source reasonably determined by the Lender from time to time), which shall be that one-month London Interbank Offered Rate for deposits in Dollars in effect two Business Days prior to the first Business Day of such Interest Period rounded up to the nearest 1/16 of 1%, with such rate to be reset effective as of the first Business Day of each succeeding Interest Period. If the Loan is advanced other than on the first Business Day of a Fiscal Quarter, the initial LIBO Rate for the Loan shall be that one-month London Interbank Offered Rate for deposits in Dollars in effect two Business Days prior to the date of the Loan, which rate shall be in effect until (and including) the last Business Day of the first Interest Period relative to the Loan. Notwithstanding the foregoing two sentences, in the event that the “ LIBO Rate ” is below zero, then the “ LIBO Rate ” with respect to the Loan will be deemed to be zero. The Lender’s internal records of applicable interest rates shall be determinative in the absence of manifest error.

“ Lien ” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property, or other priority or preferential arrangement of any kind or nature whatsoever, to secure payment of a debt or performance of an obligation.

“ Loan ” is defined in Section 2.1 .

“ Loan Documents ” means, collectively, this Agreement, the Notes, the Pledge and Security Agreement, the Copyright Security Agreement, the Patent Security Agreement, the Trademark Security Agreement, the Warrant, the Subordination Agreement, each other agreement pursuant to which the Lender is granted a Lien to secure the Obligations, the Commitment Letter and each other agreement, certificate, document or instrument delivered in connection with any Loan Document, whether or not specifically mentioned herein or therein.

“ Loan Parties ” means, collectively, the Borrower and each Guarantor.

“ Loan Request ” means a Loan request and certificate duly executed by an Authorized Officer of the Borrower substantially in the form of Exhibit B hereto.

“ Material Adverse Effect ” means a material adverse effect on (i) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Loan Parties taken as a whole, (ii) the rights and remedies of the Lender under any Loan Document or (iii) the ability of the Loan Parties to perform their respective Obligations under any Loan Document.

“ Material Agreements ” means (i) each Borrower Material Contract and each Celleration Material Contract, (ii) each contract or agreement to which any Loan Party is a party involving aggregate payments of more than $500,000, whether such payments are being made by such Loan Party to a non-Affiliated Person, or by a non-Affiliated Person to such Loan Party; and (iii) all other contracts or agreements, individually or in the aggregate, material to the business, operations, assets, prospects, conditions (financial or otherwise), performance or liabilities of the Loan Parties.

“ Maturity Date ” means the fourth anniversary of the Closing Date.

“ Merger Agreement ” means the Agreement and Plan of Merger dated as of February 2, 2015, by and among the Borrower, ALQA Cedar, Inc., Celleration, and the Stockholder Representative.

“ Merger Transaction ” means, collectively, the acquisition of Celleration by the Borrower pursuant to the Merger Agreement and all other transactions related thereto, including the transactions contemplated pursuant to this Agreement, including the payment of costs, fees and expenses related thereto.

“ MMA ” has the meaning ascribed to such term in the definition of “ FDA Requirements ”.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Multiemployer Plan ” means a “multiemployer plan” (as defined in Section 4001(a)(3) of

ERISA) that is subject to Title IV of ERISA contributed to for any employees of a Loan Party or any ERISA Affiliate.

“ NDA ” means (i) (x) a new drug application (as defined in the FD&C Act) and (y) any similar application or functional equivalent relating to any new drug application applicable to or required by any country, jurisdiction or Governmental Authority other than the U.S. and (ii) all supplements and amendments that may be filed with respect to the foregoing.

“ Net Cash Proceeds ” means when used in respect of (i) any Disposition, (ii) any issuance of any debt or equity securities, or (iii) the receipt of any proceeds in connection with any Event of Loss suffered, in each case by any Loan Party, the gross proceeds in cash or cash equivalents received by such Person (including such proceeds subsequently received in respect of noncash consideration initially received and amounts initially placed in escrow that subsequently become available) from such Disposition, issuance or Event of Loss, less all direct costs and expenses (including attorneys’ fees) incurred or to be incurred, and all federal, state, local and foreign Taxes assessed or to be assessed (if any), in connection therewith.

“ Note ” means a promissory note of the Borrower payable to the Lender, in the form of Exhibit A hereto (as such promissory note may be amended, endorsed or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrower to the Lender resulting from the outstanding amount of the Loan, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“ Obligations ” means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of each Loan Party arising under or in connection with a Loan Document and the principal of and premium, if any, and interest (including interest accruing during the pendency of any proceeding of the type described in Section 9.1.8 , whether or not allowed in such proceeding) on the Loan.

“ OFAC ” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“ Organic Document ” means, relative to each Loan Party, its certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement, operating agreement and all shareholder agreements, voting trusts and similar arrangements applicable to such Loan Party’s Capital Securities.

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

“ Other Taxes ” means any and all stamp, documentary or similar Taxes, or any other excise or property Taxes or similar levies that arise on account of any payment made or required to be made under any Loan Document or from the execution, delivery, registration, recording or enforcement of any Loan Document.

“ Other Administrative Proceeding ” means any administrative proceeding relating to a dispute involving a patent office or other relevant intellectual property registry which relates to validity, opposition, revocation, ownership or enforceability or the relevant Intellectual Property (other than Other Connection Taxes imposed with respect to an assignment).

“ Patent ” means any patent, patent application and invention disclosure, including any divisions, continuations, continuations in-part, provisionals, continued prosecution applications, substitutions, reissues, reexaminations, renewals, extensions, restorations, supplemental protection certificates and other additions in connection therewith, whether in or related to the United States or any foreign country or other jurisdiction.

“ Patent Security Agreement ” means any Patent Security Agreement executed and delivered by each Loan Party in substantially the form of Exhibit F to the Pledge and Security Agreement, as amended or otherwise modified from time to time.

“ PBGC ” means the Pension Benefit Guaranty Corporation, or any entity succeeding to all or any of its functions under ERISA.

“ PDMA ” means the Prescription Drug Marketing Act.

“ Pension Plan ” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Plan), to which a Loan Party or any ERISA Affiliate sponsors, contributes to, or provides benefits under, or has any obligation to contribute or provide benefits under, and to which such Loan Party or ERISA Affiliate may have liability, including any liability by reason of having been a substantial employer under Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

“ Permits ” means all permits, licenses, registrations, certificates, orders, approvals, authorizations, consents, waivers, franchises, variances and similar rights issued by or obtained from any Governmental Authority or any other Person, including, without limitation, those relating to Environmental Laws.

“ Permitted Debt ” is defined in Section 8.2 .

“ Permitted Lien ” is defined in Section 8.3 .

“ Person ” means any natural person, corporation, limited liability company, partnership, joint venture, association, trust or unincorporated organization, Governmental Authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.

“ Pledge and Security Agreement ” means the Pledge and Security Agreement executed and delivered by each Loan Party, substantially in the form of Exhibit D hereto, as amended or otherwise modified from time to time.

“ Product ” means any current or future product developed, manufactured, licensed, marketed, sold or otherwise commercialized by any Loan Party, including any such product in development or which may be developed.

“ Product Agreement ” means each agreement, license, document, instrument, interest (equity or otherwise) or the like under which one or more Persons grants or receives any right, title or interest with respect to any Product Development and Commercialization Activities in respect of one or more Products specified therein, or receives or is granted the right to exclude any third parties from engaging in any Product Development and Commercialization Activities with respect thereto, including each contract or agreement with suppliers, manufacturers, distributors, clinical research organizations, wholesalers, pharmacies or with any other Person related to any such entity.

“ Product Authorizations ” means any and all approvals (including applicable supplements, amendments, pre and post approvals, drug master files, governmental price and reimbursement approvals and approvals of applications for regulatory exclusivity), licenses, registrations or authorizations of any Governmental Authority necessary for the manufacture, development, distribution, use, storage, import, export, transport, promotion, marketing, sale or other commercialization of a Product in any country or jurisdiction, including without limitation INDs, NDAs, BLAs, IDEs, Device Clearance Applications or similar applications.

“ Product Development and Commercialization Activities ” means, with respect to any Product, any combination of research, development, manufacture, importation, use, sale, storage, design, labeling, marketing, promotion, supply, distribution, testing, packaging, purchasing or other commercialization activities, receipt of payment in respect of any of the foregoing, or like activities the purpose of which is to commercially exploit such Product.

“ Prohibited Payment ” means any bribe, rebate, payoff, influence payment, kickback or other payment or gift of money or anything of value (including meals or entertainment) to any officer, employee or ceremonial office holder of any government or instrumentality thereof, political party or supra-national organization (such as the United Nations), any political candidate, any royal family member or any other person who is connected or associated personally with any of the foregoing that is prohibited under any applicable law or regulation or otherwise for the purpose of influencing any act or decision of such payee in his official capacity, inducing such payee to do or omit to do any act in violation of his lawful duty, securing any improper advantage or inducing such payee to use his influence with a government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.

“ Regulatory Authority ” means any Governmental Authority that is concerned with or has regulatory oversight with respect to the use, control, safety, efficacy, reliability, manufacturing, marketing, distribution, sale or other Product Development and Commercialization Activities relating to any Product of a Loan Party, including the FDA and all equivalent of such agencies in other jurisdictions, and includes Standard Bodies.

“ Regulatory Authorizations ” means, with respect to the Products, all approvals, clearances, authorizations, orders, exemptions, registrations, certifications, licenses and Permits granted by any Regulatory Authorities, including all NDAs, BLAs, IDEs, Device Clearance Applications and Product Authorizations held by the Loan Parties or any of their respective licensors, as applicable, or that are pending before the FDA or equivalent non-United States Governmental Entity with respect to the Products.

“ Release ” means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, pouring, dumping, depositing, emitting, escaping, emptying, seeping, dispersal, migrating or placing, including movement through, into or upon the environment or any natural or man-made structure.

“ Restricted Payment ” means (i) the declaration or payment of any dividend (other than dividends payable solely in Capital Securities of a Loan Party) on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Securities of a Loan Party or any warrants, options or other right or obligation to purchase or acquire any such Capital Securities, whether now or hereafter outstanding or (ii) the making of any other distribution in respect of such Capital Securities, in each case either directly or indirectly, whether in cash, property or obligations of a Loan Party or otherwise.

“ S&P ” means Standard & Poor’s Financial Services LLC, a part of McGraw Hill Financial.

“ Sanction ” means any international economic sanction administered or enforced by the

United States Government (including, without limitation, OFAC), the United Nations Security

Council, the European Union or its Member States, Her Majesty’s Treasury or other relevant sanctions authority.

“ SEC ” means the Securities and Exchange Commission.

“ Solvent ” means, with respect to the Borrower and its Subsidiaries on a particular date, that on such date (i) the fair value of the property of the Borrower and its Subsidiaries on a consolidated basis is greater than the total amount of liabilities, including Contingent Liabilities, of the Borrower and its Subsidiaries on a consolidated basis, (ii) the present fair saleable value of the assets of the Borrower and its Subsidiaries on a consolidated basis is not less than the amount that will be required to pay the probable liability of the Borrower and its Subsidiaries on a consolidated basis on its debts as they become absolute and matured, (iii) the Borrower does not intend to, and does not believe that it or its Subsidiaries will, incur debts or liabilities beyond the ability of the Borrower and its Subsidiaries to pay as such debts and liabilities mature, (iv) the Borrower and its Subsidiaries on a consolidated basis are not engaged in business or a transaction, and the Borrower and its Subsidiaries on a consolidated basis are not about to engage in a business or a transaction, for which the property of the Borrower and its Subsidiaries on a consolidated basis would constitute an unreasonably small capital and (v) the Borrower and its Subsidiaries have not executed this Agreement or any other Loan Document or made any transfer or incurred any obligations hereunder, with actual intent to hinder, delay or defraud either present or future creditors. The amount of Contingent Liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, can reasonably be expected to become an actual or matured liability.

“ Sources and Uses Certificate ” means a certificate, required to be delivered pursuant to Section 5.1.6 , duly executed and completed by an Authorized Officer of the Borrower setting forth the sources and uses of the cash and equity proceeds to be used to consummate the Merger Transaction.

“ Standard Bodies ” means any of the organizations that create, sponsor and maintain safety, quality or other standards, including ISO, ANSI, CEN and SCC and the like.

“ Subordination Agreement ” means the Intercompany Subordination Agreement executed and delivered by each Loan Party, substantially in the form of Exhibit K hereto, as amended or otherwise modified from time to time.

“ Subsidiary ” means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other Person (irrespective of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person. Unless the context otherwise specifically requires, the term “Subsidiary” shall be a reference to a Subsidiary of the Borrower.

“ Synthetic Lease ” means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (i) that is not a capital lease in accordance with GAAP and (ii) in respect of which the lessee retains or obtains ownership of the property so leased for federal income tax purposes, other than any such lease under which that Person is the lessor.

“ Taxes ” means all income, stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with respect thereto.

“ Termination Date ” means the date on which all Obligations have been paid in full in cash and the Commitment shall have terminated.

“ Trademark ” means any trademark, service mark, trade name, logo, symbol, trade dress, domain name, corporate name and other indicator of source or origin, and all applications and registrations therefor, together with all of the goodwill associated with the therewith.

“ Trademark Security Agreement ” means any Trademark Security Agreement executed and delivered by each Loan Party substantially in the form of Exhibit G to the Pledge and Security Agreement, as amended or otherwise modified from time to time.

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

“ U.S. Tax Compliance Certificate ” is defined in Section 4.3(e)(ii)(b)(3) .

“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if, with respect to any financing statement or by reason of any provisions of law, the perfection or the effect of perfection or non-perfection of the security interests granted to the Lender pursuant to the applicable Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Loan Document and any financing statement relating to such perfection or effect of perfection or non-perfection.

“ United States ” or “ U.S. ” means the United States of America, its fifty states and the District of Columbia.

“ Voting Securities ” means, with respect to any Person, Capital Securities of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

“ Warrant ” means the warrant executed and delivered by the Borrower and the Lender, substantially in the form of Exhibit H hereto, as amended or otherwise modified from time to time.

“ Welfare Plan ” means a “welfare plan”, as such term is defined in Section 3(1) of ERISA that provides welfare benefits to terminated employees, other than to the extent required by Section 4980B(f) of the Code and the corresponding provisions of ERISA or similar state law.

“ wholly owned Subsidiary ” means any direct or indirect Subsidiaries of the Borrower, all of the outstanding Capital Securities of which (other than any director’s qualifying shares or investments by foreign nationals mandated by applicable laws) is owned directly or indirectly by the Borrower.

Section 1.2 Use of Defined Terms . Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in each other Loan Document and the schedules attached hereto.

Section 1.3 Cross-References . Unless otherwise specified, references in a Loan Document to any Article or Section are references to such Article or Section of such Loan Document, and references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

Section 1.4 Accounting and Financial Determinations . Unless otherwise specified, all accounting terms used in each Loan Document shall be interpreted, and all accounting determinations and computations thereunder (including under Section 8.4 and any definitions used in such calculations) shall be made, in accordance with those generally accepted accounting principles (“ GAAP ”) applied in the preparation of the financial statements referred to in Sections 5.1.4(a) and (b) and Sections 7.1(a) , (b) , and (c) . Unless otherwise expressly provided, all financial covenants and defined financial terms shall be computed on a consolidated basis for the Borrower and its Subsidiaries, in each case without duplication.

Article II
COMMITMENT and BORROWING procedures

Section 2.1 Commitment . On the terms and subject to the conditions of this Agreement, the Lender agrees to make a term loan (the “ Loan ”) in a single borrowing to the Borrower on the Closing Date in an amount equal to the Commitment Amount or such lesser amount requested by the Borrower in the Loan Request, as the case may be. No further borrowings will be made hereunder, and no amounts paid or prepaid with respect to the Loan may be reborrowed.

Section 2.2 Borrowing Procedures . Subject to the terms and conditions hereof, the Borrower may, by delivery of a Loan Request to the Lender, irrevocably request that the Loan be made by delivering to the Lender a Loan Request on or before 10:00 a.m. on a Business Day at least three (3) (but not greater than five (5)) Business Days prior to the Closing Date.

Section 2.3 Funding . After receipt of the Loan Request for the Loan, the Lender shall, on the Closing Date and subject to the terms and conditions hereof, make the requested proceeds of the Loan available to the Borrower by wire transfer to the account the Borrower shall have specified in its Loan Request. All such proceeds shall be applied in accordance with the Sources and Uses Certificate.

Section 2.4 Reduction of the Commitment Amounts . The Commitment Amount shall automatically and permanently be reduced to zero immediately after the making of the Loan on the Closing Date.

Article III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

Section 3.1 Repayments and Prepayments; Application . The Borrower agrees that the Loan, and any fees or interest accrued or accruing thereon, shall be repaid and prepaid solely in Dollars pursuant to the terms of this Article III .

Section 3.2 Repayments and Prepayments . The Borrower shall repay in full the entire unpaid principal amount of the Loan on the Maturity Date. Prior thereto, payments and prepayments of the Loan shall be made as set forth below.

(a) On the last Business Day of each calendar month that follows the second anniversary of the Closing Date, the Borrower shall make a scheduled principal payment on the Loan of $225,000, with any remaining unpaid balance of the Loan being payable in cash on the Maturity Date.

(b) The Borrower may, upon five (5) Business Days prior written notice to the Lender, prepay the outstanding amount of the Loan in whole or in part.

(c) Subject to Section 3.4 , upon any Disposition by any Loan Party (other than any Excluded Business Disposition) that, when taken together with all other such Dispositions made by all Loan Parties during the preceding period of 12 consecutive months, results in aggregate Net Cash Proceeds from such Dispositions that exceed $500,000 in the aggregate for such 12-month period, the Borrower shall within three (3) Business Days of such Person’s receipt of such excess proceeds prepay the outstanding principal amount of the Loan in an amount equal to 100% of such excess Net Cash Proceeds. The provisions of this clause shall not be deemed to be implied consent to any Disposition otherwise prohibited by the terms and conditions of this Agreement.

(d) Subject to Section 3.4 , upon the receipt by any Loan Party of any Event of Loss, that, when taken together with all other proceeds received upon any Events of Loss by all Loan Parties during the preceding period of 12 consecutive months, exceed $250,000 in the aggregate for such 12-month period, the Borrower shall within three (3) Business Days of such Person’s receipt of such excess proceeds thereof prepay the outstanding principal amount of the Loan in an amount equal to 100% of such excess Net Cash Proceeds.

(e) Upon any Excluded Business Disposition by any Loan Party that, when taken together with all other Excluded Business Dispositions, results in Net Cash Proceeds that exceed $5,000,000 in the aggregate, the Borrower shall within three (3) Business Days of such Person’s receipt of such excess proceeds prepay the outstanding principal amount of the Loan in an amount equal to 100% of such excess Net Cash Proceeds.

(f) Upon the issuance, sale or other incurrence of any debt securities or other Indebtedness by any Loan Party (other than Permitted Debt), the Borrower shall, within three (3) Business Days of such Person’s receipt of the proceeds thereof, prepay the outstanding principal amount of the Loan in an amount equal to 100% of the Net Cash Proceeds therefrom. The provisions of this clause shall not be deemed to be implied consent to any such issuance, sale or incurrence otherwise prohibited by the terms and conditions of this Agreement.

(g) Immediately upon any acceleration of the Maturity Date of the Loan pursuant to Section 9.2 or Section 9.3 , the Borrower shall repay the Loan in full, unless, pursuant to Section 9.3 , only a portion of the Loan are so accelerated (in which case the portion so accelerated shall be so repaid).

(h) Any term or provision hereof to the contrary notwithstanding, if the Loan hereunder is repaid or prepaid for any reason on or prior to the date that is three (3) years after the Closing Date (including repayments and prepayments made pursuant to clause (b) through (g) above, but excluding, payments made pursuant to clause (a) of this Section 3.2 ), the Borrower shall pay the Early Prepayment Fee to the Lender at the time of such prepayment, together with all other fees payable hereunder (if any), including pursuant to Sections 3.7 and 3.8 .

Section 3.3 Application . Amounts repaid or prepaid in respect of the Loan shall be applied as set forth in this Section 3.3 .

(a) Subject to clause (b) , proceeds of each prepayment or repayment of the Loan shall be applied as set forth in clause (b) of Section 4.4 .

(b) Each prepayment of the Loan made pursuant to clauses (b) , (c) , (d) , (e) or (f) of Section 3.2 shall be applied in reverse order of the scheduled repayments set forth in clause (a) of Section 3.2 .

Section 3.4 Reinvestment of Certain Proceeds. Notwithstanding clauses (c) and (d) of Section 3.2 , up to an aggregate amount of $2,500,000 of Net Cash Proceeds that would otherwise be required to be used to prepay the Loan may instead be used to replace, repair or restore the properties or assets used (i) in any Loan Party’s business or to acquire other properties or assets related to any Loan Party’s business or (ii) otherwise for working capital purposes in connection with the Borrower’s would care business; provided that, (a) no Default or Event of Default has occurred and is continuing on the date such Person receives such proceeds, and (b) the Borrower delivers a certificate to the Lender within five (5) Business Days after the date of such receipt stating that such proceeds shall be so used within one hundred eighty (180) days after the receipt of such proceeds. If all or any portion of such proceeds not so applied to the prepayment of the Loan are not used in accordance with the preceding sentence within such period or an Event of Default shall have occurred and is continuing, such remaining portion shall be applied to prepay the Loan as required by Section 3.2 on the last day of such specified period, or immediately in the case of an Event of Default.

Section 3.5 Interest Rate . During any applicable Interest Period, the Loan shall accrue interest during such Interest Period at a rate per annum equal to the sum of (i) the greater of (x) the LIBO Rate for such Interest Period and (y) 1.00%, plus (ii) the Applicable Margin. The interest rate shall be recalculated and, if necessary, adjusted for each Interest Period, in each case pursuant to the terms hereof.

Section 3.6 Default Rate . At all times commencing upon the date any Event of Default occurs, and continuing until such Event of Default is no longer continuing, the Applicable Margin shall be increased by 4.00% per annum.

