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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 29, 2023
OrthoPediatrics
Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-38242 |
26-1761833 |
(Commission File Number) |
(IRS Employer Identification No.) |
2850 Frontier Drive
Warsaw, Indiana |
46582 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including
area code: (574) 268-6379
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on which registered |
Common Stock, $0.00025 par value per share |
|
KIDS |
|
Nasdaq Global Market |
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange
Act (17 CFR 240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
Item 1.01. Entry into a Material Definitive
Agreement.
On December 29, 2023, OrthoPediatrics Corp. (the
“Company”) entered into a $80 million Credit, Security and Guaranty Agreement (the “Credit Agreement”) by and
among (i) the Company and other borrowers party to the Credit Agreement (collectively, the “Borrowers”), (ii) MidCap Funding
IV Trust, as Agent (“Agent”), (iii) MidCap Financial Trust, as Term Loan Servicer (“Servicer”), and (iv) the financial
institutions or other entities from time to time party thereto as Lenders (collectively, “Lenders”). Under the terms of the
Credit Agreement, the Lenders have provided to Borrowers a term loan in an aggregate principal amount that will not exceed $30 million
available in three tranches of $10 million each subject to certain conditions (the “Term Loan”) and a revolving loan in an
aggregate principal amount that will not exceed $50 million (the “Revolving Loan”). Interest on the Term Loan will accrue
at the greater of (a) One Month Term SOFR plus 6.50% or (b) 9.0% and interest on the Revolving Loan will accrue at the greater of (a)
One Month Term SOFR plus 4.0% or (b) 6.50% (the “Applicable Rate”) and will be payable monthly by the Borrowers. The first
tranche of $10 million was issued under the Term Loan upon execution. Payments of principal and all accrued but unpaid interest will be
due and payable upon the earlier of December 1, 2028, or (i) the occurrence of any transaction or series of transactions pursuant to which
any person or entity in the aggregate acquire(s) 35% or more of the voting capital stock of the Company (ii) a change in the majority
of the Company’s Board of Directors over a 12-month period; (iii) the Company ceases to own directly or indirectly, 100% of the
capital stock of any of its subsidiaries (with the exception of any subsidiaries permitted to be dissolved, merged or otherwise disposed
of by the Credit Agreement), or (iv) the occurrence of a change in control, fundamental change, deemed liquidation event or terms of similar
import under any document or instrument governing or relating to debt of or equity interests of Company. The loans under the Credit Agreement
are secured by a security interest in the Company’s and other Borrower’s assets. The Credit Agreement provides for customary
events of default. If an event of default is not cured within the time periods specified (if any), the Lenders and Agent have the right
to accelerate the Company’s payment of principal and interest in addition to other rights and remedies.
The debt facilities available under the Credit
Agreement replace the Fourth Amended and Restated Loan and Security Agreement with Squadron Capital LLC (“Squadron”) (as amended,
the “Squadron Loan Agreement”), which provided the Company with a $50 million revolving credit facility. There was no indebtedness
outstanding under the Squadron Loan Agreement and it was terminated in connection with the Credit Agreement.
The foregoing description of the Credit Agreement
is not complete and is qualified in its entirety by reference to the Credit Agreement, a copy of which is filed as Exhibit 10.1 and is
incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above
is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
+Certain exhibits and disclosure
schedules to the Credit Agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy
of the exhibits and disclosure schedules to the Credit Agreement to the Securities and Exchange Commission upon request.
* * * * * *
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
OrthoPediatrics Corp. |
|
|
|
Date: January
2, 2024 |
By: |
/s/ Daniel J. Gerritzen |
|
|
Daniel J. Gerritzen, |
|
|
General Counsel and Secretary |
Exhibit 10.1
Execution Version
CREDIT, SECURITY AND GUARANTY AGREEMENT
dated as of December 29, 2023
by and among
ORTHOPEDIATRICS
CORP.,
ORTHOPEDIATRICS
US DISTRIBUTION CORP.,
VILEX
IN TENNESSEE, INC.,
ORTHEX,
LLC,
TELOS
PARTNERS, LLC,
MD
ORTHOPAEDICS, INC.,
MD
INTERNATIONAL, Inc.
ORTHOPEDIATRICS
US L.P.,
ORTHOPEDIATRICS
IOWA HOLDCO, INC.,
ORTHOPEDIATRICS
GP LLC,
MEDTECH
CONCEPTS LLC,
each as Borrower and any additional borrower
that hereafter becomes party hereto, each as Borrower, and collectively as Borrowers,
and
any guarantor that hereafter becomes party
hereto, each as Guarantor, and collectively as Guarantors,
and
MIDCAP FUNDING IV TRUST,
as Agent,
MIDCAP FINANCIAL TRUST,
as Term Loan Servicer,
and
THE LENDERS
FROM TIME TO TIME PARTY HERETO
Table
of Contents
Page
Article 1 - DEFINITIONS |
1 |
|
|
Section 1.1 |
Certain Defined Terms |
1 |
Section 1.2 |
Accounting Terms and Determinations |
46 |
Section 1.3 |
Other Definitional and Interpretive Provisions |
46 |
Section 1.4 |
Settlement and Funding Mechanics |
47 |
Section 1.5 |
Time is of the Essence |
47 |
Section 1.6 |
Time of Day |
47 |
|
|
|
Article 2 - LOANS |
47 |
|
|
Section 2.1 |
Loans. |
47 |
Section 2.2 |
Interest, Interest Calculations and Certain Fees |
51 |
Section 2.3 |
Notes |
54 |
Section 2.4 |
Reserved |
55 |
Section 2.5 |
Reserved |
55 |
Section 2.6 |
General Provisions Regarding Payment; Loan Accounts |
55 |
Section 2.7 |
Maximum Interest |
56 |
Section 2.8 |
Taxes; Capital Adequacy |
56 |
Section 2.9 |
Appointment of Borrower Representative |
61 |
Section 2.10 |
Joint and Several Liability; Rights of Contribution;
Subordination and Subrogation |
62 |
Section 2.11 |
Collections and Collections Account |
64 |
Section 2.12 |
Termination; Restriction on Termination |
66 |
|
|
|
Article 3 - REPRESENTATIONS AND WARRANTIES |
67 |
|
|
Section 3.1 |
Existence and Power |
67 |
Section 3.2 |
Organization and Governmental Authorization; No Contravention |
67 |
Section 3.3 |
Binding Effect |
67 |
Section 3.4 |
Capitalization |
68 |
Section 3.5 |
Financial Information |
68 |
Section 3.6 |
Litigation |
68 |
Section 3.7 |
Ownership of Property |
68 |
Section 3.8 |
No Default |
68 |
Section 3.9 |
Labor Matters |
68 |
Section 3.10 |
Investment Company Act |
69 |
Section 3.11 |
Margin Regulations |
69 |
Section 3.12 |
Compliance With Laws; Anti-Terrorism Laws |
69 |
Section 3.13 |
Taxes |
69 |
Section 3.14 |
Compliance with ERISA |
70 |
Section 3.15 |
Consummation of Financing Documents; Brokers |
70 |
Section 3.16 |
[Reserved] |
70 |
Section 3.17 |
Material Contracts |
70 |
Section 3.18 |
Compliance with Environmental Requirements; No Hazardous
Materials |
71 |
Section 3.19 |
Intellectual Property and License Agreements |
71 |
Section 3.20 |
Solvency |
71 |
Section 3.21 |
Full Disclosure |
72 |
Section 3.22 |
Subsidiaries |
72 |
Section 3.23 |
Accuracy of Schedules |
72 |
Section 3.24 |
Eligible Account; Eligible Inventory |
72 |
Section 3.26 |
Regulatory Matters |
72 |
Section 3.27 |
Senior Indebtedness Status |
73 |
Article 4 - AFFIRMATIVE COVENANTS |
74 |
|
|
Section 4.1 |
Financial Statements, Other Reports and Notices |
74 |
Section 4.2 |
Payment and Performance of Obligations |
76 |
Section 4.3 |
Maintenance of Existence |
76 |
Section 4.4 |
Maintenance of Property; Insurance. |
77 |
Section 4.5 |
Compliance with Laws and Material Contracts |
78 |
Section 4.6 |
Inspection of Property, Books and Records |
78 |
Section 4.7 |
Use of Proceeds |
78 |
Section 4.8 |
[Reserved] |
79 |
Section 4.9 |
Notices of Material Contracts, Litigation and Defaults |
79 |
Section 4.10 |
Hazardous Materials; Remediation |
79 |
Section 4.11 |
Further Assurances; Joinder |
80 |
Section 4.12 |
Reserved |
81 |
Section 4.13 |
Power of Attorney |
82 |
Section 4.14 |
Borrowing Base Collateral Administration |
82 |
Section 4.15 |
Schedule Updates |
82 |
Section 4.16 |
Intellectual Property and Licensing |
83 |
Section 4.17 |
Regulatory Covenants |
84 |
|
|
|
Article 5 - NEGATIVE COVENANTS |
84 |
|
|
Section 5.1 |
Debt; Contingent Obligations |
84 |
Section 5.2 |
Liens |
84 |
Section 5.3 |
Distributions |
84 |
Section 5.4 |
Restrictive Agreements |
85 |
Section 5.5 |
Payments and Modifications of Subordinated Debt |
85 |
Section 5.6 |
Consolidations, Mergers and Sales of Assets; Change
in Control |
85 |
Section 5.7 |
Purchase of Assets, Investments |
85 |
Section 5.8 |
Transactions with Affiliates |
86 |
Section 5.9 |
Modification of Organizational Documents |
86 |
Section 5.10 |
Modification of Certain Agreements |
86 |
Section 5.11 |
Conduct of Business |
86 |
Section 5.12 |
[Reserved] |
86 |
Section 5.13 |
Limitation on Sale and Leaseback Transactions |
87 |
Section 5.14 |
Deposit Accounts and Securities Accounts; Payroll and
Benefits Accounts |
87 |
Section 5.15 |
Compliance with Anti-Terrorism Laws |
87 |
Section 5.16 |
Change in Accounting |
88 |
Section 5.17 |
Investment Company Act |
88 |
Section 5.18 |
Agreements Regarding Receivables |
88 |
Section 5.19 |
Restricted Foreign Subsidiaries |
88 |
|
|
|
Article 6 – FINANCIAL COVENANTS |
89 |
|
|
Section 6.1 |
Minimum Net Product Sales |
89 |
Section 6.2 |
Minimum Liquidity |
89 |
Section 6.3 |
Evidence of Compliance |
89 |
Article 7 – CONDITIONS |
90 |
|
|
Section 7.1 |
Conditions to Closing |
90 |
Section 7.2 |
Conditions to Each Loan |
90 |
Section 7.3 |
Searches |
92 |
Section 7.4 |
Post-Closing Requirements |
92 |
|
|
|
Article 8 – RESERVED |
92 |
|
|
Article 9 – SECURITY AGREEMENT |
92 |
|
|
Section 9.1 |
Generally |
92 |
Section 9.2 |
Representations and Warranties and Covenants Relating
to Collateral |
92 |
|
|
|
Article 10 - EVENTS OF DEFAULT |
96 |
|
|
Section 10.1 |
Events of Default |
96 |
Section 10.2 |
Acceleration and Suspension or Termination of Revolving
Loan Commitment and Term Loan Commitment |
99 |
Section 10.3 |
UCC Remedies |
100 |
Section 10.4 |
Protective Payments |
101 |
Section 10.5 |
Default Rate of Interest |
102 |
Section 10.6 |
Setoff Rights |
102 |
Section 10.7 |
Application of Proceeds |
102 |
Section 10.8 |
Waivers |
103 |
Section 10.9 |
Reserved |
104 |
Section 10.10 |
Marshalling; Payments Set Aside |
104 |
|
|
|
Article 11 - AGENT |
105 |
|
|
Section 11.1 |
Appointment and Authorization |
105 |
Section 11.2 |
Agents and Affiliates |
105 |
Section 11.3 |
Action by Agent |
106 |
Section 11.4 |
Consultation with Experts |
106 |
Section 11.5 |
Liability of Agent |
106 |
Section 11.6 |
Indemnification |
106 |
Section 11.7 |
Right to Request and Act on Instructions |
107 |
Section 11.8 |
Credit Decision |
107 |
Section 11.9 |
Collateral Matters |
107 |
Section 11.10 |
Agency for Perfection |
107 |
Section 11.11 |
Notice of Default |
108 |
Section 11.12 |
Assignment by Agent; Resignation of Agent; Successor
Agent |
108 |
Section 11.13 |
Payment and Sharing of Payment |
109 |
Section 11.14 |
Right to Perform, Preserve and Protect |
111 |
Section 11.15 |
Additional Titled Agents |
112 |
Section 11.16 |
Amendments and Waivers |
112 |
Section 11.17 |
Assignments and Participations |
113 |
Section 11.18 |
Funding and Settlement Provisions Applicable When Non-Funding
Lenders Exist |
116 |
|
|
|
Article 12 – Guaranty |
116 |
|
|
Section 12.1 |
Guaranty |
116 |
Section 12.2 |
Payment of Amounts Owed |
117 |
Section 12.3 |
Certain Waivers by Guarantor |
117 |
Section 12.4 |
Guarantor’s Obligations Not Affected by Modifications
of Financing Documents |
119 |
Section 12.5 |
Reinstatement; Deficiency |
120 |
Section 12.6 |
Subordination of Borrowers’ Obligations to Guarantors;
Claims in Bankruptcy |
120 |
Section 12.7 |
Maximum Liability |
120 |
Section 12.8 |
Guarantor’s Investigation |
121 |
Section 12.9 |
Termination |
121 |
Section 12.10 |
Representative |
121 |
Section 12.11 |
Guarantor Acknowledgement |
121 |
|
|
|
Article 13 - MISCELLANEOUS |
122 |
|
|
Section 13.1 |
Survival |
122 |
Section 13.2 |
No Waivers |
122 |
Section 13.3 |
Notices. |
122 |
Section 13.4 |
Severability |
124 |
Section 13.5 |
Headings |
124 |
Section 13.6 |
Confidentiality |
124 |
Section 13.7 |
Waiver of Consequential and Other Damages |
125 |
Section 13.8 |
GOVERNING LAW; SUBMISSION TO JURISDICTION |
125 |
Section 13.9 |
WAIVER OF JURY TRIAL |
125 |
Section 13.10 |
Publication; Advertisement |
126 |
Section 13.11 |
Counterparts; Integration |
126 |
Section 13.12 |
No Strict Construction |
126 |
Section 13.13 |
Lender Approvals |
126 |
Section 13.14 |
Expenses; Indemnity |
127 |
Section 13.15 |
reserved |
128 |
Section 13.16 |
Reinstatement |
128 |
Section 13.17 |
Successors and Assigns |
128 |
Section 13.18 |
USA PATRIOT Act Notification |
129 |
Section 13.19 |
Acknowledgement and Consent to Bail-In of Affected
Financial Institutions |
129 |
Section 13.21 |
Erroneous Payments |
129 |
CREDIT,
SECURITY AND GUARANTY AGREEMENT
This
CREDIT, SECURITY AND GUARANTY AGREEMENT (as the same may be amended, supplemented, restated or otherwise modified from
time to time, the “Agreement”) is dated as of December 29, 2023 by and among ORTHOPEDIATRICS CORP., a
Delaware corporation, ORTHOPEDIATRICS US DISTRIBUTION CORP., a Delaware corporation,
VILEX IN TENNESSEE, INC., a Tennessee corporation, ORTHEX, LLC, a Florida limited liability company, TELOS PARTNERS,
LLC, a Colorado limited liability company, MD ORTHOPAEDICS, INC., an Iowa corporation, MD INTERNATIONAL, INC.,
an Iowa corporation, ORTHOPEDIATRICS GP LLC, a Delaware limited liability company, ORTHOPEDIATRICS US L.P., a Delaware
limited partnership, ORTHOPEDIATRICS IOWA HOLDCO, INC., a Delaware corporation, MEDTECH CONCEPTS LLC, a Delaware limited
liability company, and any additional borrower that may hereafter be added to this Agreement and each of their successors and permitted
assigns (each individually as a “Borrower”, and collectively, the “Borrowers”), any entities that
become party hereto as Guarantors and each of their successors and permitted assigns (each individually, a “Guarantor”
and collectively, with each of their successors and assigns, the “Guarantors”), MIDCAP FUNDING IV TRUST, as
Agent, MIDCAP FINANCIAL TRUST, as Term Loan Servicer, and the financial institutions or other entities from time to time parties
hereto, each as a Lender.
RECITALS
The Credit Parties have requested
that Lenders make available to Borrowers the financing facilities as described herein. Lenders are willing to extend such credit to Borrowers
under the terms and conditions herein set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Credit Parties,
Lenders, Agent and Term Loan Servicer agree as follows:
Article 1
- DEFINITIONS
Section 1.1 Certain
Defined Terms. The following terms have the following meanings:
“Acceleration Event”
means the occurrence of an Event of Default (a) in respect of which Agent has declared all or any portion of the Obligations to
be immediately due and payable pursuant to Section 10.2, (b) pursuant to Section 10.1(a), and in respect of which Agent
has suspended or terminated the Revolving Loan Commitment or Term Loan Commitment pursuant to Section 10.2, and/or (c) pursuant
to either Section 10.1(e) and/or Section 10.1(f).
“Account Debtor”
means “account debtor”, as defined in Article 9 of the UCC, and any other obligor in respect of an Account.
“Accounts”
means, collectively, (a) any right to payment of a monetary obligation, whether or not earned by performance, (b) without duplication,
any “account” (as defined in the UCC), any accounts receivable (whether in the form of payments for services rendered or
goods sold, rents, license fees or otherwise), any “health-care-insurance receivables” (as defined in the UCC), any “payment
intangibles” (as defined in the UCC) and all other rights to payment and/or reimbursement of every kind and description, whether
or not earned by performance, (c) all accounts, “general intangibles” (as defined in the UCC), Intellectual Property,
rights, remedies, Guarantees, “supporting obligations” (as defined in the UCC), “letter-of-credit rights” (as
defined in the UCC) and security interests in respect of the foregoing, all rights of enforcement and collection, all books and records
evidencing or related to the foregoing, and all rights under the Financing Documents in respect of the foregoing, and (d) all Proceeds
of any of the foregoing.
“Acquisition”
means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition
(including through licensing) of all or substantially all of the assets of a Person, or of any business, line of business or division
or other unit of operation of a Person, (b) the acquisition of fifty percent (50%) or more of the Equity Interests of any Person,
whether or not involving a merger or consolidation with such other Person, or otherwise causing any Person to become a Subsidiary of
a Credit Party, (c) any merger or consolidation or any other combination with another Person or (d) the acquisition (including
through licensing) of any Product, Product line or Intellectual Property of or from any other Person (but in each case excluding in-bound
licenses of, and purchases of, over-the-counter and other software that is commercially available to the public and open source licenses
in the Ordinary Course of Business) or any assets constituting a business unit, line of business or division of such other Person.
“Additional Titled
Agents” has the meaning set forth in Section 11.15.
“Affected Financial
Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Lenders”
has the meaning set forth in Section 11.17(c).
“Affiliate”
means, with respect to any Person, (a) any Person that directly or indirectly controls such Person, (b) any Person which is
controlled by or is under common control with such controlling Person, and (c) each of such Person’s (other than, with respect
to any Lender, any Lender’s) officers or directors (or Persons functioning in substantially similar roles). As used in this definition,
the term “control” of a Person means the possession, directly or indirectly, of the power to vote ten percent (10%) or more
of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
“Agent”
means MCF, in its capacity as administrative agent for itself and for Lenders hereunder, as such capacity is established in, and subject
to the provisions of, Article 11, and the successors and assigns of MCF in such capacity.
“Annual Cash Burn”
means with respect to Borrowers and their Subsidiaries, an amount equal to the negative change in Borrowers’ and their Subsidiaries
(on a consolidated basis) cash and Cash Equivalents for the immediate preceding twelve (12) month period as determined as of the last
day of the fiscal quarter immediately preceding the proposed Term Loan Tranche 2 funding or Term Loan Tranche 3 funding, as applicable,
calculated on the basis of Borrowers and their Subsidiaries net cash flow from operating activities less capital expenditures and/or
other recurring expenditures (not, for the avoidance of doubt, including expenditures for any Acquisition consideration or milestones
and earnout payments in connection with any Acquisition), in each case, as determined in accordance with GAAP and without giving effect
to any increase in cash and cash equivalents resulting from the proceeds of the sale or issuance of Equity Interests, the proceeds of
Debt or other financing, proceeds licensing or asset sales or any other extraordinary receipts during the applicable period.
“Anti-Terrorism
Laws” means any Laws relating to terrorism or money laundering, including, without limitation, Executive Order No. 13224
(effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws or general
or specific licenses administered by OFAC.
“Applicable Margin”
means (a) with respect to Revolving Loans, four percent (4.00%) and (b) with respect to Term Loans and all other Obligations,
six and a half percent (6.50%).
“Applicable
Minimum Net Product Sales Threshold” means the minimum Net Product Sales amount set forth on Schedule 6.1 attached
hereto for such Defined Period.
“Approved Fund”
means any (a) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business, or (b) any
Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (a) and
that, with respect to each of the preceding clauses (a) and (b), is administered or managed by (i) a Lender, (ii) an
Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person)
that administers or manages a Lender.
“Asset Disposition”
means any sale, lease, license, transfer, assignment or other disposition (including by merger, allocation of assets (including allocation
of assets to any series of a limited liability company), division, consolidation or amalgamation, but excluding dispositions resulting
from any casualty or other damage to, any property or asset) by any Credit Party or any Subsidiary thereof of any asset of such Credit
Party or such Subsidiary.
“Assignment Agreement”
means an assignment agreement in substantially the form attached hereto as Exhibit G or such other form that is acceptable
to Agent and, as applicable, Borrower Representative.
“Available Tenor”
means, as of any date of determination with respect to the then-current Benchmark, (a) if such Benchmark is a term rate, any tenor
for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement
or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or
may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this
Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed
from the definition of “Interest Period” or similar term pursuant to Section 2.2(o).
“Availability Reserves”
means, as of any date of determination, such reserves in amounts as Agent may from time to time establish or revise in its Permitted
Discretion reducing the Borrowing Base which would otherwise be available to Borrowers as provided for herein: (a) to reflect events,
conditions, contingencies or risks which, as determined by Agent in its Permitted Discretion, adversely affect or would have a reasonable
likelihood of adversely affecting, (i) any Account or any Inventory, its value or the amount that might be received by Agent from
the sale or other disposition or realization upon such Account or Inventory, (ii) the assets, business or financial condition of
any Credit Party, (iii) the security interests and other rights of Agent in any Collateral (including the enforceability, perfection
and priority thereof), (iv) any Credit Party’s ability to perform hereunder or under the Financing Documents or (v) Agent’s
or any Lenders’ ability to enforce their rights under this Agreement and the Financing Documents or the validity and enforceability
of the Financing Documents, (b) without limiting the foregoing, to reflect the impediments to the Agent’s ability to realize
upon the Collateral included in the Borrowing Base, (c) to reflect claims and liabilities that will need to be satisfied in connection
with the realization upon the Collateral included in the Borrowing Base, (d) to reflect Agent’s good faith belief that any
collateral report or financial information furnished by or on behalf of any of the Credit Parties to Agent is or may have been incomplete,
inaccurate or misleading in any material respect, or (e) to ensure the payment of accrued interest expenses or Debt.
“Bail-In Action”
means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.
“Bail-In
Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU
of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such
EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United
Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable
in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their
affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy”, as the same may be amended, modified or supplemented
from time to time, and any successor statute thereto.
“Base Rate”
means a per annum rate of interest equal to the greater of (a) the Floor and (b) a per annum rate of interest equal to the
rate of interest announced, from time to time, within Wells Fargo Bank, National Association (“Wells Fargo”) at its
principal office in San Francisco as its “prime rate,” with the understanding that the “prime rate” is one of
Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest
are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate; provided, however, that Agent may, upon prior written notice to Borrower, choose a
reasonably comparable index or source to use as the basis for the Base Rate.
“Base Rate Loan”
means a Loan that bears interest at a rate based on the Base Rate.
“Benchmark”
means, initially, Term SOFR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with
respect to Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent
that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.2(o).
“Benchmark
Replacement” means, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that
has been selected by Agent giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the
mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention
for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities at
such time and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would
be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Financing
Documents.
“Benchmark Replacement
Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for
any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment (which may be
a positive or negative value or zero) that has been selected by Agent giving due consideration to any selection or recommendation by
the Relevant Governmental Body, or any evolving or then-prevailing market convention at such time, for determining a spread adjustment,
or method for calculating or determining such spread adjustment, for such type of replacement for U.S. dollar-denominated syndicated
credit facilities at such time.
“Benchmark Replacement
Date” means the earlier to occur of the following events with respect to the then-current Benchmark: (a) in the case of
clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public
statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the
published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark
(or such component thereof); or (b) in the case of clause (c) of the definition of “Benchmark Transition Event”,
the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced
by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided,
that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause
(c) even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date. For the avoidance
of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with
respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available
Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition
Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (a) a public
statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the
calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or
such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor
administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (b) a public statement
or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in
the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official or resolution authority
with jurisdiction over the administrator for such Benchmark (or such component), or a court or an entity with similar insolvency or resolution
authority, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available
Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication,
there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
or (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or
the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof)
are no longer, or as of a specified future date will no longer be, representative. For the avoidance of doubt, a “Benchmark Transition
Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth
above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation
thereof).
“Benchmark Transition
Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement
Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the
90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date
of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability
Period” means the period (if any) (a) beginning at the time that a Benchmark Replacement Date pursuant to clauses (a) or
(b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes
hereunder and under any Financing Document in accordance with Section 2.2(o) and (b) ending at the time that a Benchmark
Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Financing Document in accordance with Section 2.2(o).
“Blocked Person”
means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) owned
or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224, (c) with which any Lender is prohibited from dealing or otherwise engaging in any transaction
by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224, (e) that is named a “specially designated national” or “blocked person”
on the most current list published by OFAC or other similar sanctions list or is named as a “listed person” or “listed
entity” on other lists made under any Anti-Terrorism Law, or (f) any Person resident in, organized under the laws of or incorporated
in a Sanctioned Country.
“Borrower”
and “Borrowers” has the meaning set forth in the introductory paragraph hereto.
“Borrower Representative”
means OrthoPediatrics Corp., in its capacity as Borrower Representative pursuant to the provisions of Section 2.9, or any successor
Borrower Representative selected by Borrowers and approved by Agent.
“Borrowing Base”
means, the sum of:
(a) the
product of (i) eighty-five percent (85.0%) multiplied by (ii) the aggregate net amount at such time of the Eligible
Accounts; plus
(b) the
product of fifty percent (50.0%) multiplied by the value of the Eligible Inventory, valued at the lower of first-in-first-out
cost or market cost, and after factoring in all rebates, discounts and other incentives or rewards associated with the purchase of the
applicable Inventory; minus
(c) the
amount of all Availability Reserves established from time to time by Agent;
provided,
that the Borrowing Base shall automatically be adjusted down, if necessary, such that (i) the aggregate availability from Eligible
Inventory shall never exceed an amount equal to $5,000,000, as of any date of determination.
“Borrowing Base
Certificate” means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed
and substantially in a form to be agreed between Agent and Borrower. Upon such agreement, the form of Borrowing Base Certificate will
be attached to this Agreement as Exhibit C hereto.
“Borrowing Base
Collateral” means the Accounts and Inventory of the Credit Parties.
“Business Day”
means any day except a Saturday, Sunday or other day on which either the New York Stock Exchange is closed, or on which commercial banks
in Washington, DC and New York City are authorized by Law to close; provided, however, that when used in the context of
a SOFR Loan, the term “Business Day” shall also exclude any day that is not also a SOFR Business Day.
“Capital Lease”
of any Person means any lease of any property by such Person as lessee which would, in accordance with GAAP, be required to be accounted
for as a capital lease or finance lease on the balance sheet of such Person.