Section 3.7 Payment Dates . Interest accrued on the Loan shall be payable in cash, without duplication:

(a) on the Maturity Date therefor;

(b) on the date of any payment or prepayment, in whole or in part, of principal outstanding on the Loan, on the principal amount so paid or prepaid;

(c) the last day of each Interest Period for the Loan; provided that if such day is not a Business Day, then such payment shall be made on the next succeeding Business Day; and

(d) on that portion of the Loan that is accelerated pursuant to Section 9.2 or Section 9.3 , immediately upon such acceleration.

Interest accrued on the Loan or any other monetary Obligations after the date such amount is due and payable (whether on the Maturity Date, upon acceleration or otherwise) shall be payable upon demand.

Section 3.8 Exit Fee . On the day when the Loan is paid in full, whether by voluntary or involuntary prepayment, scheduled amortization, acceleration, on the Maturity Date or otherwise, the Borrower will pay an exit fee equal to the greater of (i) one percent (1%) multiplied by the remaining outstanding principal balance of the Loan immediately prior to the final payment of the Loan and (ii) $100,000.

Section 3.9 Fees . The Borrower shall pay to the Lender such fees as shall have been separately agreed in the Commitment Letter.

Article IV
LIBO RATE AND OTHER PROVISIONS

Section 4.1 Increased Costs, Etc . If any Change in Law shall (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Lender or any Person controlling the Lender (except any reserve requirement reflected in the LIBO Rate) or (ii) impose on the Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or the Loan made by the Lender, and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to, continuing or maintaining the Loan or of maintaining its obligation to make the Loan (whether of principal, interest or any other amount) then, upon written notice from the Lender, the Borrower shall within 30 days following receipt of such notice pay directly to the Lender such additional amount or amounts sufficient to compensate the Lender for such additional costs incurred or reduction suffered. A certificate of the Lender setting forth the amount or amounts necessary to compensate the Lender or a Person controlling the Lender, as the case may be, as specified in this Section 4.1 and delivered to the Borrower, shall be conclusive absent manifest error. Failure or delay on the part of the Lender to demand compensation pursuant to this Section 4.1 shall not constitute a waiver of the Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Lender pursuant to this Section 4.1 for any increased costs incurred or reductions suffered more than nine months prior to the date that the Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

Section 4.2 Increased Capital Costs . If any Change in Law affects or would affect the amount of capital required or expected to be maintained by the Lender or any Person controlling the Lender, and the Lender determines (in good faith but in its sole and absolute discretion) that the rate of return on its or such controlling Person’s capital as a consequence of the Commitment or the Loan made by it hereunder is reduced to a level below that which the Lender or such controlling Person could have achieved but for the occurrence of any such circumstance, then upon notice from time to time by the Lender to the Borrower, the Borrower shall within five days following receipt of such notice pay directly to the Lender additional amounts sufficient to compensate the Lender or such controlling Person for such reduction in rate of return. A statement of the Lender as to any such additional amount or amounts shall, in the absence of manifest error, be conclusive and binding on the Borrower. In determining such amount, the Lender may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable.

Section 4.3 Taxes . The Borrower covenants and agrees as follows with respect to Taxes.

(a) Payments Free of Taxes . Any and all payments by the Borrower under any Loan Document shall be made without setoff, counterclaim or other defense, and free and clear of, and without deduction or withholding for or on account of, any Taxes, except as required by Law. If any applicable law (as determined in the good faith discretion of the Borrower) requires the deduction or withholding of any Tax from any such payment, then the Borrower shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Payment of Other Taxes by Borrower . The Borrower shall timely pay all Other Taxes to the relevant Governmental Authority imposing such Other Taxes in accordance with applicable law.

(c) Evidence of Payments . As promptly as practicable after the payment of any Taxes or Other Taxes, and in any event within 45 days of any such payment being due, the Borrower shall furnish to the Lender a copy of an official receipt (or a certified copy thereof) evidencing the payment of such Taxes or Other Taxes.

(d) Indemnification . The Borrower shall indemnify the Lender for any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) levied, imposed or assessed on (and whether or not paid directly by) the Lender, within 10 days after demand therefor, whether or not such Indemnified Taxes are correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.

(e) Status of Lender .

(i) If the Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Lender, if reasonably requested by the Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower as will enable the Borrower to determine whether or not the Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 4.3(e)(ii)(A) , (ii)(B) , (ii)(C) and 4.3(f) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject the Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of the Lender.

(ii) Without limiting the generality of the foregoing:

(A)          if the Lender is a U.S. Person, it shall deliver to the Borrower on or prior to the date on which the Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), executed copies of IRS Form W-9 certifying that the Lender is exempt from U.S. federal backup withholding tax;

(B)          if the Lender is a Foreign Lender, it shall, to the extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall be requested by the Borrower) on or prior to the date on which the Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), whichever of the following is applicable:

(1)         in the case of the Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or 8-BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)         executed copies of IRS Form W-8ECI;

(3)         in the case of the Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that the Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable; or

(4)         to the extent the Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of the Foreign Lender are claiming the portfolio interest exemption, the Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner;

(C)          if the Lender is a Foreign Lender, it shall, to the extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall be requested by the Borrower) on or prior to the date on which the Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made; and

(f) FATCA . If a payment made to the Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if the Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Lender shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with their obligations under FATCA and to determine that the Lender has complied with the Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 4.3(f) , “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement.

(g) Maintenance of Forms . The Lender agrees that if any form or certification it previously delivered pursuant to this Section 4.3 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower in writing of its legal inability to do so.

(h) Treatment of Certain Refunds . If the Lender determines, in its sole discretion, exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by the Lender, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Lender, agrees to repay the amount paid over to any the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Lender in the event the Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the Lender be required to pay any amount to the Borrower pursuant to this subsection the payment of which would place the Lender in a less favorable net after-Tax position than the Lender would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 4.3(h) shall not be construed to require the Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

Section 4.4 Payments, Computations; Proceeds of Collateral, Etc . The parties hereto agree as follows:

(a) Unless otherwise expressly provided in a Loan Document, all payments by the Borrower pursuant to each Loan Document shall be made without setoff, deduction or counterclaim not later than 11:00 a.m. on the date due in same day or immediately available funds to such account as the Lender shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Lender on the next succeeding Business Day. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of three hundred sixty (360) days. Payments due on other than a Business Day shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.

(b) All amounts received as a result of the exercise of remedies under the Loan Documents (including from the proceeds of collateral securing the Obligations) or under applicable law shall be applied upon receipt to the Obligations as follows: (i) first, to the payment in full in cash of all interest (including interest accruing after the commencement of a proceeding in bankruptcy, insolvency or similar law, whether or not permitted as a claim under such law) and fees owing under the Loan Documents, and all costs and expenses owing to the Lender pursuant to the terms of the Loan Documents, until paid in full in cash, (ii) second, after payment in full in cash of the amounts specified in clause (b)(i) , to the payment of the principal amount of the Loan then outstanding, (iii) third, after payment in full in cash of the amounts specified in clauses (b)(i) and (b)(ii) , to the payment of all other Obligations owing to the Lender, and (iv) fourth, after payment in full in cash of the amounts specified in clauses (b)(i) through (b)(iii) , and following the Termination Date, to the Borrower or any other Person lawfully entitled to receive such surplus.

Section 4.5 Setoff . The Lender shall, upon the occurrence and during the continuance of any Event of Default described in clauses (a) through (d) of Section 9.1.8 or, upon the occurrence and during the continuance of any other Event of Default, have the right to appropriate and apply to the payment of the Obligations owing to it (whether or not then due), and (as security for such Obligations) each Loan Party hereby grants to the Lender a continuing security interest in, any and all balances, credits, deposits, accounts or moneys of each Loan Party then or thereafter maintained with the Lender. The Lender agrees promptly to notify the Borrower after any such appropriation and application made by the Lender; provided that, the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lender under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which the Lender may have.

Section 4.6 LIBO Rate Not Determinable . If prior to the commencement of any Interest Period, adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Interest Period, then the Lender shall give notice thereof to the Borrower as promptly as practicable. In the event of any such determination, the Loan shall, until the Lender has advised the Borrower that the circumstances giving rise to such notice no longer exist, bear interest at the interest rate in effect for the immediately preceding Interest Period.

Article V
CONDITIONS TO LOAN

Section 5.1 Loan . The obligation of the Lender to make the Loan shall be subject to the execution and delivery of this Agreement by the parties hereto, the delivery of a Loan Request as requested pursuant to Section 2.2 , and the prior or substantially concurrent satisfaction of each of the conditions precedent set forth below in this Article.

Section 5.1.1 Secretary’s Certificate, Etc . The Lender shall have received from each Loan Party, (i) a copy of a good standing certificate, dated a date reasonably close to the Closing Date, for each such Person and (ii) a certificate, dated as of the Closing Date, duly executed and delivered by such Person’s Secretary or Assistant Secretary, managing member or general partner, as applicable, as to:

(a) resolutions of each such Person’s board of directors (or other managing body, in the case of other than a corporation) then in full force and effect authorizing the execution, delivery and performance of each Loan Document to be executed by such Person and the transactions contemplated hereby and thereby; and

(b) the incumbency and signatures of those of its officers, managing member or general partner, as applicable, authorized to act with respect to each Loan Document to be executed by such Person;

upon which certificates the Lender may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary, managing member or general partner, as applicable, of any such Person cancelling or amending the prior certificate of such Person.

Section 5.1.2 Closing Date Certificate . The Lender shall have received a certificate, dated as of the Closing Date and in form and substance satisfactory to the Lender (the “ Closing Date Certificate ”), duly executed and delivered by an Authorized Officer of the Borrower, in which certificate the Borrower shall (i) provide, among other things, the pro forma capitalization of the Borrower immediately following the consummation of the Merger Transaction and the making of the Loan on the Closing Date and (ii) agree and acknowledge, among other things, that the statements made therein shall be deemed to be true and correct representations and warranties of the Borrower as of such date, and, at the time such certificate is delivered, such statements shall in fact be true and correct, and such statements shall include that all of the conditions set forth in this Section 5.1 have been satisfied as provided herein, including without limitation, Section 5.1.18 below. All documents and agreements required to be appended to the Closing Date Certificate, if any, shall be in form and substance satisfactory to the Lender, shall have been executed and delivered by the requisite parties, and shall be in full force and effect.

Section 5.1.3 Delivery of Notes . The Lender shall have received a Note for the Loan duly executed and delivered by an Authorized Officer of the Borrower.

Section 5.1.4 Financial Information, Etc . The Lender shall have received,

(a) audited consolidated financial statements of the Borrower and its Subsidiaries for each of the Fiscal Year ended December 31, 2014; and

(b) unaudited consolidated balance sheets of the Borrower and its Subsidiaries for each Fiscal Quarter ended after December 31, 2014, together with the related consolidated statement of operations, shareholder’s equity and cash flows for such Fiscal Quarter.

Section 5.1.5 Compliance Certificate, Etc . The Lender shall have received an initial Compliance Certificate, dated as of the Closing Date, prepared on a pro forma basis as if the Merger Transaction (including the making of the Loan) was consummated as of the last day of the calendar month preceding the Closing Date, duly executed (and with all schedules thereto duly completed) and delivered by the chief financial or accounting Authorized Officer of the Borrower. The Compliance Certificate shall also include a pro forma consolidated balance of the Borrower.

Section 5.1.6 Sources and Uses Certificate . At least three (3) Business Days prior to the Closing Date the Lender shall have received the Sources and Uses Certificate duly executed and delivered by the chief financial or accounting Authorized Officer of the Borrower, which certificate shall be in form and substance reasonably satisfactory to the Lender.

Section 5.1.7 Solvency, Etc . The Lender shall have received, a solvency certificate, substantially in the form of Exhibit J hereto, duly executed and delivered by the chief financial or accounting Authorized Officer of the Borrower, dated as of the Closing Date, certifying that the Loan Parties, taken as a whole, on a consolidated basis, after giving effect to the Loan and the consummation of the Merger Transaction, are Solvent.

Section 5.1.8 Pledge and Security Agreement . The Lender shall have received executed counterparts of the Pledge and Security Agreement, dated as of the date hereof, duly executed and delivered by each Loan Party, together with:

(a) certificates (in the case of Capital Securities that are securities (as defined in the UCC)) evidencing all of the issued and outstanding capital Securities owned by each Loan Party, which certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Capital Securities (in the case of Capital Securities that are uncertificated securities (as defined in the UCC)), confirmation and evidence satisfactory to the Lender that the security interest therein has been transferred to and perfected by the Lender in accordance with Articles 8 and 9 of the UCC and all laws otherwise applicable to the perfection of the pledge of such Capital Securities;

(b) financing statements suitable in form for naming each Loan Party as a debtor and the Lender as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the opinion of the Lender, desirable to perfect the security interests of the Lender pursuant to the Pledge and Security Agreement;

(c) UCC Form UCC-3 termination statements, if any, necessary to release all Liens and other rights of any Person (i) in any collateral described in the Pledge and Security Agreement previously granted by any Person, and (ii) securing any of the Indebtedness identified in Schedule 8.2(c) , together with such other UCC Form UCC-3 termination statements as the Lender may reasonably request from any Loan Party;

(d) evidence that all deposit accounts, lockboxes, disbursement accounts, investment accounts maintained with PNC Bank, National Association or other similar accounts of each Loan Party are Controlled Accounts;

(e) evidence that all such Controlled Accounts maintained with PNC Bank, National Association are subject to one or more account control agreements, in favor of, and satisfactory in form and substance to, the Lender; and

(f) subject to Section 7.8(b) , originals of all negotiable Documents (as defined in the UCC), Instruments (as defined in the UCC), Promissory Notes (as defined in the UCC), and tangible Chattel Paper (as defined in the UCC) owned or held by any Loan Party and having a face amount (or equivalent) in excess of $100,000.

Section 5.1.9 Intellectual Property Security Agreements . The Lender shall have received a Patent Security Agreement, a Copyright Security Agreement and a Trademark Security Agreement, as applicable, each dated as of the Closing Date, duly executed and delivered by each Loan Party that, pursuant to the Pledge and Security Agreement, is required to provide such intellectual property security agreements to the Lender.

Section 5.1.10 Warrant . The Lender and the Borrower shall have executed and delivered the Warrant.

Section 5.1.11 Merger Agreement . The Lender shall have received execution copies of the Merger Agreement, all Ancillary Documents and all amendments, waivers or other modifications thereto, if any, since February 2, 2015, together with a certificate of an Authorized Officer of the Borrower certifying that the Merger Agreement and the Ancillary Documents are in full force and effect and there have been no other amendments, waivers or other modifications thereto since February 2, 2015.

Section 5.1.12 Merger Transaction. The Merger Transaction shall have been consummated in accordance with the terms of the Merger Agreement and the Ancillary Documents and all applicable laws, rules and regulations, in each case, without any amendment or waiver that is materially adverse to the interests of the Lender.

Section 5.1.13 Insurance . The Lender shall have received (i) certified copies of the insurance policies (or binders in respect thereof), from one or more insurance companies satisfactory to the Lender, evidencing coverage required to be maintained pursuant to each Loan Document or (ii) evidence, satisfactory to it, that the Borrower has expended commercially reasonable efforts to obtain such certified copies of the insurance policies (or binders in respect thereof) prior to the Closing Date. All such insurance policies required pursuant to this Section shall (x) name the Lender as mortgagee (in the case of property insurance) or loss payee or additional insured (in the case of liability insurance), as applicable, and (y) be in addition to any requirements to maintain specific types of insurance contained in the other Loan Documents. Provided that (i) the Borrower has used its commercially reasonable efforts prior to the closing to cause each such insurance policy to so name the Lender as a mortgagee, loss payee or additional insured, and (ii) at least three (3) Business Days prior to the Closing Date the Borrower has identified to the Lender, in writing and in reasonable detail, all such policies in respect of which, as of the Closing Date, the Lender has not been (or will not be) named as a mortgagee, loss payee or additional insured, the failure of any such insurance policies to name the Lender as a mortgagee, loss payee or additional insured shall not result in the failure of the conditions set forth in this Section 5.1.13 to be satisfied.

Section 5.1.14 Certain Material Contracts . Copies of all Borrower Material Contracts and Celleration Material Contracts shall have been made available to the Lender prior to the Closing Date upon its written request. The Lender shall have received a certificate from an Authorized Officer of the Borrower certifying that (i) each such contract or agreement is in full force and effect as of the Closing Date and (ii) there has been no amendment, waiver or other modification to any such contract or agreement since February 2, 2015, except, in each case, as disclosed in such certificate or Schedule 6.16(b) . No such amendment, waiver or other modification, if any, shall be materially adverse to the Lender’s interests.

Section 5.1.15 Opinions of Counsel. The Lender shall have received opinions, dated the Closing Date and addressed to the Lender, from Haynes and Boone, LLP, New York counsel to each Loan Party, in form and substance satisfactory to the Lender.

Section 5.1.16 Closing Fees, Expenses, Etc . The Lender shall have received for its own account, all fees, costs and expenses due and payable pursuant to (i) Section 3.9 , and (ii) Section 11.3 , and in the case of clause (ii) , which in the aggregate, as of the Closing Date, shall not exceed $275,000.

Section 5.1.17 Anti-Terrorism Laws . The Lender shall have received, as applicable, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act.

Section 5.1.18 Closing Date Material Adverse Effect . The representations and warranties (other than Section 6.6 hereof) are true and correct in all material respects, no Default (other than any Default arising pursuant to Section 9.1.2 as a result of a breach of Section 6.6 hereof) shall have occurred and be continuing, or would occur as a result of making the Loan on the Closing Date, and no Closing Date Material Adverse Effect shall have occurred since December 31, 2013.

Section 5.1.19 Intercompany Subordination Agreement . The Lender shall have received executed counterparts of the Subordination Agreement, dated as of the date hereof, duly executed and delivered by each Loan Party and the Lender.

Article VI
REPRESENTATIONS AND WARRANTIES

In order to induce the Lender to enter into this Agreement and to make the Loan hereunder, each Loan Party, jointly and severally, represents and warrants to the Lender, as of the consummation of the Merger Transaction on the Closing Date, as set forth in this Article.

Section 6.1 Organization, Etc . Each Loan Party is validly organized and existing and in good standing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification, except where the failure to be in good standing as a foreign entity in any such jurisdiction would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its Obligations under each Loan Document to which it is a party, to own and hold under lease its property and to conduct its business substantially as currently conducted by it.

Section 6.2 Due Authorization, Non-Contravention, Etc . The execution, delivery and performance by each Loan Party of each Loan Document executed or to be executed by it are in each case within such Person’s powers, have been duly authorized by all necessary action, and do not:

(a) contravene (i) any Loan Party’s Organic Documents, (ii) any court decree or order binding on or affecting any Loan Party or (iii) any law or governmental regulation binding on or affecting any Loan Party, except, with respect to clause (iii), for such contraventions that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; or

(b) result in or require (i) the creation or imposition of, any Lien on any Loan Party’s properties (other than Permitted Liens) or (ii) a default under any contractual restriction binding on or affecting any Loan Party, except, with respect to clause (ii), any default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.3 Government Approval, Regulation, Etc . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person (other than those that have been, or on the Closing Date will be, duly obtained or made and which are, or on the Closing Date will be, in full force and effect) is required for the due execution, delivery or performance by any Loan Party of any Loan Document to which it is a party, except for such approvals, actions, notices or filings the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each Loan Party and its respective properties and businesses are in compliance in all material respects with all laws, rules regulations, orders and court decrees applicable to such Persons, properties or businesses, as the case may be.

Section 6.4 Validity, Etc . Each Loan Document to which any Loan Party is a party constitutes the legal, valid and binding obligations of such Person enforceable against such Person in accordance with its respective terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity).

Section 6.5 Financial Information . The consolidated financial statements of the Loan Parties furnished to the Lender pursuant to Section 5.1.4 and Sections 7.1(a) , (b) , and (c) have been prepared in accordance with GAAP consistently applied, and present fairly the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended.

Section 6.6 No Material Adverse Change . Other than the Merger Transaction, there has been no material adverse change in the business, financial performance or condition, operations (including the results thereof), assets, properties or prospects of the Loan Parties since December 31, 2013.

Section 6.7 Litigation, Labor Matters and Environmental Matters .

(a) Except as described on Schedule 6.7(a) , there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting, any Loan Party (i) as to which there is a reasonable likelihood of an adverse determination and that, if adversely determined, would reasonably be expected, individually or in the aggregate, to result in liabilities in excess of $500,000 or (ii) that would reasonably be likely to have a Material Adverse Effect.

(b) There are no labor controversies pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party (i) that would reasonably be expected, individually or in the aggregate, to result in liabilities in excess of $250,000 or (ii) that would reasonably be likely to have a Material Adverse Effect.

(c) No Loan Party (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any Permit under or in connection with any Environmental Law (“ Environmental Permit ”), (ii) is or has been subject to any Environmental Liability, (iii) has received notice of any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

Section 6.8 Subsidiaries . The Borrower has no Subsidiaries, except those Subsidiaries which are identified on Schedule 6.8 , or which are permitted to have been organized or acquired in accordance with Section 8.5 or Section 8.8 . As of the date hereof, all Subsidiaries identified on Schedule 6.8 are Guarantors.

Section 6.9 Ownership of Properties . Each Loan Party owns (i) in the case of owned real property, good and marketable fee title to, and (ii) in the case of owned personal property, good and valid title to, or, in the case of leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of its properties and assets, tangible and intangible, of any nature whatsoever, free and clear in each case of all Liens or claims, except for Permitted Liens.

Section 6.10 Taxes. Each Loan Party has filed all income and other tax returns and reports required by law to have been filed by it and has paid all Taxes thereby shown to be due and owing, except any such Taxes which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

Section 6.11 Pension Plans, Etc . During the twelve-consecutive-month period prior to the Closing Date, no formal steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien on any Loan Party or any ERISA Affiliate under Section 303(k) of ERISA or under Section 430(k) of the Code. No condition exists or event or transaction has occurred with respect to any Pension Plan or Multiemployer Plan which would reasonably be expected to result in the incurrence by any Loan Party or ERISA Affiliate of any material liability, fine or penalty. Except as disclosed in Schedule 6.11 , no Loan Party has any Contingent Liability with respect to any post-retirement benefit under a Welfare Plan.

Section 6.12 Accuracy of Information . None of the factual information heretofore or contemporaneously furnished in writing to the Lender by or on behalf of any Loan Party in connection with any Loan Document or any transaction contemplated hereby contains any untrue statement of a material fact, or omits to state any material fact necessary to make any information not misleading.

Section 6.13 Regulations U and X . No Loan Party is engaged in the business of extending credit for the purpose of buying or carrying margin stock, and no proceeds of the Loan will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U or Regulation X. Terms for which meanings are provided in F.R.S. Board Regulation U or Regulation X or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

Section 6.14 Solvency . The Loan Parties, taken as a whole, on a consolidated basis, after giving effect to the Loan and the Merger Transaction, are Solvent.

Section 6.15 Intellectual Property .

(a) Schedule 6.15(a) sets forth a complete and accurate list of all (i) Patents, (ii) registered and material unregistered Trademarks (including domain names) and any pending registrations for Trademarks and (iii) any other registered Intellectual Property and (iv) any commercially significant unregistered Intellectual Property, in each case owned or licensed by each Loan Party. For each item of Intellectual Property listed on Schedule 6.15(a) , the applicable Loan Party has, where relevant, indicated (A) the countries in each case in which such item is patented, (B) the application numbers, (C) the registration or patent numbers, (D) with respect to the Patents, the expected expiration date of the issued Patents, (E) the owner of such item of Intellectual Property and (F) with respect to Intellectual Property owned by any third party, the agreement pursuant to which that Intellectual Property is licensed to any Loan Party.

(b) With respect to all Intellectual Property of the Loan Parties listed on Schedule 6.15(a) :

(i) such Loan Party owns or has a valid license to such Intellectual Property free and clear of any and all Liens other than Permitted Liens and all such Intellectual Property are in full force and effect, and have not expired, lapsed or been forfeited, cancelled or abandoned;

(ii) such Loan Party has taken commercially reasonable actions to maintain and protect such Intellectual Property and there are no unpaid maintenance or renewal fees payable by such Loan Party that are currently overdue for any of such registered Intellectual Property;

(iii) there is no proceeding challenging the validity or enforceability of any such Intellectual Property, no Loan Party is involved in any such proceeding with any Person and none of the Intellectual Property is the subject of any Other Administrative Proceeding;

(iv) to the knowledge of the Loan Parties, (A) such Intellectual Property is valid, enforceable and subsisting and (B) no event has occurred, and nothing has been done or omitted to have been done, that would effect the validity or enforceability of such Intellectual Property; and

(v) such Loan Party is the sole and exclusive owner of all right, title and interest in and to, all such Intellectual Property that is owned by such Loan Party.

(c) To the knowledge of the Loan Parties, no third party is committing any act of Infringement of any Intellectual Property listed on Schedule 6.15(a) .

(d) With respect to each license agreement listed on Schedule 6.15(a) , such license agreement (i) is in full force and effect and is binding upon and enforceable against each Loan Party party thereto and, to the knowledge of the responsible officer of the Borrower or any relevant Subsidiary, all other parties party thereto in accordance with its terms, (ii) has not been amended or otherwise modified and (iii) has not suffered a default thereunder. No Loan Party has taken any action that would permit any other Person party to any Material Agreement to have, and to the knowledge of any responsible officer of any Loan Party, no such Person otherwise has, any defenses, counterclaims or rights of setoff thereunder.

(e) No Loan Party has received written notice from any third party alleging that the conduct of its business (including the development, manufacture, use, sale or other commercialization of any Product) Infringes any Intellectual Property of that third party and, to the knowledge of each Loan Party, the conduct of its business (including the development, manufacture, use, sale or other commercialization of any Product) does not Infringe any Intellectual Property of any third party.

Section 6.16 Material Agreements . Set forth on Schedule 6.16(a) is a complete and accurate list as of the Closing Date of each Material Agreement of each Loan Party, with a reasonable description of the parties, subject matter thereof and amendments and modifications thereto. Other than as set forth on Schedule 6.16(b) , each such Material Agreement (i) is in full force and effect and is binding upon and enforceable against each Loan Party party thereto and, to the knowledge of any responsible officer of the Borrower or any of its Subsidiaries, all other parties thereto in accordance with its terms, and (ii) has not suffered a default thereunder. No Loan Party has taken any action that would permit any other Person party to any Material Agreement to have, and to the knowledge of any responsible officer of the Borrower or any of its Subsidiaries, no such Person otherwise has, any defenses, counterclaims or rights of setoff thereunder.

Section 6.17 Permits . Each Loan Party has all Permits, including Environmental Permits, necessary or required for the ownership, operation and conduct of its business and the distribution of the Products. All such Permits are validly held and there are no defaults thereunder.

Section 6.18 Regulatory Matters . With respect to each Product:

(a) Set forth on Schedule 6.18(a) is a complete and accurate list as of the Closing Date of all material Regulatory Authorizations relating to the Loan Parties, the conduct of their business and the Products (on a per Product basis). All such material Regulatory Authorizations are (i) legally and beneficially owned exclusively by the Loan Parties, free and clear of all Liens other than Permitted Liens, (ii) validly registered and on file with the applicable Governmental Authority, in material compliance with all registration, filing and maintenance requirements (including any fee requirements) thereof, and (iii) in good standing, valid and enforceable with the applicable Governmental Authority in all material respects. All required and material notices, registrations and listings, supplemental applications or notifications, reports (including field alerts, medical device reports or other reports of adverse experiences) and other required and material filings with respect to the Products have been filed with the FDA and all other applicable Governmental Authorities.

(b) (i) All material regulatory filings required by any Regulatory Authority or in respect of any Regulatory Authorization or Product Authorization with respect to any Product or any Product Development and Commercialization Activities have been made, and all such filings are complete and correct in all material respects and have complied in all material respects with all applicable laws and regulations, (ii) all clinical and pre-clinical trials, if any, of investigational Products have been and are being conducted by each Loan Party according to all applicable laws and regulations in all material respects along with appropriate monitoring of clinical investigator trial sites for their compliance, and (iii) each Loan Party has disclosed to the Lender all such material regulatory filings and all material communications between representatives of each Loan Party and any Regulatory Authority.

(c) The Borrower and each other Loan Party and the Borrower’s agents and the agents of each other Loan Party are in compliance in all material respects with all applicable statutes, rules and regulations (including all Regulatory Authorizations and Product Authorizations) of all applicable Governmental Authorities, including the FDA and all other Regulatory Authorities, with respect to each Product and all Product Development and Commercialization Activities related thereto. The Borrower and each other Loan Party has and maintains in full force and effect all the necessary and requisite Regulatory Authorizations and Product Authorizations. The Borrower and each other Loan Party is in compliance in all material respects with all applicable registration and listing requirements set forth in the FD&C Act or equivalent regulation of each other Governmental Authority having jurisdiction over such Person. Each Loan Party adheres in all material respects to all applicable regulations of all Regulatory Authorities with respect to the Products and all Product Development and Commercialization Activities related thereto.

(d) Neither the Borrower nor any other Loan Party has received from any Regulatory Authority any notice of adverse findings with respect to any Product or any Product Development and Commercialization Activities related thereto, including any FDA Form 483 inspectional observations, notices of violations, Warning Letters, criminal proceeding notices under Section 305 of the FD&C Act, or any other similar communication from any Regulatory Authority. There have been no seizures conducted or, to the Borrower’s knowledge, threatened by any Regulatory Authority with respect to any Product, and no recalls, market withdrawals, field notifications, notifications of misbranding or adulteration or safety alerts conducted, requested or, to the Borrower’s knowledge, threatened by any Regulatory Authority with respect to any Product, and no recalls, market withdrawals, field notifications, notifications of misbranding or adulteration or safety alerts have been conducted, requested or, to the Borrower’s knowledge, threatened by any Regulatory Authority relating to any Products. Neither the Borrower nor any other Loan Party has received any written notification that remains unresolved from the FDA or any other Regulatory Authority indicating any breach or violation of any applicable Product Authorization or Regulatory Authorization, including that any of the Products is misbranded or adulterated as defined in the FD&C Act or the rules and regulations promulgated thereunder.

(e) Neither the Borrower nor any other Loan Party nor any officer, employee or agent thereof, has made an untrue statement of a material fact or fraudulent statements to the FDA or any other Regulatory Authority, failed to disclose a material fact required to be disclosed to the FDA or any other Regulatory Authority, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure was made (or was not made), could reasonably be expected to provide a basis for the FDA or any other Regulatory Authority to invoke its policy respecting Fraud, Untrue Statements of Material Facts, Bribery and Illegal Gratuities, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy.

(f) Neither the Borrower nor any other Loan Party has received any written notice that the FDA or any other applicable Regulatory Authority has commenced or initiated, or, to the knowledge of the Borrower or any such Loan Party, threatened to commence or initiate, any action to withdraw any Regulatory Authorization or Product Authorization or requested the recall of any Products or commenced or initiated or, to the knowledge of the Borrower or any such Loan Party, threatened to commence or initiate, any action to enjoin any Product Development and Commercialization Activities of the Borrower or any such Loan Party.

(g) The clinical, preclinical, safety and other studies and tests conducted by or on behalf of or sponsored by the Borrower and each other Loan Party, or in respect of which any Products or Product candidates under development have participated, were (and if still pending, are) being conducted materially in accordance with standard medical and scientific research procedures and all applicable Product Authorizations. The Borrower and each other Loan Party has operated within, and currently is in compliance in all material respects with, all applicable laws, Product Authorizations and Regulatory Authorizations, as well as the rules and regulations of the FDA and each other Regulatory Authority. Neither the Borrower nor any other Loan Party has received any notices or other correspondence from the FDA or any other Regulatory Authority requiring the termination or suspension of any clinical, preclinical, safety or other studies or tests used to support regulatory clearance of, or any Product Authorization or Regulatory Authorization for, any Product.

Section 6.19 Transactions with Affiliates . Except as set forth on Schedule 6.19 , neither the Borrower nor any Subsidiary has entered into, renewed, extended or been a part to, any transaction (including the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate during the three-year period prior to the Closing Date.

Section 6.20 Investment Company Act . No Loan Party is an “investment company” or is “controlled” by an “investment company,” as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

Section 6.21 OFAC . No Loan Party or, to the knowledge of the Borrower, any Related Party nor any of their respective directors, officers, or employees nor, to the knowledge of the Borrower, any agents or other persons acting on behalf of any of the foregoing (a) is currently the target of any Sanctions, (b) is located, organized or residing in any Designated Jurisdiction, (c) is or has been (within the previous five (5) years) engaged in any transaction with, or for the benefit of, any Person who is now or was then the target of Sanctions or who is located, organized or residing in any Designated Jurisdiction or (d) is or has ever been in violation of or subject to an investigation relating to Sanctions. No Loan, nor the proceeds from the Loan, has been or will be used, directly or indirectly, to lend, contribute or provide to, or has been or will be otherwise made available to fund, any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including the Lender and its Affiliates) of Sanctions.

Section 6.22 Anti-Corruption . No Loan Party or, to the knowledge of the Borrower, any Related Party, nor any of their respective directors, officers, or employees nor, to the knowledge of the Borrower, any agents or other persons acting on behalf of any of the foregoing, directly or indirectly, has (a) violated or is in violation of any applicable anti-corruption law, (b) made, offered to make, promised to make or authorized the payment or giving of, directly or indirectly, any Prohibited Payment and (c) been subject to any investigation by any Governmental Authority with regard to any actual or alleged Prohibited Payment.

Section 6.23 Deposit and Disbursement Accounts . Schedule 6.23 contains a list as of the Closing Date of all banks and other financial institutions at which each Loan Party maintains deposit accounts, lockboxes, disbursement accounts, investment accounts or other similar accounts, and such Schedule correctly identifies the name, address and telephone number of each bank or financial institution, the name in which the account is held, the type of account, and the complete account number therefor.

Section 6.24 Registration Rights . Except as set forth on Schedule 6.24 , no Loan Party has granted or agreed to grant any registration rights, including piggyback rights (other than pursuant to the Warrant), to any Person.

Section 6.25 Use of Proceeds . All proceeds of the Loan have been applied as set forth in the Sources and Uses Certificate.

Article VII
AFFIRMATIVE COVENANTS

Each Loan Party, jointly and severally, covenants and agrees with the Lender that until the Termination Date has occurred, each Loan Party will perform the obligations set forth below.

Section 7.1 Financial Information, Reports, Notices, Etc . The Borrower will furnish the Lender copies of the following financial statements, reports, notices and information:

(a) as soon as available and in any event; within 45 days after the end of each Fiscal Quarter, an unaudited consolidated balance sheet of the Loan Parties as of the end of such Fiscal Quarter, and consolidated statements of income and cash flow of the Loan Parties for such period, including (in each case), in comparative form the figures for the corresponding Fiscal Quarter in, and year to date portion of, the immediately preceding Fiscal Year, certified as complete and correct by the chief financial or accounting Authorized Officer of the Borrower (subject to normal year-end audit adjustments);

(b) as soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of the consolidated balance sheet of the Borrower and its Subsidiaries, and the related consolidated statements of income and cash flow of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in comparative form the figures for the immediately preceding Fiscal Year, audited (without any Impermissible Qualification) by independent public accountants acceptable to the Lender, which shall include a calculation of the financial covenants set forth in Section 8.4 and stating that, in performing the examination necessary to deliver the audited financial statements of the Borrower, no knowledge was obtained of any Event of Default;

(c) concurrently with the delivery of the financial information pursuant to clause (a) , a Compliance Certificate, executed by the chief financial or accounting Authorized Officer of the Borrower, (i) showing compliance with the financial covenants set forth in Section 8.4 and stating that no Default has occurred and is continuing (or, if a Default has occurred, specifying the details of such Default and the action that the Borrower or any of its Subsidiaries has taken or proposes to take with respect thereto) and (ii) stating that no Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate (or, if a Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate, a statement that such Subsidiary has complied with Section 7.8 );

(d) upon the Lender’s prior written request made prior to the end of any Fiscal Year, within 45 days after the commencement of such Fiscal Year, an annual budget, a business plan and financial forecasts of the Borrower and its Subsidiaries for the then current Fiscal Year of the Borrower, in form and substance as approved by the board of directors of the Borrower, which shall include a projection of income and a projected cash flow statement for each Fiscal Quarter in such Fiscal Year and a projected balance sheet as of the end of each Fiscal Quarter in such Fiscal Year, in each case prepared in reasonable detail, with appropriate presentation and discussion (in reasonable detail) of the principal assumptions upon which such budgets and projections are based, which shall be accompanied by the statement of an Authorized Officer of the Borrower to the effect that such budget and projections are based on reasonable and good faith estimates and assumptions made by the management of the Borrower for the respective periods covered thereby;

(e) as soon as possible and in any event within three (3) Business Days after the Borrower obtains knowledge of the occurrence of a Default, a statement of an Authorized Officer of the Borrower setting forth details of such Default and the action which the Borrower has taken and proposes to take with respect thereto;

(f) as soon as possible and in any event within three (3) Business Days after the Borrower obtains knowledge of (i) the occurrence of any material adverse development with respect to any litigation, action, proceeding or labor controversy described in Schedule 6.7(a) or (ii) the commencement of any litigation, action, proceeding or labor controversy of the type and materiality described in Section 6.7 , notice thereof and, to the extent the Lender requests, copies of all documentation relating thereto;

(g) as soon as possible and in any event within three (3) Business Days after the Borrower obtains knowledge of any return, recovery, dispute or claim related to any Product or inventory that involves more than $100,000, written notice thereof from an Authorized Officer of the Borrower which notice shall include any statement setting forth details of such return, recovery, dispute or claim;

(h) promptly upon becoming aware of (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) the failure of any Loan Party or any ERISA Affiliate to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien on any Loan Party or any ERISA Affiliate under Section 303(k) of ERISA or under Section 430(k) of the Code, (iii) the taking of any action with respect to a Pension Plan which would reasonably be expected to result in the requirement that any such Person furnish a bond or other security to the PBGC or such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan which would reasonably be expected to result in the incurrence by any Loan Party or any ERISA Affiliate of any material liability, fine or penalty, notice thereof and copies of all documentation relating thereto, written notice thereof from an Authorized Officer of the Borrower, which notice shall include a statement setting forth details of such events;

(i) promptly upon receipt thereof, copies of all “management letters” (or equivalent) submitted to the Borrower or any of its Subsidiaries by the independent public accountants referred to in clause (b) in connection with each audit made by such accountants; and

(j) such other financial and other information as the Lender may from time to time reasonably request (including information and reports in such detail as the Lender may request with respect to the terms of and information provided pursuant to the Compliance Certificate).

Section 7.2 Maintenance of Existence; Compliance with Contracts, Laws, Etc . Each Loan Party will (i) preserve and maintain its legal existence (except as otherwise permitted by Section 8.8 ), (ii) perform in all material respects its obligations under material agreements to which it is a party, and (iii) comply in all material respects with all applicable laws, rules, regulations and orders, including (x) the FD&C Act and the PDMA and in connection with the preparation and submission to the FDA of NDAs, and (y) the payment (before the same become delinquent) of all Taxes imposed upon such Loan Party or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been set aside on the books of such Loan Party, as applicable.

Section 7.3 Maintenance of Properties . Each Loan Party will, maintain, preserve, protect and keep its and their respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by such Loan Party may be properly conducted at all times, unless such Loan Party determines in good faith that the continued maintenance of such property is no longer economically desirable, necessary or useful to the business of such Loan Party or the Disposition of such property is otherwise permitted by Section 8.8 or Section 8.9 .

Section 7.4 Insurance . Each Loan Party will maintain:

(a) insurance on its property with financially sound and reputable insurance companies against loss and damage in at least the amounts (and with only those deductibles) customarily maintained, and against such risks as are typically insured against in the same general area, by Persons of comparable size engaged in the same or similar business as such Loan Party; and

(b) all worker’s compensation, employer’s liability insurance or similar insurance as may be required under the laws of any state or jurisdiction in which it may be engaged in business.

Without limiting the foregoing, all insurance policies required pursuant to this Section shall (i) name the Lender as mortgagee (in the case of property insurance) or loss payee or additional insured (in the case of liability insurance), as applicable, and (ii) be in addition to any requirements to maintain specific types of insurance contained in the other Loan Documents; provided that, so long as identified to the Lender in writing and in reasonable detail at least three (3) Business Days prior to the Closing Date as required pursuant to Section 5.1.13 , the Borrower shall not be in breach of this Section 7.4 with respect to any insurance policies identified in such writing so long as such insurance policies are made to comply with this Section 7.4 on or prior to the thirtieth day following the Closing Date. Notwithstanding the foregoing, the Borrower shall (i) promptly, and in any event within five days after any cancellation or modification of any insurance policy required pursuant to this Section, notify the Lender of such cancellation or modification in writing and specify the details of such cancellation or modification and (ii) promptly, and in any event within thirty days after the cancellation of an insurance policy, replace such insurance policy in accordance with this Section.

Section 7.5 Books and Records . Each Loan Party will keep books and records that accurately reflect in all material respects all of its business affairs and transactions and permit the Lender or any of its respective representatives, at reasonable times and intervals upon reasonable prior notice to the Borrower, to visit such Loan Party’s offices, to discuss such Loan Party’s financial matters with its officers and employees, and its independent public accountants (and such Loan Party hereby authorizes such independent public accountant to discuss such Loan Party’s financial matters with the Lender or its representatives whether or not any representative of such Loan Party is present) and to examine (and photocopy extracts from) any of its books and records. Each Loan Party shall pay any fees of such independent public accountant incurred in connection with the Lender’s exercise of its rights pursuant to this Section. Notwithstanding the foregoing, the Lender may not request access to the Borrower’s independent public accountants more than twice in any twelve month period.

Section 7.6 Environmental Law Covenant . Each Loan Party will (i) use and operate all of its and their businesses, facilities and properties in material compliance with all Environmental Laws, and keep and maintain all Environmental Permits and remain in compliance therewith, and (ii) promptly notify the Lender of, and provide the Lender with copies of all material claims, complaints, notices or inquiries relating to, any actual or alleged non-compliance with any Environmental Laws or Environmental Permits or any actual or alleged Environmental Liabilities. Each Loan Party will promptly resolve, remedy and mitigate any such non-compliance or Environmental Liabilities, and shall keep the Lender informed as to the progress of same.

Section 7.7 Use of Proceeds . Proceeds of the Loan shall be used as set forth in the Sources and Uses Certificate.

Section 7.8 Future Guarantors, Security, Etc .

(a) Each Loan Party will execute any documents, UCC-1 financing statements, UCC-3 termination statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Lender may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority (subject to Permitted Liens) of the Liens created or intended to be created by the Loan Documents. The Borrower will promptly cause any Subsidiary acquired or organized after the date hereof to execute a supplement (in form and substance reasonably satisfactory to the Lender) to this Agreement and each other applicable Loan Document in favor of the Lender. The Borrower will promptly notify the Lender of any subsequently acquired real property of any Loan Party and will provide the Lender with a description of such real property, the acquisition date thereof and the purchase price therefor. In addition, from time to time, each Loan Party will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected Liens with respect to such of its assets and properties as the Lender shall designate, it being agreed that it is the intent of the parties that the Obligations shall at all times be secured by, among other things, substantially all the assets of the Loan Parties (including personal property acquired subsequent to the Closing Date). Such Liens will be created under the Loan Documents in form and substance reasonably satisfactory to the Lender, and each Loan Party shall deliver or cause to be delivered to the Lender all such instruments and documents (including legal opinions and lien searches) as the Lender shall reasonably request to evidence compliance with this Section 7.8.

(b) With respect to the Collateral described in clause (f) of Section 5.1.8 , so long as the Borrower has (i) used its commercially reasonable efforts to deliver such Collateral on or before the Closing Date, and (ii) has identified to the Lender in writing and in reasonable detail at least two (2) Business Days prior to the Closing Date any portion of such Collateral that will not be delivered to the Lender as of such date, then, solely with respect to that Collateral identified in writing pursuant to clause (ii) above, (x) the Lender shall be deemed to have waived the requirement to deliver such identified Collateral as a condition to making the Loan as required pursuant to Section 5.1.8(f) , and (y) the Borrower shall have ten (10) days following the Closing Date to comply with clause (a) above with respect to such identified Collateral. If not in such compliance on or before such tenth day, the Borrower shall be deemed to be in Default of this Section 7.8 .

Section 7.9 Obtaining of Permits, Etc . With respect to Products, each Loan Party shall obtain, maintain and preserve, and take all necessary action to timely renew all Permits (including Key Permits) and accreditations which are necessary in the proper conduct of its business.