“Cash Equivalents”
means, as of any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally
guaranteed as to interest and principal by the United States government, or (ii) issued by any agency of the United States the obligations
of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date;
(b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing no more than one
(1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P
or at least P-1 from Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of commercial paper issuers generally; (d) certificates of deposit or bankers’ acceptances
maturing within one (1) year after such date and issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized”
(as defined in the regulations of its primary federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets
invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not
less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s.
“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. § 9601 et seq.,
as the same may be amended from time to time.
“Change in Control”
means any of the following events: (a) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage
of time (such right, an “option right”)), directly or indirectly, of thirty-five percent (35%) or more of the combined voting
power of all voting stock of OrthoPediatrics Corp. on a fully-diluted basis (and taking into account all such securities that such person
or group has the right to acquire pursuant to any option right); (b) during any period of twelve (12) consecutive months, a majority
of the members of the board of directors or other equivalent governing body of OrthoPediatrics Corp. cease to be composed of individuals
(i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination
to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination
to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of that board or equivalent governing body; (c) any Credit Party
ceases to own, directly or indirectly, 100% of the capital stock of any of its Subsidiaries (with the exception of any Subsidiaries permitted
to be dissolved, merged or otherwise disposed of to the extent otherwise permitted by this Agreement); or (d) the occurrence of
a “Change of Control”, “Fundamental Change”, “Change in Control”, “Deemed Liquidation Event”
or terms of similar import under any document or instrument governing or relating to Debt of or Equity Interests of such Person. As used
herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of the SEC under the Securities Exchange
Act of 1934.
“Closing Date”
means the date of this Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, any successor statutes thereto, and applicable U.S. Department
of Treasury regulations issued pursuant thereto in temporary or final form.
“Collateral”
means all property, other than Excluded Property, now existing or hereafter acquired, mortgaged or pledged to, or purported to be subjected
to a Lien in favor of, Agent, for the benefit of Agent and Lenders, pursuant to this Agreement and the Security Documents, including,
without limitation, all of the property described in Schedule 9.1 hereto.
“Collections Account”
means a segregated account or accounts maintained at the Collections Account Bank, which contains solely amounts constituting the proceeds
of Accounts.
“Collections Account
Bank” has the meaning set forth in Section 2.11.
“Commitment Annex”
means Annex A to this Agreement.
“Compliance Certificate”
means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in
the form of Exhibit B hereto.
“Conforming Changes”
means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark
Replacement (as defined in Section 2.2(o)), any technical, administrative or operational changes (including (a) changes to
the definition of “Base Rate”, “Business Day”, “Interest Period”, “Reference Time” or
other definitions, (b) the addition of concepts such as “interest period”, (c) changes to timing and/or frequency
of determining rates, making interest payments, giving borrowing requests, prepayment, conversion or continuation notices, or length
of lookback periods, (d) the applicability of Section 2.8 (Taxes; Capital Adequacy; Increased Costs; Inability to Determine
Rates; Illegality) and (e) other technical, administrative or operational matters) that Agent decides may be appropriate to reflect
the adoption and implementation of Term SOFR or such Benchmark Replacement and to permit the administration thereof by Agent in a manner
substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively
feasible or determines that no such market practice exists, in such other manner as Agent decides is reasonably necessary in connection
with the administration of this Agreement and the other Financing Documents).
“Consolidated Subsidiary”
means, at any date, any Subsidiary the accounts of which would be consolidated with those of OrthoPediatrics Corp. (or any other Person,
as the context may require hereunder) in its consolidated financial statements if such statements were prepared as of such date.
“Contingent
Obligation” means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect
to any Debt of another Person (a “Third Party Obligation”) if the purpose or intent of such Person incurring such
liability, or the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation
will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation
will be protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter
of credit issued for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing;
(c) under any Swap Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant
to any Guarantee or pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting
security therefor, to provide funds for the payment or discharge of such obligation or to preserve the solvency, financial condition
or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so Guaranteed
or otherwise supported or, if not a fixed and determinable amount, the maximum amount so Guaranteed or otherwise supported.
“Controlled Group”
means all members of a group of corporations and all members of a group of trades or businesses (whether or not incorporated) under common
control which, together with the Credit Parties, are treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code or Section 4001(b) of ERISA and, solely for purposes of Section 412 and 436 of the Code, Section 414(m) or
(o) of the Code.
“Correction”
means repair, modification, adjustment, relabeling, destruction or inspection (including patient monitoring) of a Product without its
physical removal to some other location.
“Credit Card Cash
Collateral Account” means, collectively, each segregated Deposit Account from time to time identified to Agent in writing established
by Borrower for the sole purpose of securing Borrower’s obligations under clause (k) of the definition Permitted Debt and
containing only such cash or Cash Equivalents that have been required to be pledged to secure such obligations of Borrower; provided,
that the aggregate amount of cash or Cash Equivalents deposited in all such Credit Card Cash Collateral Account(s) does not,
at any time, exceed $500,000 in the aggregate.
“Credit Party”
means each Borrower and each Guarantor; and “Credit Parties” means all such Persons, collectively; provided, however,
that, for the avoidance of doubt, in no event shall any Restricted Foreign Subsidiary be deemed to be or otherwise required to be
a “Credit Party” for purposes of this Agreement or the other Financing Documents unless and until such Person becomes
a Credit Party pursuant to the provision of Section 4.11(e).
“Credit Party Unrestricted
Cash” means unrestricted cash and Cash Equivalents of the Credit Parties that (a) are held in the name of a Credit Party
in a Deposit Account or Securities Account located in the United States that is subject to a Deposit Account Control Agreement or Securities
Account Control Agreement, as applicable, in favor of Agent and are otherwise subject to Agent’s first priority perfected security
interest, (b) is not subject to any other Lien (other than Permitted Liens), and (c) are not funds for the payment of a drawn
or committed but unpaid draft, ACH or EFT transaction
“Debt”
of a Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable arising and paid on a timely basis and in the Ordinary
Course of Business, (d) all Capital Leases of such Person, (e) all non-contingent obligations of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit, banker’s acceptance or similar instrument, (f) all
Disqualified Equity Interests, (g) all obligations secured by a Lien on any asset of such Person, whether or not such obligation
is otherwise an obligation of such Person, (h) ”earnouts”, purchase price adjustments, profit sharing arrangements,
deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of
purchase and sale contracts, (i) all Debt of others Guaranteed by such Person, (j) all monetary obligations under any synthetic
lease, tax ownership/operating lease, off-balance sheet financing or similar financing, and (k) obligations in respect of litigation
settlement agreements or similar arrangements. Without duplication of any of the foregoing, Debt of Credit Parties shall include any
and all Loans.
“Default”
means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event
of Default.
“Defaulted Lender”
means, (i) so long as such failure shall remain in existence and uncured, any Lender which shall have failed to make any Loan or
other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Financing Document, (ii) any
Lender that has notified the Credit Parties or Agent in writing that it does not intend to comply with its funding obligations hereunder,
or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund
a Loan hereunder and states that such position is based on such Lender's determination that a condition precedent to funding (which condition
precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing or public statement)
cannot be satisfied), or (iii) any Lender that has, or has a direct or indirect parent company that has, (a) become the subject
of any proceeding under the Bankruptcy Code or any other insolvency, debtor relief or debt adjustment or similar law (whether state,
provincial, territorial, federal or foreign), or (b) had appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including
the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided, that
a Lender shall not be a Defaulted Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any
direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide
such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment
on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements
made with such Lender. Any determination by Agent that a Lender is a Defaulted Lender under any one or more of clauses (i) through
(iii) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulted Lender upon
delivery of written notice of such determination to Agent and each Lender.
“Defined Period”
means (a) for purposes of calculating Annual Cash Burn, for any given calendar month, the immediately preceding twelve (12) month
period ending on the last day of such calendar month, and (b) otherwise, for any given fiscal quarter or date of determination,
the immediately preceding twelve (12) month period ending on the last day of such fiscal quarter or if such date of determination is
not the last day of a fiscal quarter, the twelve (12) month period immediately preceding any such date of determination.
“Deposit Account”
means a “deposit account” (as defined in Article 9 of the UCC), an investment account, or other account in which funds
are held or invested for credit to or for the benefit of any Credit Party.
“Deposit Account
Control Agreement” means an agreement, in form and substance reasonably satisfactory to Agent, among Agent, any Credit Party
and each financial institution in which such Credit Party maintains a Deposit Account (which is not an Excluded Account), which agreement
provides that such financial institution shall comply with instructions originated by Agent directing disposition of the funds in
such Deposit Account without further consent by the applicable Credit Party, including as to any such agreement pertaining to any Collections
Account, providing that such financial institution shall, at the direction of Agent, wire, or otherwise transfer, in immediately available
funds, on a daily basis to the Revolving Loan Payment Account all funds received or deposited into such Lockbox or Collections Account.
“Deposit Account
Restriction Agreement” means an agreement, in form and substance reasonably satisfactory to Agent, among Agent, any Credit
Party and each bank in which such Credit Party maintains a Deposit Account and into which Deposit Account proceeds of Accounts from Governmental
Account Debtors are paid directly by the Governmental Account Debtor, and which agreement provides that such bank shall not enter into
an agreement with respect to such Deposit Account pursuant to which the bank agrees to comply with instructions originated by any Person,
other than the Borrower that owns the Deposit Account, directing disposition of the funds in such Deposit Account, and containing such
other terms and conditions as Agent may reasonably require, including as to any such agreement pertaining to any Collections Account,
providing that such bank shall wire, or otherwise transfer, in immediately available funds, on a daily basis to the Revolving Loan Payment
Account and/or a Collections Account subject to a Deposit Account Control Agreement (as Agent shall elect and direct at the time such
agreement is signed) all funds received or deposited into such Collections Account and associated Lockbox unless the applicable Borrower
shall otherwise instruct the bank in writing, subject to the limitations set forth in the Deposit Account Restriction Agreement and the
other Financing Documents.
“Disqualified Equity
Interests” means, with respect to any Person, any Equity Interest in such Person that, within less than 91 days after the Termination
Date, either by its terms (or by the terms of any security or any other Equity Interests into which it is convertible or for which it
is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for
Permitted Debt or other Equity Interests in such Person or of OrthoPediatrics Corp. that do not constitute Disqualified Equity Interests
and cash in lieu of fractional shares of such Equity Interests), pursuant to a sinking fund obligation or otherwise, (b) is redeemable
at the option of the holder thereof, in whole or in part (other than solely for Permitted Debt or other Equity Interests in such Person
or of OrthoPediatrics Corp. that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity
Interests), (c) provides for the scheduled payments of dividends or distributions in cash, or (d) is or becomes convertible
into or exchangeable for Debt (other than Permitted Debt) or any other Equity Interest that would constitute Disqualified Equity Interests.
“Distribution”
means as to any Person (a) any dividend or other distribution or payment (whether in cash, securities or other property) on, or
in respect of, any Equity Interest in such Person (except those payable solely in its Equity Interests other than Disqualified Equity
Interests), (b) any payment by such Person on account of (i) the purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any Equity Interests in such Person or any claim respecting the purchase or sale of any Equity Interest
in such Person, or (ii) any option, warrant or other right to acquire any Equity Interests in such Person, (c) any management
fees, salaries or other fees or compensation to any Person holding an Equity Interest in a Credit Party or a Subsidiary of a Credit Party
(other than reasonable and customary (i) payments of salaries to individuals, (ii) directors fees, and (iii) advances
and reimbursements to employees or directors, all in the Ordinary Course of Business), an Affiliate of a Credit Party or an Affiliate
of any Subsidiary of a Credit Party, (d) any lease or rental payments to an Affiliate or Subsidiary of a Credit Party, or (e) repayments
of or debt service on loans or other indebtedness (other than conversion to Equity Interests other than Disqualified Equity Interests)
held by an Affiliate of any Credit Party unless permitted under and made pursuant to a Subordination Agreement applicable to such loans
or other indebtedness.
“Dollars”
or “$” means the lawful currency of the United States of America.
“EEA Financial Institution”
means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of
an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in
clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary
of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country”
means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution
Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA
Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Account”
means, subject to the criteria below, an account receivable of a Borrower, which was generated in the Ordinary Course of Business and
originally in the name of a Borrower and not acquired via assignment or otherwise, and which Agent, in its Permitted Discretion, deems
to be an Eligible Account. The net amount of an Eligible Account at any time shall be (a) the face amount of such Eligible Account
as originally billed minus all cash collections and other proceeds of such Account received from or on behalf of the Account Debtor
thereunder as of such date and any and all returns, rebates, discounts (which may, at Agent’s option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding
or payable in connection with such Accounts at such time, and (b) adjusted by applying percentages (known as “liquidity
factors”) by payor and/or payor class based upon the applicable Borrower’s actual recent collection history for each
such payor and/or payor class in a manner consistent with Agent’s underwriting practices and procedures. Such liquidity factors
may be adjusted by Agent from time to time as warranted by Agent’s underwriting practices and procedures and using Agent’s
Permitted Discretion; provided, however that so long as (i) no Event of Default has occurred and is continuing, (ii) borrowing
base audits and field exams conducted in accordance with the terms of this Agreement (including, without limitation, the initial borrowing
base audit and field exam as required by Section 7.2(b)) demonstrate no reason for such liquidity factors to be reduced below 100%,
as determined by Agent in its Permitted Discretion, and (iii) no events or circumstances have occurred, that cause Agent to reasonably
believe that such liquidity factors should be reduced below 100%, then Agent agrees to increase the liquidity factors applied in calculation
of the Borrowing Base to 100%. Without limiting the generality of the foregoing, no Account shall be an Eligible Account if:
(a) the
Account remains unpaid more than ninety (90) days past the claim or invoice date (but in no event more than one hundred twenty (120)
days after the applicable goods or services have been rendered or delivered);
(b) the
Account is subject to any defense, set-off, recoupment, counterclaim, deduction, discount, credit, chargeback, freight claim, allowance,
or adjustment of any kind (but only to the extent of such defense, set-off, recoupment, counterclaim, deduction, discount, credit, chargeback,
freight claim, allowance, or adjustment), or the applicable Borrower is not able to bring suit or otherwise enforce its remedies against
the Account Debtor through judicial process;
(c) if
the Account arises from the sale of goods, any part of any goods the sale of which has given rise to the Account has been returned, rejected,
lost, or damaged (but only to the extent that such goods have been so returned, rejected, lost or damaged);
(d) if
the Account arises from the sale of goods, the sale was not an absolute, bona fide sale, or the sale was made on consignment or on approval
or on a sale-or-return or bill-and-hold or progress billing basis, or the sale was made subject to any other repurchase or return agreement,
or the goods have not been shipped to the Account Debtor or its designee or the sale was not made in compliance with applicable Laws;
(e) if
the Account arises from the performance of services, the services have not actually been performed or the services were undertaken in
violation of any Law or the Account represents a progress billing for which services have not been fully and completely rendered;
(f) the
Account is subject to a Lien (other than Liens in favor of Agent or Permitted Liens that have been expressly subordinated to the Liens
of Agent or that arise solely by operation of law), or Agent does not have a first priority, perfected Lien on such Account;
(g) the
Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment, unless such Chattel Paper or Instrument
has been delivered to Agent;
(h) the
Account Debtor is an Affiliate or Subsidiary of a Credit Party, or if the Account Debtor holds any Debt of a Credit Party;
(i) more
than fifty percent (50%) of the aggregate balance of all Accounts owing from the Account Debtor obligated on the Account are ineligible
under subclause (a) above (in which case all Accounts from such Account Debtor shall be ineligible);
(j) without
limiting the provisions of clause (i) above, fifty percent (50%) or more of the aggregate unpaid Accounts from the Account
Debtor obligated on the Account are not deemed Eligible Accounts under this Agreement for any reason;
(k) the
total unpaid Accounts of the Account Debtor obligated on the Account exceed twenty percent (20%) of the net amount of all Eligible Accounts
owing from all Account Debtors (but only the amount of the Accounts of such Account Debtor exceeding such twenty percent (20%) limitation
shall be considered ineligible);
(l) any
covenant, representation or warranty contained in the Financing Documents with respect to such Account has been breached in any material
respect (with respect to covenants) or is incorrect in any material respect (with respect to representations and warranties);
(m) the
Account is unbilled or has not been invoiced to the Account Debtor in accordance with the procedures and requirements of the applicable
Account Debtor;
(n) the
Account is an obligation of an Account Debtor that is the federal, state or local government or any political subdivision thereof, unless
Agent has agreed to the contrary in writing and Agent has received from the Account Debtor the acknowledgement of Agent’s notice
of assignment of such obligation pursuant to this Agreement and Borrowers have otherwise complied with applicable statutes or ordinances
necessary for Agent or Lenders to enforce their rights and collect amounts due in respect of such Account;
(o) the
Account is an obligation of an Account Debtor that has suspended business, made a general assignment for the benefit of creditors, is
unable to pay its debts as they become due or as to which a petition has been filed (voluntary or involuntary) under any law relating
to bankruptcy, insolvency, reorganization or relief of debtors, or the Account is an Account as to which any facts, events or occurrences
exist which could reasonably be expected to impair the validity, enforceability or collectability of such Account or reduce the amount
payable or delay payment thereunder;
(p) the
Account Debtor has its principal place of business or executive office outside the United States;
(q) the
Account is payable in a currency other than United States dollars;
(r) the
Account Debtor is an individual;
(s) the
Borrower owning such Account has not signed and delivered to Agent notices, to the extent requested by Agent, directing the Account Debtors
to make payment to the applicable Collections Account;
(t) the
Account includes late charges or finance charges (but only such portion of the Account shall be ineligible);
(u) the
Account arises out of the sale of any Inventory upon which any other Person holds, claims or asserts a Lien (other than Permitted Liens
arising solely by operation of law, Liens in favor of Agent or Liens that have been expressly subordinated to the Liens of Agent); or
(v) the
Account or Account Debtor fails to meet such other specifications and requirements which may from time to time be established by Agent
in its Permitted Discretion.
“Eligible Assignee”
means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural
person) approved by Agent; provided, however, that notwithstanding the foregoing, (x) so long as no Event of Default has occurred
and is continuing, (i) “Eligible Assignee” shall not include any Credit Party or any of a Credit Party’s
Subsidiaries, and (y) no proposed assignee intending to assume all or any portion of the Revolving Loan Commitment or any unfunded
portion of the Term Loan Commitments shall be an Eligible Assignee unless such proposed assignee either already holds a portion of such
Revolving Loan Commitment or Term Loan Commitments, or has been approved as an Eligible Assignee by Agent.
“Eligible Inventory”
means Inventory owned by a Borrower and acquired and dispensed by such Borrower in the Ordinary Course of Business that Agent, in its
Permitted Discretion, deems to be Eligible Inventory. Without limiting the generality of the foregoing, no Inventory shall be Eligible
Inventory if:
(a) such
Inventory is not owned by a Borrower free and clear of all Liens and rights of any other Person (including the rights of a purchaser
that has made progress payments and the rights of a surety that has issued a bond to assure such Borrower’s performance with respect
to that Inventory) except for Permitted Liens arising solely by operation of law, Liens in favor of Agent or Liens that have been expressly
subordinated to the Liens of Agent;
(b) such
Inventory is placed on consignment or is in transit;
(c) such
Inventory is covered by a negotiable document of title, unless such document has been delivered to Agent with all necessary endorsements,
free and clear of all Liens except for Permitted Liens arising solely by operation of law and those in favor of Agent;
(d) such
Inventory is excess, obsolete, unsalable, shopworn, seconds, damaged, unfit for sale, unfit for further processing, is of substandard
quality or is not of good and merchantable quality;
(e) such
Inventory consists of marketing materials, display items or packing or shipping materials, manufacturing supplies or Work-In-Process;
(f) such
Inventory is not subject to a first priority Lien in favor of Agent;
(g) such
Inventory consists of goods that can be transported or sold only with licenses that are not readily available, obtained or assigned to
Agent or of Hazardous Materials in concentrations or amounts that violate applicable Environmental Law;
(h) such
Inventory is not covered by casualty insurance acceptable to Agent;
(i) any
covenant, representation or warranty contained in the Financing Documents with respect to such Inventory has been breached in any material
respect;
(j) such
Inventory is located (i) outside of the continental United States or (ii) on premises where the aggregate amount of all Inventory
(valued at cost) of Borrowers located thereon is less than $10,000;
(k) such
Inventory is located on premises with respect to which Agent has not received a landlord, warehouseman, bailee or mortgagee letter acceptable
in form and substance to Agent unless Agent has instituted a reserve in an amount equal to three (3) months’ rent or third
party charges, as applicable, in respect of such location;
(l) such
Inventory consists of (A) discontinued items, (B) slow-moving or excess items held in inventory, or (C) used items held
for resale;
(m) such
Inventory does not consist of finished goods;
(n) such
Inventory does not meet all standards imposed by any Governmental Authority, including with respect to its production, acquisition or
importation (as the case may be);
(o) such
Inventory has an expiration date within the next six (6) months;
(p) such
Inventory consists of products for which Borrowers have a greater than six (6) month supply on hand;
(q) such
Inventory is held for rental or lease by or on behalf of Borrowers;
(r) such
Inventory consists of instrument sets;
(s) such
Inventory is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third parties, which agreement
restricts the ability of Agent or any Lender to sell or otherwise dispose of such Inventory; or
(t) such
Inventory fails to meet such other specifications and requirements which may from time to time be established by Agent in its Permitted
Discretion. Agent and Borrowers agree that Inventory shall be subject to periodic appraisal by Agent and that valuation of Inventory
shall be subject to adjustment pursuant to the results of such appraisal. Notwithstanding the foregoing, the valuation of Inventory shall
be subject to any legal limitations on sale and transfer of such Inventory.
“Environmental Laws”
means any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, policies and other governmental
directives or requirements, as well as common law, pertaining to the environment, natural resources, pollution, health (including any
environmental clean-up statutes and all regulations adopted by any local, state, federal or other Governmental Authority, and any statute,
ordinance, code, order, decree, law rule or regulation all of which pertain to or impose liability or standards of conduct concerning
medical waste or medical products, equipment or supplies), safety or clean-up that apply to any Credit Party and relate to Hazardous
Materials, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
§ 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. § 1251 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
§ 136 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Occupational
Safety and Health Act (29 U.S.C. § 651 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. §
4851 et seq.), any analogous state or local laws, any amendments thereto, and the regulations promulgated pursuant to said laws,
together with all amendments from time to time to any of the foregoing and judicial interpretations thereof.
“Equipment”
means “equipment” as defined in Article 9 of the UCC.
“Equity Interests”
means, with respect to any Person, all shares of capital stock, partnership interests, membership interests in a limited liability company
or other ownership in participation or equivalent interests (however designated, whether voting or non-voting) of such Person’s
equity capital (including any warrants, options or other purchase rights with respect to the foregoing), whether now outstanding or issued
after the Closing Date.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as the same may be amended, modified or supplemented from time to time, and
any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.
“ERISA Plan”
means any “employee benefit plan”, as such term is defined in Section 3(3) of ERISA (other than a Multiemployer
Plan), which any Credit Party or any Subsidiary maintains, sponsors or contributes to, or, in the case of an employee benefit plan which
is subject to Section 412 of the Code or Title IV of ERISA, to which any Credit Party or any Subsidiary has any liability,
including on account of any member of the Controlled Group, including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five (5) years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
“Erroneous Payment”
has the meaning specified therefor in Section 13.20.
“Erroneous Payment
Deficiency Assignment” has the meaning specified therefor in Section 13.20.
“Erroneous Payment
Impacted Loans” has the meaning specified therefor in Section 13.20.
“Erroneous Payment
Return Deficiency” has the meaning specified therefor in Section 13.20.
“EU Bail-In Legislation
Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as
in effect from time to time.
“Event of Default”
has the meaning set forth in Section 10.1.
“Excluded Accounts”
means (a) segregated Deposit Accounts into which there is deposited no funds other than those intended solely to cover wages and
payroll for employees of a Credit Party for a period of service no longer than two weeks at any time (and related contributions to be
made on behalf of such employees to health and benefit plans) plus balances for outstanding checks for wages and payroll from prior periods,
(b) segregated Deposit Accounts constituting employee withholding accounts and contain only funds deducted from pay otherwise due
to employees for services rendered to be applied toward the tax obligations of such employees, (c) segregated Deposit Accounts constituting
trust, fiduciary and escrow accounts in which there is not maintained at any point in time funds on deposit greater than $250,000 in
the aggregate for all such accounts, and (d) segregated Deposit Accounts or Securities Accounts holding cash or Cash Equivalents
described in clauses (o), (p) and (q) of the definition Permitted Liens (and subject to the cap set forth therein); provided
that the accounts described in clauses (a) through (d) above shall be used solely for the purposes described in such clauses.
“Excluded Perfection
Assets” means, collectively:
(a) Excluded
Accounts;
(b) letter
of credit rights with a value of less than $100,000 individually or $250,000 in the aggregate (other than to the extent consisting of
a supporting obligation or that can be perfected by the filing of a UCC financing statement);
(c) commercial
tort claims where the amount of damages claimed by the applicable Credit Party is less than $250,000 in the aggregate for all such commercial
tort claims;
(d) Electronic
Chattel Paper or tangible Chattel Paper, in each case, with a value of less than $100,000 individually or $250,000 in the aggregate (other
than to the extent consisting of a supporting obligation or that can be perfected by the filing of a UCC financing statement); and
(e) motor
vehicles, aircraft and other assets subject to certificates of title with an aggregate net book value (as reasonably determined by the
Borrowers) of less than $250,000 (other than to the extent a security interest thereon can be perfected by the filing of a financing
statement under the UCC).
“Excluded Property”
means, collectively:
(a) any
lease, license, contract, permit, letter of credit, purchase money arrangement, instrument or agreement to which any Credit Party is
a party or any of its rights or interests thereunder if and to the extent that the grant of such security interest shall constitute a
result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of any Credit Party therein or (ii) result
in a breach or termination pursuant to the terms of, or default under, any such lease, license, contract, permit, letter of credit, purchase
money arrangement, instrument or agreement;
(b) any
governmental licenses or state or local franchises, charters and authorizations, to the extent that Agent may not validly possess a security
interest in any such license, franchise, charter or authorization under applicable Law;
(c) any
asset which is subject to a purchase money Lien or Capital Lease permitted hereunder to the extent the granting of a security interest
in such asset is prohibited pursuant to the terms of the contract governing such purchase money Lien or Capital Lease; and
(d) any
“intent-to-use” trademarks or service mark applications for which an amendment to allege use or statement of use has not
been filed under 15 U.S.C. § 1051 Section 1(c) or Section 1(d), respectively or if filed, has not been deemed
in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively by the United States Patent and Trademark Office;
provided
that (x) any such limitation described in the foregoing clauses (a) and (b) on the security interests
granted hereunder shall apply only to the extent that any such prohibition could not be rendered ineffective pursuant to the UCC or any
other applicable Law (including Sections 9-406, 9-407 and 9-408 of the UCC) or principles of equity, (y) in the event of the
termination or elimination of any such prohibition or the requirement for any consent contained in such contract, agreement, permit,
lease or license or in any applicable Law, to the extent sufficient to permit any such item to become Collateral hereunder, or upon the
granting of any such consent, or waiving or terminating any requirement for such consent, a security interest in such contract, agreement,
permit, lease, license, franchise, authorization or asset shall be automatically and simultaneously granted hereunder and shall be included
as Collateral hereunder, and (z) all rights to payment of money due or to become due pursuant to, and all products and Proceeds
(and rights to the Proceeds) from the sale of, any Excluded Property shall be and at all times remain subject to the security interests
created by this Agreement (unless such Proceeds would independently constitute Excluded Property).
“Excluded Taxes”
means any of the following Taxes imposed on or with respect to Agent, Term Loan Servicer, any Lender or any other recipient of any payment
to be made by or on behalf of any obligation of the Credit Parties hereunder or the Obligations or required to be withheld or deducted
from a payment to Agent, Term Loan Servicer, such Lender or such recipient (including any interest and penalties thereon): (a) Taxes
to the extent imposed on or measured by Agent’s, Term Loan Servicer’s any Lender’s or such recipient’s net income
(however denominated), branch profits Taxes, and franchise Taxes and similar Taxes, in each case, (i) imposed by the jurisdiction
(or any political subdivision thereof) under which Agent, Term Loan Servicer, such Lender or such recipient is organized, has its principal
office or conducts business with respect to entering into any of the Financing Documents or taking any action thereunder or (ii) that
are Other Connection Taxes; (b) in the case of a Lender, United States withholding Taxes imposed on amounts payable to or for the
account of such Lender with respect to an applicable interest in the Loans pursuant to a Law in effect on the date on which (i) such
Lender becomes a party to this Agreement other than as a result of an assignment requested by a Credit Party under Section 2.8(i) or
Section 11.17(c) or (ii) such Lender changes its lending office for funding its Loan, except in each case to the extent
that, pursuant to Section 2.8, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan, Revolving Loan Commitments or Term Loan Commitment or to such Lender immediately
before it changed its lending office; (c) Taxes attributable to Agent’s, Term Loan Servicer’s, such Lender’s or
such recipient’s failure to comply with Section 2.8(c); and (d) any U.S. federal withholding taxes imposed in respect
of a Lender under FATCA.
“Existing Kosciusko
County Mortgage” means that certain Mortgage dated as of August 1, 2013 by OrthoPediatrics Corp. in favor of Tawani Enterprises
Inc.
“FATCA”
means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future U.S. Treasury regulations or official interpretations
thereof and any agreement entered into pursuant to the implementation of Section 1471(b)(1) of the Code, and any intergovernmental
agreement between the United States Internal Revenue Service, the U.S. Government and any governmental or taxation authority under any
other jurisdiction which agreement’s principal purposes deals with the implementation of such sections of the Code.
“FDA”
means the Food and Drug Administration of the United States of America, any comparable state or local Governmental Authority, any comparable
Governmental Authority in any non-United States jurisdiction, and any successor agency of any of the foregoing.
“FDCA”
means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 301 et seq., and all regulations promulgated thereunder.
“Federal Funds Rate”
means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal
to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System as published
by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided, however, that (a) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to Agent on such day on such transactions as determined by Agent in a commercially reasonable manner.
“Fee Letter”
means each agreement between Agent (and to the extent applicable Term Loan Servicer) and Borrower relating to fees payable to Agent and/or
Lenders in connection with this Agreement.
“Financing Documents”
means this Agreement, any Notes, the Security Documents, each Fee Letter, each subordination or intercreditor agreement pursuant to which
any Debt and/or any Liens securing such Debt are subordinated to all or any portion of the Obligations and all other documents, instruments
and agreements related to the Obligations and heretofore executed, executed concurrently herewith or executed at any time and from time
to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.
“Floor”
means the rate per annum of interest equal to two and a half percent (2.50%).
“Foreign Guarantor”
means each Guarantor not organized under the laws of the United States, any state thereof or the District of Columbia that becomes a
Credit Party upon the completion of the Post-Closing Joinder Obligations or pursuant to Section 4.11(e) following the Closing
Date.
“Foreign Lender”
has the meaning set forth in Section 2.8(c)(i).
“GAAP”
means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and authority within the United States accounting profession), which
are applicable to the circumstances as of the date of determination.
“General Intangible”
means any “general intangible” as defined in Article 9 of the UCC, and any personal property, including things in action,
other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit
rights, letters of credit, money, and oil, gas or other minerals before extraction, but including payment intangibles and software.
“Good Manufacturing
Practices” means current good manufacturing practices, as set forth in 21 C.F.R. Parts 210 and 211.
“Governmental Account
Debtor” means Medicare, Medicaid, TRICARE and any other state or federal healthcare program in its capacity as an Account Debtor.
“Governmental Authority”
means any nation or government, any state, local or other political subdivision thereof, and any agency, department or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other
Person owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing, whether domestic or foreign.
“Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part), provided, however, that the term Guarantee shall not include endorsements for collection
or deposit in the Ordinary Course of Business. The term “Guarantee” used as a verb has a corresponding meaning.
“Guarantor”
means each Credit Party (other than a Borrower) that has executed or delivered, or shall in the future execute or deliver, this Agreement
as a Guarantor or any other Guarantee of any portion of the Obligations.
“Hazardous Materials”
means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing
materials; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which
is prohibited by any Environmental Laws; toxic mold, any substance that requires special handling; and any other material or substance
now or in the future defined as a “hazardous substance,” “hazardous material,” “hazardous waste,”
“toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” or other words of similar
import within the meaning of any Environmental Law, including: (a) any “hazardous substance” defined as such in (or
for purposes of) CERCLA, or any so-called “superfund” or “superlien” Law, including the judicial interpretation
thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (c) any material now
defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d) any petroleum or petroleum by-products, including
crude oil or any fraction thereof; (e) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel;
(f) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; (g) any toxic or harmful substances,
wastes, materials, pollutants or contaminants (including, without limitation, asbestos, polychlorinated biphenyls, flammable explosives,
radioactive materials, infectious substances, materials containing lead-based paint or raw materials which include hazardous constituents);
and (h) any other toxic substance or contaminant that is subject to any Environmental Laws or other past or present requirement
of any Governmental Authority.
“Hazardous Materials
Contamination” means contamination (whether now existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant property by Hazardous Materials, or any derivatives thereof,
or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating from or disposed
of in connection with the relevant property.
“Healthcare Laws”
means all applicable Laws relating to the procurement, development, provision, clinical and non-clinical evaluation or investigation,
product approval or clearance, manufacture, production, analysis, distribution, dispensing, importation, exportation, use, handling,
quality, reimbursement, sale, labeling, advertising, promotion, or postmarket requirements of any medical device or other product (including,
without limitation, any ingredient or component of, or accessory to, the foregoing products) subject to regulation under the FDCA or
otherwise by the FDA, and similar state or foreign laws, controlled substance laws, consumer product safety laws, Medicare, Medicaid,
TRICARE, and all laws, policies, procedures, requirements and regulations pursuant to which Regulatory Required Permits are issued, in
each case, as the same may be amended from time to time.
“Indemnified Taxes”
means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of
Borrowers or any other Credit Party under any Financing Documents and (b) to the extent not otherwise described in (a), Other Taxes.
“Instrument”
means “instrument”, as defined in Article 9 of the UCC.
“Intellectual Property”
means all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, patent applications and like protections, including improvements, divisions, continuations,
renewals, reissues, extensions, and continuations-in-part of the same, trademarks, trade names, service marks, rights of use of any name,
domain names, or any other similar rights, any applications therefor, whether registered or not, know-how, operating manuals, trade secret
rights, clinical and non-clinical data, rights to unpatented inventions, and any claims for damage by way of any past, present, or future
infringement of any of the foregoing.
“Interest Period”
means any period commencing on the first day of a calendar month and ending on the last day of such calendar month.
“Inventory”
means “inventory” as defined in Article 9 of the UCC.
“Investment”
means, with respect to any Person, directly or indirectly, (a) to purchase or acquire any stock or stock equivalents, or any obligations
or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (b) to make or
otherwise consummate any Acquisition, or (c) make, purchase or hold any advance, loan, extension of credit or capital contribution
to or in, or any other investment in (including the making of investments in the form of intercompany transfer pricing and cost-plus
pricing arrangements), any Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect thereto.
“IRS”
has the meaning set forth in Section 2.8(c)(i).
“Joinder Requirements”
has the meaning set forth in Section 4.11(c).
“Kosciusko County
Property” means the real property located at 2850 Frontier Drive, Warsaw, Indiana (Kosciusko County) 46582.
“L/C Cash Collateral
Accounts” means, collectively, each segregated Deposit Account from time to time identified to Agent in writing established
by Borrower for the sole purpose of securing Borrower’s obligations under clause (h) of the definition Permitted Contingent
Obligations and containing only such cash or Cash Equivalents that have been required to be pledged to secure such obligations of Borrower;
provided, that the aggregate amount of cash or Cash Equivalents deposited in all such L/C Cash Collateral Accounts does not, at
any time, exceed $500,000 in the aggregate.
“Laws”
means any and all federal, state, provincial, territorial, local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, codes, injunctions, permits, governmental agreements and governmental restrictions, whether now or
hereafter in effect, which are applicable to any Credit Party in any particular circumstance. “Laws” includes, without
limitation, Healthcare Laws, Environmental Laws and applicable U.S. and non-U.S. export control laws and regulations, including without
limitation the Export Administration Regulations.
“Lender”
means each of (a) MCF, in its capacity as a lender hereunder, (b) each other Person party hereto in its capacity as a lender
hereunder, (c) each other Person that becomes a party hereto as Lender pursuant to Section 11.17, and (d) the respective
successors of all of the foregoing, and “Lenders” means all of the foregoing.
“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, in respect of such
asset. For the purposes of this Agreement and the other Financing Documents, any Credit Party or any Subsidiary thereof shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement relating to such asset.
“Liquidity”
means, as of any date of determination, the sum of (a) Revolving Loan Availability plus (b) Credit Party Unrestricted
Cash on such date.
“Litigation”
means any action, suit or proceeding before any court, mediator, arbitrator or Governmental Authority.
“Loan Account”
means the Term Loan Account or the Revolving Loan Account, as applicable.
“Loan(s)”
means the Term Loan, the Revolving Loans and each and every advance under the Term Loan, or any combination of the foregoing, as the
context may require. All references herein to the “making” of a Loan or words of similar import mean, with respect to the
Term Loan, the making of any advance in respect of a Term Loan.
“Lockbox”
has the meaning set forth in Section 2.11.
“Margin Stock”
means “margin stock” as such term is defined in Regulation T, U, or X of the Board of Governors of the Federal Reserve System.
“Market Withdrawal”
means a Person’s Removal or Correction of a distributed product which involves a minor violation that would not be subject to legal
action by the FDA or which involves no violation, e.g., normal stock rotation practices, routine equipment adjustments and repairs, etc.
“Material Adverse
Effect” means with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, a material adverse change in, or a material
adverse effect upon, any of (a) the condition (financial or otherwise), operations, business, properties, or prospects of the Credit
Parties taken as a whole, (b) the rights and remedies of Agent, Term Loan Servicer, or Lenders under any Financing Document, or
the ability of any Credit Party to perform any of its obligations under any Financing Document to which it is a party, (c) the legality,
validity or enforceability of any Financing Document, (d) the existence, perfection or priority of any security interest granted
to the Agent or the Lenders in any Financing Document, except solely as a result of any action or inaction of Agent or any Lender (provided
that such action or inaction is not caused by a Credit Party’s failure to comply with the terms of the Financing Documents) (e) the
value of any material Collateral, or (f) a material impairment of the prospect of repayment of any portion of the Obligations.
“Material Contracts”
means the contracts that are required to be filed by OrthoPediatrics Corp. with the United States Securities and Exchange Commission
under Regulation 601(b)(10) of Regulation S-K promulgated under the Securities Act of 1933, as amended.
“Material Intangible
Assets” means all of (a) Intellectual Property owned by the Credit Parties or their Subsidiaries and (b) license
or sublicense agreements or other agreements with respect to rights in Intellectual Property not owned by a Credit Party or a Subsidiary
thereof, in each case, that are material to the condition (financial or otherwise), business or operations of the Credit Parties and
their Subsidiaries (taken as a whole), as determined by Agent in its reasonable discretion.
“Maturity Date”
means December 1, 2028.
“Maximum Lawful
Rate” has the meaning set forth in Section 2.7.
“MCF”
means MidCap Financial Trust, a Delaware statutory trust, and its successors and assigns.
“Minimum Balance”
means, at any time, an amount that equals the product of: (a) the average Revolving Loan Limit during the immediately preceding
month multiplied by (b) the Minimum Balance Percentage for such month.
“Minimum Balance
Fee” means a fee equal to (a) the positive difference, if any, remaining after subtracting (i) the average end-of-day
principal balance of Revolving Loans outstanding during the immediately preceding month (without giving effect to the clearance day calculations
referenced above or in Section 2.2(a) from (ii) the Minimum Balance multiplied by (b) the highest interest
rate applicable to the Revolving Loans during such month (or, during the existence of an Event of Default, the default rate of interest
set forth in Section 10.5(a)).
“Minimum Balance
Percentage” means fifteen percent (15.0%).
“Mortgaged Property”
means all real property owned by any of the Credit Parties, including, without limitation, (i) the vacant land located at Frontier
Drive, Warsaw, Indiana 46582 (Parcel No. 43-07-29-300-008.000-017) and (ii) the real property located at 604 North Parkway
Street, Wayland (Henry County), Iowa 52654, and, in each case, all improvements thereon, (iii) the real property located at
608 North Parkway Street, Wayland (Henry County), Iowa 52654, and all improvements thereon, (iv) the South 125 feet of Lot
1 in Wayland Industrial Park in the Town of Wayland, Henry County, Iowa, and all improvements thereon, (v) a parcel of land
located in the south part of Lot 1 of the Wayland Industrial Park, Town of Wayland, Henry County, Iowa and more particularly described
as follows: Commencing at the SW Corner of Lot 1, thence N00°3l'54"E, 125.00 ft. to the POINT OF BEGINNING for this parcel,
thence continuing N00°31'54"E, 100.00 ft. along the West line of Lot 1, thence N89°47'54"E, 323.64 ft., thence S00°18'15"W,
100.00 ft. along the East line or Lot 1, thence S89°47'57"W, 324.03 ft to the POINT OF BEGINNING, and all improvements thereon,
and (vi) except for the Kosciusko County Property until the Kosciusko County Mortgage Requirement Date; provided that at all times
following the Kosciusko County Mortgage Requirement Date the Kosciusko County Property and all improvements thereon shall be considered
“Mortgaged Property”.
“Mortgages”
means the mortgages, deeds of trust, deeds to secure debt, leasehold mortgages, leasehold deeds of trust or leasehold deeds to secure
debt and other similar security documents delivered pursuant to Section 4.11 or 7.4, each in form reasonably acceptable to Agent,
including as may be required to account for local law matters.
“Multiemployer Plan”
means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which any Credit Party or any other member
of the Controlled Group (or any Person who in the last five years was a member of the Controlled Group) is making or accruing an obligation
to make contributions or has within the preceding five plan years (as determined on the applicable date of determination) made contributions.
“Net Product Sales”
means, for any period, (a) the gross revenues of Credit Parties generated solely through the commercial sale of Products (not including
any Products that Credit Parties or their Subsidiaries acquire by way of an Acquisition on or following the Closing Date) by Credit Parties
to third parties in the Ordinary Course of Business during such period, less (b)(i) trade, quantity and cash discounts allowed by
Credit Parties in respect of such Products, (ii) discounts, refunds, rebates, charge backs, retroactive price adjustments and any
other allowances which effectively reduce net selling price of such Products, (iii) product returns and allowances with respect
to such Products, (iv) allowances for shipping or other distribution expenses with respect to such Products, (iv) set-offs
and counterclaims with respect to such Products, and (v) any other similar and customary deductions used by Borrower or its Subsidiaries
in determining net revenues, all, in respect of (a) and (b), as determined in accordance with GAAP (as applicable) and in the Ordinary
Course of Business.
“Non-Funding Lender”
has the meaning set forth in Section 11.18.
“Notes”
has the meaning set forth in Section 2.3.
“Notice of Borrowing”
means a notice of a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit D
hereto.
“Obligations”
means all obligations, liabilities and indebtedness (monetary (including, without limitation, the payment of interest and other amounts
arising after the commencement of any case with respect to any Credit Party under the Bankruptcy Code or any similar statute which would
accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part
in such case) or otherwise) of each Credit Party under this Agreement or any other Financing Document, in each case howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.
“OFAC”
means the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists”
means, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224,
66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to
any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“Ordinary Course
of Business” means, in respect of any transaction involving any Credit Party or any Subsidiary, the ordinary course of business
of such Credit Party or Subsidiary, as conducted by such Credit Party or Subsidiary in accordance with past practices and undertaken
by such Person in good faith and not for purposes of evading any covenant or restriction in any Financing Document.
“Organizational
Documents” means, with respect to any Person other than a natural person, the documents by which such Person was organized
(such as a certificate of incorporation, articles of incorporation, certificate of limited partnership or articles of organization, and
including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate
to the internal governance of such Person (such as by-laws, a partnership agreement or an operating agreement, joint venture agreement,
limited liability company agreement or members agreement), including any and all shareholder agreements or voting agreements relating
to the capital stock or other Equity Interests of such Person.
“Other Connection
Taxes” means taxes imposed as a result of a present or former connection between Agent, Term Loan Servicer or any Lender and
the jurisdiction imposing such tax (other than connections arising from Agent, Term Loan Servicer or such Lender having executed, delivered,
become a party to, performed its obligations under, received payments under, engaged in any other transaction pursuant to or enforced
any Financing Document, or sold or assigned an interest in any Loans or any Financing Document).
“Other Taxes”
means all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest
under, or otherwise with respect to, any Financing Document, except any such taxes that are Other Connection Taxes imposed with respect
to an assignment (other than an assignment made pursuant to Section 2.8(i)).
“Participant”
has the meaning set forth in Section 11.17.
“Participant Register”
has the meaning set forth in Section 11.17(a)(iii).
“Payment Account”
means, as applicable, the Term Loan Payment Account or the Revolving Loan Payment Account.
“Payment Recipient”
has the meaning specified therefor in Section 13.20 of this Agreement.
“PBGC”
means the Pension Benefit Guaranty Corporation and any Person succeeding to any or all of its functions under ERISA.
“Pension Plan”
means any ERISA Plan that is subject to Section 412 of the Code or Title IV of ERISA.
“Perfection Certificate”
means the Perfection Certificate delivered to Agent as of the Closing Date, as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms of this Agreement.
“Permit”
means all licenses, certificates, accreditations, product clearances or approvals, supplier numbers, marketing authorizations, drug or
device authorizations and approvals, other authorizations, franchises, qualifications, accreditations, registrations, permits, consents
and approvals of a Credit Party issued or required under Laws applicable to the business of the Credit Parties or any of their Subsidiaries
or necessary in the manufacturing, importing, exporting, possession, ownership, warehousing, marketing, promoting, sale, labeling, furnishing,
distribution or delivery of goods or services under Laws applicable to the business of the Credit Parties or any of their Subsidiaries.
Without limiting the generality of the foregoing, “Permit” includes any Regulatory Required Permit.
“Permitted Acquisitions”
means any Acquisition by a Credit Party, in each case, to the extent that each of the following conditions shall have been satisfied:
| (a) | the Borrower Representative shall have
delivered to Agent at least ten (10) Business Days (or such shorter period as may be
agreed by Agent) prior to the closing of the proposed Acquisition: (i) a description
of the proposed Acquisition; (ii) to the extent available in the case of an Acquisition
for cash consideration in excess of $1,000,000, a due diligence package (including, to the
extent available, a quality of earnings report); and (iii) copies of the respective
agreements, documents or instruments pursuant to which such Acquisition is to be consummated
(or substantially final drafts thereof), any schedules to such agreements, documents or instruments
and all other material ancillary agreements, instruments and documents to be executed or
delivered in connection therewith, and, to the extent required to be completed prior to the
closing of such Acquisition under the related acquisition agreement and reasonably requested
by Agent, all material regulatory and third party approvals and copies of any environmental
assessments, if applicable; |
| (b) | the Credit Parties (including any new
Subsidiary to the extent required by Section 4.11) shall execute and deliver the agreements,
instruments and other documents to the extent required the terms of this Agreement, including,
without limitation, by Section 4.11 hereof, including such agreements, instruments and
other documents necessary to ensure that any new Subsidiary complies with the Joinder Requirements
and that Agent receives a first priority perfected Lien in all entities and assets acquired
in connection with the Acquisition to the extent required by this Agreement; |
| (c) | at the time of such Acquisition and after
giving effect thereto, no Default or Event of Default has occurred and is continuing; |
| (d) | the Acquisition would not result in a
Change in Control and each Borrower remains a surviving legal entity after such Acquisition; |
| (e) | with respect to any Acquisition involving
an in-license to a Credit Party, all such in-licenses or agreements related thereto shall
constitute “Collateral” and Agent to have the ability in the event of a liquidation
of any Collateral to dispose of such Collateral in accordance with Agent’s rights and
remedies under this Agreement and the other Financing Documents; |
| (f) | all transactions in connection with such
Acquisition shall be consummated in all material respects in accordance with applicable Laws; |
| (g) | the assets acquired in such Acquisition
are for use in the same, similar, related or complementary lines of business as the Credit
Parties are currently engaged or a similar, related or complementary line of business reasonably
related, ancillary or supplemental thereto or incidental thereto or reasonably expansive
thereof; |
| (h) | if required, such Acquisition shall have
been approved by the board of directors (or other similar body) and/or the stockholders or
other equity holders of any Person being acquired in such Acquisition; |
| (i) | no Debt or Liens are assumed or created
(other than Permitted Liens and Permitted Debt) in connection with such Acquisition; |
| (j) | Agent shall have received a certificate
of a Responsible Officer of the Borrower Representative demonstrating, on a pro forma basis
after giving effect to the consummation of such Acquisition, that Credit Parties are in compliance
with the financial covenants set forth in Article 6 hereof; |
| (k) | unless Agent shall otherwise consent
in writing (in its sole discretion), (x) if the Acquisition is an equity purchase or
merger, the target and its Subsidiaries must have as their jurisdiction of formation a state
within the United States or the District of Columbia, and (y) if the Acquisition is
an asset purchase, not less than 90% of the fair market value of all of the assets so acquired
shall be located within (or in the case of Registered Intellectual Property, registered in)
the United States; |
| (l) | the consideration payable by the Credit
Parties and their Subsidiaries in connection with such Acquisition shall consist solely of
(x) noncash Equity Interests (other than Disqualified Equity Interest) in OrthoPediatrics
Corp. and/or (y) cash and Cash Equivalents not to exceed in the aggregate the cap set
forth in clause (m) below; |
| (m) | the sum of all cash amounts (including
any cash equivalents but excluding the cash proceeds received from any substantially contemporaneous
issuance of common equity interests of OrthoPediatrics Corp.) paid or payable in connection
with all Permitted Acquisitions (including all Debt, liabilities and Contingent Obligations
(in each case to the extent otherwise permitted hereunder) incurred or assumed and the maximum
amount of any earn-out or comparable payment obligation in connection therewith, regardless
of when due or payable and whether or not reflected on a consolidated balance sheet of Borrowers,
the “Acquisition Consideration”), shall not exceed $10,000,000 in the
aggregate in any calendar year; |
| (n) | prior to the consummation of each such
Acquisition, Borrowers have provided a certificate (and such other evidence as Agent may
reasonably require) demonstrating to Agent’s reasonable satisfaction that, after giving
pro forma effect to such Acquisition, the Credit Parties will be in compliance with the Liquidity
covenant set forth in Section 6.2 at all times during the period of twelve (12) months
following the consummation of such Acquisition; |
| (o) | Agent has received, prior to the consummation
of such Acquisition, updated monthly financial projections (including without information
necessary to support the calculations provided in clause (n) above) in form and substance
reasonably satisfactory to Agent, for the immediately succeeding twelve (12) months following
the proposed consummation of the Acquisition beginning with the month during which the Acquisition
is to be consummated (the “Transaction Projections”). |
Notwithstanding the foregoing,
no Accounts or Inventory acquired by a Credit Party in a Permitted Acquisition shall be included as Eligible Accounts or Eligible Inventory
until a field examination (and, if required by Agent, an Inventory appraisal) with respect thereto has been completed to the reasonable
satisfaction of Agent, including the establishment of reserves required in Agent’s Permitted Discretion; provided that field
examinations and appraisals in connection with Permitted Acquisitions shall not count against the limited number of field examinations
or appraisals for which expense reimbursement may be sought.
“Permitted Asset
Dispositions” means the following Asset Dispositions:
| (a) | dispositions of Inventory in the Ordinary
Course of Business and not pursuant to any bulk sale; |
| (b) | dispositions of furniture, fixtures and
equipment in the Ordinary Course of Business that the applicable Credit Party or Subsidiary
determines in good faith is no longer used or useful in the business of such Credit Party
and its Subsidiaries and with a fair salable value not to exceed Five Hundred Thousand Dollars
($500,000) in the aggregate for all such furniture, fixtures and equipment in any calendar
year; |
| (c) | expiration, forfeiture, invalidation,
cancellation, abandonment or lapse (including, without limitation, the narrowing of claims)
of Intellectual Property (other than Material Intangible Assets) that is, in the reasonable
good faith judgment of a Credit Party, no longer useful in the conduct of the business of
the Credit Parties or any of their Subsidiaries; |
| (e) | dispositions consisting of the use or
payment of cash or Cash Equivalents in the Ordinary Course of Business for equivalent value
and in a manner that is not prohibited by the terms of this Agreement or the other Financing
Documents; |
| (f) | (i) Asset Dispositions from a Credit
Party to any other Credit Party (other than a Foreign Guarantor), (ii) Asset Dispositions
from a Foreign Guarantor to another Foreign Guarantor to the extent approved by Agent in
writing, (iii) Asset Dispositions from any Restricted Foreign Subsidiaries to any Credit
Party, (iv) Asset Dispositions from any Restricted Foreign Subsidiary to another Restricted
Foreign Subsidiary; |
| (g) | sales, forgiveness or discounting, on
a non-recourse basis and in the Ordinary Course of Business, of past due Accounts (other
than Eligible Accounts included in the Borrowing Base) in connection with the settlement
of delinquent Accounts or in connection with the bankruptcy or reorganization of suppliers
or customers in accordance with the applicable terms of this Agreement; |
| (h) | to the extent constituting an Asset Disposition,
the granting of Permitted Liens; |
| (i) | (i) any
termination of any lease, sublease, license or sub-license (other than any licenses constituting
Material Contracts or Material Intangible Assets) in the Ordinary Course of Business (and
any related Asset Disposition of improvements made to leased real property resulting therefrom),
(ii) any expiration of any option agreement in respect of real or personal property,
and (iii) any surrender or waiver of contractual rights or the settlement, release or
surrender of contractual rights or litigation claims (including in tort) in the Ordinary
Course of Business; and |
| (j) | dispositions of tangible personal property
(and not, for the avoidance of doubt, any Intellectual Property or other General Intangibles)
so long as (i) the assets subject to such Asset Dispositions are sold for fair value,
as determined by the Borrowers in good faith, (ii) at least 75% of the consideration
therefor is cash or Cash Equivalents, (iii) the aggregate amount of such Asset Dispositions
in any twelve (12) month period does not exceed $500,000, and (iv) no Event of Default
has occurred and is continuing or would result from the making of such disposition. |
“Permitted Contest”
means, with respect to any tax obligation or other obligation allegedly or potentially owing from any Credit Party or its Subsidiary
to any governmental tax authority or other third party, a contest maintained in good faith by appropriate proceedings promptly instituted
and diligently conducted and with respect to which such reserve or other appropriate provision, if any, as shall be required in conformity
with GAAP shall have been made on the books and records and financial statements of the applicable Credit Party(ies); provided,
however, that (a) compliance with the obligation that is the subject of such contest is effectively stayed during such challenge;
(b) Credit Parties’ and their Subsidiaries’ title to, and its right to use, the Collateral is not adversely affected
thereby and Agent’s Lien and priority on the Collateral are not adversely affected, altered or impaired thereby; (c) the Collateral
or any part thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by
Credit Parties or their Subsidiaries; and (d) upon a final determination of such contest, Credit Parties and their Subsidiaries
shall promptly comply with the requirements thereof.