Section 7.10 Product Licenses . Each Loan Party shall (i) maintain each Permit, including each Regulatory Authorization, from, or file any notice or registration in, each jurisdiction in which such Loan Party is required to obtain any Permit or Regulatory Authorization or to file any notice or registration, in order to sell or distribute the Products and (ii) promptly provide evidence of same to the Lender.

Section 7.11 Maintenance of Regulatory Authorizations, Contracts, Intellectual Property, Etc . With respect to the Products, each Loan Party will (i) maintain in full force and effect all material Regulatory Authorizations (including Device Clearance Applications and Product Authorizations), contract rights, or other rights necessary for the operations of its business, (ii) notify the Lender, promptly after learning thereof, of any product recalls, safety alerts, corrections, withdrawals, marketing suspensions, removals or the like conducted, to be undertaken or issued by any Loan Party or its respective suppliers whether or not at the request, demand or order of any Governmental Authority or otherwise with respect to any Product, or any basis for undertaking or issuing any such action or item, (iii) maintain in full force and effect, and pay all costs and expenses relating to, all material Intellectual Property owned or controlled by any Loan Party and all Material Agreements, (iv) notify the Lender, promptly after learning thereof, of any Infringement or other violation by any Person of its Intellectual Property and aggressively pursue any such Infringement or other violation except in any specific circumstances where both (x) such Loan Party is able to demonstrate that it is not commercially reasonable to do so and (y) where not doing so does not materially adversely affect any Product, (v) use commercially reasonable efforts to pursue and maintain in full force and effect legal protection for all new Intellectual Property developed or controlled by such Loan Party and (vi) notify the Lender, promptly after learning thereof, of (x) any claim by any Person that the conduct of such Loan Party’s business (including the development, manufacture, use, sale or other commercialization of any Product) Infringes any Intellectual Property of such Loan Party and, if requested by the Lender, use commercially reasonable efforts to resolve such claim, or (y) any event, circumstance, act or omission that would cause any representation or warranty contained in Section 6.18 to be incorrect in any material respect if such representation or warranty was to be made at the time such Loan Party learned of such event, circumstance, act or omission.

Section 7.12 Restriction of Amendments to Certain Documents . No Loan Party will amend or otherwise modify any provision of, or waive any rights under, any Product Agreement or any documents relating thereto in a manner that is materially adverse to the interests of the Lender without the consent of the Lender, such consent not to be unreasonably withheld or delayed. No Loan Party will amend or otherwise modify, or waive any rights under, any other document, instrument or agreement if, in any case, such amendment, modification or waiver would reasonably be expected to be materially adverse to the interests of the Lender, including, but not limited to, the security interest of the Lender therein.

Section 7.13 Cash Management . Each Loan Party will:

(a) maintain all deposit accounts, disbursement accounts, investment accounts (and other similar accounts) and lockboxes with a bank or financial institution that has executed and delivered to the Lender an account control agreement, in form and substance reasonably acceptable to the Lender; each such deposit account, disbursement account, investment account (or similar account) and lockbox (each, a “ Controlled Account ”) shall be a cash collateral account, with all cash, checks and other similar items of payment in such account securing payment of the Obligations, and each Loan Party shall have granted a Lien to the Lender over such Controlled Accounts;

(b) deposit promptly, and in any event no later than two (2) Business Days after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all accounts and other rights and interests into Controlled Accounts; and

(c) at any time after the occurrence and during the continuance of an Event of Default, at the written request of the Lender, each Loan Party will cause all payments constituting proceeds of accounts to be directed into lockbox accounts under agreements in form and substance satisfactory to the Lender.

For the avoidance of doubt, and notwithstanding anything herein to the contrary, the execution and delivery of account control agreements with respect to each Loan Party’s deposit accounts, disbursement accounts, investment accounts (and other similar accounts) and/or lockboxes shall not be a condition precedent to the Lender’s obligation to make the Loan on the Closing Date, except with respect to deposit accounts maintained with PNC Bank, National Association.

Section 7.14 Modification of Organic Documents . No Loan Party will amend, modify or otherwise change its Organic Documents if, in any case, such amendment or modification would be adverse to the interests of the Lender.

Section 7.15 Inconsistent Agreements . No Loan Party will enter into any agreement containing any provision which would (i) be violated or breached by such Person hereunder or by the performance by such Person of any of its obligations hereunder or under any other Loan Document, (ii) prohibit any such Person from granting to the Lender a Lien on any of its assets or (iii) create or permit to exist or become effective any encumbrance (other than a Permitted Lien) or restriction on the ability of any Subsidiary of the Borrower to (x) pay dividends or make other distributions to the Borrower, or pay any Indebtedness owed to the Borrower, (y) make loans or advances to the Borrower or (z) transfer any of its assets or properties to the Borrower.

Article VIII
negativE COVENANTS

Each Loan Party, jointly and severally, covenants and agrees with the Lender that until the Termination Date has occurred, each Loan Party will perform or cause to be performed the obligations set forth below.

Section 8.1 Business Activities . No Loan Party will engage in any business activity except those business activities engaged in on the date of this Agreement and activities reasonably incidental thereto.

Section 8.2 Indebtedness . No Loan Party will create, incur, assume or permit to exist any Indebtedness, other than the following (collectively, “ Permitted Debt ”):

(a) Indebtedness in respect of the Obligations;

(b) Indebtedness pursuant to Hedging Agreements;

(c) Indebtedness existing as of the Closing Date which is identified in Schedule 8.2(c), and refinancing of such Indebtedness in a principal amount not in excess of that which is outstanding on the Closing Date (as such amount has been reduced following the Closing Date);

(d) unsecured Indebtedness in respect of performance, surety or appeal bonds provided in the ordinary course of business in an aggregate amount at any time outstanding not to exceed $250,000, but excluding (in each case) Indebtedness incurred through the borrowing of money or Contingent Liabilities in respect thereof;

(e) Indebtedness in respect of letters of credit securing such Loan Party’s obligations under any commercial real property lease agreement in an aggregate amount at any time outstanding not to exceed $350,000;

(f) purchase money Indebtedness and Capitalized Lease Liabilities in an aggregate amount at any time outstanding not to exceed $250,000; and

(g) the contingent Indebtedness of the Borrower for Earn-Out Payments;

provided that, no Indebtedness otherwise permitted by clauses (c) , (f) , or (g) shall be assumed, created or otherwise incurred if a Default has occurred and is then continuing or would result therefrom.

Section 8.3 Liens . No Loan Party will create, incur, assume or permit to exist any Lien upon any of its property (including Capital Securities of any Person), revenues or assets, whether now owned or hereafter acquired, except (each of the following clauses (a) through (g) , “ Permitted Lien ”):

(a) Liens securing payment of the Obligations;

(b) Liens existing as of the Closing Date and disclosed in Schedule 8.3(b) securing Indebtedness described in clause (c) of Section 8.2 , and refinancings of such Indebtedness; provided that, no such Lien shall encumber any additional property and the amount of Indebtedness secured by such Lien is not increased from that existing on the Closing Date (as such Indebtedness may have been permanently reduced subsequent to the Closing Date);

(c) Liens in favor of carriers, warehousemen, mechanics, materialmen and landlords granted in the ordinary course of business for amounts not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(d) Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, bids, leases or other similar obligations (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety and appeal bonds or performance bonds;

(e) judgment Liens in existence for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies and which do not otherwise result in an Event of Default under Section 9.1.6 ;

(f) easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such Lien is attached;

(g) Liens for Taxes not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; and

(h) Cash collateral in an amount not to exceed $350,000 securing letters of credit permitted pursuant to Section 8.2(e) .

Section 8.4 Financial Covenants .

(a) The Loan Parties, on a consolidated basis, shall maintain a monthly minimum balance of $2,000,000 in unrestricted, unencumbered cash in one or more Controlled Accounts that is free and clear of all Liens, other than Liens granted hereunder in favor of the Lender and Permitted Liens;

(b) With respect to each calculation date set forth below (each a “ Calculation Date ”), Consolidated Total Revenue of the Borrower for the twelve consecutive month period ended on such Calculation Date shall not be less than the amount set forth opposite such Calculation Date:

Section 8.5 Investments . No Loan Party will purchase, make, incur, assume or permit to exist any Investment in any other Person, except:

(a) Investments existing on the Closing Date and identified in Schedule 8.5(a) ;

(b) Cash Equivalent Investments;

(c) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(d) Investments consisting of any deferred portion of the sales price received by any Loan Party in connection with any Disposition permitted under Section 8.9 ;

(e) Investments constituting (i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase price of goods or services, in each case in the ordinary course of business, or (iv) any security deposit in connection with real property lease agreements not to exceed $200,000 in the aggregate; and

(f) Investments in another Loan Party.

Section 8.6 Restricted Payments, Etc . No Loan Party will declare or make a Restricted Payment, or make any deposit for any Restricted Payment, other than Restricted Payments made by Subsidiaries to the Borrower or to other wholly owned Subsidiaries.

Section 8.7 Issuance of Capital Securities . Except as set forth in Schedule 8.7 , no Subsidiary of the Borrower will issue any Capital Securities (whether for value or otherwise) to any Person other than (in the case of Subsidiaries), to the Borrower or to other wholly owned Subsidiaries.

Section 8.8 Consolidation, Merger; Permitted Acquisitions, Etc . No Loan Party will liquidate or dissolve, consolidate with, or merge into or with, any other Person, or purchase or otherwise acquire any other Person or all or substantially all of the assets of any other Person (or any division thereof), except that, so long as no Event of Default has occurred and is continuing (or would occur), (i) any Loan Party may liquidate or dissolve voluntarily into, and may merge with and into, any other Loan Party, (ii) any Loan Party may from time to time acquire another Person or all or substantially all of the assets of another Person (or any division thereof); provided that (A) such acquisition is approved by the boards of director of the Borrower, (B) the newly acquired (or continuing or surviving) Person shall comply with Section 7.8 hereof and shall be engaged in a line of business similar to the Borrower, (C) the aggregate consideration paid for all acquisitions pursuant to this clause (ii) (other than the acquisition contemplated pursuant to the Merger Transaction) shall not exceed an amount equal to $20,000,000 less any amount paid to acquire any inbound license pursuant to Section 8.16 hereof, (D) the aggregate consideration paid in cash for all such acquisitions pursuant to this clause (ii) (other than the acquisition contemplated pursuant to the Merger Transaction) shall not exceed an amount equal to $5,000,000, less the amount of cash used to acquire any inbound license pursuant to Section 8.16 hereof, (E) the Borrower shall, immediately prior to consummating any such transaction described above, deliver to the Lender a pro forma Compliance Certificate that gives effect to such transaction and certifies pro forma compliance with Section 8.4 , such certificate to be executed and delivered by the chief financial or accounting Authorized Officer of the Borrower and (F) the Borrower shall have complied with Section 7.8 .

Section 8.9 Permitted Dispositions . No Loan Party will dispose of any of its assets (including accounts receivable and Capital Securities) to any Person in one transaction or series of transactions unless such Disposition (i) is inventory or obsolete, damaged, worn out or surplus property Disposed of in the ordinary course of its business, (ii) has an aggregate fair market value that, when taken together with all other Dispositions made pursuant to this clause (ii) , does not exceed $500,000, (iii) is made, in cash, pursuant to an Earn-out Payment permitted under Section 8.2(g) or (iv) constitutes an Excluded Business Disposition.

Section 8.10 Modification of Certain Agreements . No Loan Party will consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to the terms or provisions contained in any (i) Organic Documents of any Loan Party, or (ii) Material Contracts (as defined in the Merger Agreement), in each case, if the result would have an adverse effect on the rights or remedies of the Lender.

Section 8.11 Transactions with Affiliates . No Loan Party will enter into or cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property or the rendering of services) with any of its other Affiliates, unless such arrangement, transaction or contract (i) is on fair and reasonable terms no less favorable to such Loan Party than it could obtain in an arm’s-length transaction with a Person that is not an Affiliate and (ii) is of the kind which would be entered into by a prudent Person in the position of such Loan Party with a Person that is not one of its Affiliates.

Section 8.12 Restrictive Agreements, Etc . No Loan Party will enter into any agreement prohibiting (i) the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, (ii) the ability of such Loan Party to amend or otherwise modify any Loan Document or (iii) the ability of any Subsidiary to make any payments, directly or indirectly, to the Borrower, including by way of dividends, advances, repayments of loans, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments. The foregoing prohibitions shall not apply to restrictions contained (x) in any Loan Document, or (y) in the case of clause (i) , any agreement governing any Indebtedness permitted by clause (f) of Section 8.2 as to the assets financed with the proceeds of such Indebtedness.

Section 8.13 Sale and Leaseback . No Loan Party will directly or indirectly enter into any agreement or arrangement providing for the sale or transfer by it of any property (now owned or hereafter acquired) to a Person and the subsequent lease or rental of such property or other similar property from such Person.

Section 8.14 Product Sales . No Loan Party will sell or distribute Products or cause any sale or distribution where such Loan Party is required to obtain any Permit, or to file any notice or registration in any jurisdiction prior to any such sale or distribution, in each case, until such Loan Party has obtained such required Permit or filed such notice or registration.

Section 8.15 Outbound Licenses . No Loan Party will enter into or become bound by any outbound license or agreement unless such outbound license (i) is approved by the board of directors of the Borrower, (ii) is entered into on an arm’s-length basis on commercially reasonable terms, (iii) does not constitute a Disposition prohibited pursuant to Section 8.9 , and (iv) does not impair the Lender from fully exercising its rights under any of the Loan Documents in the event of a disposition or liquidation of the rights, assets or property that is the subject of such license or agreement.

Section 8.16 Inbound Licenses . No Loan Party shall, after the date hereof, enter into or become bound by any inbound license or agreement (other than over-the-counter software that is commercially available to the public) unless (i) no Default has occurred and is continuing; (ii) such Loan Party has provided written notice to the Lender of the material terms of such license or agreement with a description of its anticipated and projected impact on such Loan Party’s business or financial condition, and (iii) such Loan Party has taken such commercially reasonable actions as the Lender may reasonably request to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for the Lender to be granted a valid and perfected security interest in such license or agreement allowing the Lender to fully exercise its rights under any of the Loan Documents in the event of a disposition or liquidation of the rights, assets or property that is the subject of such license or agreement; provided that (A) the aggregate consideration paid for all such inbound licenses pursuant to this Section 8.16 shall not exceed an amount equal to $20,000,000 less any amount paid for any acquisition pursuant to Section 8.8 hereof, and (B) the aggregate consideration paid in cash for all such inbound licenses pursuant to this Section 8.16 shall not exceed an amount equal to $5,000,000, less the amount of cash used for any acquisitions pursuant to Section 8.8 hereof.

Section 8.17 Change in Name, Location, Executive Office, or Executive Management; Change in Fiscal Year . Unless the Borrower has given the Lender 30 days prior written notice, no Loan Party will (i) change its legal name or any trade name used to identify it in the conduct of its business or ownership of its properties, (ii) change its jurisdiction of organization or legal structure, (iii) relocate its chief executive office, principal place of business or any office in which it maintains books or records relating to its business (including the establishment of any new office or facility), (iv) change its federal taxpayer identification number or organizational number (or equivalent) without 30 days prior written notice to the Lender, or (v) replace its chief financial officer. No Loan Party will change its Fiscal Year or any of its Fiscal Quarters.

Article IX
EVENTS OF DEFAULT

Section 9.1 Listing of Events of Default . Each of the following events or occurrences described in this Article shall constitute an “Event of Default”.

Section 9.1.1 Non-Payment of Obligations . The Borrower shall default in the payment or prepayment when due of (i) any principal of or interest on the Loan, or (ii) any fee described in Article III or any other monetary Obligation, and in the case of clause (ii) such default shall continue unremedied for a period of three (3) Business Days after such amount was due.

Section 9.1.2 Breach of Warranty . Any representation or warranty made or deemed to be made by any Loan Party in any Loan Document (including any certificates delivered pursuant to Article V ) is or shall be incorrect when made or deemed to have been made in any material respect.

Section 9.1.3 Non-Performance of Certain Covenants and Obligations . Any Loan Party shall default in the due performance or observance of any of its obligations under Sections 7.4 , 7.7 , 7.8 , 7.13 , or Article VIII .

Section 9.1.4 Non-Performance of Other Covenants and Obligations . Any Loan Party shall default in the due performance and observance of any other covenant, obligation or agreement contained in any Loan Document executed by it, and such default shall continue unremedied for a period of fifteen (15) days after the earlier to occur of (a) written notice thereof given to the Borrower by the Lender or (b) the date on which any Loan Party has actual knowledge of such default.

Section 9.1.5 Default on Other Indebtedness . A default shall occur in the payment of any amount when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (other than Indebtedness permitted under Section 8.2 ) of any Loan Party having a principal or stated amount, individually or in the aggregate, in excess of $250,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause or declare such Indebtedness to become due and payable or to require such Indebtedness to be prepaid, redeemed, purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity.

Section 9.1.6 Judgments . Any judgment or order for the payment of money individually or in the aggregate in excess of $500,000 (exclusive of any amounts fully covered by insurance (less any applicable deductible) and as to which the insurer has acknowledged its responsibility to cover such judgment or order) shall be rendered against any Loan Party and such judgment shall not have been vacated or discharged or stayed or bonded pending appeal within 45 days after the entry thereof or enforcement proceedings shall have been commenced by any creditor upon such judgment or order.

Section 9.1.7 Change in Control . Any Change in Control shall occur.

Section 9.1.8 Bankruptcy, Insolvency, Etc . Any Loan Party shall:

(a) become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, debts as they become due;

(b) apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of any thereof, or make a general assignment for the benefit of creditors;

(c) in the absence of such application, consent or acquiescence in or permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days; provided that, each Loan Party hereby expressly authorizes the Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend its rights under the Loan Documents;

(d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by a Loan Party, such case or proceeding shall be consented to or acquiesced in by a Loan Party, as the case may be, or shall result in the entry of an order for relief or shall remain for 60 days undismissed; provided that, each Loan Party hereby expressly authorizes the Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend its rights under the Loan Documents; or

(e) take any action authorizing, or in furtherance of, any of the foregoing.

Section 9.1.9 Impairment of Security, Etc . Any Loan Document or any Lien granted thereunder shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party party thereto; any Loan Party shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or, except as permitted under any Loan Document, any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien.

Section 9.1.10 Material Adverse Change . Any circumstance occurs that could reasonably be expected to have a Material Adverse Effect.

Section 9.1.11 Regulatory Matters . If any of the following occurs: (i) the FDA or any other Governmental Authority (A) issues a letter or other communication asserting any Product lacks a required Product Authorization, including in respect of CE marks or 510(k)s, or (B) initiates enforcement action against, or issues a warning letter with respect to, any Loan Party, or any of their Products or the manufacturing facilities therefor, that causes any Loan Party to discontinue marketing or withdraw any of its material Products, or causes a delay in the manufacture of any of its material Products, which discontinuance, withdrawal or delay lasts for more than 90 days, (ii) there is a recall of any Product that has generated or is expected to generate at least $1,000,000 in revenue for the Loan Parties in the aggregate over any consecutive twelve (12) month period or (iii) any Loan Party enters into a settlement agreement with the FDA or any other Governmental Authority that results in aggregate liability as to any single or related series of transactions, incidents or conditions, in excess of $500,000.

Section 9.1.12 Pension Plans . Any of the following events shall occur with respect to any Pension Plan:

(a) the institution of any steps by any Loan Party, any ERISA Affiliate or any other Person to terminate a Pension Plan if, as a result of such termination, any Loan Party or any such ERISA Affiliate would be required to make a contribution to such Pension Plan, or would reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $250,000;

(b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien on the Borrower or any ERISA Affiliate under section 303(k) of ERISA or under Section 430(k) of the Code; or

(c) any ERISA Event shall occur, which would reasonably be expected to result in a Material Adverse Effect.

Section 9.1.13 Celgene License Agreement . The Borrower is in default under the Celgene License Agreement; the Celgene License Agreement is terminated or otherwise is no longer in full force and effect with respect to the Borrower; or the Celgene License Agreement has been amended, waived or otherwise modified in a manner materially adverse to the Lender’s interests.

Section 9.1.14 Key Permit Events . Any Key Permit or any of the Loan Parties’ material rights or interests thereunder is terminated, amended or otherwise determined to be ineffective in any manner adverse to any of the Products or Loan Parties in any material respect.

Section 9.2 Action if Bankruptcy . If any Event of Default described in clauses (a) through (d) of Section 9.1.8 with respect to any Loan Party shall occur, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand to any Person.

Section 9.3 Action if Other Event of Default . If any Event of Default (other than any Event of Default described in clauses (a) through (d) of Section 9.1.8 ) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Lender may, by notice to the Borrower declare all or any portion of the outstanding principal amount of the Loan and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, and the Commitments shall terminate.

Article X
GUARANTY

Section 10.1 Guaranty . Each Guarantor hereby agrees that such Guarantor is jointly and severally liable for, and hereby absolutely and unconditionally guarantees to the Lender and its successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations owed or hereafter owing to Lender by each Loan Party. Each Guarantor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, and that its obligations under this Article X shall be absolute and unconditional, irrespective of, and unaffected by,

(a) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Loan Document or any other agreement, document or instrument to which any Loan Party is or may become a party;

(b) the absence of any action to enforce this Agreement (including this Article X ) or any other Loan Document or the waiver or consent by the Lender with respect to any of the provisions thereof;

(c) the existence, value or condition of, or failure to perfect its Lien against, any security for the Obligations or any action, or the absence of any action, by the Lender in respect thereof (including the release of any such security);

(d) the insolvency of any Loan Party; or

(e) any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor,

it being agreed by each Guarantor that its obligations under this Article X shall not be discharged until the Termination Date. Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the Obligations guaranteed hereunder.

Section 10.2 Waivers . Each Guarantor expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Lender to marshal assets or to proceed in respect of the Obligations guaranteed hereunder against the Borrower or any other Guarantor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, such Guarantor. It is agreed among each Guarantor and the Lender that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and that, but for the provisions of this Article X and such waivers, the Lender would decline to enter into this Agreement.