“Permitted Contingent
Obligations” means
| (a) | Contingent Obligations arising in respect
of the Debt under the Financing Documents; |
| (b) | Contingent Obligations resulting from
endorsements for collection or deposit in the Ordinary Course of Business; |
| (c) | Contingent
Obligations outstanding on the Closing Date and set forth on Schedule 5.1
(but not including any refinancings, extensions, increases or amendments to such Debt
other than a Permitted Refinancing); |
| (d) | Contingent
Obligations incurred in the Ordinary Course of Business with respect to surety and appeal
bonds, performance bonds and other similar obligations not to exceed Two Hundred Fifty Thousand
($250,000) in the aggregate at any time outstanding; |
| (e) | Contingent Obligations arising under
indemnity agreements with title insurers to cause such title insurers to issue to Agent mortgagee
title insurance policies; |
| (f) | Contingent Obligations arising with
respect to customary indemnification obligations in favor of purchasers in connection with
dispositions of personal property assets permitted under Section 5.6 or in connection
with any other commercial agreement entered into by a Credit Party or a Subsidiary thereof
in the Ordinary Course of Business; |
| (g) | so long as there exists no Event of
Default both immediately before and immediately after giving effect to any such transaction,
Contingent Obligations existing or arising under any Swap Contract, provided, however,
that such obligations are (or were) entered into by a Credit Party or a Subsidiary in the
Ordinary Course of Business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably anticipated
by such Person and not for purposes of speculation; |
| (h) | Contingent Obligations existing or arising
in connection with any letter of credit for the primary purpose of securing a lease of real
property in the Ordinary Course of Business, provided that the aggregate amount of
all such letter of credit reimbursement obligations does not at any time exceed Two Hundred
Fifty Thousand Dollars ($250,000) outstanding; |
| (i) | Contingent Obligations arising under
guarantees by a Credit Party of Debt or other obligations, which Debt or other obligations
are otherwise permitted hereunder; provided, however, that if such obligation is subordinated
to the Obligations, such guarantee shall be subordinated to the same extent; |
| (j) | Contingent Obligations arising with
respect to customary indemnification obligations, adjustment of purchase price, non-compete
or similar obligations of any Credit Party, to the extent such Contingent Obligations arise
in connection with a Permitted Acquisition; and |
| (k) | other Contingent Obligations not permitted
by clauses (a) through (j) above, not to exceed Five Hundred Thousand Dollars
($500,000) in the aggregate at any time outstanding. |
“Permitted Debt”
means:
| (a) | Credit Parties Debt to Agent and each
Lender under this Agreement and the other Financing Documents; |
| (b) | Debt incurred as a result of endorsing
negotiable instruments received in the Ordinary Course of Business; |
| (c) | purchase money Debt and Capital Leases
not to exceed $2,000,000 in the aggregate at any time (whether in the form of a loan or a
lease) used solely to acquire Equipment used in the Ordinary Course of Business and secured
only by such Equipment and any Permitted Refinancing thereof; |
| (d) | Debt existing on the date of this Agreement
and described on Schedule 5.1 (but not including any refinancings, extensions,
increases or amendments to such Debt other than any Permitted Refinancing thereof); |
| (e) | so long as there exists no Event of
Default both immediately before and immediately after giving effect to any such transaction,
Debt existing or arising under any Swap Contract, provided, however, that such obligations
are (or were) entered into by Borrower or a Subsidiary in the Ordinary Course of Business
for the purpose of directly mitigating risks associated with liabilities, commitments, investments,
assets, or property held or reasonably anticipated by such Person and not for purposes of
speculation; |
| (f) | Debt owed to any Person providing property,
casualty, liability, or other insurance to the Credit Parties, including to finance insurance
premiums, so long as the amount of such Debt is not in excess of the amount of the unpaid
cost of, and shall be incurred only to defer the cost of, such insurance for the policy year
in which such Debt is incurred and such Debt is outstanding only during such policy year; |
| (g) | Debt consisting of unsecured intercompany
loans and advances incurred by (1) any Credit Party (other than a Foreign Guarantor)
owing to any other Credit Party, (2) any Credit Party owing to any Restricted Foreign
Subsidiary, (3) any Foreign Guarantor owing to any Credit Party (other than a Foreign
Guarantor) so long as such Debt constitutes a Permitted Investment of the applicable Credit
Party pursuant to clause (j) of the definition of Permitted Investment, (4) any
Foreign Guarantor owing to any other Foreign Guarantor, (5) any Restricted Foreign Subsidiary
owing to any other Restricted Foreign Subsidiary, or (6) any Restricted Foreign Subsidiary
owing to any Credit Party so long as such Debt constitutes a Permitted Investment of the
applicable Credit Party pursuant to clause (i) of the definition of Permitted Investments;
provided that, in each case other than the foregoing clause (1), any such Debt owed
by a Credit Party shall, at the request of Agent, be subordinated to the payment in full
of the Obligations pursuant to documentation in form and substance reasonably satisfactory
to Agent; |
| (i) | to the extent also constituting Debt
(without duplication), Permitted Contingent Obligations; |
| (j) | Debt in respect of netting services,
overdraft protections and other like services, in each case incurred in the Ordinary Course
of Business; |
| (k) | Debt, in an aggregate amount not to
exceed $500,000 at any time outstanding, in respect of credit cards, credit card processing
services, debit cards, stored value cards, purchase cards (including so-called “procurement
cards” or “P-cards”) or other similar cash management or merchant services,
in each case, incurred in the Ordinary Course of Business; provided that, to the extent
such Debt is secured, it is secured solely by cash collateral held in a Credit Card Cash
Collateral Account; |
| (l) | unsecured
earn-out obligations and other similar contingent purchase price obligations incurred in
connection with a Permitted Acquisition, in an amount not to exceed the cap set forth in
clause (m) of the definition of Permitted Acquisitions after taking into account all
other Acquisition Consideration paid or payable by Borrowers during the term of this Agreement
(and not including any seller notes or other non-contingent Debt); |
| (m) | at all time prior to the Kosciusko County
Mortgage Requirement Date, Debt in an aggregate principal amount not to exceed $762,591.21
evidenced by the Existing Kosciusko County Mortgage (“Kosciusko County Mortgage
Debt”); and |
| (n) | Other unsecured Debt not to exceed $500,000
in the aggregate at any time at any time outstanding. |
“Permitted Discretion”
mean a determination made in good faith and in the exercise of reasonable business judgment.
“Permitted Distributions”
means the following Distributions:
| (a) | Distributions by any Subsidiary of a
Credit Party to a Credit Party; |
| (b) | dividends payable solely in common Equity
Interests (other than Disqualified Equity Interests) so long as such dividends do not result
in a Change in Control; |
| (c) | repurchases of stock of current or former
employees, directors or consultants pursuant to stock purchase agreements so long as an Event
of Default does not exist at the time of such repurchase and would not exist after giving
effect to such repurchase, provided, however, that such repurchase does not exceed
Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate per fiscal year; |
| (d) | distributions of Equity Interests (other
than Disqualified Equity Interests) upon the conversion or exchange of Equity Interests (including
options and warrants) or Subordinated Debt; |
| (e) | cash payments in lieu of the issuance
of fractional shares in connection with the exercise of warrants, options or other securities
convertible into or exchangeable for capital stock, or in connection with dividends, share
splits, reverse share splits (or any combination thereof) and other Investments permitted
hereunder, in an aggregate maximum amount not to exceed One Hundred Thousand Dollars ($100,000)
in any fiscal year; and |
| (f) | distributions of Equity Interests (other
than Disqualified Equity Interests) of OrthoPediatrics Corp. as part of the purchase price
for Acquisitions completed by the Credit Parties prior to the Closing Date in accordance
with the applicable purchase documents so long as such distributions do not result in a Change
in Control. |
“Permitted Investments”
means:
| (a) | Investments shown on Schedule 5.7
and existing on the Closing Date; |
| (b) | to the extent constituting an Investment,
the holding by a Person of cash and Cash Equivalents owned by such Person; |
| (c) | Investments consisting of the endorsement
of negotiable instruments for deposit or collection or similar transactions in the Ordinary
Course of Business; |
| (d) | Investments consisting of (i) travel
advances and employee relocation loans and other employee loans and advances in the Ordinary
Course of Business, and (ii) loans to employees, officers or directors relating to the
purchase of equity securities of Borrowers or their Subsidiaries (other than Restricted Foreign
Subsidiaries) pursuant to employee stock purchase plans or agreements approved by Borrowers’
Board of Directors (or other governing body) in the Ordinary Course of Business, but the
aggregate of all such loans and advances outstanding pursuant to this clause (d) may
not exceed $250,000 at any time; |
| (e) | Investments (including debt obligations)
received in connection with the bankruptcy or reorganization of customers or suppliers and
in settlement of delinquent obligations of, and other disputes with, customers or suppliers
arising in the Ordinary Course of Business; |
| (f) | Investments consisting of notes receivable
of, or prepaid royalties and other credit extensions, to customers and suppliers who are
not Affiliates, in the Ordinary Course of Business, provided, however, that this clause
(f) shall not apply to Investments of any Credit Party in any Subsidiary; |
| (g) | Investments consisting of Deposit Accounts
or Securities Accounts in which Agent has received a Deposit Account Control Agreement or
Securities Account Control Agreement, except in the case of Excluded Accounts; |
| (h) | Investments by (1) any Credit Party
in any other Credit Party (other than a Foreign Guarantor), (2) any Foreign Guarantor
in any other Foreign Guarantor to the extent approved in writing by Agent, (3) any Restricted
Foreign Subsidiary in any other Restricted Foreign Subsidiary; and (4) any Restricted
Foreign Subsidiary in any Borrower or Guarantor; provided that all obligations of the Credit
Parties in connection with any Investment by a Restricted Foreign Subsidiary in any Credit
Party (other than in the form of Equity Interests not constituting Disqualified Equity Interests)
shall be subordinated to the Obligations pursuant to a Subordination Agreement; |
| (i) | so long as no Event of Default exists
at the time of such Investment or after giving effect to such Investment, Investments
of cash and Cash Equivalents by Credit Parties in a Restricted Foreign Subsidiary but solely
to the extent that (x) the aggregate amount of such Investments (including payments
in respect of intercompany Debt or in connection with intercompany transfer pricing and cost-plus
pricing arrangements) made with respect to all Restricted Foreign Subsidiaries does not,
at any time, exceed $1,000,000 in any twelve (12) month period, and (y) with respect
to any individual Restricted Foreign Subsidiary, the amount of such Investments in such Restricted
Foreign Subsidiary at any time outstanding does not exceed the amount necessary to fund the
current monthly operating expenses of such Restricted Foreign Subsidiary (taking into account
their revenue from other sources; provided that in no event shall any Investment be
made pursuant to this clause (i) unless Credit Parties are in compliance with Section 5.19(a) before
and after giving effect to such Investment; |
| (j) | to the extent constituting Investments,
intercompany receivables that arise solely from customary and reasonable transfer pricing
and cost sharing arrangements (i.e., “cost plus” arrangements) and associated
“true-up” payments among the Credit Parties and the Foreign Guarantors or the
Post-Closing Guarantors, in each case, that are in the Ordinary Course of Business and only
to the extent such arrangements are entered into in order to accurately reflect the costs
of operating the business of the Foreign Guarantors or the Restricted Foreign Subsidiaries,
as applicable, and/or to maintain compliance with all applicable jurisdictional Tax requirements; |
| (k) | Investments constituting Permitted Acquisitions; |
| (l) | the granting of Permitted Licenses; |
| (m) | Investments in prepaid expenses, utility
and workers’ compensation, performance and other similar deposits, each as entered
into in the Ordinary Course of Business; and |
| (n) | so long as no Event of Default exists
at the time of such Investment or after giving effect to such Investment, other non-Acquisition
Investments of cash and Cash Equivalents in an amount not exceeding One Million Five Hundred
Thousand Dollars ($1,500,000) in the aggregate in any calendar year. |
“Permitted License”
means (a) any non-exclusive license or sublicense of discrete Intellectual Property rights of Credit Parties or their Subsidiaries
so long as all such licenses or sublicenses (i) are granted to third parties in the Ordinary Course of Business, (ii) do not
result in a legal transfer of title to the licensed property, (iii) have been granted in exchange for fair consideration on commercially
reasonable terms, and (iv) no Event of Default has occurred and is continuing or would result from the granting of such license
or sublicense, and (b) any exclusive license of rights to discrete Intellectual Property rights of Borrower or its Subsidiaries
so long as such licenses (i) are granted to third parties in the Ordinary Course of Business, (ii) do not result in a legal
transfer of title to the licensed property, (iii) (iii) have been granted in exchange for cash consideration on commercially
reasonable terms, (iv) are exclusive solely as to either (A) discrete geographical areas outside of the United States, (B) product
indications or fields of use related primarily to the adult population (i.e., non-pediatric indications or fields of use), and/or (C) designated
hospitals and/or healthcare facilities whose primary patient population are adults, (v) Borrowers or such Subsidiary has given Agent
at least ten (10) days’ written notice prior to entering in such license, (vi) no Event of Default exists at the time
such Permitted License is granted or would result from the granting of such Permitted License, and (vii) Borrowers shall have made
the mandatory prepayment with the net cash proceeds received in connection with the granting of such license or sublicense.
“Permitted Liens”
means:
| (a) | deposits or pledges of cash arising
in the Ordinary Course of Business to secure obligations under workmen’s compensation,
social security or similar laws, or under unemployment insurance (but excluding Liens arising
under ERISA or, with respect to any Pension Plan or Multiemployer Plan, the Code) pertaining
to a Credit Party’s or its Subsidiary’s employees, if any; |
| (b) | deposits or pledges of cash and Cash
Equivalents in the Ordinary Course of Business to secure, without duplication, (i) leases
and other obligations of like nature arising in the Ordinary Course of Business and (ii) Permitted
Contingent Obligations described in clause (h) of the definition thereof; |
| (c) | carrier’s, warehousemen’s,
mechanic’s, workmen’s, landlord’s materialmen’s or other like Liens
on Collateral arising in the Ordinary Course of Business with respect to obligations which
are not due, or which are being contested pursuant to a Permitted Contest; |
| (d) | Liens for taxes or other governmental
charges not at the time delinquent or thereafter payable without penalty or the subject of
a Permitted Contest; |
| (e) | attachments, stay or appeal bonds, judgments
and other similar Liens on Collateral for sums not exceeding $250,000 in the aggregate and
arising in connection with court proceedings that do not constitute an Event of Default;
provided, however, that the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are the subject of a Permitted Contest; |
| (f) | Liens with respect to real estate, easements,
rights of way, restrictions, minor defects or irregularities of title, none of which, individually
or in the aggregate, materially interfere with the benefits of the security intended to be
provided by the Security Documents, materially affect the value or marketability of the Collateral,
impair the use or operation of the Collateral for the use currently being made thereof or
impair Credit Parties’ ability to pay the Obligations in a timely manner or impair
the use of the Collateral or the ordinary conduct of the business of any Credit Party or
any Subsidiary and which, in the case of any real estate that is part of the Collateral,
are set forth as exceptions to or subordinate matters in the title insurance policy accepted
by Agent insuring the lien of the Security Documents; |
| (g) | Liens and encumbrances in favor of Agent
under the Financing Documents; |
| (h) | Liens, other than on Collateral that
is part of the Borrowing Base, existing on the date hereof and set forth on Schedule 5.2
on the Closing Date and Liens granted in a Permitted Refinancing of the obligations or
liabilities secured by such Liens; |
| (i) | any Lien on any Equipment and the proceeds
thereof securing Debt permitted under clause (c) of the definition of Permitted Debt;
provided, however, that such Lien attaches concurrently with or within twenty
(20) days after the acquisition thereof and Liens incurred in a Permitted Refinancing of
such Debt secured by such Liens; |
| (j) | to the extent constituting a Lien, the
granting of a Permitted License; |
| (k) | purported Liens evidenced by the filing
of precautionary UCC financing statements relating solely to operating leases or consignments
of personal property entered into the Ordinary Course of Business; |
| (l) | Liens granted in the Ordinary Course
of Business on the unearned portion of insurance premiums securing the financing of insurance
premiums to the extent the financing is permitted clause (f) of the definition of Permitted
Debt; |
| (m) | Liens
that are rights of set-off, bankers’ liens or similar non-consensual Liens relating
to Deposit Accounts or Securities Accounts in favor of banks, other depositary institutions
and securities intermediaries solely to secure payment of fees and similar costs and
expenses and arising in the Ordinary Course of Business |
| (n) | Leases
or subleases of real property granted in the Ordinary Course of Business; |
| (o) | Liens, deposits and pledges encumbering
cash and Cash Equivalents with a value not to exceed Two Hundred Fifty Thousand Dollars ($250,000)
in the aggregate at any time, to secure the performance of bids, tenders, contracts (other
than contracts for the payment of money), public or statutory obligations, surety, indemnity,
performance or other similar bonds or other similar obligations arising in the Ordinary Course
of Business; |
| (p) | Liens solely in respect of the Credit
Card Cash Collateral Accounts and amounts deposited therein to the extent securing obligations
permitted pursuant to clause (k) of the definition of Permitted Debt; |
| (q) | Liens solely in respect of the L/C Cash
Collateral Accounts and amounts deposited therein to the extent securing obligations permitted
pursuant to clause (h) of the definition of Permitted Contingent Obligations; |
| (r) | at all time prior to the Kosciusko County
Mortgage Requirement Date, Liens solely in respect of the Kosciusko County Property securing
the Kosciusko County Mortgage Debt; and |
| (s) | Liens
in favor of customs and revenue authorities arising as a matter of Law to secure payment
of customs duties in connection with the importation of goods in the Ordinary Course of Business. |
“Permitted Modifications”
means (a) such amendments or other modifications to a Borrower’s or Subsidiary’s Organizational Documents as are required
under this Agreement or by applicable Law and fully disclosed to Agent within thirty (30) days after such amendments or modifications
have become effective, and (b) such amendments or modifications to a Borrower’s or Subsidiary’s Organizational Documents
(other than those involving a change in the name of a Borrower or Subsidiary or involving a reorganization of a Borrower or Subsidiary
under the laws of a different jurisdiction) that would not adversely affect the rights and interests of Agent or Lenders and fully disclosed
to Agent within thirty (30) days after such amendments or modifications have become effective.
“Permitted
Refinancing” means Debt constituting a refinancing, extension or renewal of Debt; provided that the refinanced, extended,
or renewed Debt (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Debt being
refinanced or extended (plus any reasonable and customary interest, fees, premiums and costs and expenses) (b) has a weighted average
maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Debt being refinanced or
extended, (c) is not entered into as part of a sale leaseback transaction, (d) is not secured by a Lien on any assets other
than the collateral securing the Debt being refinanced or extended, (e) the obligors of which are the same as the obligors of the
Debt being refinanced or extended, (f) is otherwise on terms no less favorable to Credit Parties and their Subsidiaries, taken as
a whole, than those of the Debt being refinanced or extended, and (g) no Event of Default has occurred and is continuing at the
time such refinancing, extension or renewal occurs or would result therefrom.
“Person”
means any natural person, corporation, limited liability company, professional association, limited partnership, general partnership,
joint stock company, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any Governmental Authority.
“Pledge Agreement”
means that certain Pledge Agreement, dated as of the date hereof, executed by certain Credit Parties in favor of Agent, for the benefit
of Lenders, covering all the Equity Interests respectively owned by the Credit Parties, as amended, restated, or otherwise modified from
time to time.
“Post-Closing Guarantors”
means each of (a) ApiFix Ltd, a private company incorporated under the laws of the State of Israel (the “Israeli Guarantor”),
and (b) OrthoPediatrics Canada ULC, an unlimited liability company governed by the laws of British Columbia (the “Canadian
Guarantor”).
“Prepayment Fee”
has the meaning set forth in Section 2.2(i).
“Pro Rata Share”
means (a) with respect to a Lender’s obligation to make advances in respect of a Term Loan Tranche 1 and such Lender’s
right to receive payments of principal, interest and fees with respect to the Term Loan Tranche 1, the Term Loan Tranche 1 Commitment
Percentage of such Lender; provided that if the Term Loan Tranche 1 Commitment has been reduced to
zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan Tranche 1 and the
denominator shall be the aggregate unpaid principal amount of the Term Loan Tranche 1, (b) with respect to a Lender’s
obligation to make advances in respect of a Term Loan Tranche 2 and such Lender’s right to receive payments of principal, interest
and fees with respect to the Term Loan Tranche 2, the Term Loan Tranche 2 Commitment Percentage of such Lender; provided
that if the Term Loan Tranche 2 Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount
of such Lender’s portion of the Term Loan Tranche 2 and the denominator shall be the aggregate unpaid principal amount of the Term
Loan Tranche 2, (c) with respect to a Lender’s obligation to make advances in respect of a Term Loan Tranche 3 and
such Lender’s right to receive payments of principal, interest and fees with respect to the Term Loan Tranche 3, the Term Loan
Tranche 3 Commitment Percentage of such Lender; provided that if the Term Loan Tranche 3 Commitment
has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan
Tranche 3 and the denominator shall be the aggregate unpaid principal amount of the Term Loan Tranche 3, (d) with respect
to a Lender’s obligation to make Revolving Loans, and such Lender’s right to receive any fee payable to or for the benefit
of the Revolving Lenders, the Revolving Loan Commitment Percentage of such Lender, (e) with respect to a Lender’s right to
receive payments of principal and interest with respect to Revolving Loans, such Lender’s Revolving Loan Exposure with respect
thereto, and (f) for all other purposes (including, without limitation, the indemnification obligations arising under Section 11.6)
with respect to any Lender, the percentage obtained by dividing (i) the sum of the Revolving Loan Commitment Amount (or,
in the event the Revolving Loan Commitment shall have been reduced to zero, such Lender’s then existing Revolving Loan Outstandings),
the then remaining Term Loan Commitment Amount, and the then outstanding principal advances under the Term Loan of such Lender, by
(ii) the sum of the Revolving Loan Commitment (or, in the event the Revolving Loan Commitment shall have been reduced to zero,
the then existing Revolving Loan Outstandings), the then remaining Term Loan Commitment, and the then outstanding principal advances
under the Term Loans of all Lenders.
“Proceeding”
means any suit, formal charge, complaint, action or hearing, whether judicial or administrative, before any Governmental Authority or
arbitrator.
“Proceeds”
means “proceeds” (as defined in Article 9 of the UCC).
“Products”
means, from time to time, any products currently manufactured, sold, developed, tested or marketed by any Credit Party or any of its
Subsidiaries, including without limitation, those products set forth on Schedule 4.17 (as updated from time to time in accordance
with Section 4.15) but excluding, for the avoidance of doubt, any consulting or other services offered by any Credit Party or any
of its Subsidiaries; provided, that, for the avoidance of doubt, any new Product not disclosed on Schedule 4.17 shall still constitute
a “Product” as herein defined.
“Protective Advance”
means all sums expended by Agent in accordance with the provisions of Section 10.4 to (a) protect the priority, validity and
enforceability of any lien on, and security interests in, any Collateral and the instruments evidencing and securing the Obligations,
(b) prevent the value of any Collateral from being diminished, or (c) protect any of the Collateral from being materially damaged,
impaired, mismanaged or taken.
“Real Estate Collateral
Requirements” means the requirement that Agent shall have received a duly executed Mortgage from the applicable Credit Party
for each Mortgaged Property in form and substance reasonably acceptable to Agent and suitable for recording or filing, together, with
respect to each Mortgage for any property located in the United States, with the following documents: (a) a fully paid policy of
title insurance (i) in a form approved by Agent insuring the Lien of the Mortgage encumbering such property as a valid first priority
Lien, free and clear of all defects and other encumbrances, subject only to the exceptions set forth on Schedule B thereto, (ii) in
an amount reasonably satisfactory to Agent, (iii) issued by a nationally recognized title insurance company reasonably satisfactory
to Agent (the “Title Company”) (provided, however, that for the avoidance of doubt, it is hereby agreed that First
American Title Insurance Company and Chicago Title Insurance Company shall both be deemed satisfactory to Agent) and (iv) that includes
(A) such insurance and direct access reinsurance as Agent may reasonably deem necessary or desirable and (B) such endorsements
or affirmative insurance reasonably required by Agent and available in the applicable jurisdiction (including, if applicable without
limitation, endorsements on matters relating to usury, zoning, mechanic’s liens, variable rate, address, separate tax lot, subdivision,
tie in or cluster, contiguity, access and so-called comprehensive coverage over covenants and restrictions), (b) with respect to
any property located in any jurisdiction in which a zoning endorsement is not available (or for which a zoning endorsement is not available
at a premium that is not excessive as reasonably determined by Agent), if requested by Agent, a zoning compliance letter from the applicable
municipality or a zoning report from Planning and Zoning Resource Corporation (or another person acceptable to Agent), in each case satisfactory
to Agent, (c) a Survey, (d) an appraisal complying with the requirements of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, by a third- party appraiser selected by Agent, (e) a favorable opinion from each local counsel where the
applicable Mortgaged Properties are located, reasonably acceptable to Agent and in form and substance reasonably satisfactory to Agent
which includes, without limitation, the due execution and delivery and enforceability of each applicable Mortgage, the corporate formation,
existence and good standing of the applicable mortgagor, and such other matters as may be reasonably requested by Agent, (f) no
later than three (3) Business Days (or such later date as Agent may agree in its sole discretion) prior to the delivery of the Mortgage,
the following documents and instruments, in order to comply with the National Flood Insurance Reform Act of 1994 and related legislation
(including the regulations of the Board of Governors of the Federal Reserve System): (A) a completed standard flood hazard determination
form and (B) if the improvement(s) to the improved real property is located in a special flood hazard area, a notification
to Agent (“Borrower Notice”) and, if applicable, notification to Agent that flood insurance coverage under the National
Flood Insurance Program (“NFIP”) is not available because the community does not participate in the NFIP, documentation
evidencing Agent’s receipt of the Borrower Notice and (C) if the Borrower Notice is required to be given and flood insurance
is available in the community in which the property is located, a copy of the flood insurance policy, Agent’s application for a
flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such
other evidence of flood insurance satisfactory to Agent, (g) at the Borrowers’ sole cost and expense, Phase I environmental
site assessment reports prepared in accordance with the current ASTM E1527 standard (“Phase Is”) (to the extent not
already provided) and reliance letters for such Phase Is (if such Phase Is were not performed on behalf of, or addressed to, Agent),
which Phase Is and reliance letters shall be in form and substance reasonably acceptable to Agent and any other environmental information,
assessments or reports as Agent shall reasonably request and, to the extent such Phase I identified conditions that are in violation
of, or require sampling under, Environmental Laws, such other environmental assessments (“Phase IIs”) as Agent may
reasonably require, and (h) such other agreements, instruments and documents (including, without limitation, guarantees, subordination
or pari passu confirmations, consulting engineer’s reports and lien searches) as Agent shall reasonably require, and with respect
to each Mortgage for any property located outside the United States, equivalent documents available in the applicable jurisdiction and
required by Agent.
“Recall”
means a Person’s Removal or Correction of a marketed product that the FDA considers to be in violation of the laws it administers
and against which the FDA would initiate legal action, e.g., seizure.
“Reference Time”
means approximately a time substantially consistent with market practice two (2) SOFR Business Days prior to the first day of each
calendar month. If by 5:00 pm (New York City time) on any interest lookback day, Term SOFR in respect of such interest lookback day has
not been published on the SOFR Administrator’s Website, then Term SOFR for such interest lookback day will be Term SOFR as published
in respect of the first preceding SOFR Business Day for which Term SOFR was published on the SOFR Administrator’s Website; provided
that such first preceding SOFR Business Day is not more than three (3) SOFR Business Days prior to such interest lookback day.
“Register”
has the meaning set forth in Section 11.17(a)(iii).
“Registered Intellectual
Property” means any patent, registered trademark or servicemark, registered copyright, registered mask work, or any pending
application for any of the foregoing.
“Regulatory Reporting
Event” has the meaning set forth in Section 4.17.