Section 10.3 Benefit of Guaranty . Each Guarantor agrees that the provisions of this Article X are for the benefit of the Lender and its successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between the Borrower, on the one hand, and the Lender, on the other hand, the obligations of the Borrower and each Guarantor under the Loan Documents.

Section 10.4 Subordination of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, each Guarantor hereby expressly and irrevocably subordinates to the prior payment in full, in cash, of the Obligations any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor until all Commitments have expired or been terminated and the Obligations are indefeasibly paid in full in cash. Each Guarantor acknowledges and agrees that this subordination is intended to benefit the Lender and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this Article X , and that the Lender and its successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 10.4 .

Section 10.5 Election of Remedies . If the Lender may, under applicable law, proceed to realize its benefits under any of the Loan Documents giving the Lender a Lien upon any collateral, whether owned by any Loan Party or by any other Person, either by judicial foreclosure or by non-judicial sale or enforcement, the Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Article X . If, in the exercise of any of its rights and remedies, the Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Loan Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Guarantor hereby consents to such action by the Lender and waives any claim based upon such action, even if such action by the Lender shall result in a full or partial loss of any rights of subrogation which each Guarantor might otherwise have had but for such action by the Lender. Any election of remedies which results in the denial or impairment of the right of the Lender to seek a deficiency judgment against the any Loan Party shall not impair any Guarantor’s obligation to pay the full amount of the Obligations. In the event the Lender shall bid at any foreclosure or trustee’s sale or at any private sale permitted by law or the Loan Documents, the Lender may bid all or less than the amount of the Obligations and the amount of such bid need not be paid by the Lender but shall be credited against the Obligations. The amount of the successful bid at any such sale, whether the Lender or any other party is the successful bidder, shall be conclusively deemed to be the fair market value of the collateral and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Article X , notwithstanding that any present or future law or court decision or ruling may have the effect of reducing the amount of any deficiency claim to which the Lender might otherwise be entitled but for such bidding at any such sale.

Section 10.6 Limitation . Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this Article X shall be limited to an amount not to exceed the amount which could be claimed by the Lender from such Guarantor under this Article X without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the United States Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Guarantor.

Section 10.7 Liability Cumulative . The liability of each Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Lender under this Agreement and the other Loan Documents to which each Loan Party is a party or in respect of any Obligations or obligation of such Loan Party, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

Article XI
MISCELLANEOUS PROVISIONS

Section 11.1 Waivers, Amendments, Etc . The provisions of each Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Lender and, so long as no Event of Default has occurred and is continuing, the Borrower.

No failure or delay on the part of the Lender in exercising any power or right under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on any Loan Party in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Lender under any Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

Section 11.2 Notices; Time . All notices and other communications provided under any Loan Document shall be in writing or by facsimile and addressed, delivered or transmitted, if to the Borrower or the Lender, to the applicable Person at its address or facsimile number set forth on Schedule 11.2 hereto, or at such other address or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter. Unless otherwise indicated, all references to the time of a day in a Loan Document shall refer to New York City time.

Section 11.3 Payment of Costs and Expenses . The Borrower agrees to pay on demand all expenses of the Lender (including the fees and out-of-pocket expenses of Morrison & Foerster LLP, counsel to the Lender and of local counsel, if any, who may be retained by or on behalf of the Lender) in connection with:

(a) the negotiation, preparation, execution and delivery of the Commitment Letter, each Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to any Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated; and

(b) the filing or recording of any Loan Document (including any financing statements) and all amendments, supplements, amendment and restatements and other modifications to any thereof, searches made following the Closing Date in jurisdictions where financing statements (or other documents evidencing Liens in favor of the Lender) have been recorded and any and all other documents or instruments of further assurance required to be filed or recorded by the terms of any Loan Document; and

(c) the preparation and review of the form of any document or instrument relevant to any Loan Document;

provided that the Expense Deposit (if any) shall be applied by the Lender from time to time for purposes of satisfying the foregoing expenses of the Borrower. Notwithstanding the foregoing, in no event shall the Borrower be required to pay, pursuant to this Section 11.3 , the Commitment Letter or otherwise, any expenses of the Lender (including the fees and out-of-pocket expenses of Morrison & Foerster LLP, counsel to the Lender and of local counsel, if any, who may be retained by or on behalf of the Lender) incurred on or prior to the Closing Date in excess of $275,000 in the aggregate

The Borrower also agrees to reimburse the Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses of counsel to the Lender) incurred by the Lender in connection with (i) the negotiation of any restructuring or “work-out” with the Borrower, whether or not consummated, of any Obligations and (ii) the enforcement of any Obligations.

Section 11.4 Indemnification . In consideration of the execution and delivery of this Agreement by the Lender, the Borrower hereby indemnifies, agrees to defend, exonerates and holds the Lender and each of its officers, directors, employees and agents (collectively, the “ Indemnified Parties ”) free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities, obligations and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys’ and professionals’ fees and disbursements, whether incurred in connection with actions between the parties hereto or the parties hereto and third parties (collectively, the “ Indemnified Liabilities ”), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to (i) the entering into and performance of any Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of the Borrower as the result of any determination by the Lender pursuant to Article V not to fund the Loan; provided that, any such action is resolved in favor of such Indemnified Party) or (ii) any Environmental Liability, any actual or alleged breach of or non-compliance with Environmental Laws or Environmental Permits, any Hazardous Materials, or any other decision, act, omission or matter relating to the environment, natural resources, health, safety or welfare. If and to the extent that the foregoing indemnification may be unenforceable for any reason, the Borrower agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The Lender acknowledges and agrees that in no event will the Loan Parties’ aggregate liability under this Section 11.4 exceed the Indemnified Parties’ actual out-of-pocket pecuniary loss. In addition, the Lender shall take commercially reasonable actions in settling or otherwise compromising any action, lawsuit or other claim for which it may seek indemnification hereunder. This Section 11.4 shall not apply with respect to Taxes other than Taxes losses that arise from any other non-Tax claims.

Section 11.5 Survival . The obligations of the Borrower under Section 4.1 , Section 4.2 , Section 4.3 , Section 11.3 and Section 11.4 , shall in each case survive any assignment by the Lender and the occurrence of the Termination Date. The representations and warranties made by each Loan Party in each Loan Document shall survive the execution and delivery of such Loan Document.

Section 11.6 Severability . Any provision of any Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 11.7 Headings . The various headings of each Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of such Loan Document or any provisions thereof.

Section 11.8 Execution in Counterparts, Effectiveness, Etc . This Agreement may be executed by the parties hereto in several counterparts, each of which shall be an original and all of which shall constitute together but one and the same agreement. This Agreement shall become effective when counterparts hereof executed on behalf of the Borrower, each other Loan Party and the Lender, shall have been received by the Lender. Delivery of an executed counterpart of a signature page to this Agreement by email (e.g. “pdf” or “tiff”) or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 11.9 Governing Law; Entire Agreement . EACH LOAN DOCUMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). The Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter thereof and supersede any prior agreements, written or oral, with respect thereto.

Section 11.10 Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that, no Loan Party may assign or transfer its rights or obligations hereunder without the prior written consent of the Lender; and provided , further , that the Lender shall provide the Borrower with prompt written notice of any assignment by the Lender of the Loan (in whole or in part) or any of the Lender’s rights hereunder, unless such assignment is to an Affiliate of the Lender. Notwithstanding anything contained herein to the contrary, in no event will the Lender (i) prior to the Closing Date, be permitted to assign or delegate any of its obligations hereunder, including, its obligation to make the Loan subject to the terms hereof, to any Person (other than an Affiliate of the Lender) or (ii) at any time, be permitted to assign or delegate any of its obligations hereunder, including, its obligation to make the Loan subject to the terms hereof, to any Person engaged in the development, commercialization, sale and distribution of silver-based, tissue-based or ultrasonic energy-based wound care products and exudate management products. The Lender, acting solely for this purpose as a non-fiduciary agent of the Loan Parties (such agency being solely for tax purposes), shall maintain a record of each transfer or assignment made under this Section 11.10 and shall record the names and addresses of each transferee or assign, and principal amounts (and stated interest) of the Loan (or portion thereof) owing to, each such Person. The entries in such record shall be conclusive absent manifest error, and each Loan Party therein shall treat each Person whose name is recorded therein as a lender hereunder for all purposes of this Agreement. Such register shall be available for inspection by the Loan Parties at any reasonable time and from time to time upon reasonable prior notice.

Section 11.11 Other Transactions . Nothing contained herein shall preclude the Lender, from engaging in any transaction, in addition to those contemplated by the Loan Documents, with any Loan Party or any of their respective Affiliates in which such Loan Party or such Affiliate is not restricted hereby from engaging with any other Person.

Section 11.12 Forum Selection and Consent to Jurisdiction . ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE LOAN PARTIES IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH LOAN PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 11.2 . EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT EACH LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

Section 11.13 Waiver of Jury Trial . THE LENDER AND EACH LOAN PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR EACH LOAN PARTY IN CONNECTION THEREWITH. EACH LOAN PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THE LOAN DOCUMENTS.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

[ Signature Page to Credit Agreement ]

[ Signature Page to Credit Agreement ]

Exhibit 10.2

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AND SECURITY AGREEMENT, dated as of May 29, 2015 (as amended or otherwise modified from time to time, this “ Security Agreement ”), is made by and among ALLIQUA BIOMEDICAL, INC., a Delaware corporation (the “ Borrower ”) and the Guarantors (defined below), for the benefit of PERCEPTIVE CREDIT OPPORTUNITIES FUND, LP (together with its successors, transferees or assignees, the “ Secured Party ”), pursuant to the Credit Agreement (defined below).

WITNESSETH :

WHEREAS, pursuant to a Credit Agreement and Guaranty, dated as of May 29, 2015, (as amended or otherwise modified from time to time, the “ Credit Agreement ”), by and among the Borrower, each guarantor party thereto (a “ Guarantor ”) and the Secured Party, the Secured Party has extended the Commitment to make a Loan to the Borrower; and

WHEREAS, as a condition precedent to the making of the Loan under the Credit Agreement, the Borrower and the Guarantors (together with any of their Subsidiaries that becomes a party to this Security Agreement pursuant to the terms of the Credit Agreement, the “ Grantors ”) are required to execute and deliver this Security Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor agrees, for the benefit of the Secured Party, as follows:

ARTICLE I
DEFINITIONS

SECTION 1.1   Certain Terms . The following terms (whether or not underscored) when used in this Security Agreement, including its preamble and recitals, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“ Borrower ” is defined in the preamble .

“ CFC ” means a Person that is a controlled foreign corporation under Section 957 of the Code.

“ Collateral ” is defined in Section 2.1 .

“ Collateral Account ” is defined in clause (b) of Section 4.3 .

“ Computer Hardware and Software Collateral ” means:

(a)     all computer and other electronic data processing hardware, integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories and all peripheral devices and other related computer hardware, including all operating system software, utilities and application programs in whatsoever form;

(b)     all software programs (including both source code, object code and all related applications and data files), designed for use on the computers and electronic data processing hardware described in clause (a) above ;

(c)     all firmware associated therewith;

(d)     all documentation (including flow charts, logic diagrams, manuals, guides, specifications, training materials, charts and pseudo codes) with respect to such hardware, software and firmware described in the preceding clauses (a) through (c) ;and

(e)     all rights with respect to all of the foregoing, including copyrights, licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications and any substitutions, replacements, improvements, error corrections, updates, additions or model conversions of any of the foregoing.

“ Control Agreement ” means an authenticated agreement or document, in form and substance reasonably satisfactory to the Secured Party, that provides for the Secured Party to have “control” (as defined in the UCC) over the Controlled Accounts.

“ Copyright Collateral ” means all copyrights of any Grantor, whether statutory or common law, registered or unregistered and whether published or unpublished, now or hereafter in force throughout the world including all of such Grantor’s right, title and interest in and to all copyrights registered in the United States Copyright Office or anywhere else in the world and also including the copyrights referred to in Item A of Schedule V , and registrations and recordings thereof and all applications for registration thereof, all copyright licenses, including each copyright license referred to in Item B of Schedule V , the right to sue for past, present and future infringements of any of the foregoing, all rights corresponding thereto, all extensions and renewals of any thereof and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and Proceeds of suit.

“ Credit Agreement ” is defined in the first recital .

“ Distributions ” means all dividends or other distributions paid on Capital Securities, including in connection with (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends, mergers, consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any Capital Securities.

“ Excluded Equity ” means any voting stock in excess of sixty-five percent (65%) of the outstanding voting stock of any CFC.

“ Excluded Assets ” means, collectively, (a) Excluded Equity, (b) any property owned by any Grantor that is subject to a purchase money Lien or a capital lease, or (c) any assets of a CFC; provided , however , “ Excluded Assets ” shall not include any proceeds, products, substitutions, or replacements of Excluded Assets (unless such proceeds, products, substitutions, or replacements would otherwise constitute Excluded Assets).

“ Filing Statements ” is defined in clause (b) of Section 3.7 .

“ General Intangibles ” means all “general intangibles” and all “payment intangibles”, each as defined in the UCC.

“ Grantor ” is defined in the preamble .

“ Guarantor ” is defined in the first recital and shall also include each additional Subsidiary of the Borrower or any Guarantor formed, created or acquired after the Closing Date.

“ Intellectual Property Collateral ” means, collectively, the Computer Hardware and Software Collateral, the Copyright Collateral, the Patent Collateral, the Trademark Collateral and the Trade Secrets Collateral.

“ Patent Collateral ” means:

(a)     Inventions, invention disclosures and discoveries, whether patentable or not, all letters patent and applications for letters patent throughout the world, including provisional, design and utility patents each patent and patent application referred to in Item A of Schedule III ;

(b)     all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a) ;

(c)     all patent licenses, and other agreements providing any Grantor with the right to use any items of the type referred to in clauses (a) and (b) above, including each patent license referred to in Item B of Schedule III ; and

(d)     all Proceeds of, and rights associated with, the foregoing (including licenses, royalties and Proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, and for breach or enforcement of any patent license.

“ Secured Party ” is defined in the preamble .

“ Security Agreement ” is defined in the preamble .

“ Trademark Collateral ” means:

(a)     (i)     all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos and other source or business identifiers, and all goodwill of the business associated therewith, now existing or hereafter adopted or acquired including those referred to in Item A of Schedule IV , whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America, or any State thereof or any other country or political subdivision thereof or otherwise, and all common-law rights relating to the foregoing, and (ii) the right to obtain all reissues, extensions or renewals of the foregoing (collectively referred to as the “ Trademark ”);

(e)     all Trademark licenses for the grant by or to any Grantor of any right to use any trademark, including each trademark license referred to in Item B of Schedule IV ; and

(f)     all of the goodwill of the business connected with the use of, and symbolized by the items described in, clause (a) above, and to the extent applicable clause (b) above;

(g)     the right to sue third parties for past, present and future infringements of any Trademark Collateral described in clause (a) above and, to the extent applicable, clause (b) above; and

(h)     all Proceeds of, and rights associated with, the foregoing, including any claim by any Grantor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license and all rights corresponding thereto throughout the world.

“ Trade Secrets Collateral ” means all common law and statutory trade secrets and all other confidential, proprietary or useful information and all know-how (all of the foregoing being collectively called a “ Trade Secret ”), whether or not such Trade Secret has been reduced to a writing or other tangible form, including all Documents and things embodying, incorporating or referring in any way to such Trade Secret, all Trade Secret licenses, including each Trade Secret license referred to in Schedule VI , and including the right to sue for and to enjoin and to collect damages for the actual or threatened misappropriation of any Trade Secret and for the breach or enforcement of any such Trade Secret license.

SECTION 1.2   Credit Agreement Definitions . Unless otherwise defined herein or the context otherwise requires, terms used in this Security Agreement, including its preamble and recitals, have the meanings provided in the Credit Agreement, including, without limitation, Section 1.4 thereof.

SECTION 1.3   UCC Definitions . When used herein the terms “Account”, “Certificate of Title”, “Certificated Securities”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contract”, “Deposit Account”, “Document”, “Electronic Chattel Paper”, “Equipment”, “Goods”, “Instrument”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”, “Securities Account”, “Security Entitlement”, “Supporting Obligations” and “Uncertificated Securities” have the meaning provided in Article 8 or Article 9, as applicable, of the UCC. “Letters of Credit” has the meaning provided in Section 5-102 of the UCC.

ARTICLE II
SECURITY INTEREST

SECTION 2.1   Grant of Security Interest . Each Grantor hereby grants to the Secured Party, a continuing security interest in all of such Grantor’s right, title, and interest in and to the following property, whether now or hereafter existing, owned or acquired by such Grantor, and wherever located, (collectively, the “ Collateral ”):

(a)     Accounts;

(b)     Chattel Paper;

(c)     Commercial Tort Claims listed on Item I of Schedule II (as such schedule may be amended or supplemented from time to time);

(d)     Deposit Accounts;

(e)     Documents;

(f)     General Intangibles;

(g)     Goods;

(h)     Instruments;

(i)     Intellectual Property Collateral;

(j)     Investment Property;

(k)     Letter-of-Credit Rights and Letters of Credit;

(l)     Supporting Obligations;

(m)     all books, records, writings, databases, information and other property relating to, used or useful in connection with, evidencing, embodying, incorporating or referring to, any of the foregoing in this Section;

(n)     all Proceeds of the foregoing and, to the extent not otherwise included, (A) all payments under insurance (whether or not the Secured Party is the loss payee thereof) and (B) all tort claims; and

(o)     all other property and rights of every kind and description and interests therein.

Notwithstanding the foregoing or anything contained herein to the contrary, the Collateral shall exclude, and no lien or security interest is hereby granted on, any Excluded Assets.

SECTION 2.2   Security for Obligations . This Security Agreement and the Collateral in which the Secured Party is granted a security interest hereunder by the Grantors secures the payment and performance by the Grantors of all of the Obligations under the Credit Agreement and each other Loan Document including, without limitation, the payment of all principal of and premium, if any, and interest (including interest accruing during the pendency of any proceeding of the type described in Section 9.1.8 of the Credit Agreement) on the Loan.

SECTION 2.3   Grantors Remain Liable . Anything herein to the contrary notwithstanding:

(a)     the Grantors will remain liable under their respective contracts and agreements included in the Collateral to the extent set forth therein, and will perform all of their respective duties and obligations under such contracts and agreements to the same extent as if this Security Agreement had not been executed;

(b)     the exercise by the Secured Party of any of its rights hereunder will not release any Grantor from any of its duties or obligations under any such contracts or agreements included in the Collateral; and

(c)     the Secured Party will have no obligation or liability under any contracts or agreements included in the Collateral by reason of this Security Agreement, nor will it be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

SECTION 2.4   Distributions on Pledged Shares . In the event that any Distribution with respect to any Capital Securities pledged hereunder is permitted to be paid (in accordance with Section 8.6 of the Credit Agreement), such Distribution or payment may be paid directly to the relevant Grantor. If any Distribution is made in contravention of Section 8.6 of the Credit Agreement, the relevant Grantor shall hold the same segregated and in trust for the Secured Party until paid to the Secured Party in accordance with Section 4.1.5 .

SECTION 2.5   Security Interest Absolute, etc . This Security Agreement shall in all respects be a continuing, absolute, unconditional and irrevocable grant of security interest, and shall remain in full force and effect until the Termination Date. All rights of the Secured Party and the security interests granted to the Secured Party hereunder, and all obligations of the each Grantor hereunder, shall, in each case, be absolute, unconditional and irrevocable irrespective of:

(a)     any lack of validity, legality or enforceability of any Loan Document;

(b)     the failure of the Secured Party (i) to assert any claim or demand or to enforce any fight or remedy against any Obligor or any other Person (including any Grantor) under the provisions of any Loan Document or otherwise, or (ii) to exercise any right or remedy against any other guarantor (including any Grantor) of, or collateral securing, any Obligations;

(c)     any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other extension, compromise or renewal of any Obligations;

(d)     any reduction, limitation, impairment or termination of any Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Grantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, non-genuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations or otherwise;

(e)     any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of any Loan Document;

(f)     any addition, exchange or release of any Collateral or of any Person that is (or will become) a Grantor (including each Grantor hereunder) of the Obligations, or any surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition to, or consent to or departure from, any other guarantee held by the Secured Party securing any of the Obligations; or

(g)     any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Obligor, any surety or any guarantor.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

In order to induce the Secured Party to enter into the Credit Agreement and make the Loan thereunder, the Grantors represent and warrant to the Secured Party as set forth below.

SECTION 3.1   As to Capital Securities of the Subsidiaries, Investment Property .

(a)         With respect to any direct Subsidiary of each Grantor that is

(i)     a corporation, business trust, joint stock company or similar Person, all Capital Securities issued by such Subsidiary are duly authorized and validly issued, fully paid and non-assessable, and represented by a certificate; and

(ii)         a partnership or limited liability company, no Capital Securities issued by such Subsidiary (A) are dealt in or traded on securities exchanges or in securities markets, (B) expressly provide that such Capital Securities is a security governed by Article 8 of the UCC or (C) are held in a Securities Account, except, with respect to this clause (a)(ii) , Capital Securities (x) for which the Secured Party is the registered owner or (y) with respect to which the issuer has agreed in an authenticated record with such Grantor and the Secured Party to comply with any instructions of the Secured Party without the consent of such Grantor.

(b)     Each Grantor has delivered all Certificated Securities constituting Collateral held by such Grantor on the Closing Date to the Secured Party, together with duly executed undated blank stock powers, or other equivalent instruments of transfer acceptable to the Secured Party.

(c)     With respect to Uncertificated Securities constituting Collateral owned by any Grantor, such Grantor has caused the issuer thereof either to (i) register the Secured Party as the registered owner of such security or (ii) agree in an authenticated record with such Grantor and the Secured Party that such issuer will comply with instructions with respect to such security originated by the Secured Party without further consent of such Grantor.

(d)     The percentage of the issued and outstanding Capital Securities of each Subsidiary pledged by each Grantor hereunder is as set forth on Schedule I .

(e)     All deposit accounts, lockboxes, disbursement accounts, investment accounts or other similar accounts of each Grantor are Controlled Accounts.

SECTION 3.2   Grantor Name, Location, etc.

(a)     The jurisdictions in which the Grantors are located for purposes of Sections 9-301 and 9-307 of the UCC are set forth in Item A of Schedule II .