“Regulatory Required
Permit” means any and all licenses, approvals and permits issued by the FDA, or any other applicable Governmental Authority,
necessary for (a) the testing, manufacture, marketing or sale of any Product by any applicable Credit Party or its Subsidiaries
as such activities are being conducted by such Credit Party and its Subsidiaries with respect to such Product at such time, and those
issued by State governments or foreign governments for the conduct of any Credit Party’s or any Subsidiary’s business or
(b) the operation by any applicable Credit Party or its subsidiaries of any manufacturing facility or other similar operation.
“Relevant Governmental
Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened
by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Removal”
means the physical removal of a Product from its point of use to some other location for repair, modification, adjustment, relabeling,
destruction, or inspection.
“Replacement Lender”
has the meaning set forth in Section 11.17(c).
“Required Lenders”
means at any time Lenders holding (a) of more than fifty percent (50%) the sum of the Revolving Loan Commitments, the remaining
Term Loan Commitments, and the then outstanding principal advances under the Term Loans (taken as a whole) or (b) if the Revolving
Loan Commitments has been reduced to zero, more than fifty percent (50%) of the sum of the then aggregate outstanding principal
balance of the Revolving Loans, the remaining Term Loan Commitments, and the then outstanding principal advances under the Term Loans
(taken as a whole).
“Resolution Authority”
means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”
means any of the Chief Financial Officer or any other officer of the applicable Credit Party acceptable to Agent.
“Restricted Foreign
Subsidiary” means (a)(i) OrthoPediatrics EU Limited (United Kingdom); (a)(ii) OrthoPediatrics AUS PTY LTD (Australia);
(a)(iii) OrthoPediatrics NZ LTD (New Zealand); (a)(iv) OP EU B.V. (The Netherlands); (a)(v) OP Netherlands B.V. (The Netherlands);
(a)(vi) ApiFix Ltd. (Israel); (a)(vii) OrthoPediatrics GmbH (Germany); and (a)(viii) OrthoPediatrics Canada ULC (Canada),
and (b) each other direct and indirect Subsidiary of OrthoPediatrics Corp. formed or acquired after the Closing Date and not organized
under the laws of the United States, Washington, D.C. or any state thereof to the extent that such Subsidiary is established primarily
to create a sales office or technical support office in its jurisdiction of incorporation (or region) and Agent expressly agrees, in
writing, that such Subsidiary constitutes a Restricted Foreign Subsidiary; provided that no foreign Subsidiary that becomes a
Credit Party pursuant to Section 4.11(e) or Section 7.4 shall be a “Restricted Foreign Subsidiary” for purposes
of this Agreement or the other Financing Documents.
“Revolving Lender”
means each Lender having a Revolving Loan Commitment Amount in excess of Zero Dollars ($0) (or, in the event the Revolving Loan Commitment
shall have been terminated at any time, each Lender at such time having Revolving Loan Outstandings in excess of Zero Dollars ($0)).
“Revolving Loan
Account” has the meaning set forth in Section 2.6(b).
“Revolving Loan
Availability” means, at any time, the Revolving Loan Limit minus the Revolving Loan Outstandings.
“Revolving Loan
Commitment” means, as of any date of determination, the aggregate Revolving Loan Commitment Amounts of all Lenders as of such
date.
“Revolving Loan
Commitment Amount” means, as to any Lender, the dollar amount set forth opposite such Lender’s name on the Commitment
Annex under the column “Revolving Loan Commitment Amount” (if such Lender’s name is not so set forth thereon, then
the dollar amount on the Commitment Annex for the Revolving Loan Commitment Amount for such Lender shall be deemed to be Zero Dollars
($0)), as such amount may be adjusted from time to time by any amounts assigned (with respect to such Lender’s portion of Revolving
Loans outstanding and its commitment to make Revolving Loans) pursuant to the terms of any and all effective Assignment Agreements to
which such Lender is a party. For the avoidance of doubt, the aggregate Revolving Loan Commitment Amount of all Lenders on the Closing
Date shall be $50,000,000.
“Revolving Loan
Commitment Percentage” means, as to any Lender, (a) on the Closing Date, the percentage set forth opposite such Lender’s
name on the Commitment Annex under the column “Revolving Loan Commitment Percentage” (if such Lender’s name is not
so set forth thereon, then, on the Closing Date, such percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the Revolving Loan Commitment Amount of such Lender on such date divided by
the Revolving Loan Commitment on such date.
“Revolving Loan
Exposure” means, with respect to any Lender on any date of determination, the percentage equal to the amount of such Lender’s
Revolving Loan Outstandings on such date divided by the aggregate Revolving Loan Outstandings of all Lenders on such date.
“Revolving Loan
Limit” means, at any time, the lesser of (a) the Revolving Loan Commitment and (b) the Borrowing Base.
“Revolving
Loan Outstandings” means, at any time of calculation, without duplication (a) the then existing aggregate outstanding
principal amount of Revolving Loans, and (b) when used with reference to any single Lender, the then existing outstanding principal
amount of Revolving Loans advanced by such Lender.
“Revolving Loan
Payment Account” means the account specified on the Agent’s signature page hereto as the Revolving Loan Payment
Account, into which all payments by or on behalf of each Borrower to Agent (other than payments of principal, interest, fees, expenses,
charges and all other amounts owing solely in respect of the Term Loans) under the Financing Documents shall be made, or such other account
as Agent shall from time to time specify by notice to Borrower Representative.
“Revolving Loans”
has the meaning set forth in Section 2.1(b).
“Sanctioned
Country” means any country or territory that is itself subject to comprehensive sanctions maintained by OFAC including
at the time of this Agreement, Cuba, Iran, North Korea, Syria and the Crimea, Donetsk People’s Republic and Luhansk People’s
Republic regions.
“SEC”
means the United States Securities and Exchange Commission.
“Securities Account”
means a “securities account” (as defined in Article 9 of the UCC), an investment account, or other account in which
investment property or securities are held or invested for credit to or for the benefit of any Credit Party.
“Securities Account
Control Agreement” means an agreement, in form and substance satisfactory to Agent, among Agent, any applicable Credit Party
and each securities intermediary in which such Credit Party maintains a Securities Account pursuant to which Agent shall obtain “control”
(as defined in Article 9 of the UCC) over such Securities Account.
“Security
Document” means this Agreement, the Pledge Agreement, each Mortgage, and each other agreement, document or instrument
executed concurrently herewith or at any time hereafter pursuant to which one or more Credit Parties or any other Person either (a) Guarantees
payment or performance of all or any portion of the Obligations, and/or (b) provides, as security for all or any portion of the
Obligations, a Lien on any of its assets in favor of Agent for its own benefit and the benefit of the Lenders, as any or all of the same
may be amended, supplemented, restated or otherwise modified from time to time.
“SOFR”
means, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day.
“SOFR Administrator”
means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of Term SOFR selected by Agent in its reasonable
discretion).
“SOFR Administrator’s
Website” means the website of the SOFR Administrator, currently at https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html,
or any successor source for Term SOFR identified by the SOFR Administrator from time to time.
“SOFR Business Day”
means any day other than a Saturday or Sunday or a day on which the Securities Industry and Financial Markets Association recommends
that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“SOFR Interest Rate”
means, with respect to each day during which interest accrues on a Loan, the rate per annum (expressed as a percentage) equal to (a) Term
SOFR for the applicable Interest Period for such day; or (b) if the then-current Benchmark has been replaced with a Benchmark Replacement
pursuant to Section 2.2(o), such Benchmark Replacement for such day. Notwithstanding the foregoing, the SOFR Interest Rate shall
not at any time be less than the Floor.
“SOFR Loan”
means a Loan that bears interest at a rate based on Term SOFR.
“Solvent”
means, with respect to any Person, that such Person (a) owns and will own assets the fair saleable value of which are (i) greater
than the total amount of its debts and liabilities (including subordinated and Contingent Obligations), and (ii) greater than the
amount that will be required to pay the probable liabilities of its then existing debts as they become absolute and matured considering
all financing alternatives and potential asset sales reasonably available to it; (b) has capital that is not unreasonably small
in relation to its business as presently conducted or after giving effect to any contemplated transaction; and (c) does not intend
to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due.
“Stated Rate”
has the meaning set forth in Section 2.7.
“Subordinated Debt”
means any Debt of Credit Parties incurred pursuant to the terms of the Subordinated Debt Documents and with the prior written consent
of Agent. As of the Closing Date, there is no Subordinated Debt.
“Subordinated Debt
Documents” means any documents evidencing and/or securing Debt governed by a Subordination Agreement, all of which documents
must be in form and substance acceptable to Agent in its sole discretion. As of the Closing Date, there are no Subordinated Debt Documents.
“Subordination Agreement”
means each agreement between Agent and another creditor of Credit Parties, as the same may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms thereof, pursuant to which the Debt owing from any Credit Party and/or the Liens
securing such Debt granted by any Credit Party to such creditor are subordinated in any way to the Obligations and the Liens created
under the Security Documents, the terms and provisions of such Subordination Agreements to have been agreed to by and be acceptable to
Agent in the exercise of its sole discretion.
“Subsidiary”
means, with respect to any Person, (a) any corporation (or any foreign equivalent thereof) of which an aggregate of fifty percent
(50%) or more of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially
by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate
the vote of more than fifty percent (50%) of such Equity Interests whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company (or any foreign equivalent thereof) in which such Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise
requires, each reference to a Subsidiary shall be a reference to a Subsidiary of a Credit Party.
“Survey”
shall mean a survey of any Mortgaged Property (and all improvements thereon) which is (i) prepared by a surveyor or engineer licensed
to perform surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated (or redated) not earlier than one (1) year
(or such earlier date as Agent may agree in its reasonable discretion) prior to the date of delivery thereof unless there shall have
occurred within six months prior to such date of delivery any exterior construction on the site of such Mortgaged Property or any easement,
right of way or other interest in the Mortgaged Property has been granted or become effective through operation of law or otherwise with
respect to such Mortgaged Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall
be dated (or redated) after the completion of such construction or if such construction shall not have been completed as of such date
of delivery, not earlier than twenty (20) days (or such earlier date as Agent may agree in its sole discretion) prior to such date of
delivery, or after the grant or effectiveness of any such easement, right of way or other interest in the Mortgaged Property, (iii) certified
by the surveyor (in a manner reasonably acceptable to Agent) to Agent and the Title Company, (iv) complying in all respects with
the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation
of such survey, (v) sufficient for the Title Company to remove all standard survey exceptions from the mortgage policy relating
to such Mortgaged Property and issue the endorsements of the type required by clause (a)(iv)(B) of the definition of Real Estate
Collateral Requirements and (vi) otherwise reasonably acceptable to Agent.
“Swap Contract”
means any “swap agreement”, as defined in Section 101 of the Bankruptcy Code, that is obtained by a Credit Party to
provide protection against fluctuations in interest or currency exchange rates, but only if Agent provides its prior written consent
to the entry into such “swap agreement”.
“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees
or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term
Lender” means a Lender with a Term Loan Commitment or a portion of the outstanding Term Loans.
“Term Loan”
means, collectively, the Term Loan Tranche 1, the Term Loan Tranche 2 and the Term Loan Tranche 3.
“Term Loan Account”
has the meaning set forth in Section 2.6(c).
“Term Loan Commitment
Amount” means, with respect to each Lender, the sum of such Lender’s Term Loan Tranche 1 Commitment Amount, Term Loan
Tranche 2 Commitment Amount and Term Loan Tranche 3 Commitment Amount.
“Term
Loan Commitment Percentage” means, as to any Lender with respect to each of such Lender’s Term Loan Commitments,
(a) on the Closing Date, with respect to each tranche of the Term Loan, the applicable percentage set forth opposite such Lender’s
name on the Commitment Annex under the column “Term Loan Tranche 1 Commitment Percentage”, “Term Loan Tranche 2 Commitment
Percentage”, and “Term Loan Tranche 3 Commitment Percentage” (if such Lender’s name is not so set forth thereon,
then, on the Closing Date, such percentage for such Lender shall be deemed to be zero), and (b) on any date following the Closing
Date, as applicable to each tranche of Term Loan, the percentage equal to (i) the Term Loan Tranche 1 Commitment of such Lender
on such date divided by the aggregate Term Loan Tranche 1 Commitments on such date, (ii) the Term Loan Tranche 2 Commitment
of such Lender on such date divided by the aggregate Term Loan Tranche 2 Commitments on such date, or (iii) the Term Loan
Tranche 3 Commitment of such Lender on such date divided by the aggregate Term Loan Tranche 3 Commitments on such date.
“Term Loan Commitments”
means the Term Loan Tranche 1 Commitments, the Term Loan Tranche 2 Commitments, and the Term Loan Tranche 3 Commitments. For the avoidance
of doubt, the aggregate Term Loan Commitments of all Lenders on the Closing Date shall be $30,000,000.
“Term Loan Payment
Account” means the account specified on the Term Loan Servicer’s signature page hereto as the Term Loan Payment
Account, into which all payments by or on behalf of each Borrower to Agent of principal, interest, fees, expenses, charges and all other
amounts owing solely in respect of the Term Loans under the Financing Documents shall be made, or such other account as Term Loan Servicer
shall from time to time specify by notice to Borrower Representative.
“Term Loan Servicer”
MidCap Financial Trust, in its capacity as Term Loan Servicer for itself and for Lenders hereunder, as such capacity is established in,
and subject to the provisions of, Article 11, and the successors and assigns of MidCap Financial Trust in such capacity.
“Term Loan Tranche
1” has the meaning set forth in Section 2.1(a)(i)(A).
“Term Loan Tranche
1 Commitment Amount” means, with respect to each Lender, the amount set forth opposite such Lender’s name on Annex A
hereto under the caption “Term Loan Tranche 1 Commitment Amount”, as amended from time to time to reflect any permitted and
effective assignments and as such amount may be reduced or terminated pursuant to this Agreement.
“Term Loan Tranche
1 Commitments” means the sum of each Lender’s Term Loan Tranche 1 Commitment Amount.
“Term Loan Tranche
2” has the meaning set forth in Section 2.1(a)(i)(B).
"Term Loan Tranche
2 Activation Date” means July 1, 2024.
“Term Loan Tranche
2 Commitment Amount” means, with respect to each Lender, the amount set forth opposite such Lender’s name on Annex A
hereto under the caption “Term Loan Tranche 2 Commitment Amount”, as amended from time to time to reflect any permitted and
effective assignments and as such amount may be reduced or terminated pursuant to this Agreement.
“Term Loan Tranche
2 Commitment Termination Date” means the earlier of (a) June 30, 2025 and (b) the date on which Agent provides
notice to the Credit Parties, following the occurrence of an Event of Default (which has not been waived or cured as of the date such
notice is given), that the Term Loan Tranche 2 Commitments have been terminated.
“Term Loan Tranche
2 Commitments” means the sum of each Lender’s Term Loan Tranche 2 Commitment Amount.
“Term Loan Tranche
3” has the meaning set forth in Section 2.1(a)(i)(C).
"Term Loan Tranche
3 Activation Date” means January 1, 2025.
“Term Loan Tranche
3 Commitment Amount” means, with respect to each Lender, the amount set forth opposite such Lender’s name on Annex A
hereto under the caption “Term Loan Tranche 3 Commitment Amount”, as amended from time to time to reflect any permitted and
effective assignments and as such amount may be reduced or terminated pursuant to this Agreement.
“Term Loan Tranche
3 Commitment Termination Date” means the earlier of (a) June 30, 2025 and (b) the date on which Agent provides
notice to the Credit Parties, following the occurrence of an Event of Default (which has not been waived or cured as of the date such
notice is given), that the Term Loan Tranche 3 Commitments have been terminated.
“Term Loan Tranche
3 Commitments” means the sum of each Lender’s Term Loan Tranche 3 Commitment Amount.
“Term SOFR”
means the greater of (x) the forward-looking term rate for a period comparable to such Interest Period based on SOFR that is published
by the SOFR Administrator and is displayed on the SOFR Administrator’s Website at approximately the Reference Time for such Interest
Period and (y) the Floor. Unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.2(o),
in the event that a Benchmark Replacement with respect to Term SOFR is implemented, then all references herein to Term SOFR shall be
deemed references to such Benchmark Replacement.
“Termination Date”
means the earliest to occur of (a) the Maturity Date, (b) any date on which the maturity of the Loans is accelerated pursuant
to Section 10.2, or (c) the termination date stated in any notice of termination of this Agreement provided by Borrowers in
accordance with Section 2.12.
“U.S. Tax Compliance
Certificate” has the meaning set forth in Section 2.8(c)(i).
“UCC”
means the Uniform Commercial Code of the State of New York or of any other state the laws of which are required to be applied in connection
with the perfection of security interests in any Collateral.
“UK Financial Institution”
means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated
by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates
of such credit institutions or investment firms.
“UK Resolution Authority”
means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark
Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“United States”
means the United States of America.
“U.S. Tax Compliance
Certificate” has the meaning set forth in Section 2.8(c)(i).
“Withholding Agent”
means any Borrower, Agent or Term Loan Servicer, as applicable.
“Work-In-Process”
means Inventory that is not a product that is finished and approved by a Borrower in accordance with applicable Laws and such Borrower’s
normal business practices for release and delivery to customers.
“Write-Down
and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers
of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down
and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers
of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any
UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into
shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect
as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In
Legislation that are related to or ancillary to any of those powers.
Section 1.2 Accounting
Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder (including, without limitation, determinations made pursuant to the exhibits hereto) shall be made, and
all financial statements required to be delivered hereunder shall be prepared on a consolidated basis in accordance with GAAP applied
on a basis consistent with the most recent audited consolidated financial statements of each Credit Party and its Consolidated Subsidiaries
delivered to Agent and each of the Lenders on or prior to the Closing Date. If at any time any change in GAAP would affect the computation
of any financial ratio or financial requirement set forth in any Financing Document, and either Borrowers or the Required Lenders shall
so request, Agent, the Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided, however, that
until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein
and (b) Borrowers shall provide to Agent and the Lenders financial statements and other documents required under this Agreement
which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in
GAAP. Any obligations of a Person under a lease (whether existing now or entered into in the future) that is not (or would not be) a
capital lease obligation under GAAP as in effect prior to giving effect to FASB Accounting Standards Update No. 2016-02, Leases,
shall not be treated as a capital lease obligation solely as a result of the adoption of changes in GAAP, unless the parties hereto shall
enter into a mutually acceptable amendment addressing such changes, as provided for above.
Section 1.3 Other
Definitional and Interpretive Provisions. References in this Agreement to “Articles”, “Sections”, “Annexes”,
“Exhibits”, or “Schedules” shall be to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement
unless otherwise specifically provided. Any term defined herein may be used in the singular or plural. “Include”, “includes”
and “including” shall be deemed to be followed by “without limitation”. Except as otherwise specified or limited
herein, references to any Person include the successors and assigns of such Person. References “from” or “through”
any date mean, unless otherwise specified, “from and including” or “through and including”, respectively. References
to any statute or act shall include all related current regulations and all amendments and any successor statutes, acts and regulations.
All amounts used for purposes of financial calculations required to be made herein shall be without duplication. References to any statute
or act, without additional reference, shall be deemed to refer to federal statutes and acts of the United States. References to any agreement,
instrument or document shall include all schedules, exhibits, annexes and other attachments thereto. References to capitalized terms
that are not defined herein, but are defined in the UCC, shall have the meanings given them in the UCC. All references herein to times
of day shall be references to daylight or standard time, as applicable. All references herein to a merger, transfer, consolidation, amalgamation,
assignment, sale or transfer, or analogous term, will be construed to mean also a division of or by a limited liability company, as if
it were a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term, as applicable. Any series of
limited liability company shall be considered a separate Person. Any statement in this Agreement as to the “knowledge” of
a Borrower or Credit Party means the actual knowledge of any officer or director (or terms of similar import) of such Borrower or Credit
Party, after reasonable inquiry.
Section 1.4 Settlement
and Funding Mechanics. Unless otherwise specified herein, the settlement of all payments and fundings hereunder between or among
the parties hereto shall be made in lawful money of the United States and in immediately available funds.
Section 1.5 Time
is of the Essence. Time is of the essence in Borrower’s and each other Credit Party’s performance under this Agreement
and all other Financing Documents.
Section 1.6 Time
of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight savings or
standard, as applicable).
Article 2
- LOANS
Section 2.1 Loans.
(a) Term
Loans.
(i) Term
Loan Amounts.
(A) On
the terms and subject to the conditions set forth herein and in the other Financing Documents, each Lender with a Term Loan Tranche 1
Commitment Amount severally hereby agrees to make to Borrowers a Term Loan on the Closing Date in an original aggregate principal amount
equal to the Term Loan Tranche 1 Commitments (the “Term Loan Tranche 1”). Each such Lender’s obligation to fund
the Term Loan Tranche 1 shall be limited to such Lender’s Term Loan Tranche 1 Commitment Percentage, and no Lender shall have any
obligation to fund any portion of any Term Loan required to be funded by any other Lender, but not so funded.
(B) On
the terms and subject to the conditions set forth herein and in the other Financing Documents, each Lender with a Term Loan Tranche 2
Commitment Amount severally hereby agrees to make to Borrowers a Term Loan on a Business Day occurring on or after the Term Loan Tranche
2 Activation Date and on or prior to the Term Loan Tranche 2 Commitment Termination Date in an original aggregate principal amount equal
to the Term Loan Tranche 2 Commitment (the “Term Loan Tranche 2”). Each such Lender’s obligation to fund the
Term Loan Tranche 2 shall be limited to such Lender’s Term Loan Tranche 2 Commitment Amount, and no Lender shall have any obligation
to fund any portion of any Term Loan required to be funded by any other Lender, but not so funded. Unless previously terminated, upon
the Term Loan Tranche 2 Commitment Termination Date, the Term Loan Tranche 2 Commitment shall thereupon automatically be terminated and
the Term Loan Tranche 2 Commitment Amount of each Lender as of such date shall be reduced by such Lender’s Pro Rata Share of such
total reduction in the Term Loan Commitments.
(C) On
the terms and subject to the conditions set forth herein and in the other Financing Documents, each Lender with a Term Loan Tranche 3
Commitment Amount severally hereby agrees to make to Borrowers a Term Loan on a Business Day occurring on or after the Term Loan Tranche
3 Activation Date and on or prior to the Term Loan Tranche 3 Commitment Termination Date in an original aggregate principal amount equal
to the Term Loan Tranche 3 Commitment (the “Term Loan Tranche 3”). Each such Lender’s obligation to fund the
Term Loan Tranche 3 shall be limited to such Lender’s Term Loan Tranche 3 Commitment Amount, and no Lender shall have any obligation
to fund any portion of any Term Loan required to be funded by any other Lender, but not so funded. Unless previously terminated, upon
the Term Loan Tranche 3 Commitment Termination Date, the Term Loan Tranche 3 Commitment shall thereupon automatically be terminated and
the Term Loan Tranche 3 Commitment Amount of each Lender as of such date shall be reduced by such Lender’s Pro Rata Share of such
total reduction in the Term Loan Commitments.
(D) No
Borrower shall have any right to reborrow any portion of the Term Loan that is repaid or prepaid from time to time. Borrowers shall deliver
to Agent and Term Loan Servicer a Notice of Borrowing with respect to each proposed Term Loan advance, such Notice of Borrowing to be
delivered, (i) in the case of a Term Loan Tranche 1 borrowing, no later than 12:00 P.M. (Eastern time) on the Closing Date
and (ii) in the case of a Term Loan Tranche 2 borrowing and Term Loan Tranche 3 borrowing, no later than 12:00 P.M. (Eastern
time) fifteen (15) Business Days (or such shorter period as may be agreed by Agent, Term Loan Servicer and the Lenders) prior to such
proposed borrowing.
(ii) Scheduled
Repayments; Mandatory Prepayments; Optional Prepayments.
(A) There
shall become due and payable, and the Borrowers shall repay each Term Loan through, scheduled principal payments as set forth on Schedule
2.1 attached hereto. Notwithstanding the payment schedule set forth above, the outstanding principal amount of each Term Loan shall
become immediately due and payable in full on the Termination Date.
(B) There
shall become due and payable and Borrowers shall prepay each Term Loan in the following amounts and at the following times:
(i) Unless
Agent shall otherwise consent in writing, subject to Borrower’s option to apply casualty proceeds in accordance with this Section 2.1(a)(ii)(B)(i),
within five (5) Business Days of the date on which any Credit Party (or Agent as loss payee or assignee) receives any casualty proceeds
in excess of $250,000 with respect to any Collateral, an amount equal to one hundred percent (100%) of such proceeds (net of out-of-pocket
expenses and repayment of secured debt permitted under clause (c) of the definition of Permitted Debt and encumbering the property
that suffered such casualty), or such lesser portion of such proceeds as Agent shall elect to apply to the Term Loans and related Obligations;
provided that, so long as no Event of Default then exists, any such casualty proceeds in excess of $250,000 and less than $2,000,000
may instead be used by Borrowers within three hundred and sixty (360) days from the receipt of such proceeds to replace, repair, purchase
or otherwise reinvest such proceeds in assets used or useful in the business of the Credit Parties;
(ii) without
limiting Section 5.6(b) and unless Agent shall otherwise consent in writing, within five (5) Business Days of receipt
by any Credit Party of the proceeds of any Asset Disposition (A) that is not made in the Ordinary Course of Business, (B) that
pertains to any Collateral upon which a Borrowing Base is calculated, or (C) is made in reliance on clause (b) of the definition
of Permitted License, an amount equal to one hundred percent (100%) of the net cash proceeds of such Asset Disposition (net of out-of-pocket
expenses and repayment of secured debt permitted under clause (c) of the definition of Permitted Debt and encumbering such asset),
or such lesser portion as Agent shall elect to apply to the Obligations;
(iii) an
amount equal to any interest that is deemed to be in excess of the Maximum Lawful Rate (as defined below) and is required to be applied
to the reduction of the principal balance of the Loans by any Lender as provided for in Section 2.7; and
(iv) upon
the termination of all Revolving Loan Commitments and the payment of the then existing aggregate outstanding principal amount of the
Revolving Loans, the aggregate outstanding Obligations in full;
(C) Borrowers
may from time to time, with at least ten (10) Business Days prior irrevocable written notice (which notice may be conditioned on
the closing of a refinancing or other applicable transaction) to Agent, prepay the Term Loans in whole but not in part (other than mandatory
partial prepayments required under this Agreement); provided, that such prepayment shall be accompanied by all prepayment fees
and any other fees required hereunder and any fees required under the Fee Letter or any Financing Document in connection with such prepayments.
(iii) All
Prepayments. Except as this Agreement may specifically provide otherwise, all prepayments of the Term Loan shall be applied by Term
Loan Servicer to the Term Loans and related Obligations in inverse order of maturity. The monthly payments required under Schedule 2.1
shall continue in the same amount (for so long as the Term Loan and/or (if applicable) any advance thereunder shall remain outstanding)
notwithstanding any partial prepayment, whether mandatory or optional, of the Term Loan. Notwithstanding anything to the contrary contained
in the foregoing, in the event that there have been multiple advances under the Term Loan each of which such advances has a separate
amortization schedule of principal payments under Schedule 2.1 attached hereto, each prepayment of the Term Loan shall be
applied by Term Loan Servicer to reduce and prepay the principal balance of the earliest-made advance then outstanding in the inverse
order of maturity of the scheduled payments with respect to such advance until such earliest-made advance is paid in full (and to the
extent the total amount of any such partial prepayment shall exceed the outstanding principal balance of such earliest-made advance,
the remainder of such prepayment shall be applied successively to the remaining advances under the Term Loan in the direct order of the
respective advance dates in the manner provided for in this sentence).
(iv) Payments
Generally. All payments by or on behalf of each Borrower to Term Loan Servicer of principal, interest, fees, expenses, charges and
all other amounts owing solely in respect of the Term Loans under the Financing Documents shall be made to the Term Loan Payment Account.
(b) Revolving
Loans.
(i) Revolving
Loans and Borrowings. On the terms and subject to the conditions set forth herein, each Lender severally agrees to make loans to
Borrowers from time to time as set forth herein (each a “Revolving Loan”, and collectively, “Revolving Loans”)
equal to such Lender’s Revolving Loan Commitment Percentage of Revolving Loans requested by Borrowers hereunder, provided,
however, that after giving effect thereto, the Revolving Loan Outstandings shall not exceed the Revolving Loan Limit. Borrowers
shall deliver to Agent a Notice of Borrowing with respect to each proposed borrowing of a Revolving Loan, such Notice of Borrowing to
be delivered before 1:00 p.m. (Eastern time) two (2) Business Days prior to the date of such proposed borrowing. Each Borrower
and each Revolving Lender hereby authorizes Agent to make Revolving Loans on behalf of Revolving Lenders, at any time in its sole discretion,
to pay principal owing in respect of the Revolving Loans and interest, fees, expenses and other charges payable by any Credit Party in
respect of the Revolving Loans from time to time arising under this Agreement or any other Financing Document (it being understood that
Agent shall not be entitled to make discretionary Revolving Loans to pay any amounts due and owing under or in respect of the Term Loans).
The Borrowing Base shall be determined by Agent based on the most recent Borrowing Base Certificate delivered to Agent in accordance
with this Agreement (absent manifest error) and such other information as may be available to Agent. Without limiting any other rights
and remedies of Agent hereunder or under the other Financing Documents, the Revolving Loans shall be subject to Agent’s continuing
right to withhold from the Borrowing Base Availability Reserves, and to increase and decrease such Availability Reserves from time to
time in accordance with the terms of this Agreement.
(ii) Mandatory
Revolving Loan Repayments and Prepayments.
(A) The
Revolving Loan Commitment shall terminate on the Termination Date. On such Termination Date, there shall become due, and Borrowers shall
pay, the entire outstanding principal amount of each Revolving Loan, together with accrued and unpaid Obligations pertaining thereto
incurred to, but excluding the Termination Date; provided, however, that such payment is made not later than 12:00 Noon (Eastern
time) on the Termination Date.
(B) If
at any time the Revolving Loan Outstandings exceed the Revolving Loan Limit, then, on the next succeeding Business Day, Borrowers shall
repay the Revolving Loans, in an aggregate amount equal to such excess.
(C) Principal
payable on account of Revolving Loans shall be payable by Borrowers to Agent (I) immediately upon the receipt by any Borrower or
Agent of any payments on or proceeds from any of the Accounts, to the extent of such payments or proceeds, as further described in Section 2.11
below, and (II) in full on the Termination Date.
(iii) Optional
Prepayments. Borrowers may from time to time prepay the Revolving Loans in whole or in part; provided, however, that
any such partial prepayment shall be in an amount equal to $100,000 or a higher integral multiple of $25,000 (or, if less, the principal
amount of Revolving Loans outstanding). For the avoidance of doubt, nothing in this clause shall permit termination of the Revolving
Loan Commitment by Borrower other than in accordance with Section 2.12(b).
(iv) Payments
Generally. All payments by or on behalf of each Borrower to Agent under the Financing Documents (other than those described in Section 2.1(a)(iv) above)
shall be made to the Revolving Loan Payment Account.
Section 2.2 Interest, Interest
Calculations and Certain Fees.
(a) Interest.
(i) From
and following the Closing Date, except as expressly set forth in this Agreement, Loans and the other Obligations shall bear interest
at the sum of the SOFR Interest Rate plus the Applicable Margin. Interest on the Loans shall be paid monthly in arrears on the
first (1st) day of each month and on the maturity of such Loans, whether by acceleration or otherwise. Interest on all other Obligations
shall be payable upon demand.
(ii) For
purposes of calculating interest, all funds transferred to the Revolving Loan Payment Account for application to any Revolving Loans
shall be subject to a two (2) Business Day clearance period and all interest accruing on such funds during such clearance period
shall accrue for the benefit of Agent, and not for the benefit of the Lenders.
(iii) In
the event one or more of the following events occurs with respect to Term SOFR: (a) a public statement or publication of information
by or on behalf of the SOFR Administrator announcing that the SOFR Administrator has ceased or will cease to provide Term SOFR for a
1-month period, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator
that will continue to provide Term SOFR for a 1-month period; (b) a public statement or publication of information by the regulatory
supervisor for the SOFR Administrator, the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official or resolution
authority with jurisdiction over the SOFR Administrator, or a court or an entity with similar insolvency or resolution authority, which
states that the SOFR Administrator has ceased or will cease to provide Term SOFR for a 1-month period permanently or indefinitely, provided
that, at the time of such statement or publication, there is no successor administrator that will continue to provide Term SOFR for a
1-month period; or (c) a public statement or publication of information by the regulatory supervisor for the SOFR Administrator
announcing that Term SOFR for a 1-month period is no longer, or as of a specified future date will no longer be, representative and Agent
has provided Borrower Representative with notice of the same, any outstanding affected SOFR Loans will be deemed to have been converted
to Base Rate Loan at the end of the applicable Interest Period.
(iv) In
connection with Term SOFR, Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the
contrary herein or in any other Financing Document, any amendments implementing such Conforming Changes will become effective without
any further action or consent of any other party to this Agreement or any other Financing Document. Agent will promptly notify Borrower
Representative and the Lenders of the effectiveness of any Conforming Changes.
(b) Unused
Line Fee. From and following the earlier of (x) the date forty-five (45) days after the Closing Date and (y) the date of
the initial borrowing of the Revolving Loans, Borrowers shall pay Agent, for the benefit of all Lenders committed to make Revolving Loans,
in accordance with their respective Pro Rata Shares, a fee in an amount equal to (1) if the average daily balance of the sum of
the Revolving Loan Outstandings during the preceding month is greater than or equal to the Minimum Balance: (i) (A) the average
daily amount of the Revolving Loan Limit during the preceding month minus (B) the average daily balance of the sum of the
Revolving Loan Outstandings during the preceding month, multiplied by (ii) one half of one percent (0.50%) per annum or (2) if
the Minimum Balance is greater than the average daily balance of the sum of the Revolving Loan Outstandings during the preceding month:
(i) (A) the average daily amount of the Revolving Loan Limit during the preceding month minus (B) the Minimum Balance,
multiplied by (ii) one half of one percent (0.50%) per annum. The unused line fee shall be paid monthly in arrears
on the first day of each month and shall be deemed fully earned when due and payable and, once paid, shall be non-refundable.
(c) Fee
Letter. In addition to the other fees set forth herein, the Borrowers agree to pay Agent or Term Loan Servicer, as applicable, the
fees set forth in the Fee Letter.
(d) Minimum
Balance Fee. On the first day of each month, commencing on the earlier of (x) the date forty-five (45) days after the Closing
Date and (y) the date of the initial borrowing of the Revolving Loans, the Borrowers agree to pay to Agent, for the ratable benefit
of all Revolving Loan Lenders, the sum of the Minimum Balance Fee due for the prior month. The Minimum Balance Fee shall be deemed fully
earned when due and payable and, once paid, shall be non-refundable.
(e) Collateral
Management Fee. From and following the earlier of (x) the date forty-five (45) days after the Closing Date and (y) the
date of the initial borrowing of the Revolving Loans, Borrowers shall pay Agent, for its own account and not for the benefit of any other
Lenders, a fee in an amount equal to the product obtained by multiplying (i) the greater of (A) the average end-of-day
principal balance of Revolving Loans outstanding during the immediately preceding month and (B) the Minimum Balance, by (ii) three
fifths of one percent (0.60%) per annum. For purposes of calculating the average end-of-day principal balance of Revolving Loans, all
funds paid into the Revolving Loan Payment Account (or which were required to be paid into the Revolving Loan Payment Account hereunder)
or otherwise received by Agent for the account of Borrowers shall be subject to a two (2) Business Day clearance period. The collateral
management fee shall be payable monthly in arrears on the first day of each calendar month and shall be deemed fully earned when due
and payable and, once paid, shall be non-refundable.
(f) [Reserved].
(g) [Reserved].
(h) Deferred
Revolving Loan Origination Fee. If Lenders’ funding obligations in respect of the Revolving Loan Commitment under this Agreement
terminate or are permanently reduced for any reason (whether by voluntary termination by Borrowers, by reason of the occurrence of an
Event of Default or the automatic termination of the Revolving Loan Commitments (including any automatic termination due to the occurrence
of an Event of Default described in Section 10.1(f)) or otherwise) prior to the Maturity Date, Borrowers shall pay to Agent on the
date of such reduction, for the benefit of all Lenders committed to make Revolving Loans on the Closing Date, a fee as compensation for
the costs of such Lenders being prepared to make funds available to Borrowers under this Agreement, equal to an amount determined by
multiplying the amount of the Revolving Loan Commitment so terminated or permanently reduced by the following applicable
percentage amount: (w) three percent (3.00%) for the first year following the Closing Date, (x) two percent (2.00%) for the
second year following the Closing Date, (y) one percent (1.00%) for the third year following the Closing Date, and (z) zero
percent (0.00%) thereafter. All fees payable pursuant to this paragraph shall be deemed fully-earned on of the Closing Date and non-refundable
once paid.
(i) Prepayment
Fee. If any advance under the Term Loan is prepaid at any time, in whole or in part, for any reason (whether by voluntary prepayment
by Borrower, by mandatory prepayment by Borrower, by reason of the occurrence of an Event of Default or otherwise, or if the Term Loan
shall become accelerated (including any automatic acceleration due to the occurrence of an Event of Default described in Section 10.1(f))
or otherwise) and due and payable in full, Borrowers shall pay to Term Loan Servicer, for the benefit of all Term Lenders in accordance
with their Pro Rata Shares, as compensation for the costs of such Lenders making funds available to Borrowers under this Agreement, a
prepayment fee (the “Prepayment Fee”) calculated in accordance with this subsection. The Prepayment Fee in respect
of the Term Loans shall be equal to an amount determined by multiplying the amount being prepaid (or required to be prepaid, if
such amount is greater) by the following applicable percentage amount: (w) three percent (3.00%) for the first year following
the Closing Date, (x) two percent (2.00%) for the second year following the Closing Date, (y) one percent (1.00%) for the third
year following the Closing Date, and (z) zero percent (0.00%) thereafter. The Prepayment Fee shall not apply to or be assessed upon
any prepayment made by Borrowers if such payments were required by Agent to be made pursuant to Section 2.1(a)(ii)(B) subpart
(i) (relating to casualty proceeds), or subpart (iii) (relating to payments exceeding the Maximum Lawful Rate). All fees payable
pursuant to this paragraph shall be deemed fully earned as of the Closing Date and non-refundable once paid.
(j) Audit
Fees. Borrowers shall pay to Agent, for its own account and not for the benefit of any other Lenders, all reasonable and documented,
out-of-pocket fees and expenses in connection with audits and inspections of Borrowers’ books and records, audits, valuations or
appraisals of the Collateral, audits of Borrowers’ compliance with applicable Laws and such other matters as Agent shall deem appropriate,
which shall be due and payable on the first Business Day of the month following the date of issuance by Agent of a written request for
payment thereof to Borrowers, subject to the limitations set forth in Section 4.6 (in the case of audits and field examinations)
and Section 4.14(c) (in the case of valuations or appraisals of the Collateral).
(k) Wire
Fees. Borrowers shall pay to Agent or Term Loan Servicer, for its own account and not for the account of any other Lenders, on written
demand, fees for incoming and outgoing wires made for the account of Borrowers, such fees to be based on Agent’s or Term Loan Servicer’s,
as applicable, then current wire fee schedule (available upon written request of the Borrowers).
(l) Late
Charges. If payments of principal (other than a final installment of principal upon the Termination Date), interest due on the Obligations,
or any other amounts due hereunder or under the other Financing Documents are not timely made and remain overdue for a period of five
(5) days, Borrowers, without notice or demand by Agent, promptly shall pay to Agent, for its own account and not for the benefit
of any other Lenders, as additional compensation to Agent in administering the Obligations, an amount equal to two percent (2.0%) of
each delinquent payment.
(m) Computation
of Interest and Related Fees. All interest and fees under each Financing Document shall be calculated on the basis of a 360-day year
for the actual number of days elapsed. The date of funding of a Loan shall be included in the calculation of interest. The date of payment
of a Loan shall be excluded from the calculation of interest. If a Loan is repaid on the same day that it is made, one (1) day’s
interest shall be charged.
(n) Automated
Clearing House Payments. If Agent or Term Loan Servicer (or their respective designated servicers or trustees on behalf of a securitization
vehicle) so elects, monthly payments of principal, interest, fees, expenses or any other amounts due and owing from Borrower to Agent
or Term Loan Servicer hereunder shall be paid to Agent or Term Loan Servicer, as applicable, by Automated Clearing House debit of immediately
available funds from the financial institution account designated by Borrower Representative in the Automated Clearing House debit authorization
executed by Borrowers or Borrower Representative in connection with this Agreement, and shall be effective upon receipt. Borrowers shall
execute any and all forms and documentation necessary from time to time to effectuate such automatic debiting. In no event shall any
such payments be refunded to Borrowers.
(o) Benchmark
Replacement Setting; Conforming Changes.
(i) Upon
the occurrence of a Benchmark Transition Event, Agent and Borrowers may amend this Agreement to replace the then-current Benchmark with
a Benchmark Replacement. Any such amendment will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business
Day after Agent has posted such proposed amendment to all Lenders and Borrower so long as Agent has not received, by such time, written
notice of objection thereto from Lenders comprising the Required Lenders. No such replacement will occur prior to the applicable Benchmark
Transition Start Date. In connection with the implementation of a Benchmark Replacement, Agent will have the right to make Conforming
Changes from time to time and, notwithstanding anything to the contrary herein or in any other Financing Document, any amendments implementing
such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other
Financing Document. Agent will promptly notify Borrower Representative and the Lenders of the implementation of any Benchmark Replacement
and the effectiveness of any Conforming Changes.
(ii) Any
determination, decision or election that may be made by Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section will
be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party
to this Agreement or any other Financing Document, except, in each case, as expressly required pursuant to this Section. Notwithstanding
anything to the contrary herein or in any other Financing Document, at any time, (a) if the then-current Benchmark is a term rate
(including Term SOFR) and either (i) any tenor for such Benchmark is not displayed on a screen or other information service that
publishes such rate from time to time as selected by Agent in its reasonable discretion or (ii) the regulatory supervisor for the
administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark
is or will be no longer representative, then Agent may modify the definition of “Interest Period” (or any similar or analogous
definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor, and (b) if
a tenor that was removed pursuant to clause (a) above either (i) is subsequently displayed on a screen or information service
for a Benchmark or (ii) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a
Benchmark, then Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark
settings at or after such time to reinstate such previously removed tenor. Agent will promptly notify Borrower Representative of the
removal or reinstatement of any tenor of a Benchmark pursuant to this Section.
(p) Upon
Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period, any outstanding affected
Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period.
Section 2.3 Notes.
The portion of the Loans made by each Lender shall be evidenced, if so requested by such Lender, by one or more promissory notes executed
by Borrowers on a joint and several basis (each, a “Note”) in an original principal amount equal to such Lender’s
Revolving Loan Commitment Amount or Term Loan Commitments.
Section 2.4 Reserved.
Section 2.5 Reserved.
Section 2.6 General
Provisions Regarding Payment; Loan Accounts.
(a) All
payments to be made by each Credit Party under any Financing Document, including payments of principal and interest made hereunder and
pursuant to any other Financing Document, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment
or counterclaim. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the then applicable
rate during such extension (it being understood and agreed that, solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in full, on any such extended due date, such payment shall
be deemed to have been paid on the original due date without giving effect to any extension thereto). Any payments received in a Payment
Account before 12:00 Noon (Eastern time) on any date shall be deemed received by Agent or Term Loan Servicer, as applicable, on
such date, and any payments received in the applicable Payment Account at or after 12:00 Noon (Eastern time) on any date shall be
deemed received by Agent or Term Loan Servicer, as applicable, on the next succeeding Business Day.
(b) Agent
shall maintain a revolving loan account (the “Revolving Loan Account”) on its books to record Revolving Loans and
other extensions of credit made by the Revolving Lenders hereunder or under any other Financing Document, and all payments thereon made
by each Borrower. All entries in the Revolving Loan Account shall be made in accordance with Agent’s customary accounting practices
as in effect from time to time. The balance in the Revolving Loan Account, as recorded in Agent’s books and records at any time
shall be conclusive and binding evidence of the amounts due and owing to Agent by each Borrower absent manifest error; provided,
however, that any failure to so record or any error in so recording shall not limit or otherwise affect any Borrower’s duty
to pay all amounts owing hereunder or under any other Financing Document. Agent shall endeavor to provide Borrowers with a monthly statement
regarding the Revolving Loan Account (but none of Agent or any Lender shall have any liability if Agent shall fail to provide any such
statement). Unless any Borrower notifies Agent of any objection to any such statement (specifically describing the basis for such objection)
within ninety (90) days after the date of receipt thereof, it shall be deemed final, binding and conclusive upon Borrowers in all respects
as to all matters reflected therein.
(c) Term
Loan Servicer shall maintain a term loan account (the “Term Loan Account”) on its books to record Term Loans and other
extensions of credit made by the Term Lenders hereunder or under any other Financing Document, and all payments thereon made by each
Borrower. All entries in the Term Loan Account shall be made in accordance with Term Loan Servicer’s customary accounting practices
as in effect from time to time. The balance in the Term Loan Account, as recorded in Term Loan Servicer’s books and records at
any time shall be conclusive and binding evidence of the amounts due and owing to Term Loan Servicer by each Borrower absent manifest
error; provided, however, that any failure to so record or any error in so recording shall not limit or otherwise affect
any Borrower’s duty to pay all amounts owing hereunder or under any other Financing Document. Term Loan Servicer shall endeavor
to provide Borrowers with a monthly statement regarding the Term Loan Account (but none of Term Loan Servicer or any Lender shall have
any liability if Term Loan Servicer shall fail to provide any such statement). Unless any Borrower notifies Term Loan Servicer of any
objection to any such statement (specifically describing the basis for such objection) within ninety (90) days after the date of receipt
thereof, it shall be deemed final, binding and conclusive upon Borrowers in all respects as to all matters reflected therein.
Section 2.7 Maximum
Interest. In no event shall the interest charged with respect to the Loans or any other Obligations of any Borrower under any Financing
Document exceed the maximum amount permitted under the laws of the State of New York or of any other applicable jurisdiction. Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate of interest payable hereunder or under any Note or other Financing
Document (the “Stated Rate”) would exceed the highest rate of interest permitted under any applicable law to be charged
(the “Maximum Lawful Rate”), then for so long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the Stated Rate is
less than the Maximum Lawful Rate, each Borrower shall, to the extent permitted by law, continue to pay interest at the Maximum Lawful
Rate until such time as the total interest received is equal to the total interest which would have been received had the Stated Rate
been (but for the operation of this provision) the interest rate payable. Thereafter, the interest rate payable shall be the Stated Rate
unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event this provision shall again apply. In no event
shall the total interest received by any Lender exceed the amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence, any Lender has received interest hereunder
in excess of the Maximum Lawful Rate, such excess amount shall be applied to the reduction of the principal balance of the Loans or to
other amounts (other than interest) payable hereunder, and if no such principal or other amounts are then outstanding, such excess or
part thereof remaining shall be paid to Borrowers. In computing interest payable with reference to the Maximum Lawful Rate applicable
to any Lender, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days
in the year in which such calculation is made.
Section 2.8 Taxes;
Capital Adequacy.
(a) All
payments of principal and interest on the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction
for any present or future Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion
of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then
the applicable Withholding Agent 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 any such withholding or deduction is in respect
of an Indemnified Tax, then the Credit Parties shall pay such additional amount or amounts as is necessary to ensure that the net amount
actually received by Agent, Term Loan Servicer and each Lender will equal the full amount such recipient would have received had no such
withholding or deduction been required (including, without limitation, such withholdings and deductions applicable to additional sums
payable under this Section 2.8). After payment of any Tax by a Credit Party to a Governmental Authority pursuant to this Section 2.8,
such Credit Party shall promptly forward to Agent and Term Loan Servicer the original or a certified copy of an official receipt, a copy
of the return reporting such payment, or other documentation satisfactory to Agent and Term Loan Servicer evidencing such payment to
such authority. Credit Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option
of Agent or Term Loan Servicer, as applicable, timely reimburse Agent or Term Loan Servicer, as applicable for the payment of, any Other
Taxes.
(b) The
Credit Parties shall indemnify Agent, Term Loan Servicer and Lenders, within ten (10) days after demand thereof, for the full amount
of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.8)
payable or paid by Agent, Term Loan Servicer or any Lender or required to be withheld or deducted from a payment to Agent, Term Loan
Servicer or any Lender and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes and Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate in reasonable detail as to the amount
of such payment or liability delivered to Borrowers by a Lender (with a copy to Agent and Term Loan Servicer), or by Agent or Term Loan
Servicer, as applicable, on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(c) Any
Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Financing Document
shall deliver to Borrower Representative, Agent and Term Loan Servicer, at the time or times prescribed by applicable Law or reasonably
requested by Borrower Representative, Agent or Term Loan Servicer, such properly completed and executed documentation reasonably requested
by Borrower Representative, Agent or Term Loan Servicer as will permit such payments to be made without withholding or at a reduced rate
of withholding. In addition, any Lender, if reasonably requested by Borrower Representative, Agent or Term Loan Servicer, shall deliver
such other documentation prescribed by applicable Law or reasonably requested by Borrowers, Agent or Term Loan Servicer as will enable
Borrowers, Agent or Term Loan Servicer, as applicable, to determine whether or not such 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 2.8(c)(i), 2.8(c)(ii) and 2.8(e) below) shall
not be required if in such Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any
material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(i) Each
Lender that is not a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal
income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after
the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) (each such Lender a “Foreign
Lender”) shall, to the extent permitted by Law, execute and deliver to Borrower Representative, Agent and Term Loan Servicer
(in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative, Agent or Term Loan
Servicer) whichever of the following is applicable: (A) in the case of a 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 Financing Document, two (2) properly
completed and executed originals of United States Internal Revenue Service (“IRS”) Forms W-8BEN or W-8BEN-E (or successor
form) 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 Financing Documents, two (2) properly completed
and executed originals of IRS Forms W-8BEN or W-8BEN-E (or successor form) 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; (B) two
(2) executed originals of IRS Form W-8ECI (or successor form); (C) in the case of a 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 E-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, a “10 percent shareholder” of any 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) two (2) executed originals of IRS Forms W-8BEN or W-8BEN-E (or successor form); (D) to
the extent a Foreign Lender is not the beneficial owner, two (2) executed originals of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN or W-8BEN-E (or successor form), a U.S. Tax Compliance Certificate substantially in the form
of Exhibit E-2 or Exhibit E-3, IRS Form W-9 (or successor form), 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 such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance
Certificate substantially in the form of Exhibit E-4 on behalf of each such direct and indirect partner; or (E) other
applicable forms, certificates or documents prescribed by the IRS. Each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower
Representative, Agent and Term Loan Servicer in writing of its legal inability to do so. In addition, to the extent permitted by applicable
Law, such forms shall be delivered by each Foreign Lender upon the obsolescence or invalidity of any form previously delivered by such
Foreign Lender. Each Foreign Lender shall promptly notify Borrower Representative at any time it determines that it is no longer in a
position to provide any previously delivered certificate to Borrower Representative (or any other form of certification adopted by the
U.S. taxing authorities for such purpose).
(ii) Each
Lender that is a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal
income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after
the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) shall, to the extent permitted
by Law, provide to Borrower Representative, Agent and Term Loan Servicer on or prior to the date on which such Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative, Term Loan Servicer
or Agent), a properly completed and executed IRS Form W-9 or any successor form certifying as to such Lender’s entitlement
to an exemption from U.S. backup withholding and other applicable forms, certificates or documents prescribed by the IRS or reasonably
requested by Borrower Representative, Term Loan Servicer or Agent. Each such Lender shall promptly notify Borrowers at any time it determines
that any certificate previously delivered to Borrower Representative (or any other form of certification adopted by the U.S. governmental
authorities for such purposes) is no longer valid.
(iii) Any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower Representative, Agent and Term Loan Servicer
(in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative, Term Loan Servicer
or Agent), 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
Borrowers, Agent or Term Loan Servicer to determine the withholding or deduction required to be made.
(d) If
any Lender determines, in its reasonable discretion, that it has received a refund in respect of any Taxes as to which it has been indemnified
by any Borrower pursuant to this Section 2.8 (including by the payment of additional amounts pursuant to this Section 2.8),
then it shall promptly pay an amount equal to such refund to Borrowers, net of all reasonable out-of-pocket expenses of such Lender or
of Agent or Term Loan Servicer with respect thereto, including any Taxes; provided, however, that Borrowers, upon the written
request of such Lender, Agent or Term Loan Servicer, agree to repay any amount paid over to Borrowers to such Lender or to Agent or Term
Loan Servicer (plus any related penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such
Lender, Agent or Term Loan Servicer is required, for any reason, to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this Section 2.8, in no event will the indemnified party be required to pay any amount to an indemnifying
party pursuant to this Section 2.8(d) the payment of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been
deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been
paid. This Section 2.8 shall not be construed to require any indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(e) If
a payment made to a Lender under any Financing Document would be subject to U.S. federal withholding tax imposed by FATCA if such 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), such Lender shall deliver to Borrower Representative, Agent and Term Loan Servicer at the time
or times prescribed by Law and at such time or times reasonably requested by Borrower Representative, Agent or Term Loan Servicer 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 Borrower Representative, Agent or Term Loan Servicer as may be necessary for Borrowers, Agent and
Term Loan Servicer to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e),
“FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) Each
Lender shall severally indemnify Agent and Term Loan Servicer, within ten (10) days after demand therefor, for (i) any Indemnified
Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified Agent or Term Loan Servicer,
as applicable, for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable
to such Lender’s failure to comply with the provisions of Section 11.17 relating to the maintenance of a Participant Register
and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent or Term Loan Servicer
in connection with any Financing Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by Agent or Term Loan Servicer, as appliable, shall be conclusive absent manifest error. Each Lender
hereby authorizes Agent and Term Loan Servicer to set off and apply any and all amounts at any time owing to such Lender under any Financing
Document or otherwise payable by Agent or Term Loan Servicer, as applicable, to such Lender from any other source against any amount
due to Agent or Term Loan Servicer, as applicable, under this paragraph (f).
(g) If
any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable Law regarding capital adequacy,
in each instance, after the Closing Date, or any change after the Closing Date in the interpretation, administration or application thereof
by any Governmental Authority, central bank or comparable agency charged with the interpretation, administration or application thereof,
or the compliance by any Lender or any Person controlling such Lender with any request, guideline or directive regarding capital adequacy
(whether or not having the force of Law) of any such Governmental Authority, central bank or comparable agency adopted or otherwise taking
effect after the Closing Date, has or would have the effect of reducing the rate of return on such Lender’s or such controlling
Person’s capital as a consequence of such Lender’s obligations hereunder to a level below that which such Lender or such
controlling Person could have achieved but for such adoption, taking effect, change, interpretation, administration, application or compliance
(taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) then from
time to time, upon demand by such Lender (which demand shall be accompanied by a certificate setting forth the basis for such demand
and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to Agent and Term Loan Servicer), Borrowers
shall promptly pay to such Lender such additional amount as will compensate such Lender or such controlling Person for such reduction,
so long as such amounts have accrued on or after the day which is two hundred seventy (270) days prior to the date on which such Lender
first made demand therefor; provided that notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith
and (ii) 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 applicable Law”, regardless of the date enacted, adopted
or issued.
(h) If
any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable 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 or participated in by, any Lender, (ii) subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, or any SOFR Loan made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Taxes covered by Section 2.8); or (iii) impose on any Lender any other condition, cost or expense
affecting this Agreement or SOFR Loans made by such Lender, and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan the interest on which is determined by reference to Term SOFR (or of maintaining its obligation
to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrowers will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(i) If
any Lender requests compensation under any of the clauses in this Section 2.8, or requires Borrowers to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, then, upon the written request
of Borrower Representative, such Lender shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder (subject to the provisions of Section 11.17) to another of its
offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate
or materially reduce amounts payable pursuant to any such Section, as the case may be, in the future, (ii) would not subject such
Lender to any unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to such Lender (as determined in its
sole good faith discretion). Without limitation of the provisions of Section 13.14, each Borrower hereby agrees to pay all reasonable
and documented, out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.