(b)      Each location in which a secured party would have filed a UCC financing statement in the five years prior to the date hereof to perfect a security interest in Equipment, Inventory and General Intangibles owned by a Grantor is set forth in Item B of Schedule II .

(c)      No Grantor has any trade names other than those set forth in Item C of Schedule II hereto.

(d)      During the four months preceding the date hereof, no Grantor has been known by any legal name different from the one set forth on the signature page hereto and no Grantor has been the subject of any merger or other corporate reorganization, except as set forth in Item D of Schedule II hereto.

(e)      Each Grantor’s federal taxpayer identification number is (and, during the four months preceding the date hereof, such Grantor has not had a federal taxpayer identification number different from that) set forth in Item E of Schedule II hereto.

(f)      No Grantor is a party to any federal, state or local government contract except as set forth in Item F of Schedule II hereto.

(g)      No Grantor maintains any Deposit Accounts, Securities Accounts or Commodity Accounts with any Person, in each case, except as set forth on Item G of Schedule II .

(h)      No Grantor is the beneficiary of any Letters of Credit, except as set forth on Item H of Schedule II .

(i)      No Grantor has Commercial Tort Claims except as set forth on Item I of Schedule II .

(j)      The name set forth on the signature page attached hereto is the true and correct legal name (as defined in the UCC) of each Grantor.

(k)      Each Grantor has obtained a legal, valid and enforceable consent of each issuer of any Letter of Credit having a face amount (or equivalent) in excess of $100,000 pledged by such Grantor to the assignment of the Proceeds of such Letter of Credit to the Secured Party and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Secured Party pursuant hereto) having control (within the meaning of Section 9-104 of the UCC) over, or any other interest in any of such Grantor’s rights in respect thereof.

SECTION 3.3   Ownership, No Liens, etc . Except as disclosed on Schedules III through V , each Grantor owns its Collateral free and clear of any Lien, except for (A) any security interest (i) created by the Loan Documents, or (ii) which will be released simultaneously with the making of the Loan under the Credit Agreement and (B) Permitted Liens. No effective UCC financing statement or other filing similar in effect covering all or any part of the Collateral is on file in any recording office, except those filed in favor of the Secured Party relating to this Security Agreement or as to which a duly authorized termination statement relating to such UCC financing statement or other instrument has been delivered to the Secured Party on the Closing Date.

SECTION 3.4   Possession of Inventory, Control; etc.

(a)     Except as otherwise permitted in the Credit Agreement, each Grantor has, and agrees that it will maintain, exclusive possession of its Documents, Instruments, Promissory Notes, Goods, Equipment and Inventory, other than (i) Equipment and Inventory in transit in the ordinary course of business, (ii) Equipment and Inventory that is in the possession or control of a warehouseman, bailee agent or other Person (other than a Person controlled by or under common control with such Grantor) that has been notified of the security interest created in favor of the Secured Party pursuant to this Security Agreement, and has authenticated a record acknowledging that it holds possession of such Collateral for the Secured Party’s benefit and waives any Lien held by it against such Collateral, and (iii) Instruments or Promissory Notes that have been delivered to the Secured Party pursuant to Section 3.5 . In the case of Equipment or Inventory described in clause (ii) above, no lessor or warehouseman of any premises or warehouse upon or in which such Equipment or Inventory is located has (i) issued any warehouse receipt or other receipt in the nature of a warehouse receipt in respect of any such Equipment or Inventory, (ii) issued any Document for any such Equipment or Inventory, (iii) received notification of the Secured Party’s interest (other than the security interest granted hereunder) in any such Equipment or Inventory or (iv) any Lien on any such Equipment or Inventory.

(b)     Each Grantor is the sole entitlement holder of its Accounts and no other Person (other than the Secured Party pursuant to this Security Agreement) has control or possession of, or any other interest in, any of its Accounts or any other securities or property credited thereto.

SECTION 3.5   Negotiable Documents, Instruments and Chattel Paper . Subject to Section 7.8(b) of the Credit Agreement, each Grantor has delivered to the Secured Party possession of all originals of all negotiable Documents, Instruments, Promissory Notes, and tangible Chattel Paper having a face amount (or equivalent) in excess of $100,000 owned or held by such Grantor on the Closing Date.

SECTION 3.6   Intellectual Property Collateral . Except as disclosed on Schedules III through V and except for standard off-the-shelf software used by any Grantor, with respect to any Intellectual Property Collateral:

(a)     each Grantor has made all necessary filings and recordations to protect its interest in such Intellectual Property Collateral, including recordations of all of its interests in the Patent Collateral and Trademark Collateral in the United States Patent and Trademark Office and in corresponding offices throughout the world, and its claims to the Copyright Collateral in the United States Copyright Office and in corresponding offices throughout the world;

(b)     no Grantor has made a previous assignment, sale, transferor agreement constituting a present or future assignment, sale or transfer of any Intellectual Property for purposes of granting a security interest or as Collateral that has not been terminated or released;

(c)     each Grantor has executed and delivered to the Secured Party, Intellectual Property Collateral security agreements for all Copyrights, Patents and Trademarks owned by such Grantor, including all Copyrights, Patents and Trademarks on Schedule III through V (as such schedules may be amended or supplemented from time to time); and

(d)     the consummation of the transactions contemplated by the Credit Agreement and this Security Agreement will not result in the termination or material impairment of any of the Intellectual Property Collateral.

SECTION 3.7   Validity, etc.

(a)     This Security Agreement creates a valid security interest in the Collateral securing the payment of the Obligations.

(b)     Each Grantor has authorized Lender to file or caused to be filed all UCC-1 financing statements in the filing office for such Grantor’s jurisdiction of organization listed in Item A of Schedule II (collectively, the “ Filing Statements ”) and has taken all other actions requested by the Secured Party necessary for the Secured Party to obtain control of the Collateral as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC.

(c)     Upon the filing of the Filing Statements with the appropriate agencies therefor, the security interests created under this Security Agreement shall constitute a perfected security interest in the Collateral described on such Filing Statements in favor of the Secured Party to the extent that a security interest therein may be perfected by filing pursuant to the relevant UCC prior to all other Liens.

SECTION 3.8   Authorization, Approval, etc . Except as have been obtained or made and are in full force and effect, no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or any other third party is required either:

(a)     for the grant by any Grantor of the security interest granted hereby or for the execution, delivery and performance of this Security Agreement by any Grantor;

(b)     for the perfection or maintenance of the security interests hereunder including the first priority nature of such security interest (except with respect to the Filing Statements or, with respect to Intellectual Property Collateral, the recordation of any agreements with the U.S. Patent and Trademark Office or the U.S. Copyright Office) or the exercise by the Secured Party of its rights and remedies hereunder; or

(c)     for the exercise by the Secured Party of the voting or other rights provided for in this Security Agreement, or, except (i) with respect to any securities issued by a Subsidiary of a Grantor, as may be required in connection with a disposition of such securities by laws affecting the offering and sale of securities generally, the remedies in respect of the Collateral pursuant to this Security Agreement and (ii) any “change of control” or similar filings required by state licensing agencies.

ARTICLE IV
COVENANTS

Each Grantor covenants and agrees that, until the Termination Date, such Grantor will perform, comply with and be bound by the obligations set forth below.

SECTION 4.1   As to Investment Property, etc. Capital Securities of Subsidiaries. No Grantor will allow any of its Subsidiaries :

(a)     that is a corporation, business trust, joint stock company or similar Person, to issue Uncertificated Securities;

(b)     that is a partnership or limited liability company, to (i) issue Capital Securities that are to be dealt in or traded on securities exchanges or in securities markets, expressly provide in its Organic Documents that its Capital Securities are securities governed by Article 8 of the UCC, or (ii) place such Subsidiary’s Capital Securities in a Securities Account; and

(c)     to issue Capital Securities in addition to or in substitution for the Capital Securities pledged hereunder, except to such Grantor (and such Capital Securities are immediately pledged and delivered to the Secured Party pursuant to the terms of this Security Agreement).

SECTION 4.1.1   Investment Property (other than Certificated Securities) .

(a)     With respect to any Deposit Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or Security Entitlements constituting Investment Property owned or held by any Grantor, such Grantor will, upon the Secured Party’s request, cause the intermediary maintaining such Investment Property to execute a Control Agreement relating to such Investment Property pursuant to which such intermediary agrees to comply with the Secured Party’s instructions with respect to such Investment Property without further consent by such Grantor. The provisions of this Section 4.1.1(a) shall not apply to Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a Grantor's salaried employees; provided that the funds on deposit in such Deposit Accounts shall at no time exceed the actual payroll, payroll taxes and other employee wage and benefit payments then owing by such Grantor for the immediately succeeding payroll period. For the avoidance of doubt, and notwithstanding anything herein to the contrary, the execution and delivery of such Control Agreements shall not be a condition precedent to the Lender’s obligation to make the Loan on the Closing Date, except with respect to Deposit Accounts maintained with PNC Bank, National Association.

(b)     With respect to any Uncertificated Securities (other than Uncertificated Securities credited to a Securities Account) constituting Investment Property owned or held by any Grantor, such Grantor will cause the issuer of such securities to either (i) register the Secured Party as the registered owner thereof on the books and records of the issuer or (ii) execute a Control Agreement relating to such Investment Property pursuant to which the issuer agrees to comply with the Secured Party’s instructions with respect to such Uncertificated Securities without further consent by such Grantor.

SECTION 4.1.2   Certificated Securities (Stock Powers) . Each Grantor agrees that all Certificated Securities delivered to the Secured Party by such Grantor pursuant to this Security Agreement, will be accompanied by duly executed undated blank stock powers, or other equivalent instruments of transfer reasonably acceptable to the Secured Party.

SECTION 4.1.3       Continuous Pledge . Each Grantor will (except as otherwise permitted under the Credit Agreement or this Security Agreement) deliver to the Secured Party and at all times keep pledged to the Secured Party pursuant hereto, on a first-priority, perfected basis all of its Investment Property, all Dividends and Distributions with respect thereto, all of its Payment Intangibles in excess of $100,000 to the extent they are evidenced by a Document, Instrument, Promissory Note or Chattel Paper, and all interest and principal with respect to such Payment Intangibles, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral. Each Grantor agrees that it will, promptly following receipt thereof, deliver to the Secured Party possession of all originals of negotiable Documents, Instruments, Promissory Notes and Chattel Paper that it acquires following the Closing Date.

SECTION 4.1.4       Voting Rights; Dividends, etc . Each Grantor agrees:

(a)         promptly upon receipt of notice of the occurrence and continuance of an Event of Default from the Secured Party and without any request therefor by the Secured Party, so long as such Event of Default shall continue, to deliver (properly endorsed where required hereby or requested by the Secured Party) to the Secured Party all Dividends and Distributions with respect to Investment Property, all interest, principal, other cash payments on Payment Intangibles, and all Proceeds of the Collateral, in each case thereafter received by such Grantor, all of which shall be held by the Secured Party as additional Collateral; and

(b)        with respect to Collateral consisting of general partner interests or limited liability company interests, to promptly modify its Organic Documents to admit the Secured Party as a general partner or member, as applicable, immediately upon the occurrence and continuance of an Event of Default and so long as the Secured Party has notified such Grantor of the Secured Party’s intention to exercise its voting power under this clause,

(i)     that the Secured Party may exercise (to the exclusion of such Grantor) the voting power and all other incidental rights of ownership with respect to any Investment Property constituting Collateral and such Grantor hereby grants the Secured Party an irrevocable proxy, exercisable under such circumstances, to vote such Investment Property; and

(ii)         to promptly deliver to the Secured Party such additional proxies and other documents as may be necessary to allow the Secured Party to exercise such voting power.

All dividends, Distributions, interest, principal, cash payments, Payment Intangibles and Proceeds that may at any time and from time to time be held by any Grantor, but which such Grantor is then obligated to deliver to the Secured Party, shall, until delivery to the Secured Party, be held by such Grantor separate and apart from its other property in trust for the Secured Party. The Secured Party agrees that unless an Event of Default shall have occurred and be continuing and the Secured Party shall have given the notice referred to in clause (b), the Grantors will have the exclusive voting power with respect to any of their Investment Property constituting Collateral and the Secured Party will, upon the written request of a Grantor, promptly deliver such proxies and other documents, if any, as shall be reasonably requested by such Grantor which are necessary to allow such Grantor to exercise that voting power; provided that no vote shall be cast, or consent, waiver, or ratification given, or action taken by any Grantor that would impair any such Collateral or be inconsistent with or violate any provision of any Loan Document.

SECTION 4.2   Change of Name, etc . No Grantor will change its name or place of incorporation or organization or federal taxpayer identification number except upon 30 days’ prior written notice to the Secured Party.

SECTION 4.3   As to Accounts .

(a)     The Grantors shall have the right to collect all Accounts so long as no Event of Default shall have occurred and be continuing.

(b)     Upon (i) the occurrence and continuance of an Event of Default and (ii) the delivery of notice by the Secured Party to a Grantor, all Proceeds of Collateral received by such Grantor shall be delivered in kind to the Secured Party for deposit in a Deposit Account of such Grantor maintained with the Secured Party or with any depositary institution that has entered into a Control Agreement in favor of the Secured Party (together with any other Accounts pursuant to which any portion of the Collateral is deposited with the Secured Party, the “ Collateral Accounts ”), and such Grantor shall not commingle any such Proceeds, and shall hold separate and apart from all other property, all such Proceeds in express trust for the benefit of the Secured Party until delivery thereof is made to the Secured Party.

(c)     Following the delivery of notice pursuant to clause (b)(ii) and during the continuance of an Event of Default, the Secured Party shall have the right to apply any amount in the Collateral Account to the payment of any Obligations which are due and payable.

(d)     With respect to each of the Collateral Accounts, it is hereby confirmed and agreed that (i) deposits in such Collateral Account are subject to a security interest as contemplated hereby, and (ii) such Collateral Account shall be under the control of the Secured Party.

SECTION 4.4   As to Grantors’ Use of Collateral .

(a)     Subject to clause (b) , each Grantor (i) may in the ordinary course of its business, at its own expense, sell, lease or furnish under the contracts of service any of the Inventory normally held by such Grantor for such purpose, and use and consume, in the ordinary course of its business, any raw materials, work in process or materials normally held by such Grantor for such purpose, (ii) will, at its own expense, endeavor to collect, as and when due and in accordance with its customary practices, all amounts due with respect to any of the Collateral, including the taking of such action with respect to such collection as the Secured Party may request following the occurrence and during the continuance of an Event of Default or, in the absence of such request, as such Grantor may deem advisable, and (iii) may grant, in the ordinary course of business, to any party obligated on any of the Collateral, any rebate, refund or allowance to which such party may be lawfully entitled, and may accept, in connection therewith, the return of Goods, the sale or lease of which shall have given rise to such Collateral.

(b)     At any time following the occurrence and during the continuance of an Event of Default, whether before or after the maturity of any of the Obligations, the Secured Party may (i) revoke any or all of the rights of any Grantor set forth in clause (a) , (ii) notify any parties obligated on any of the Collateral to make payment to the Secured Party of any amounts due or to become due thereunder and (iii) enforce collection of any of the Collateral by suit or otherwise and surrender, release, or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder or evidenced thereby.

(c)     Upon request of the Secured Party following the occurrence and during the continuance of an Event of Default, each Grantor will, at its own expense, notify any parties obligated on any of its Collateral to make payment to the Secured Party of any amounts due or to become due thereunder.

(d)     At any time following the occurrence and during the continuation of an Event of Default, the Secured Party may endorse, in the name of any Grantor, any item, howsoever received by the Secured Party, representing any payment on or other Proceeds of any of the Collateral.

SECTION 4.5   As to Intellectual Property Collateral . Each Grantor covenants and agrees to comply with the following provisions as such provisions relate to any Intellectual Property Collateral material to the operations or business of such Grantor:

(a)     the Grantor shall use commercially reasonable efforts to pursue and maintain, at its own expense, legal protection for all Intellectual Property owned or controlled by the Borrower or any of the Subsidiaries, including (i) initiating proceedings before the United States Patent and Trademark Office, the United States Copyright Office or similar offices or agencies in other countries or political subdivisions thereof, and filing applications for renewal, affidavits of use, affidavits of in contestability and opposition, interference and cancellation proceedings and the paying fees and taxes and (ii) not doing or failing to perform acts whereby such Intellectual Property may lapse or become abandoned or dedicated to the public, invalid or unenforceable;

(b)     the Grantor shall promptly notify the Secured Party if it knows, or has reason to know, that any application or registration relating to any material item of the Intellectual Property Collateral may become abandoned or dedicated to the public or placed in the public domain or invalid or unenforceable, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any foreign counterpart thereof or any court) regarding such Grantor’s ownership of any of the Intellectual Property Collateral, its right to register the same or to keep and maintain and enforce the same;

(c)     in no event will the Grantor or any of its agents, employees, designees or licensees file an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Secured Party, and upon request of the Secured Party (subject to the terms of the Credit Agreement), executes and delivers all agreements, instruments and documents as the Secured Party may request to evidence the Secured Party’s security interest in such Intellectual Property Collateral; and

(d)     Within 30 days from the end of each Fiscal Quarter the Grantor will execute and deliver to the Secured Party (as applicable) a Patent Security Agreement, Trademark Security Agreement and/or Copyright Security Agreement, as the case may be, in the forms of Exhibit A , Exhibit B and Exhibit C hereto in connection with its obtaining an interest in any such Intellectual Property, and shall execute and deliver to the Secured Party any other document reasonably required to acknowledge or register or perfect the Secured Party’s interest in any part of such item of Intellectual Property Collateral unless such Grantor shall determine in good faith (with the consent of the Secured Party) that any Intellectual Property Collateral is of negligible economic value to such Grantor.

SECTION 4.6   As to Letter-of-Credit Rights .

(a)     Each Grantor, by granting a security interest in its Letter-of-Credit Rights to the Secured Party, intends to (and hereby does) collaterally assign to the Secured Party its rights (including its contingent rights) to the Proceeds of all Letter-of-Credit Rights of which it is or hereafter becomes a beneficiary or assignee. Each Grantor will promptly use commercially reasonable efforts to cause the issuer of each Letter of Credit having a face amount (or equivalent) in excess of $100,000 and each nominated person (if any) with respect thereto to consent to such assignment of the Proceeds thereof in a consent agreement in form and substance reasonably satisfactory to the Secured Party and deliver written evidence of such consent to the Secured Party.

(b)     Upon the occurrence and during the continuance of an Event of Default, each Grantor will, promptly upon request by the Secured Party, (i) notify (and such Grantor hereby authorizes the Secured Party to notify) the issuer and each nominated person with respect to each of the Letters of Credit that the Proceeds thereof have been assigned to the Secured Party hereunder and any payments due or to become due in respect thereof are to be made directly to the Secured Party and (ii) arrange for the Secured Party to become the transferee beneficiary Letter of Credit.

SECTION 4.7   As to Commercial Tort Claims . Each Grantor covenants and agrees that, until the payment in full of the Obligations and termination of all Commitments, with respect to any Commercial Tort Claim hereafter arising asserting damages in excess of $100,000 (individually or in the aggregate for all such claims), it shall deliver to the Secured Party a supplement in form and substance satisfactory to the Secured Party, together with all supplements to schedules thereto identifying such new Commercial Tort Claims.

SECTION 4.8   Electronic Chattel Paper and Transferable Records . If any Grantor at any time holds or acquires an interest in any electronic chattel paper or any “transferable record,” as that term is defined in Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, with a value in excess of $1,000,000, such Grantor shall promptly notify the Secured Party thereof and, at the request of the Secured Party, shall take such action as the Secured Party may request to vest in the Secured Party control under Section 9-105 of the U.C.C. of such electronic chattel paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Secured Party agrees with each Grantor that the Secured Party will arrange, pursuant to procedures satisfactory to the Secured Party and so long as such procedures will not result in the Secured Party’s loss of control, for such Grantor to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the U.C.C. or, as the case may be, Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the U.S. Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such electronic chattel paper or transferable record.

SECTION 4.9   Further Assurances, etc . Each Grantor agrees that, from time to time at its own expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that the Secured Party may request, in order to perfect, preserve and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Grantor will:

(a)     from time to time upon the request of the Secured Party, promptly deliver to the Secured Party such stock powers, instruments and similar documents, reasonably satisfactory in form and substance to the Secured Party, with respect to such Collateral as the Secured Party may request and will, from time to time upon the request of the Secured Party, after the occurrence and during the continuance of any Event of Default, promptly transfer any securities constituting Collateral into the name of any nominee designated by the Secured Party; if any Collateral shall be evidenced by an Instrument, negotiable Document, Promissory Note or tangible Chattel Paper, deliver and pledge to the Secured Party hereunder such Instrument, negotiable Document, Promissory Note or tangible Chattel Paper duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Secured Party;

(b)     file (and hereby authorize the Secured Party to file) such Filing Statements or continuation statements, or amendments thereto, and such other instruments or notices (including any assignment of claim form under or pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or any regulation promulgated under or pursuant to any version thereof), as may be necessary or that the Secured Party may request in order to perfect and preserve the security interests and other rights granted or purported to be granted to the Secured Party hereby;

(c)     deliver to the Secured Party and at all times keep pledged to the Secured Party pursuant hereto, on a first-priority, perfected basis, at the request of the Secured Party, all Investment Property constituting Collateral, all Dividends and Distributions with respect thereto, and all interest and principal with respect to Promissory Notes, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral;

(d)     not take or omit to take any action the taking or the omission of which would result in any material impairment or alteration of any obligation of the maker of any Payment Intangible or other Instrument constituting Collateral, except as provided in Section 4.4 ;

(e)     not create any tangible Chattel Paper without placing a legend on such tangible Chattel Paper reasonably acceptable to the Secured Party indicating that the Secured Party has a security interest in such Chattel Paper;

(f)     furnish to the Secured Party, from time to time at the Secured Party’s request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Party may request, all in reasonable detail; and

(g)     subject to other provisions of this Agreement, do all things reasonably requested by the Secured Party in accordance with this Security Agreement in order to enable the Secured Party to have and maintain control over the Collateral consisting of Investment Property, Deposit Accounts, Letter-of-Credit-Rights and Electronic Chattel Paper.