(j) Subject
to Section 2.2(o), if Agent determines (which determination shall be conclusive and binding absent manifest error) that Term SOFR
cannot be determined pursuant to the definition thereof on or prior to the first day of any Interest Period, Agent will promptly so notify
the Borrowers and each Lender. Upon notice thereof by Agent to Borrowers, any obligation of the Lenders to make SOFR Loans shall be suspended
until Agent revokes such notice. Upon receipt of such notice, any outstanding affected SOFR Loans will be deemed to have been converted
into Base Rate Loans at the end of the applicable Interest Period. Upon any such conversion, Borrower shall also pay any additional amounts
required pursuant to this Agreement.
(k) If
any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable lending office to make, maintain or fund SOFR Loans, or to determine or charge interest rates based upon Term
SOFR, then, upon notice thereof by such Lender to Borrowers (through Agent), any obligation of such Lender to make SOFR Loans shall be
suspended, in each case until such Lender notifies Agent and Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, all SOFR Loans shall become Base Rate Loans. Upon any such conversion, Borrower shall also pay any
additional amounts required pursuant to this Agreement.
(l) Each
party’s obligations under this Section 2.8 shall survive the resignation or replacement of Agent or Term Loan Servicer or
any assignment of rights by, or the replacement of, a Lender and the repayment, satisfaction or discharge of all Obligations hereunder.
Section 2.9 Appointment
of Borrower Representative.
(a) Each
Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent and attorney-in-fact to request and receive
Loans in the name or on behalf of such Borrower and any other Borrowers, deliver Notices of Borrowing and Borrowing Base Certificates
give instructions with respect to the disbursement of the proceeds of the Loans , giving and receiving all other notices and consents
hereunder or under any of the other Financing Documents and taking all other actions (including in respect of compliance with covenants)
in the name or on behalf of any Borrower or Borrowers pursuant to this Agreement and the other Financing Documents. Agent, Term Loan
Servicer and Lenders may disburse the Loans to such bank account of Borrower Representative or a Borrower or otherwise make such Loans
to a Borrower, in each case as Borrower Representative may designate or direct, without notice to any other Borrower. Notwithstanding
anything to the contrary contained herein, Agent or Term Loan Servicer, as applicable, may at any time and from time to time require
that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.
(b) Borrower
Representative hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 2.9.
Borrower Representative shall ensure that the disbursement of any Loans that are at any time requested by or to be remitted to or for
the account of a Borrower, shall be remitted or issued to or for the account of such Borrower.
(c) Each
Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent to receive statements on account and all other
notices from Agent, Term Loan Servicer and the Lenders with respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Documents.
(d) Any
notice, election, representation, warranty, agreement or undertaking made or delivered by or on behalf of any Borrower by Borrower Representative
shall be deemed for all purposes to have been made or delivered by such Borrower, as the case may be, and shall be binding upon and enforceable
against such Borrower to the same extent as if made or delivered directly by such Borrower.
(e) No
resignation by or termination of the appointment of Borrower Representative as agent and attorney-in-fact as aforesaid shall be effective,
except after ten (10) Business Days’ prior written notice to Agent and Term Loan Servicer. If the Borrower Representative
resigns under this Agreement, Borrowers shall be entitled to appoint a successor Borrower Representative (which shall be a Borrower and
shall be reasonably acceptable to Agent and Term Loan Servicer as such successor). Upon the acceptance of its appointment as successor
Borrower Representative hereunder, such successor Borrower Representative shall succeed to all the rights, powers and duties of the retiring
Borrower Representative and the term “Borrower Representative” means such successor Borrower Representative for all purposes
of this Agreement and the other Financing Documents, and the retiring or terminated Borrower Representative’s appointment, powers
and duties as Borrower Representative shall be thereupon terminated.
Section 2.10 Joint
and Several Liability; Rights of Contribution; Subordination and Subrogation.
(a) Borrowers
are defined collectively to include all Persons named as one of the Borrowers herein; provided, however, that any references herein
to “any Borrower”, “each Borrower” or similar references, shall be construed as a reference to each individual
Person named as one of the Borrowers herein. Each Person so named shall be jointly and severally liable for all of the obligations of
Borrowers under this Agreement. Each Borrower, individually, expressly understands, agrees and acknowledges, that the credit facilities
would not be made available on the terms herein in the absence of the collective credit of all of the Persons named as the Borrowers
herein, the joint and several liability of all such Persons, and the cross-collateralization of the collateral of all such Persons. Accordingly,
each Borrower individually acknowledges that the benefit to each of the Persons named as one of the Borrowers as a whole constitutes
reasonably equivalent value, regardless of the amount of the credit facilities actually borrowed by, advanced to, or the amount of collateral
provided by, any individual Borrower. In addition, each entity named as one of the Borrowers herein hereby acknowledges and agrees that
all of the representations, warranties, covenants, obligations, conditions, agreements and other terms contained in this Agreement shall
be applicable to and shall be binding upon and measured and enforceable individually against each Person named as one of the Borrowers
herein as well as all such Persons when taken together. By way of illustration, but without limiting the generality of the foregoing,
the terms of Section 10.1 of this Agreement are to be applied to each individual Person named as one of the Borrowers herein (as
well as to all such Persons taken as a whole), such that the occurrence of any of the events described in Section 10.1 of this Agreement
as to any Person named as one of the Borrowers herein shall constitute an Event of Default even if such event has not occurred as to
any other Persons named as the Borrowers or as to all such Persons taken as a whole.
(b) Notwithstanding
any provisions of this Agreement to the contrary, it is intended that the joint and several nature of the liability of each Borrower
for the Obligations and the Liens granted by Borrowers to secure the Obligations, not constitute a Fraudulent Conveyance (as defined
below). Consequently, Agent, Term Loan Servicer, Lenders and each Borrower agree that if the liability of a Borrower for the Obligations,
or any Liens granted by such Borrower securing the Obligations would, but for the application of this sentence, constitute a Fraudulent
Conveyance, the liability of such Borrower and the Liens securing such liability shall be valid and enforceable only to the maximum extent
that would not cause such liability or such Lien to constitute a Fraudulent Conveyance, and the liability of such Borrower and this Agreement
shall automatically be deemed to have been amended accordingly. For purposes hereof, the term “Fraudulent Conveyance”
means a fraudulent conveyance under Section 548 of Chapter 11 of Title II of the Bankruptcy Code or a fraudulent conveyance
or fraudulent transfer under the applicable provisions of any fraudulent conveyance or fraudulent transfer law or similar law of any
state, nation or other governmental unit, as in effect from time to time.
(c) Agent
is hereby authorized, without notice or demand (except as otherwise specifically required under this Agreement) and without affecting
the liability of any Borrower hereunder, at any time and from time to time, to (i) renew, extend or otherwise increase the time
for payment of the Obligations; (ii) with the written agreement of any Borrower, change the terms relating to the Obligations or
otherwise modify, amend or change the terms of any Note or other agreement, document or instrument now or hereafter executed by any Borrower
and delivered to Agent for any Lender; (iii) accept partial payments of the Obligations; (iv) take and hold any Collateral
for the payment of the Obligations or for the payment of any guaranties of the Obligations and exchange, enforce, waive and release any
such Collateral; (v) apply any such Collateral and direct the order or manner of sale thereof as Agent, in its reasonable discretion,
may determine; and (vi) settle, release, compromise, collect or otherwise liquidate the Obligations and any Collateral therefor
in any manner, all guarantor and surety defenses being hereby waived by each Borrower. Except as specifically provided in this Agreement
or any of the other Financing Documents, Agent shall have the exclusive right to determine the time and manner of application of any
payments or credits, whether received from any Borrower or any other source, and such determination shall be binding on all Borrowers.
All such payments and credits may be applied, reversed and reapplied, in whole or in part, to any of the Obligations that Agent shall
determine, in its reasonable discretion, without affecting the validity or enforceability of the Obligations of any other Borrower.
(d) Each
Borrower hereby agrees that, except as hereinafter provided, its obligations hereunder shall be unconditional, irrespective of (i) the
absence of any attempt to collect the Obligations from any obligor or other action to enforce the same; (ii) the waiver or consent
by Agent with respect to any provision of any instrument evidencing the Obligations, or any part thereof, or any other agreement heretofore,
now or hereafter executed by a Borrower and delivered to Agent; (iii) failure by Agent to take any steps to perfect and maintain
its security interest in, or to preserve its rights to, any security or collateral for the Obligations; (iv) the institution of
any proceeding under the Bankruptcy Code, or any similar proceeding, by or against a Borrower or Agent’s election in any such proceeding
of the application of Section 1111(b)(2) of the Bankruptcy Code; (v) any borrowing or grant of a security interest by
a Borrower as debtor-in-possession, under Section 364 of the Bankruptcy Code; (vi) the disallowance, under Section 502
of the Bankruptcy Code, of all or any portion of Agent’s claim(s) for repayment of any of the Obligations; or (vii) any
other circumstance other than payment in full of the Obligations which might otherwise constitute a legal or equitable discharge or defense
of a guarantor or surety.
(e) Borrowers
hereby agree, as between themselves, that to the extent that Agent or Term Loan Servicer, on behalf of Lenders, shall have received from
any Borrower any Recovery Amount (as defined below), then the paying Borrower shall have a right of contribution against each other Borrower
in an amount equal to such other Borrower’s contributive share of such Recovery Amount; provided, however, that in the event
any Borrower suffers a Deficiency Amount (as defined below), then the Borrower suffering the Deficiency Amount shall be entitled to seek
and receive contribution from and against the other Borrowers in an amount equal to the Deficiency Amount; and provided, further,
that in no event shall the aggregate amounts so reimbursed by reason of the contribution of any Borrower equal or exceed an amount that
would, if paid, constitute or result in Fraudulent Conveyance. Until all Obligations have been paid and satisfied in full (other than
inchoate indemnification obligations for which no claim has yet been made), no payment made by or for the account of a Borrower including,
without limitation, (i) a payment made by such Borrower on behalf of the liabilities of any other Borrower, or (ii) a payment
made by any other Guarantor under any Guarantee, shall entitle such Borrower, by subrogation or otherwise, to any payment from such other
Borrower or from or out of such other Borrower’s property. The right of each Borrower to receive any contribution under this Section 2.10(e) or
by subrogation or otherwise from any other Borrower shall be subordinate in right of payment to the Obligations and such Borrower shall
not exercise any right or remedy against such other Borrower or any property of such other Borrower by reason of any performance of such
Borrower of its joint and several obligations hereunder, until the Obligations (other than inchoate indemnification obligations for which
no claim has yet been made) have been indefeasibly paid and satisfied in full, and no Borrower shall exercise any right or remedy with
respect to this Section 2.10(e) until the Obligations (other than inchoate indemnification obligations for which no claim has
yet been made) have been indefeasibly paid and satisfied in full. As used in this Section 2.10(e), the term “Recovery Amount”
means the amount of proceeds received by or credited to Agent or Term Loan Servicer from the exercise of any remedy of the Lenders under
this Agreement or the other Financing Documents, including, without limitation, the sale of any Collateral. As used in this Section 2.10(e),
the term “Deficiency Amount” means any amount that is less than the entire amount a Borrower is entitled to receive
by way of contribution or subrogation from, but that has not been paid by, the other Borrowers in respect of any Recovery Amount attributable
to the Borrower entitled to contribution, until the Deficiency Amount has been reduced to Zero Dollars ($0) through contributions and
reimbursements made under the terms of this Section 2.10(e) or otherwise.
Section 2.11 Collections
and Collections Account.
(a) By
the earlier of (x) the date that is five (5) Business Days prior to the date of the initial borrowing of the Revolving Loans
and (y) the expiration of the post-closing period specified in paragraph 1 of Schedule 7.4 (the “Collections Account Activation
Date”), Borrowers shall (i) maintain a lockbox (the “Lockbox”) and one or more Collections Accounts
with a United States depository institution reasonably acceptable to Agent (the “Collections Account Bank”), subject
to the provisions of this Agreement, and shall execute with the Collections Account Bank a Deposit Account Control Agreement and such
other agreements related to such Collections Accounts as Agent may require and (ii) ensure that all collections of Accounts (other
than Accounts for which the Account Debtor is a Governmental Account Debtor) are paid directly from Account Debtors directly into the
Lockbox for deposit into a Collections Account and/or directly into a Collections Account; provided, however, that unless Agent
shall otherwise direct by written notice to Borrowers, Borrowers shall be permitted to cause Account Debtors who are individuals to pay
Accounts directly to Borrowers, which Borrowers shall then administer and apply in the manner required below. At all times following
the Collections Account Activation Date, all funds deposited into a Collections Account shall be transferred into the Revolving Loan
Payment Account by the close of each Business Day.
(b) If
any of the Account Debtors are Governmental Account Debtors, at all times following the Collections Account Activation Date, Borrowers
shall establish and maintain additional lockboxes (also herein referred to collectively in the singular as the “Lockbox”)
and related Collections Accounts with the Collection Bank (such Collections Accounts, “Governmental Account Debtor Collections
Accounts”), subject to the provisions of this Agreement, and shall execute with the Collections Bank a Deposit Account Restriction
Agreement and such other agreements related to such Lockbox and Governmental Account Debtor Collections Account as Agent may require.
A separate Lockbox shall be established for each Borrower that is a licensed provider under the Medicaid or Medicare programs, if applicable.
At all times following the Collections Account Activation Date, Borrowers shall ensure that all collections of Accounts due from Governmental
Account Debtors are paid directly from such Account Debtors into the applicable Lockbox and/or Governmental Account Debtor Collections
Account established pursuant to this subsection for deposit into the Governmental Account Debtor Collections Account established pursuant
to this subsection. All funds deposited into a Governmental Account Debtor Collection Account that is subject (or required to be subject)
to a Deposit Account Restriction Agreement shall be transferred into either (at Agent’s option) (i) the Revolving Loan Payment
Account by the close of each Business Day, or (ii) the Collections Account established pursuant to Section 2.11(a), which such
transfer shall be made via an automatic immediate intrabank transfer, and then transferred to the Revolving Loan Payment Account by the
close of each Business Day.
(c) [Reserved.]
(d) Notwithstanding
anything in any lockbox agreement, account agreement or Deposit Account Control Agreement to the contrary, Borrowers agree that they
shall be liable for any fees and charges in effect from time to time and charged by the Collections Account Bank in connection with the
Lockbox or a Collections Account, and that Agent shall have no liability therefor. Borrowers hereby indemnify and agree to hold Agent
harmless from any and all liabilities, claims, losses and demands whatsoever, including reasonable attorneys’ fees and expenses,
arising from or relating to actions of Agent or the Collections Account Bank pursuant to this Section 2.11 or any lockbox agreement,
account agreement or Deposit Account Control Agreement or similar agreement, except to the extent of such losses arising solely from
Agent’s gross negligence or willful misconduct.
(e) Agent
shall apply, on a daily basis, all funds transferred into the Revolving Loan Payment Account pursuant to this Section 2.11 to
reduce the outstanding Revolving Loans in such order of application as Agent shall elect. If as the result of collections of Accounts
pursuant to the terms and conditions of this Section, a credit balance exists with respect to the Revolving Loan Account, such credit
balance shall not accrue interest in favor of Borrowers, but Agent shall transfer such funds into an account designated by Borrower Representative
for so long as no Event of Default exists.
(f) At
all times following the Collections Account Activation Date, to the extent that any collections of Accounts or proceeds of other Collateral
are not sent directly to the Lockbox or a Collections Account but are received by any Borrower,
such collections shall be held in trust for the benefit of Agent pursuant to an express trust created hereby and immediately remitted,
in the form received, to the Lockbox or a Collections Account. No such funds received by any Borrower shall be commingled with other
funds of the Credit Parties.
(g) Borrowers
acknowledge and agree that compliance with the terms of this Section is essential, and that Agent and Lenders will suffer immediate
and irreparable injury and have no adequate remedy at law, if, at any time following the initial borrowing of Revolving Loans, any Borrower,
through acts or omissions, causes or permits Account Debtors to send payments other than to the Lockbox or a Collections Account or if
any Borrower fails to promptly deposit collections of Accounts or proceeds of other Collateral in a Collections Account as herein required.
Accordingly, in addition to all other rights and remedies of Agent and Lenders hereunder, Agent shall have the right to seek specific
performance of the Borrowers’ obligations under this Section, and any other equitable relief as Agent may deem necessary or appropriate,
and Borrowers waive any requirement for the posting of a bond in connection with such equitable relief.
(h) Borrowers
shall not, and Borrowers shall not suffer or permit any Credit Party to, (i) withdraw any amounts from the Lockbox or any Collections
Account, (ii) change the procedures or sweep instructions under the agreements governing any Collections Accounts, or (iii) send
to or deposit in any Collections Account any funds other than payments made with respect to and proceeds of Accounts or other Collateral.
(i) The
Credit Parties shall cooperate with Agent in the identification and reconciliation on a daily basis of all amounts received in or required
to be deposited into the Collections Accounts. If more than five percent (5.0%) of the collections of Accounts received by Borrowers
during any given fifteen (15) day period is not identified or reconciled to the reasonable satisfaction of Agent within ten (10) Business
Days of receipt, Agent shall not be obligated to make further advances under this Agreement until such amount is identified or is reconciled
to the reasonable satisfaction of Agent, as the case may be. In addition, if any such amount cannot be identified or reconciled to the
reasonable satisfaction of Agent, Agent may utilize its own staff or, if it deems necessary, engage an outside auditor, in either case
at Borrowers’ expense (which in the case of Agent’s own staff shall be in accordance with Agent’s then prevailing customary
charges (plus expenses)), to make such examination and report as may be necessary to identify and reconcile such amount.
(j) If
any Borrower breaches its obligation to direct payments of the proceeds of the Collateral to the Collections Accounts, Agent, as the
irrevocably made, constituted and appointed true and lawful attorney for Borrowers, may, by the signature or other act of any of Agent’s
authorized representatives (without requiring any of them to do so), direct any Account Debtor to pay proceeds of the Collateral to Borrowers
by directing payment to a Collections Account.
(k) Nothing
in this Section 2.11 shall be deemed to limit any of Agent or Lenders remedies following an Event of Default under this Agreement,
any Deposit Account Control Agreement or any other Financing Document or under applicable Law.
Section 2.12 Termination;
Restriction on Termination.
(a) Termination
by Lenders. In addition to the rights set forth in Section 10.2, Agent may, and at the direction of Required Lenders shall,
terminate this Agreement upon or after the occurrence and during the continuance of an Event of Default upon notice to Borrower Representative.
(b) Termination
by Borrowers. Upon at least ten (10) Business Day’ prior written notice and pursuant to payoff documentation in form and
substance reasonably satisfactory to Agent, Term Loan Servicer and Lenders, Borrowers may, at their option, terminate this Agreement;
provided, however, that no such termination shall be effective until Borrowers have complied with Section 2.12(c) and
the Obligations, including the payment of all fees due and owing under any Fee Letter, are paid in full (other than inchoate indemnification
obligations for which no claim has yet been made). Any notice of termination given by Borrowers shall be irrevocable unless all Lenders
otherwise agree in writing and no Lender shall have any obligation to make any Loans on or after the termination date stated in such
notice; provided that a notice of termination may state that such notice is conditioned upon the consummation of an acquisition
or sale transaction or upon the effectiveness of other credit facilities or the receipt of proceeds from the issuance of other Debt or
any other specified event, in which case such notice may be revoked by the Borrowers by notice to the Agent on or prior to the specified
effective date if such condition is not satisfied. Borrowers may elect to terminate this Agreement in its entirety only. No section of
this Agreement or type of Loan available hereunder may be terminated singly.
(c) Effectiveness
of Termination. All of the Obligations shall be immediately due and payable upon the Termination Date. All undertakings, agreements,
covenants, warranties and representations of the Credit Parties contained in the Financing Documents shall survive any such termination
and Agent shall retain its Liens in the Collateral and Agent, Term Loan Servicer and each Lender shall retain all of its rights and remedies
under the Financing Documents notwithstanding such termination until all Obligations have been discharged or paid, in full, in immediately
available funds, including, without limitation, all Obligations under Section 2.2 and the terms of any Fee Letter resulting from
such termination (in each case, other than inchoate indemnification obligations for which no claim has yet been made). Notwithstanding
the foregoing or the payment in full of the Obligations, Agent shall not be required to terminate its Liens in the Collateral unless,
with respect to any loss or damage Agent may incur as a result of dishonored checks or other items of payment received by Agent from
Credit Parties or any Account Debtor and applied to the Obligations, Agent shall have retained cash Collateral or other Collateral for
such period of time as Agent, in its Permitted Discretion, may deem necessary to protect Agent and each Lender from any such loss or
damage. Upon the payment in full, in cash in immediately available funds, of all Obligations and the termination of the Revolving Loan
Commitments and Term Loan Commitments, as Borrower may reasonably request, Agent shall, at Borrower’s sole cost and expense, execute
and deliver such documents evidencing the release and termination of the security interest in the Collateral granted under this Agreement
and the other Financing Documents pursuant to and in accordance with the terms of any applicable payoff documentation.
Article 3
- REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders
to enter into this Agreement and to make the Loans and other credit accommodations contemplated hereby, each Borrower and each Credit
Party party hereto, hereby represents and warrants to Agent and each Lender that:
Section 3.1 Existence
and Power. Each Credit Party (a) is an entity as specified on Schedule 3.1, (b) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization specified on Schedule 3.1, (c) has
the same legal name as it appears in such Credit Party’s Organizational Documents and an organizational identification number (if
any), in each case as specified on Schedule 3.1, (d) has all powers to own its assets and has powers and all Permits
necessary or desirable in the operation of its business as presently conducted or as proposed to be conducted, except where the failure
to have such powers or Permits could not reasonably be expected to have a Material Adverse Effect, and (e) is qualified to do business
as a foreign entity in each jurisdiction in which it is required to be so qualified, which jurisdictions as of the Closing Date are specified
on Schedule 3.1, except in the case of this clause (e) where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party (x) has had, over the
five (5) year period preceding the Closing Date, any name other than its current name, or (y) was incorporated or organized
under the laws of any jurisdiction other than its current jurisdiction of incorporation or organization.
Section 3.2 Organization
and Governmental Authorization; No Contravention. The execution, delivery and performance by each Credit Party of the Financing Documents
to which it is a party (a) are within its powers, (b) have been duly authorized by all necessary action pursuant to its Organizational
Documents, (c) require no further action by or in respect of, or filing with, any Governmental Authority other than (i) recordings,
filings and other perfection actions in connection with the Liens granted to Agent under this Agreement or any Security Document and
(ii) those obtained or made on or prior to the Closing Date and (d) do not violate, conflict with or cause a breach or a default
under (i) any Law applicable to any Credit Party, (ii) any of the Organizational Documents of any Credit Party, or (iii) any
agreement or instrument binding upon it, except for such violations, conflicts, breaches or defaults as could not, with respect to this
clause (iii), reasonably be expected to have a Material Adverse Effect.
Section 3.3 Binding
Effect. Each of the Financing Documents to which any Credit Party is a party constitutes a valid and binding agreement or instrument
of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by
general equitable principles. Each Financing Document has been duly executed and delivered by each Credit Party party thereto.
Section 3.4 Capitalization.
The issued and outstanding equity securities of each of the Credit Parties (other than OrthoPediatrics Corp.) as of the Closing Date
are as set forth on Schedule 3.4. All issued and outstanding Equity Interest of each of the Credit Parties are duly authorized
and validly issued, fully paid, nonassessable, free and clear of all Liens other than those in favor of Agent for the benefit of Agent
and Lenders, and such equity securities were issued in compliance with all applicable Laws. The identity of the holders of the equity
securities of each of the Credit Parties (other than OrthoPediatrics Corp.) and the percentage of their fully-diluted ownership of the
equity securities of each of the Credit Parties (other than OrthoPediatrics Corp.) as of the Closing Date is set forth on Schedule 3.4.
No shares of the capital stock or other Equity Interests of any Credit Party (other than OrthoPediatrics Corp.), other than those described
above, are issued and outstanding as of the Closing Date. Except as set forth on Schedule 3.4, as of the Closing Date there
are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase
or acquisition from any Credit Party of any equity securities of any such entity.
Section 3.5 Financial
Information. All information delivered to Agent and pertaining to the financial condition of any Credit Party fairly in all material
respects presents the financial position of such Credit Party as of such date and for such period then ended in conformity with GAAP
(and as to unaudited financial statements, subject to normal year-end adjustments and the absence of footnote disclosures). Since December 31,
2022, there has been (a) no material adverse change in the business, operations, properties, prospects or condition (financial or
otherwise) of any Credit Party and (b) no fact, event or circumstance that could reasonably be expected to result in a Material
Adverse Effect.
Section 3.6 Litigation.
Except as set forth on Schedule 3.6 as of the Closing Date, and except as hereafter disclosed to Agent in writing, there
is no Litigation pending against, or to such Borrower’s knowledge threatened in writing against, any Credit Party or any of their
Subsidiaries, which, if adversely determined, could reasonably be expected to result in any judgment or liability of more than One Million
Dollars ($1,000,000). There is no Litigation pending in which an adverse decision could reasonably be expected to have a Material Adverse
Effect or which in any manner draws into question the validity of any of the Financing Documents.
Section 3.7 Ownership
of Property. Each Borrower and each of its Subsidiaries is the lawful sole owner of, has good and marketable title to and is in lawful
possession of, or has valid leasehold interests in, all material properties, accounts and other assets (real or personal, tangible, intangible
or mixed) purported or reported to be owned or leased (as the case may be) by such Person.
Section 3.8 No
Default. No Event of Default, or to such Borrower’s knowledge, Default, has occurred and is continuing. No Credit Party is
in breach or default under or with respect to any contract, agreement, lease or other instrument to which it is a party or by which its
property is bound or affected, which breach or default could reasonably be expected to have a Material Adverse Effect.
Section 3.9 Labor
Matters. As of the Closing Date, there are no strikes or other labor disputes pending or, to any Borrower’s knowledge, threatened
in writing against any Credit Party, which could reasonably be expected to have a Material Adverse Effect. Hours worked and payments
made to the employees of the Credit Parties have not been in material violation of the Fair Labor Standards Act or any other applicable
Law dealing with such matters. All payments due from the Credit Parties, or for which any claim may be made against any of them, on account
of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on their books,
as the case may be. The consummation of the transactions contemplated by the Financing Documents will not give rise to a right of termination
or right of renegotiation on the part of any union under any collective bargaining agreement to which it is a party or by which it is
bound, the result of which could reasonably be expected to have a Material Adverse Effect.
Section 3.10 Investment
Company Act. No Credit Party is an “investment company” or a company “controlled” by an “investment
company” or a “subsidiary” of an “investment company,” all within the meaning of the Investment Company
Act of 1940.
Section 3.11 Margin
Regulations.
(a) The
Credit Parties and their Subsidiaries do not own any stock, partnership interest or other equity securities, except for Permitted Investments.
Without limiting the foregoing, the Credit Parties and their Subsidiaries do not own or hold any Margin Stock.
(b) None
of the proceeds from the Loans have been or will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any Margin Stock or
for any other purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning of Regulation
T, U or X of the Federal Reserve Board.
Section 3.12 Compliance
With Laws; Anti-Terrorism Laws.
(a) Each
Credit Party is in compliance with the requirements of all applicable Laws, (including all applicable Healthcare Laws), except for such
Laws the noncompliance with which could not reasonably be expected to have a Material Adverse Effect.