With respect to the foregoing and the grant of the security interest hereunder, each Grantor hereby authorizes the Secured Party to file one or more financing or continuation or financing change statements, and amendments thereto, relative to all or any part of the Collateral. Each Grantor agrees that a carbon, photographic or other reproduction of this Security Agreement or any UCC financing statement covering the Collateral or any part thereof shall be sufficient as a UCC financing statement where permitted by law. Each Grantor hereby authorizes the Secured Party to file financing statements describing as the collateral covered thereby “all of the debtor’s personal property or assets” or words to that effect, notwithstanding that such wording may be broader in scope than the Collateral described in this Security Agreement.

SECTION 4.10   Deposit Accounts . Following the occurrence and during the continuance of an Event of Default, at the request of the Secured Party, each Grantor will maintain all of its Deposit Accounts only with the Secured Party or with any depositary institution that has entered into a Control Agreement in favor of the Secured Party.

SECTION 4.11   Inbound Licenses . Each Grantor will, promptly after entering into or becoming bound by any inbound license or similar agreement relating to the sale, distribution, licensing or other commercialization of any Product or any Intellectual Property covering any Product (other than over-the-counter software that is commercially available to the public), take all action necessary to cause the Secured Party to be granted a perfected and valid security interest in such license or similar agreement, including obtaining the consent of, or waiver by, any Person whose consent or waiver is necessary for the Secured Party to be granted a perfected and valid security interest in such license or similar agreement and to fully exercise its rights under any of the Loan Documents in the event of a disposition or liquidation of the rights, assets or property that is the subject of such license or similar agreement.

ARTICLE V
THE SECURED PARTY

SECTION 5.1   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, from time to time in the Secured Party’s discretion, following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish the purposes of this Security Agreement, including:

(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 respect of any of the Collateral;

(b)     to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper, in connection with clause (a) above;

(c)     to file any claims or take any action or institute any proceedings which the Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Secured Party with respect to any of the Collateral;

(d)     dispose of all or any part of any Collateral as provided in Section 6.1(a)(iv) below; and

(e)     to perform the affirmative obligations of such Grantor hereunder.

Each Grantor hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section is irrevocable and coupled with an interest.

SECTION 5.2   Secured Party May Perform . If any Grantor fails to perform any agreement contained herein, the Secured Party may itself perform, or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be payable by the Borrower pursuant to Section 10.3 of the Credit Agreement.

SECTION 5.3   Secured Party Has No Duty . The powers conferred on the Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Secured Party shall have no duty as to any Collateral or responsibility for

(a)     ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Investment Property, whether or not the Secured Party has or is deemed to have knowledge of such matters, or

(b)     taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

SECTION 5.4   Reasonable Care . The Secured Party is required to exercise reasonable care in the custody and preservation of any of the Collateral in its possession; provided that the Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral, if it takes such action for that purpose as any Grantor reasonably requests in writing at times other than upon the occurrence and during the continuance of any Event of Default, but failure of the Secured Party to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care.

ARTICLE VI
REMEDIES

SECTION 6.1   Certain Remedies . If any Event of Default shall have occurred and be continuing:

(a)     The Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a Secured Party on default under the UCC (whether or not the UCC applies to the affected Collateral) and also may:

(i)          take possession of any Collateral not already in its possession without demand and without legal process;

(ii)         require any Grantor to, and each Grantor hereby agrees that it will, at its 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 a place to be designated by the Secured Party that is reasonably convenient to both parties,

(iii)        enter onto the property where any Collateral is located and take possession thereof without demand and without legal process;

(iv)        without notice except as specified below, lease, license, sell or otherwise dispose of 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 or for future delivery, 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 days’ prior notice to such 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. 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.

(b)         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 by the Secured Party against, all or any part of the Obligations as set forth in Section 4.4 of the Credit Agreement.

(c)          The Secured Party may:

(i)          transfer all or any part of the Collateral into the name of the Secured Party or its nominee, with or without disclosing that such Collateral is subject to the Lien hereunder,

(ii)         notify the parties obligated on any of the Collateral to make payment to the Secured Party of any amount due or to become due thereunder,

(iii)        withdraw, or cause or direct the withdrawal, of all funds with respect to the Collateral Account;

(iv)        enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto,

(v)         endorse any checks, drafts, or other writings in any Grantor’s name to allow collection of the Collateral,

(vi)        take control of any Proceeds of the Collateral, and

(vii)       execute (in the name, place and stead of any Grantor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral.

SECTION 6.2   Securities Laws . If the Secured Party shall determine to exercise its right to sell all or any of the Collateral that are Capital Securities pursuant to Section 6.1 , each Grantor agrees that, upon request of the Secured Party, such Grantor will, at its own expense:

(a)     execute and deliver, and cause (or, with respect to any issuer which is not a Subsidiary of such Grantor, use commercially reasonable efforts to cause) each issuer of the Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Secured Party, advisable to permit the transfer of such Collateral pursuant to exemption from registration under the Securities Act of 1933, as from time to time amended (the “ Securities Act ”). In the event that the Secured Party determines, in its reasonable discretion, that an exemption from registration is unavailable to effect a transfer or sale of such Collateral, such Grantor agrees that it will file and cause a resale registration statement to be declared effective;

(b)     use commercially reasonable efforts to exempt the Collateral under the state securities or “Blue Sky” laws and to obtain all necessary governmental approvals for the sale of the Collateral, as requested by the Secured Party;

(c)     cause (or, with respect to any issuer that is not a Subsidiary of such Grantor, use commercially reasonable efforts to cause) each such issuer to make available to its security holders, as soon as practicable, an earnings statement that will satisfy the provisions of Section 11(a) of the Securities Act; and

(d)     do or cause to be done all such other acts and things as may be necessary to make such sale of the Collateral or any part thereof valid and binding and in compliance with applicable law.

SECTION 6.3   Compliance with Restrictions . Each Grantor agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred and be continuing, the Secured Party is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any Governmental Authority or official, and each Grantor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Secured Party be liable nor accountable to any Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction.

SECTION 6.4   Protection of Collateral . The Secured Party may from time to time, at its option, perform any act which any Grantor fails to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of an Event of Default) and the Secured Party may from time to time take any other action which the Secured Party deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.

ARTICLE VII
MISCELLANEOUS PROVISIONS

SECTION 7.1   Loan Document . This Security Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof, including Article XI thereof.

SECTION 7.2   Binding on Successors, Transferees and Assigns; Assignment . This Security Agreement shall remain in full force and effect until the Termination Date has occurred, shall be binding upon each Grantor and its successors, transferees and assigns and shall inure to the benefit of and be enforceable by the Secured Party and its successors, transferees and assigns; provided that no Grantor may (unless otherwise permitted under the terms of the Credit Agreement or this Security Agreement) assign any of its obligations hereunder without the prior written consent of the Secured Party.

SECTION 7.3   Amendments, etc . No amendment to or waiver of any provision of this Security Agreement, nor consent to any departure by any Grantor from its obligations under this Security Agreement, shall in any event be effective unless the same shall be in writing and signed by the Secured Party and the Grantors and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 7.4   Notices . All notices and other communications provided for hereunder shall be in writing or by facsimile and addressed, delivered or transmitted to the appropriate party at the address or facsimile number of such party specified in the Credit Agreement or at such other address or facsimile number as may be designated by such party in a notice to the other party. Any notice or other communication, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice or other communication, if transmitted by facsimile, shall be deemed given when transmitted and electronically confirmed.

SECTION 7.5   Release of Liens . Upon (a) the Disposition of Collateral in accordance with the Credit Agreement or (b) the occurrence of the Termination Date, the security interests granted herein shall automatically terminate with respect to (i) such Collateral (in the case of clause (a) ) or (ii) all Collateral (in the case of clause (b) ). Upon any such Disposition or termination, the Secured Party will, at the Grantors’ sole expense, deliver to the relevant Grantor, without any representations, warranties or recourse of any kind whatsoever, all Collateral held by the Secured Party hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

SECTION 7.6   Additional Grantor . Upon the execution and delivery by any other Person of a supplement in the form of Annex I hereto, such Person shall become a “ Grantor ” hereunder with the same force and effect as if it were originally a party to this Security Agreement and named as a “ Grantor ” hereunder. The execution and delivery of such supplement shall not require the consent of any Grantor hereunder, and the rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Security Agreement.

SECTION 7.7   No Waiver; Remedies . In addition to, and not in limitation of Section 2.5 , no failure on the part of the Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 7.8   Headings . The various headings of this Security Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Security Agreement or any provisions thereof.

SECTION 7.9   Severability . Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Security Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 7.10   Governing Law, Entire Agreement, etc . THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NON-PERFECTION, AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. This Security Agreement and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and thereof and supersede any prior agreements, written or oral, with respect thereto.

SECTION 7.11   Counterparts . This Security Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Security Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Security Agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Security Agreement to be duly executed and delivered by its Authorized Officer as of the date first above written.

Exhibit 10.3

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

Warrant Certificate No.:

Original Issue Date: May 29, 2015

FOR VALUE RECEIVED, ALLIQUA BIOMEDICAL, INC., a Delaware corporation (the “ Company ”), hereby certifies that PERCEPTIVE CREDIT OPPORTUNITIES FUND, LP (the “ Initial Holder ”) is entitled to purchase from the Company 750,000 duly authorized, validly issued, fully paid and nonassessable shares of Common Stock at a purchase price per share of $5.5138 (subject to adjustment as provided herein, the “ Exercise Price ”), all subject to the terms, conditions and adjustments set forth below. Certain capitalized terms used herein are defined in Section 1 hereof.

This Warrant has been issued pursuant to the terms of, and as a condition precedent to the making of the Loan under, the Credit Agreement and Guaranty, dated as of May 29, 2015 (the “ Credit Agreement ”), among the Company, Perceptive Credit Opportunities Fund, LP and the guarantors parties thereto.

Section 1.           Definitions . As used herein, capitalized terms have the meanings set forth below.

(a)        Certain Terms . The following terms will have the following meanings when used herein:

“ Aggregate Exercise Price ” means an amount equal to the product of (i) the number of Warrant Shares in respect of which the Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (ii) the Exercise Price in effect as of the Exercise Date in accordance with the terms hereof.

“ Board ” means the board of directors (or equivalent) of the Company.

“ Business Day ” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in New York City are authorized or obligated by law or executive order to close.

“ Cash Payment ” has the meaning set forth in Section 3(b)(i) .

“ Choice Acquisition Agreement ” means that certain Agreement and Plan of Merger, dated May 5, 2014, by and among the Company, ALQA Merger Sub, Inc., and Choice Therapeutics, Inc.

“ Common Stock ” means the common stock, par value $0.001 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

“ Common Stock Deemed Outstanding ” means, at any given time, the sum of (i) the number of shares of Common Stock actually outstanding at such time, plus (ii) the number of shares of Common Stock issuable upon exercise of Options actually outstanding at such time, plus (iii) the number of shares of Common Stock issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless of whether the Options or Convertible Securities are actually exercisable at such time.

“ Company ” has the meaning set forth in the preamble.

“ Convertible Securities ” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

“ Credit Agreement ” has the meaning set forth in the preamble.

“ Demand Registration ” has the meaning set forth in the Registration Rights Addendum.

“ Excluded Issuances ” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d) ) by the Company after the Original Issue Date of: (i) shares of Common Stock issued upon the exercise of the Warrant; (ii) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends and recapitalizations) issued directly or upon the exercise of Options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the Board and the affirmative vote of the requisite number of the Company’s stockholders (subject to adjustment for reverse and forward stock splits and similar transactions); (iii) shares of Common Stock issuable upon exercise, conversion or exchange of Options or Convertible Securities issued and outstanding on February 2, 2015, provided that such Options or Convertible Securities have not been amended since the date of this Warrant to increase the number of shares of Common Stock or to decrease the exercise price, exchange price or conversion price of such securities; (iv) securities issued pursuant to the Merger Agreement or the Choice Acquisition Agreement; and (v) other shares of Common Stock to the extent (but only to the extent) that (x) such issuance or sale occurred on or before December 31, 2015, and (y) the proceeds of such sale or issuance, when taken together with all other such issuances and sales pursuant to this clause (v) , do not result in gross selling proceeds to the Company in excess of $25,000,000.

“ Exercise Date ” means, for any given exercise of the Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Eastern Standard Time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price.

“ Exercise Agreement ” has the meaning set forth in Section 3(a)(i) .

“ Exercise Period ” has the meaning set forth in Section 2 .

“ Exercise Price ” has the meaning set forth in the preamble.

“ Fair Market Value ” means, for any date, the price determined by the first of the following clauses that applies: (i) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. or a similar quotation system or association for such day (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)) or (ii) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected jointly by the Initial Holder and the Company.

“ Holder ” has the meaning provided in the Registration Rights Addendum.

“ Initial Holder ” has the meaning set forth in the preamble.

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

“ Original Issue Date ” means the date set forth as such in the preamble hereto, which date shall be on or prior to the date the Loan is made under the Credit Agreement.

“ Piggyback Registration ” has the meaning set forth in the Registration Rights Addendum.

“ Purchase Rights ” has the meaning set forth in Section 5 .

“ Registration Rights ” has the meaning set forth in Section 6 .

“ Registration Rights Addendum ” has the meaning set forth in Section 6 .

“ Trading Market ” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or any over-the-counter market operated by OTC Markets Group Inc. (or any successors to any of the foregoing).

“ Warrant ” means this warrant to purchase shares of Common Stock.

“ Warrant Register ” has the meaning set forth in Section 12 .

“ Warrant Shares ” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms hereof.

(b)        Credit Agreement Terms . Unless otherwise defined, capitalized terms used herein will have the meanings ascribed thereto in the Credit Agreement.

Section 2.           Term of Warrant . Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., Eastern Standard Time, on the fifth anniversary of the Original Issue Date or, if such day is not a Business Day, on the next preceding Business Day (the “ Exercise Period ”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).

Section 3.          Exercise of Warrant.

(a)           Exercise Procedure . This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i)        surrender of this Warrant, subject to Section 3(e) to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “ Exercise Agreement ”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii)       payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b) .

(b)           Payment of the Aggregate Exercise Price . Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Agreement, by the following methods:

(i)        by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in either case in the amount of such Aggregate Exercise Price (collectively, a “ Cash Payment ”);

(ii)       by instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price; or

(iii)      any combination of the foregoing;

provided that, any term or provision of this Section (b) to the contrary notwithstanding, with respect to any exercise of this Warrant, not less than one-half (1/2) of the Aggregate Exercise Price payable as a result of such exercise shall be in the form of a Cash Payment. In the event of any withholding of Warrant Shares pursuant to clause (ii) or (iii) above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by the Company shall be rounded up to the nearest whole share and the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by the Company in an amount equal to the product of (x) such incremental fraction of a share being so withheld multiplied by (y) the Fair Market Value per Warrant Share as of the Exercise Date.

(c)           Delivery of Stock Certificates . Upon receipt by the Company of the Exercise Agreement and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(d) hereof. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 7 below, such other Person’s name as shall be designated in the Exercise Agreement. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(d)           Fractional Shares . The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the volume weighted average price of the Common Stock on the Exercise Date as reported by Bloomberg L.P.

(e)           Surrender of this Warrant . Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date the final Exercise Agreement is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

(f)           Valid Issuance of Warrant and Warrant Shares; Payment of Taxes . With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i)          This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii)         All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens and charges.

(iii)        The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv)        The Company shall cause the Warrant Shares, immediately upon such exercise, to be listed on any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares are listed at the time of such exercise.

(v)         The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant.

(g)           Conditional Exercise . Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

(h)           Reservation of Shares . During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

Section 4.          Adjustment to Exercise Price and Number of Warrant Shares . In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 .

(a)           Adjustment to Exercise Price Upon Issuance of Common Stock . Except as provided in Section 4(b) and except in the case of an event described in either Section 4(d) or Section 4(e) , if the Company shall, at any time or from time to time after the Original Issue Date, issue or sell, or in accordance with Section 4(d) is deemed to have issued or sold, any shares of Common Stock without consideration or for consideration per share less than the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), then immediately upon such issuance or sale (or deemed issuance or sale), the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale) shall be reduced (and in no event increased) to an Exercise Price equal to the quotient obtained by dividing:

(i)          the sum of (A) the product obtained by multiplying the Common Stock Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) by the Exercise Price then in effect plus (B) the aggregate consideration, if any, received (or to be received) by the Company upon such issuance or sale (or deemed issuance or sale); by

(ii)         the sum of (A) the Common Stock Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) plus (B) the aggregate number of shares of Common Stock issued or sold (or to be issued or sold or deemed issued or sold) by the Company in such issuance or sale (or deemed issuance or sale).

(b)           Exceptions To Adjustment Upon Issuance of Common Stock . Anything herein to the contrary notwithstanding, there shall be no adjustment to the Exercise Price or the number of Warrant Shares issuable upon exercise of this Warrant with respect to any Excluded Issuance.

(c)           Effect of Certain Events on Adjustment to Exercise Price . For purposes of determining the adjusted Exercise Price under Section 4(a) hereof, the following shall be applicable:

(i)           Issuance of Options . If the Company shall, at any time or from time to time after the Original Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible Securities issuable upon the exercise of such Options are immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(c)(v) ) for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon the exercise of such Options is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price under Section 4(a)) , at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of all such Options, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the issuance or sale of all such Convertible Securities and the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of shares of Common Stock issuable upon the exercise of all such Options or upon the conversion or exchange of all Convertible Securities issuable upon the exercise of all such Options. Except as otherwise provided in Section 4(c)(iii) , no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock or of Convertible Securities upon exercise of such Options or upon the actual issuance of Common Stock upon conversion or exchange of Convertible Securities issuable upon exercise of such Options.

(ii)          Issuance of Convertible Securities . If the Company shall, at any time or from time to time after the Original Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible Securities is immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(c)(v) ) for which Common Stock is issuable upon the conversion or exchange of such Convertible Securities is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Convertible Securities, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price pursuant to Section 4(a)) , at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of such Convertible Securities, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. Except as otherwise provided in Section 4(c)(iii) , (A) no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock upon conversion or exchange of such Convertible Securities and (B) no further adjustment of the Exercise Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Exercise Price have been made pursuant to the other provisions of this Section 4(c) .

(iii)         Change in Terms of Options or Convertible Securities . Upon any change in any of (A) the total amount received or receivable by the Company as consideration for the granting or sale of any Options or Convertible Securities referred to in Section 4(c)(i) or Section 4(c)(ii) hereof, (B) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of any Options or upon the issuance, conversion or exchange of any Convertible Securities referred to in Section 4(c)(i) or Section 4(c)(ii) hereof, (C) the rate at which Convertible Securities referred to in Section 4(c)(i) or Section 4(c)(ii) hereof are convertible into or exchangeable for Common Stock, or (D) the maximum number of shares of Common Stock issuable in connection with any Options referred to in Section 4(c)(i) hereof or any Convertible Securities referred to in Section 4(c)(ii) hereof (in each case, other than in connection with an Excluded Issuance), then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment to the Exercise Price pursuant to this Section 4 ) the Exercise Price in effect at the time of such change shall be adjusted or readjusted, as applicable, to the Exercise Price which would have been in effect at such time pursuant to the provisions of this Section 4 had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion rate or maximum number of shares, as the case may be, at the time initially granted, issued or sold, but only if as a result of such adjustment or readjustment the Exercise Price then in effect is reduced.

(iv)         Treatment of Expired or Terminated Options or Convertible Securities . Upon the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security (or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant to this Section 4 (including without limitation upon the redemption or purchase for consideration of all or any portion of such Option or Convertible Security by the Company), the Exercise Price then in effect hereunder shall forthwith be changed pursuant to the provisions of this Section 4 to the Exercise Price which would have been in effect at the time of such expiration or termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion thereof), to the extent outstanding immediately prior to such expiration or termination, never been issued.

(v)          Calculation of Consideration Received . If the Company shall, at any time or from time to time after the Original Issue Date, issue or sell, or is deemed to have issued or sold in accordance with Section 4(d) , any shares of Common Stock, Options or Convertible Securities: (A) for cash, the consideration received therefor shall be deemed to be the net amount received by the Company therefor; (B) marketable securities, the amount of consideration shall be the Fair Market Value of such securities; (C) for consideration other than cash or marketable securities, the amount of the consideration other than cash or marketable securities received by the Company shall be the fair value of such consideration; (D) for no specifically allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration received by the Company in such transaction as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be, issued in such transaction; or (E) to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be, issued to such owners. For purposes of this clause (v) , the net amount of any cash consideration and the fair value of any consideration other than cash or marketable securities shall be determined in good faith jointly by the Board and the Holder.

(vi)         Record Date . For purposes of any adjustment to the Exercise Price or the number of Warrant Shares in accordance with this Section 4 , in case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue 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.

(vii)        Treasury Shares . The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale of Common Stock for the purpose of this Section 4 .

(viii)       Other Dividends and Distributions . Subject to the provisions of this Section 4(c) , if the Company shall, at any time or from time to time after the Original Issue Date, make or declare, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or any other distribution payable in cash, securities of the Company (other than a dividend or distribution of shares of Common Stock, Options or Convertible Securities in respect of outstanding shares of Common Stock), or other property, then, and in each such event, provision shall be made so that the Holder shall receive upon exercise of the Warrant, in addition to the number of Warrant Shares receivable thereupon, the kind and amount of cash, securities of the Company, or other property which the Holder would have been entitled to receive had the Warrant been exercised in full into Warrant Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained such cash, securities or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section 4 with respect to the rights of the Holder; provided , that no such provision shall be made if (i) the Holder receives, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities, cash or other property in an amount equal to the amount of such cash, securities or other property as the Holder would have received if the Warrant had been exercised in full into Warrant Shares on the date of such event or (ii) an adjustment is made to this Warrant pursuant to Section 4(d) .

(d)           Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock . If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(d) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

(e)           Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger . In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation, merger or similar transaction of the Company with or into one or more other Persons, (iv) sale of all or substantially all of the Company’s assets to one or more other Persons or (v) other similar transaction (other than any such transaction covered by Section 4(d)) , in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of each successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale or similar transaction, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale or similar transaction). The provisions of this Section 4(e) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(e) , the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(e) with respect to this Warrant.

(f)           Certain Events . If any event of the type contemplated by the provisions of this Section 4 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features) occurs, then the Board shall make an appropriate adjustment in the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant so as to protect the rights of the Holder in a manner consistent with the provisions of this Section 4 ; provided , that no such adjustment pursuant to this Section 4(f) shall increase the Exercise Price or decrease the number of Warrant Shares issuable as otherwise determined pursuant to this Section 4 .

(g)           Certificate as to Adjustment .

(i)          As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

(ii)         As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(h)           Notices . In the event:

(i)          that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

(ii)         of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or sale of all or substantially all of the Company’s assets to another Person; or

(iii)        of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

then, and in each such case, the Company shall send or cause to be sent to the Holder at least five (5) Business Days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.

Section 5.           Purchase Rights . In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues or sells any shares of Common Stock, Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Stock (the “ Purchase Rights ”), then the Holder shall be entitled to (but shall not be obligated to) acquire, upon the same terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.

Section 6.           Registration Rights . The parties hereto agree that all Warrant Shares issued upon exercise of this Warrant are and shall be subject to, and shall have the benefit of, the registration rights (the “ Registration Rights ”) set forth in Addendum I hereto (the “ Registration Rights Addendum ”). The terms and provisions of the Registration Rights Addendum shall be binding upon the Company, the Holder and their respective successors, transferees and assigns, as if set forth in full within this Warrant. Notwithstanding the foregoing, no Holder shall be entitled to request any Demand Registration or Piggyback Registration unless such Holder, either individually or acting in concert with other Holders participating in such request, hold at least 25% of the number of Warrant Shares issuable upon exercise of this Warrant on the Original Issue Date.

Section 7.           Transfer of Warrant . Subject to Section 6 above and the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B , together with funds sufficient to pay any transfer taxes described in Section 3(f)(v) in connection with the making of such transfer. Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

Section 8.           Holder Not Deemed a Stockholder; Limitations on Liability . Except as otherwise specifically provided herein (including Section 4(c)(viii) ), prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 8 , the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

Section 9.           Replacement on Loss; Division and Combination .

(a)           Replacement of Warrant on Loss . Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided , that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

(b)           Division and Combination of Warrant . Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

Section 10.          No Impairment . The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, through any shareholders, voting or similar agreement, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but 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 reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Section 11.         Compliance with the Securities Act .

(a)           Agreement to Comply with the Securities Act; Legend . The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 11 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “ Securities Act ”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”

(b)           Representations of the Holder . In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i)          The Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a present view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

(ii)         The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “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 Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii)        The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, 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 Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

Section 12.         Warrant Register . The Company shall keep and properly maintain at its principal executive offices a register (the “ Warrant Register ”) for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

Section 13.        Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder or under the Registration Rights Addendum shall be in writing and shall be deemed to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13 ).

Section 14.         Cumulative Remedies . Except to the extent expressly provided in Section 8 to the contrary, the rights and remedies provided in this Warrant and the Registration Rights Addendum are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

Section 15.         Equitable Relief . Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant or the Registration Rights Addendum would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

Section 16.         Entire Agreement . This Warrant, together with the Credit Agreement and the Registration Rights Addendum, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant, the Credit Agreement and the Registration Rights Addendum, the statements in the body of this Warrant shall control.

Section 17.         Successor and Assigns . This Warrant, the Registration Rights Addendum and the rights evidenced hereby and thereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors, transferees and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

Section 18.         No Third-Party Beneficiaries . This Warrant and the Registration Rights Addendum are for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted transferees and assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant and the Registration Rights Addendum.

Section 19.          Headings . The headings in this Warrant and the Registration Rights Addendum are for reference only and shall not affect the interpretation of this Warrant or the Registration Rights Addendum.

Section 20.         Amendment and Modification; Waiver . Except as otherwise provided herein, this Warrant and the Registration Rights Addendum may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof or thereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant or the Registration Rights Addendum shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 21.         Severability . If any term or provision of this Warrant or the Registration Rights Addendum is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or the Registration Rights Addendum or invalidate or render unenforceable such term or provision in any other jurisdiction.

Section 22.         Governing Law . This Warrant and the Registration Rights Addendum shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.

Section 23.         Submission to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon this Warrant, the Registration Rights Addendum or the transactions contemplated hereby or thereby shall be instituted in the state or federal courts sitting in the borough of Manhattan in the City of New York, New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

Section 24.       WAIVER OF JURY TRIAL . EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS WARRANT OR THE REGISTRATION RIGHTS ADDENDUM IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS WARRANT OR THE REGISTRATION RIGHTS ADDENDUM OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 25.         Counterparts . This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

Section 26.        No Strict Construction . This Warrant and the Registration Rights Addendum shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

[ Signature page to Warrant ]

Exhibit A
to Warrant

FORM OF EXERCISE AGREEMENT

(To be signed only upon exercise of Warrant)

To: ________________

The undersigned, as holder of a right to purchase shares of Common Stock of ALLIQUA BIOMEDICAL, INC., a Delaware corporation (the “ Company ”), pursuant to that certain Warrant of the Company, dated as of May [___], 2015 and bearing Warrant Certificate No. [__] (the “ Warrant ”), hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, [________ (_____)] shares of Common Stock of the Company and herewith makes payment of [___________ Dollars ($________)] therefor by the [following method] ¹ :

(Check all that apply):

Unless otherwise defined herein, capitalized terms have the meanings provided in the Warrant.

DATED: ______________

¹ Note : No more than one-half (1/2) of the Aggregate Exercise Price may be paid by using the method described in Section 3(b)(ii) .

Exhibit B
to Warrant

FORM OF ASSIGNMENT AGREEMENT

THE UNDERSIGNED, [_________], is the holder (in such capacity, the “ Holder ”) of a warrant issued by ALLIQUA BIOMEDICAL, INC. (the “ Company ”) bearing Warrant Certificate No. [__] (the “ Subject Warrant ”), entitling the Holder to purchase up to [___] shares of the Company’s Common Stock. Unless otherwise defined, capitalized terms used herein have the meanings ascribed thereto in the Warrant, dated May [___], 2015 (the “ Warrant ”), between the Company and Perceptive Credit Opportunities Fund, LP.

FOR VALUE RECEIVED, the Holder hereby sells, assigns and transfers to [_____], (the “ Assignee ”) the right to acquire [all Warrant Shares entitled to be purchased upon exercise of the Subject Warrant] [______ of the Warrant Shares entitled to be purchased upon exercise of the Subject Warrant]. In furtherance of the foregoing assignment, the Holder hereby irrevocably instructs the Company to (i) memorialize such assignment on the Warrant Register as required pursuant to Section 12 of the Warrant, and (ii) pursuant to Section 7 of the Warrant, execute and deliver to the Assignee [and the Holder] a new Warrant [new Warrants] reflecting the foregoing assignment ([each] a “ Substitute Warrant ”).

The Assignee acknowledges and agrees that its Substitute Warrant and the shares of Common Stock to be issued upon exercise or conversion thereof are being acquired for investment and that the Assignee will not offer, sell or otherwise dispose of its Substitute Warrant or any shares of stock to be issued upon exercise or conversion thereof except under circumstances which will not result in a violation of the Securities Act or any applicable state securities laws. The Assignee represents and warrants for the benefit of the Company that the Assignee is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

Accordingly, the following restrictive legend is made applicable to the Assignee’s Substitute Warrant and the securities covered thereby:

The Substitute Warrant being issued in connection with the assignment contemplated hereby, along with the securities to be issued upon the exercise thereof, have not been registered under the Securities Act, and may not be offered, sold or otherwise transferred, assigned, pledged or hypothecated in the absence of such registration or any exemption therefrom under such Securities Act, any applicable state securities laws and the rules and regulations thereunder.

[SIGNATURE PAGE FOLLOWS]

Addendum I
to Warrant

REGISTRATION RIGHTS ADDENDUM

Reference is made to the Warrant, dated May [___], 2015, (the “ Warrant ”) by and between Alliqua Biomedical, Inc. (the “ Company ”) and Perceptive Credit Opportunities Fund, LP.

Unless otherwise defined, capitalized terms used herein have the meanings ascribed thereto pursuant to Section 1 of the Warrant.

The terms and provisions of this Addendum I (this “ Addendum ”) form a part of the Warrant as if set forth in full therein, and the parties thereto are bound by, and entitled to the benefits and subject to the obligations of, the terms and provisions hereof as if set forth in full in the Warrant.

2.              Defined Terms . As used in this Addendum, the following terms shall have the following meanings:

“ Addendum ” has the meaning set forth in the preamble.

“ Demand Registration ” has the meaning set forth in Section 2(a) .

“ Holder ” means the Initial Holder (as defined in the Warrant) and all permitted transferees, successors and assigns of the Initial Holder and their respective permitted transferees, successors and assigns, in any case, subject to Section 6 of the Warrant, it being understood that for purposes of this Addendum a Person shall be deemed to be a Holder whenever such Person holds a Warrant, has the right to acquire or obtain from the Company any Registrable Securities upon exercise of such Warrant, has acquired Registrable Securities upon exercise of a Warrant, or has acquired Registrable Securities after the exercise of a Warrant as a result of any subsequent stock split, stock combination, dividend, distribution, recapitalization or similar event.

“ Inspectors ” has the meaning set forth in Section 5(h) .

“ Piggyback Registration ” has the meaning set forth in Section 3(a) .

“ Prospectus ” means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

“ Records ” has the meaning set forth in Section 5(h) .

“ Registrable Securities ” means (i) any shares of Common Stock issuable upon exercise or exchange of a Warrant, and (ii) any shares of Common Stock issued or issuable with respect to any shares described in clause (i) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a Registration Statement covering such securities has been declared effective by the SEC and such securities have been disposed of pursuant to such effective Registration Statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met, (iii) such securities may be resold without subsequent registration under the Securities Act, or (iv) such securities shall have ceased to be outstanding.

“ Registration Statement ” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Addendum, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

“ Rule 144 ” means Rule 144 promulgated under the Securities Act or any successor rule thereto.

“ Securities Act ” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect from time to time.

“ Selling Expenses ” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the reasonable fees and disbursements of counsel for the holders of Registrable Securities required to be paid by the Company pursuant to Section 6 .

3.              Demand Registration . The Company agrees as follows:

 (a)          The Company shall at all times use its reasonable best efforts to qualify and remain qualified to register securities under the Securities Act pursuant to a Registration Statement on Form S-3 or any successor form thereto. The Holders shall have the right to request 3 registrations of their Registrable Securities on Form S-3 or any similar short-form registration (each a “ Demand Registration ”). Each request for a Demand Registration shall specify the approximate number of Registrable Securities requested to be registered. Upon receipt of any such request, the Company shall promptly (but in no event later than ten (10) days following receipt thereof) deliver notice of such request to all other holders of Registrable Securities who shall then have ten (10) days from the date such notice is given to notify the Company in writing of their desire to be included in such registration. The Company shall cause a Registration Statement on Form S-3 (or any successor form) to be filed within thirty (30) days after the date on which the initial request is given and shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the SEC as soon as practicable thereafter.

(b)          The Company shall not be obligated to effect any Demand Registration within one hundred twenty (120) days after the effective date of a previous Demand Registration pursuant to which Holders of Registrable Securities were permitted to register, and actually sold, at least 50% of the shares of Registrable Securities requested to be included therein. The Company may postpone for up to ninety (90) days the filing or effectiveness of a Registration Statement for a Demand Registration if the Company’s Board determines in its reasonable good faith judgment that such Demand Registration would (i) materially interfere with a significant acquisition, corporate organization, public or private offering of the Company’s securities or other transaction similar to any of the foregoing involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act. The Company may delay a Demand Registration hereunder only once in any period of twelve consecutive months. If any registration is withdrawn or delayed pursuant to this clause (b) the Company shall pay all expenses associated with such registration.

(c)          If the Holders initially requesting a Demand Registration elect to distribute the Registrable Securities covered by their request in an underwritten offering, they shall so advise the Company as a part of their request made pursuant to Section 2(a) , and the Company shall include such information in its notice to the other Holders of Registrable Securities. The Company shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering; provided , that such selection shall be subject to the consent of Holders of a majority of the Registrable Securities, which consent shall not be unreasonably withheld or delayed.

(d)          If a Demand Registration involves an underwritten offering and the managing underwriter of the requested Demand Registration advises the Company in writing that in its opinion the number of shares of Common Stock proposed to be included in the Demand Registration, including all Registrable Securities and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such underwritten offering and/or the number of shares of Common Stock proposed to be included in such registration would adversely affect the price per share of the Registrable Securities proposed to be sold in such underwritten offering, the Company shall include in such Demand Registration (i) first, the number of shares of Common Stock that the Holders propose to sell, and (ii) second, the number of shares of Common Stock proposed to be included therein by any other Persons (including shares of Common Stock to be sold for the account of the Company and/or other holders of Common Stock) allocated among such Persons in such manner as they may agree. If the managing underwriter determines that less than all of the Registrable Securities held by Holders proposed to be sold can be included in such offering, then such Registrable Securities that can be included in such offering shall be allocated pro rata among the respective Holders thereof on the basis of the number of Registrable Securities owned by each such Holder.

4.             Piggyback Registration .

(a)          Whenever the Company proposes to register any shares of its Common Stock under the Securities Act (other than a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 of the Securities Act is applicable, or a Registration Statement on Form S-4, S-8 or any successor form thereto or another form not available for registering the Registrable Securities for sale to the public), whether for its own account or for the account of one or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration of Registrable Securities (a “ Piggyback Registration ”), the Company shall give prompt written notice (in any event no later than ten (10) Business Days prior to the filing of such Registration Statement) to the Holders of the Company’s intention to effect such a registration and, subject to Section 3(b) and Section 3(c) , shall include in such registration all Registrable Securities that the Holders have requested to be included within such registration; provided to have its Registrable Securities included in such registration a Holder must provide such request in writing to the Company within three (3) Business Days after the Company’s notice has been given to each such Holder. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2 of this Addendum.

(b)          If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the managing underwriter advises the Company in writing that in its opinion the number of shares of Common Stock proposed to be included in such registration, including all Registrable Securities (if any Holders of Registrable Securities have elected to include Registrable Securities in such Piggyback Registration) and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such registration (i) first, the number of shares of Common Stock that the Company proposes to sell; (ii) second, the number of shares of Common Stock, if any, requested to be included therein by Holders allocated pro rata among all such Holders on the basis of the number of Registrable Securities owned by each such Holder or in such manner as they may otherwise agree; and (iii) third, the number of shares of Common Stock requested to be included therein by other holders of Common Stock (other than Holders), allocated among such holders in such manner as they may agree.

(c)          If a Piggyback Registration is initiated as an underwritten offering on behalf of a holder of Common Stock other than a Holder, and the managing underwriter advises the Company in writing that in its opinion the number of shares of Common Stock proposed to be included in such registration, including all Registrable Securities held by Holders held by Holders and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such registration (i) first, the number of shares of Common Stock requested to be included therein by the holder(s) requesting such registration and by the Holders, allocated pro rata among all such stockholders on the basis of the number of shares of Common Stock (on a fully diluted, as converted basis) and the number of Registrable Securities, as applicable, owned by all such stockholders or in such manner as they may otherwise agree; and (ii) second, the number of shares of Common Stock requested to be included therein by other holders of Common Stock, allocated among such holders in such manner as they may agree.

(d)          If any Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company, the Company shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering.

5.             Registration Procedures . If and whenever Holders request that any Registrable Securities be registered pursuant to the provisions of this Addendum, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as soon as reasonably practicable:

(a)          Subject to Section 2(a) , prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective.

(b)          Prepare and file with the SEC such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than ninety (90) days, or if earlier, until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such Registration Statement.

(c)          At least five (5) Business Days before filing such Registration Statement, Prospectus or amendments or supplements thereto, furnish to one counsel selected by Holders of a majority of the Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the review, comment and approval of such counsel.

(d)          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.

(e)          Furnish to each selling Holder such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement thereto (in each case including all exhibits and documents incorporated by reference therein) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder.

(f)          Use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as any selling Holder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdictions; provided , that the Company shall not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this Section 4 .

(g)          Notify each selling Holder, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such Holder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading.

(h)          Make available for inspection by any selling Holder, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such Holder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”), and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement; provided , that such Inspectors enter into a written, reasonable and customary confidentiality agreement with the Company.

(i)          Provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration.

(j)          Use its reasonable best efforts to cause such Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed, on a national securities exchange selected by the Holders of a majority of such Registrable Securities.

(k)          In connection with an underwritten offering, enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all such other customary actions as the Holders or the managing underwriter of such offering reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making appropriate officers of the Company available to participate in a “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities); provided , however , that the officers of the Company shall not be required to be available for more than ten (10) Business Days during any twelve (12) month period for any “road show,” marketing activities or one-on-one meetings.

(l)          Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and make available to its stockholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act.

(m)          Furnish to each selling Holder and each underwriter, if any, with (i) a legal opinion of the Company’s outside counsel, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), in form and substance as is customarily given in opinions of the Company’s counsel to underwriters in underwritten public offerings; and (ii) a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as is customarily given in accountants’ letters to underwriters in underwritten public offerings.

(n)          Without limiting Section 4 above, use its reasonable best efforts to cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Holders to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof.

(o)          Notify the Holders promptly of any request by the SEC to amend or supplement such Registration Statement or Prospectus or for additional information.

(p)          Notify the Holders, which notice shall be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made, as promptly as reasonably possible (i) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose, (ii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (iii) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any 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, in light of the circumstances under which they were made, not misleading, and (iv) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided , however , in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company. If the Company notifies the Holders in accordance with this paragraph to suspend the use of any Registration Statement or Prospectus until the requisite changes to such Registration Statement or Prospectus have been made, then the Holders shall suspend use of such Registration Statement or Prospectus. The Company will use its commercially reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or Prospectus, and, if any such order suspending the effectiveness of a Registration Statement or Prospectus is issued, shall promptly use its commercially reasonable best efforts to cause all stop orders to be withdrawn, to update or correct any financial statements or other information contained in the Registration Statement or Prospectus, as the case may be, and to otherwise ensure that the use of the Registration Statement or Prospectus may be resumed as promptly as is practicable.

(q)          Permit any Holder that, in such Holder’s sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such Holder and its counsel, should be included.

(r)          Otherwise use its reasonable best efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby.

6.             Expenses . All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations pursuant to this Addendum and in connection with the registration and disposition of Registrable Securities, including, without limitation, all registration and filing fees, underwriting expenses (other than fees, omissions or discounts), expenses of any audits incident to or required by any such registration, fees and expenses of complying with securities and “blue sky” laws, printing expenses, reasonable fees and expenses of the Company’s counsel and accountants and reasonable fees and expenses of one counsel for the Holders participating in such registration as a group (selected by Holders of a majority of the Registrable Securities initially requesting such registration, and, in the case of all other registrations hereunder, the holders of a majority of the Registrable Securities included in the registration), shall be paid by the Company. All Selling Expenses relating to Registrable Securities held by Holders and registered pursuant to this Addendum shall be borne and paid by the Holders of such Registrable Securities, in proportion to the number of Registrable Securities registered for each such Holder.

7.             Indemnification .

(a)          The Company shall indemnify and hold harmless, to the fullest extent permitted by law, each Holder, such Holder’s officers, directors, managers, members, partners, stockholders and Affiliates, each underwriter, broker or any other Person acting on behalf of such Holder and each other Person, if any, who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against all losses, claims, actions, damages, liabilities and expenses, joint or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance; and shall reimburse such Persons for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein or by such Holder’s failure to deliver a copy of the Registration Statement, Prospectus, free-writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished such Holder with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Securities.

(b)          In connection with any registration in which a Holder is participating, each such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, such Holder shall indemnify and hold harmless, the Company, each director of the Company, each officer of the Company who shall sign such Registration Statement, each underwriter, broker or other Person acting on behalf of the Holders and each Person who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, actions, damages, liabilities or expenses resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder; provided , that the obligation to indemnify shall be several, not joint and several, for each Holder and shall be limited to the net proceeds (after underwriting fees, commissions or discounts) actually received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement.

(c)          Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section 6 , such indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. The failure of any indemnified party to notify an indemnifying party of any such action shall not (unless such failure shall have a material adverse effect on the indemnifying party) relieve the indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and to assume the defense of the claims in any such action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after written notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided , that if (i) any indemnified party shall have reasonably concluded that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity provided hereunder, or (ii) such action seeks an injunction or equitable relief against any indemnified party or involves actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party without such indemnified party’s prior written consent (but, without such consent, shall have the right to participate therein with counsel of its choice) and such indemnifying party shall reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicting indemnified parties shall have a right to retain one separate counsel, chosen by the Holders of a majority of the Registrable Securities included in the registration, at the expense of the indemnifying party. In no event will any indemnified party settle or compromise any claim for which it may seek indemnification hereunder without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld.

(d)          If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided , that the maximum amount of liability in respect of such contribution shall be limited, in the case of each Holder to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such Holder from the sale of Registrable Securities effected pursuant to such registration. 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 alleged untrue statement of a material fact or the omission or alleged omission to state 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. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation shall be entitled to contribution from any Person.

8.             Participation in Underwritten Registrations . No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided , that, in connection with any underwritten registration, no Holder shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such Holder, such Holder’s ownership of its shares of Common Stock to be sold in the offering and such Holder’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 7 .

9.             Rule 144 Compliance . With a view to making available to the Holders the benefits of Rule 144 under the Securities Act and any other rule or regulation of the SEC that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 (or any successor form), the Company shall:

(a)          make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the Registration Date;

(b)          use reasonable best efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(c)          furnish to any Holder so long as the Holder owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company as such holder may reasonably request in connection with the sale of Registrable Securities without registration.

10.            Preservation of Rights . The Company shall not (i) grant any registration rights to third parties which are more favorable than or inconsistent with the rights granted hereunder, or (ii) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly granted to the holders of Registrable Securities in this Addendum.

11.            Termination . The terms and provisions of this Addendum shall be of no further force or effect upon the earlier to occur of (i) when there shall no longer be any Registrable Securities outstanding and (ii) the date that is 3 years after the expiration of the Exercise Period (as defined in the Warrant); provided , that the provisions of Section 5 and Section 6 shall survive any such termination.

12.            Existing Shelf . Notwithstanding anything contained herein to the contrary, in no event shall any Holder be entitled to have any Registrable Securities included in any prospectus supplement or post-effective amendment to the Company’s existing registration statement on Form S-3 (SEC File No. 333-197844).