(b) None
of the Credit Parties and, to the knowledge of the Credit Parties, none of their Affiliates (i) is in violation of any Anti-Terrorism
Law, (ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked Person, or is controlled
by a Blocked Person, (iv) is acting or will act for or on behalf of a Blocked Person, (v) is associated with, or will become
associated with, a Blocked Person or (vi) is providing, or will provide, material, financial or technical support or other services
to or in support of acts of terrorism of a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates
or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (A) conducts
any business or engages in making or receiving any contribution of funds, goods or services directly or indirectly to or for the benefit
of any Blocked Person or Sanctioned Country, or (B) deals in, or otherwise engages in any transaction directly or indirectly relating
to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism
Law.
Section 3.13 Taxes.
All federal income and franchise tax returns, reports and statements, all state and local income and franchise tax returns, reports and
statements and all other material federal, state and local tax returns, reports and statements required to be filed by or on behalf of
each Credit Party have been filed with the appropriate Governmental Authorities in all jurisdictions in which such returns, reports and
statements are required to be filed and, except to the extent subject to a Permitted Contest, all Taxes (including real property Taxes)
and other charges shown to be due and payable in respect thereof have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for nonpayment thereof. Except to the extent subject to a Permitted Contest, all state
and local sales and use Taxes required to be paid by each Credit Party have been paid. All federal and state returns have been filed
by each Credit Party for all periods for which returns were due with respect to employee income tax withholding, social security and
unemployment taxes, and, except to the extent subject to a Permitted Contest, the amounts shown thereon to be due and payable have been
paid in full or adequate provisions therefor have been made.
Section 3.14 Compliance
with ERISA.
(a) Each
ERISA Plan (and the related trusts and funding agreements) complies in form and in operation with, has been administered in compliance
with, and the terms of each ERISA Plan satisfy, the applicable requirements of ERISA and the Code in all material respects. Each ERISA
Plan which is intended to be qualified under Section 401(a) of the Code is so qualified, and the United States Internal Revenue
Service has issued a favorable determination letter with respect to each such ERISA Plan which may be relied on currently. No Credit
Party has incurred liability for any material excise tax under any of Sections 4971 through 5000 of the Code.
(b) Except
as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Credit Party and each
Subsidiary is in compliance with the applicable provisions of ERISA and the provision of the Code relating to ERISA Plans and the regulations
and published interpretations therein. During the thirty-six (36) month period prior to the Closing Date or the making of any Loan (i) no
steps have been taken to terminate any Pension Plan, and (ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 303(k) of ERISA or Section 430(k) of the Code and no event has occurred
that would give rise to a Lien under Section 4068 of ERISA. No condition exists or event or transaction has occurred with respect
to any Pension Plan which could result in the incurrence by any Credit Party of any material liability, fine or penalty. No Credit Party
has incurred liability to the PBGC (other than for current premiums) with respect to any employee Pension Plan. All contributions (if
any) have been made on a timely basis to any Multiemployer Plan that are required to be made by any Credit Party or any other member
of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable Law; no Credit Party nor
any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Plan, incurred any withdrawal liability
with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from
any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan,
and no Credit Party nor any member of the Controlled Group has received any notice that any Multiemployer Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated,
or that any such plan is or may become insolvent.
Section 3.15 Consummation
of Financing Documents; Brokers. Except for fees payable to Agent, Term Loan Servicer and/or Lenders, no broker, finder or other
intermediary has brought about the obtaining, making or closing of the transactions contemplated by the Financing Documents, and no Credit
Party has or will have any obligation to any Person in respect of any finder’s or brokerage fees, commissions or other expenses
in connection herewith or therewith.
Section 3.16 [Reserved].
Section 3.17 Material
Contracts. All Material Contracts that are required to be filed have been filed by OrthoPediatrics Corp. with the United States Securities
and Exchange Commission under Regulation 601(b)(10) of Regulation S-K promulgated under the Securities Act of 1933, as amended,
and are publicly available. The consummation of the transactions contemplated by the Financing Documents will not give rise to a right
of termination in favor of any party to any Material Contract (other than any Credit Party), except for such Material Contracts the noncompliance
with which would not reasonably be expected to have a Material Adverse Effect.
Section 3.18 Compliance
with Environmental Requirements; No Hazardous Materials. Except in each case as set forth on Schedule 3.18:
(a) no
notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed,
no penalty has been assessed and no investigation or review is pending, or to such Credit Party’s knowledge, threatened in writing
by any Governmental Authority or other Person with respect to any (i) alleged violation by any Credit Party of any Environmental
Law, (ii) alleged failure by any Credit Party to have any Permits required in connection with the conduct of its business or to
comply with the terms and conditions thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of
any Hazardous Materials, or (iv) release of Hazardous Materials, in each case except where the failure to obtain such document could
not reasonably be expected to have a Material Adverse Effect; and
(b) no
property now owned or leased by any Credit Party and, to the knowledge of each Credit Party, no such property previously owned or leased
by any Credit Party, to which any Credit Party has, directly or indirectly, transported or arranged for the transportation of any Hazardous
Materials in violation of applicable Law, is listed or, to such Credit Party’s knowledge, proposed for listing, on the National
Priorities List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list or is the subject of federal,
state or local enforcement actions or, to the knowledge of such Credit Party, other investigations which may lead to claims against any
Credit Party for clean-up costs, remedial work, damage to natural resources or personal injury claims, including, without limitation,
claims under CERCLA, which claims could reasonably be expected to have a Material Adverse Effect.
For purposes of this Section 3.18,
each Credit Party shall be deemed to include any business or business entity (including a corporation) that is, in whole or in part,
a predecessor of such Credit Party.
Section 3.19 Intellectual
Property and License Agreements. A list of all Registered Intellectual Property of each Credit Party and all material in-bound license
or sublicense agreements, and exclusive out-bound license or sublicense agreements (but, in each case, excluding in-bound licenses of
over-the-counter and other software that is commercially available to the public and open source licenses in the Ordinary Course of Business),
as of the Closing Date and, as updated pursuant to Section 4.15, is set forth on Schedule 3.19. Except for Permitted Licenses and
Permitted Liens arising by operation of law, each Credit Party is the sole owner of its material Intellectual Property free and clear
of any Liens. Each material patent owned or licensed by any Credit Party is valid and enforceable in all material respects and no part
of the Material Intangible Assets has been judged invalid or unenforceable, in whole or in part, and to the best of Credit Parties’
knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party in any material respect.
Section 3.20 Solvency.
After giving effect to the Loan advance and the liabilities and obligations of each Credit Party under the Financing Documents, each
Borrower and each additional Credit Party is Solvent.
Section 3.21 Full
Disclosure. None of the written information (financial or otherwise) furnished by or on behalf of any Credit Party to Agent or any
Lender in connection with the consummation of the transactions contemplated by the Financing Documents, contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light
of the circumstances under which such statements were made. All financial projections delivered to Agent and the Lenders by Credit Parties
(or their agents) have been prepared on the basis of the assumptions stated therein. Such projections represent each Credit Party’s
best estimate of such Credit Party’s future financial performance and such assumptions are believed by such Credit Party to be
fair and reasonable in light of current business conditions; provided, however, that Credit Parties can give no assurance
that such projections will be attained. Agent and each Lender acknowledges and agrees that all financial performance projections delivered
to Agent represent Borrowers’ best good faith estimate of future financial performance and are based on assumptions believed by
Credit Parties to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by Agent and Lenders
that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by
such projections may differ from the projected results.
Section 3.22 Subsidiaries.
Credit Parties do not own any stock, partnership interests, limited liability company interests or other equity securities or Subsidiaries
except for Permitted Investments.
Section 3.23 Accuracy
of Schedules. All information set forth in the Schedules to this Agreement is true, accurate and complete in all material respects
as of the Closing Date. All information set forth in the Perfection Certificate is true, accurate and complete in all material respects
as of the Closing Date and any other subsequent date in which Borrower is required to update such certificate.
Section 3.24 Eligible
Account; Eligible Inventory.
(a) As
to each Account that is identified by Borrowers as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account
is (i) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or
the rendition of services to such Account Debtor in the Ordinary Course of Business of the applicable Borrower, (ii) owed to the
applicable Borrower without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (iii) not
excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of “Eligible Account”.
(b) As
to each item of Inventory that is identified by the applicable Borrowers as Eligible Inventory in a Borrowing Base Certificate submitted
to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, (b) not excluded as ineligible by
virtue of one or more of the excluding criteria (set forth in the definition of “Eligible Inventory”), and (c) otherwise
constitutes “Eligible Inventory” under such definition.
Section 3.26 Regulatory
Matters.
(a) All
of Credit Parties’ and their Subsidiaries’ material Products and material Regulatory Required Permits (limited to those Regulatory
Required Permits the loss of which would reasonably be expected to have a Material Adverse Effect) are listed on Schedule 4.17 on the
Closing Date. With respect to each material Product, (i) the Credit Parties and their Subsidiaries have received, and such Product
is the subject of, all Regulatory Required Permits needed in connection with the testing, manufacture, marketing or sale of such Product
as currently being conducted by or on behalf of the Credit Parties, and have provided Agent with all notices and other information required
by Section 4.1, and (ii) such Product is being tested, manufactured, marketed or sold, as the case may be, by Credit Parties
(or to the Credit Parties’ knowledge, by any applicable third parties) in material compliance with all applicable Laws and Regulatory
Required Permits.
(b) None
of the Credit Parties or any Subsidiary thereof are in violation of any Healthcare Law in any material respect.
(c) As
of the Closing Date, no Borrower or any Subsidiary thereof receives any material payments directly (including through any third party
payment processor) from Medicare, Medicaid, or TRICARE.
(d) To
the Credit Parties’ knowledge (after reasonable inquiry), none of the Credit Parties or their Subsidiaries’ officers, directors,
employees, shareholders, their agents or affiliates has made an untrue statement of material fact or fraudulent statement to the FDA
or failed to disclose a material fact required to be disclosed to the FDA, committed an act, made a statement, or failed to make a statement
that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities,” set forth in 56 Fed. Regulation 46191 (September 10, 1991).
(e) Except
as would not reasonably be expected to result in a Material Adverse Effect, each Product (i) has been and/or shall be manufactured,
imported, possessed, owned, warehoused, marketed, promoted, sold, labeled, furnished, distributed and marketed and each service has been
conducted in accordance with all applicable Permits and Laws; and (ii) has been and/or shall be manufactured in accordance with
Good Manufacturing Practices.
(f) No
Credit Party, nor any Subsidiary thereof, is subject to any proceeding, suit or, to any Credit Party’s knowledge, investigation
by any federal, state, local or foreign government or quasi-governmental body, agency, board or authority or any other administrative
or investigative body (including the Office of the Inspector General of the United States Department of Health and Human Services),which
could reasonably be expected to result in the revocation, transfer, surrender, suspension of any material Permits of Borrower or any
Subsidiary thereof or otherwise be expected to result in a Material Adverse Effect.
(g) As
of the Closing Date, there have been no Regulatory Reporting Events.
Section 3.27 Senior
Indebtedness Status(a) . The Obligations of each Credit Party under this Agreement and each of the
other Financing Documents ranks and shall continue to rank at least senior in priority of payment to all Debt that is contractually subordinated
to the Obligations of each such Person under this Agreement and is designated as “Senior Indebtedness” (or an equivalent
term) under all instruments and documents, now or in the future, relating to all Debt that is contractually subordinated to the Obligations
under this Agreement of each such Person.
Article 4
- AFFIRMATIVE COVENANTS
Each Credit Party agrees
that:
Section 4.1 Financial
Statements, Other Reports and Notices. The Credit Parties will deliver to Agent:
(a) as
soon as available, but no later than forty-five (45) days after the last day of each fiscal quarter, a company prepared consolidated
and consolidating balance sheet, cash flow and income statement (including year-to-date results) covering OrthoPediatrics Corp. and its
Consolidated Subsidiaries’ consolidated and consolidating operations during the period, prepared in accordance with GAAP (subject
to normal year-end adjustments and the absence of footnote disclosures), consistently applied, setting forth in comparative form the
corresponding figures as at the end of the corresponding month of the previous fiscal year and the projected figures for such period
based upon the projections required hereunder, all in reasonable detail, certified by a Responsible Officer and in a form reasonably
acceptable to Agent; provided that to the extent any of the foregoing is available on the SEC EDGAR website, delivery to
Agent will be deemed to have occurred when made public;
(b) as
soon as available, but no later than 90 days after the last day of OrthoPediatrics Corp.’s fiscal year, audited consolidated and
consolidating financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (other than a going
concern qualification based solely on the upcoming maturity date of the Debt under this Agreement occurring within 12 months of the date
of such audit) on the financial statements from an independent certified public accounting firm acceptable to Agent in its reasonable
discretion; provided that to the extent any of the foregoing is available on the SEC EDGAR website, delivery to Agent will be
deemed to have occurred when made public;
(c) within
ten (10) days of delivery or filing thereof, copies of all statements, reports and notices made available to such Credit Party’s
security holders and copies of all reports and other filings made by such Credit Party with any stock exchange on which any securities
of any Credit Party are traded and/or the SEC; provided that to the extent any of the foregoing is available on the SEC EDGAR website,
delivery to Agent will be deemed to have occurred when made public;
(d) a
prompt, but in no event later than when the next Compliance Certificate is required to be delivered, written report of any legal actions
pending or threatened in writing against any Credit Party or any of its Subsidiaries that could reasonably be expected to result in damages
or costs to any Credit Party or any of its Subsidiaries of One Million Dollars ($1,000,000) or more or otherwise could be reasonably
expected to result in a Material Adverse Effect;
(e) prompt
written notice of an event that materially and adversely affects the value of any Material Intangible Asset;
(f) within
forty five (45) days after the start of each fiscal year, projections for the forthcoming two fiscal years, on a quarterly basis for
the current year and on an annual basis for the subsequent year;
(g) promptly
(but in any event within ten (10) days of any request therefor) such readily available other budgets, sales projections, operating
plans and other financial information and information, reports or statements regarding the Credit Parties, their business and the Collateral
as Agent may from time to time reasonably request;
(h) by
the date that is forty-five (45) days following the end of each month, deliver to Agent a duly completed Compliance Certificate signed
by a Responsible Officer setting forth calculations showing (i) compliance with the financial covenants set forth in Article 6
and (ii) monthly cash and Cash Equivalents of (x) Credit Parties taken as a whole, (y) the Foreign Guarantors taken as
a whole, and (z) the Restricted Foreign Subsidiaries taken as a whole, as of the date that is five (5) Business Days prior
to the delivery of the applicable Compliance Certificate;
(i) within
ten (10) days after the last day of such month, deliver to Agent a duly completed Borrowing Base Certificate signed by a Responsible
Officer, with aged listings of accounts receivable and accounts payable (by invoice date);
(j) written
notice to Agent promptly, but in any event within ten (10) Business Days of a Responsible Officer of a Credit Party receiving written
notice or otherwise becoming aware that:
(i) any
development, testing, and/or manufacturing of any Product that is material to the Credit Parties’ or their Subsidiaries business
should cease;
(ii) the
marketing or sales of a Product, which is material to the Credit Parties’ or their Subsidiaries’ business and which has been
approved for marketing and sale, should cease (or be required to cease) or such Product should be withdrawn from the marketplace;
(iii) any
Governmental Authority is conducting an investigation or review (other than routine reviews in the Ordinary Course of Business) of any
Regulatory Required Permit the loss of which could be reasonably expected to result in a Material Adverse Effect;
(iv) any
Regulatory Required Permit, the loss of which could be reasonably expected to result in a Material Adverse Effect, has been revoked or
withdrawn;
(v) any
Governmental Authority, including without limitation the FDA, the Office of the Inspector General of HHS or the United States Department
of Justice, has commenced any action against a Credit Party or a Subsidiary thereof, any action to enjoin a Credit Party or a Subsidiary
thereof from conducting their businesses at any facility owned or used by them or for any material civil penalty, injunction, seizure
or criminal action;
(vi) receipt
by a Credit Party or any Subsidiary thereof, or any material contract manufacturer for the Credit Parties or any of their Subsidiaries,
from the FDA a warning letter, Form FDA-483, “Untitled Letter,” other correspondence or notice setting forth alleged
violations of laws and regulations enforced by the FDA, or any comparable material correspondence from any state or local authority responsible
for regulating medical device products and establishments, or any comparable correspondence from any foreign counterpart of the FDA,
or any comparable correspondence from any foreign counterparty of any state or local authority with regard to any material Product or
the manufacture, processing, packing, or holding thereof;
(vii) any
Credit Party or any Subsidiary thereof receives any payments directly (including through any third party payment processor) from Medicare,
Medicaid, or TRICARE;
(viii) any
significant failures in the manufacturing of any material Product have occurred such that the amount of such Product successfully manufactured
in accordance with all specifications thereof and the required payments to be made to any Credit Party or any Subsidiary therefor in
any month shall decrease significantly with respect to the quantities of such Product and payments produced in the prior month; or
(ix) any
Credit Party or any Subsidiary thereof engaging in any Recalls, Market Withdrawals, or other forms of product retrieval from the marketplace
of any Products (other than discrete batches or lots that are not material in quantity or amount and are not made in conjunction with
a larger recall) (each of the events set forth in clauses (i)-(ix) a “Regulatory Reporting Event”);
(k) promptly
after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including,
without limitation, the USA PATRIOT Act;
(l) promptly,
but in any event within five (5) Business Days, that Liquidity has fallen below $10,000,000 as of the close of business on any Business
Day;
(m) promptly,
but in any event within five (5) Business Days, after any Responsible Officer of any Credit Party obtains knowledge of the
occurrence of any event or change (including, without limitation, any notice of any violation of applicable Healthcare Laws) that has
resulted or would reasonably be expected to result in, either in any case or in the aggregate, a Material Adverse Effect, a certificate
of a Responsible Officer specifying the nature and period of existence of any such event or change, or specifying the notice given or
action taken by such holder or Person and the nature of such event or change, and what action the applicable Credit Party or Subsidiary
has taken, is taking or proposes to take with respect thereto.
Section 4.2 Payment
and Performance of Obligations. Each Credit Party (a) will pay and discharge, and cause each Subsidiary to pay and discharge,
on a timely basis as and when due, all of their respective obligations and liabilities, except for such obligations and/or liabilities
(i) that may be the subject of a Permitted Contest, and (ii) the nonpayment or nondischarge of which could not reasonably be
expected to have a Material Adverse Effect or result in a Lien against any Collateral, except for Permitted Liens, (b) without limiting
anything contained in the foregoing clause (a), pay all amounts due and owing in respect of (i) all federal Taxes (including without
limitation, payroll and withholdings tax liabilities) and (ii) all material foreign and state Taxes and other local Taxes (including
without limitation, payroll and withholdings tax liabilities), in each case, on a timely basis as and when due, and in any case prior
to the date on which any fine, penalty, interest, late charge or loss may be added thereto for nonpayment thereof, (c) will maintain,
and cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of all of their respective obligations
and liabilities, and (d) will not breach or permit any Subsidiary to breach, or permit to exist any default under, the terms of
any lease, commitment, contract, instrument or obligation to which it is a party, or by which its properties or assets are bound, except
for such breaches or defaults which could not reasonably be expected to have a Material Adverse Effect.
Section 4.3 Maintenance
of Existence. Each Credit Party will preserve, renew and keep in full force and effect and in good standing, and will cause each
Subsidiary to preserve, renew and keep in full force and effect and in good standing, (a) their respective existence and (b) their
respective rights, privileges and franchises necessary or desirable in the normal conduct of business, unless, solely in the case of
this clause (b), a failure to do so could not reasonably be expected to have a Material Adverse Effect.
Section 4.4 Maintenance
of Property; Insurance.
(a) Each
Credit Party will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted. If all or any part of the Collateral useful or necessary in its business, or upon which
any Borrowing Base is calculated, becomes damaged or destroyed, each Credit Party will, and will cause each Subsidiary to, promptly and
completely repair and/or restore the affected Collateral in a good and workmanlike manner, regardless of whether Agent agrees to disburse
insurance proceeds or other sums to pay costs of the work of repair or reconstruction.
(b) Upon
completion of any Permitted Contest, Credit Parties shall, and will cause each Subsidiary to, promptly pay the amount due, if any, and
deliver to Agent proof of the completion of the contest and payment of the amount due, if any.
(c) Each
Credit Party will maintain (i) casualty insurance on all real and personal property on an all risks basis (including the perils
of flood, windstorm and quake), covering the repair and replacement cost of all such property and coverage, business interruption and
rent loss coverages with extended period of indemnity (for the period required by Agent from time to time) and indemnity for extra expense,
in each case without application of coinsurance and with agreed amount endorsements, (ii) general and professional liability insurance
(including products/completed operations liability coverage), and (iii) such other insurance coverage, in each case against loss
or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts
as are customarily carried under similar circumstances by such other Persons; provided, however, that, in no event shall
such insurance be in amounts or with coverage less than, or with carriers with qualifications inferior to, any of the insurance or carriers
in existence as of the Closing Date (or required to be in existence after the Closing Date under a Financing Document). All such insurance
shall be provided by insurers having an A.M. Best policyholders rating reasonably acceptable to Agent.
(d) On
or prior to the Closing Date, and at all times thereafter, each Credit Party will cause Agent to be named as an additional insured, assignee
and lender loss payee (which shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required
to be maintained pursuant to this Section 4.4 pursuant to endorsements in form and substance acceptable to Agent. Credit Parties
shall deliver to Agent and the Lenders (i) on the Closing Date, a certificate from Credit Parties’ insurance broker dated
such date showing the amount of coverage as of such date, and that such policies will include effective waivers (whether under the terms
of any such policy or otherwise) by the insurer of all claims for insurance premiums against all loss payees and additional insureds
and all rights of subrogation against all loss payees and additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each additional insured, assignee and loss payee and that no
cancellation, reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days (or ten (10) days
for nonpayment of premium) after receipt by each additional insured, assignee and loss payee of written notice thereof, (ii) on
an annual basis, and upon the request of any Lender through Agent from time to time full information as to the insurance carried, (iii) within
five (5) days of receipt of notice from any insurer, a copy of any notice of cancellation, nonrenewal or material change in coverage
from that existing on the date of this Agreement, (iv) forthwith, notice of any cancellation or nonrenewal of coverage by any Credit
Party, and (v) at least thirty (30) days prior to expiration of any policy of insurance, evidence of renewal of such insurance upon
the terms and conditions herein required.
(e) In
the event any Credit Party fails to provide Agent with evidence of the insurance coverage required by this Agreement, Agent may purchase
insurance at Credit Parties’ expense to protect Agent’s interests in the Collateral. This insurance may, but need not, protect
such Credit Party’s interests. The coverage purchased by Agent may not pay any claim made by such Credit Party or any claim that
is made against such Credit Party in connection with the Collateral. Such Credit Party may later cancel any insurance purchased by Agent,
but only after providing Agent with evidence that such Credit Party has obtained insurance as required by this Agreement. If Agent purchases
insurance for the Collateral, Credit Parties will be responsible for the costs of that insurance to the fullest extent provided by law,
including interest and other charges imposed by Agent in connection with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance
may be more than the cost of insurance such Credit Party is able to obtain on its own.
Section 4.5 Compliance
with Laws and Material Contracts. Each Credit Party will comply, and cause each Subsidiary to comply, with the requirements of all
applicable Laws (including all Healthcare Laws) and Material Contracts, except to the extent that failure to so comply could not reasonably
be expected to (a) have a Material Adverse Effect, or (b) result in any Lien (other than a Permitted Lien) upon either (i) a
material portion of the assets of any such Person in favor of any Governmental Authority, or (ii) any Collateral which is part of
the Borrowing Base (other than, in each case, any Permitted Lien).
Section 4.6 Inspection
of Property, Books and Records. Each Credit Party will keep, and will cause each Subsidiary to keep, proper books of record substantially
in accordance with GAAP in which full, true and correct entries shall be made of all dealings and transactions in relation to its business
and activities; and will permit, and will cause each Subsidiary to permit, during normal business hours, at the sole cost of the applicable
Credit Party or any applicable Subsidiary, representatives of Agent to visit and inspect any of their respective properties, to examine
and make abstracts or copies from any of their respective books and records, to conduct a collateral audit and analysis of their respective
operations and the Collateral, to evaluate and make physical verifications and appraisals of the Inventory and other Collateral in any
manner and through any medium that Agent considers advisable, to verify the amount and age of the Accounts, the identity and credit of
the respective Account Debtors, to review the billing practices of Credit Parties and to discuss their respective affairs, finances and
accounts with their respective officers, employees and independent public accountants as often as may reasonably be desired. In the absence
of an Event of Default which is continuing, (i) such inspections and audits shall be conducted at Credit Parties’ expense
no more often than two (2) times every twelve (12) months, and (ii) Agent exercising any rights pursuant to this Section 4.6
shall give the applicable Credit Party or any applicable Subsidiary commercially reasonable prior notice of such exercise. No notice
shall be required during the existence and continuance of any Default or Event of Default or any time during which Agent reasonably believed
a Default or Event of Default exists.
Section 4.7 Use
of Proceeds. Borrowers shall use the proceeds of the Term Loan Tranche 1 borrowing solely for (a) payment of transaction fees
incurred in connection with the Financing Documents, (b) payment of amounts due pursuant to an Acquisition with the written consent
of Agent, (c) the payment in full on the Closing Date of certain existing Debt and (d) for working capital needs of Borrowers
and their Subsidiaries. Borrowers shall use the proceeds of any Term Loan Tranche 2 borrowing and Term Loan Tranche 3 borrowing solely
for (a) transaction fees incurred in connection with the Financing Documents, and (b) working capital needs and general corporate
purposes of the Borrowers are their Subsidiaries. Borrowers shall use the proceeds of Revolving Loans solely for (a) transaction
fees incurred in connection with the Financing Documents and the refinancing on the Closing Date of Debt, and (b) for working capital
needs and general corporate purposes of Borrowers and their Subsidiaries. No portion of the proceeds of the Loans will be used for family,
personal, agricultural or household use. No portion of the proceeds of the Loans will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for purchasing or carrying Margin Stock or for any other purpose that entails a violation of,
or that is inconsistent with, the provisions of the regulations of the Board of Governors of the Federal Reserve System, including Regulation
T, U, or X of the Federal Reserve Board.
Section 4.8 [Reserved].
Section 4.9 Notices
of Material Contracts, Litigation and Defaults.
(a) Credit
Parties shall promptly provide written notice to Agent after any Credit Party or Subsidiary receives or delivers any notice of termination
or default or similar notice in connection with any Material Contract.
(b) Credit
Parties shall promptly (but in any event within five (5) Business Days) provide written notice to Agent (i) upon any Credit
Party becoming aware of the existence of any Default or Event of Default, (ii) of any strikes or other labor disputes pending or,
to any Credit Party’s knowledge, threatened against any Credit Party, in each case, that could reasonably be expected to have a
Material Adverse Effect, and (iii) if there is any infringement or claim of infringement by any other Person with respect to any
Intellectual Property rights of any Credit Party that could reasonably be expected to have a Material Adverse Effect, or if there is
any claim by any other Person that any Credit Party in the conduct of its business is infringing on the Intellectual Property rights
of others that could reasonably be expected to have a Material Adverse Effect. Credit Parties represent and warrant that Schedule 4.9
sets forth a complete list of all matters existing as of the Closing Date for which notice is required under this Section 4.9(b).
(c) Each
Credit Party shall provide such further information (including copies of such documentation) as Agent or any Lender shall reasonably
request with respect to any of the events or notices described in clauses (a) and (b) above and any notice given in respect
of a Regulatory Reporting Event. From the date hereof and continuing through the termination of this Agreement, each Credit Party shall
make available to Agent and each Lender, without expense to Agent or any Lender, each Credit Party’s officers, employees and agents
and books, to the extent that Agent or any Lender may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Agent or any Lender with respect to any Collateral or relating to a Credit Party.
Section 4.10 Hazardous
Materials; Remediation.
(a) If
any release or disposal of Hazardous Materials shall occur or shall have occurred on any real property or any other assets of any Credit
Party, such Credit Party will cause, or direct the applicable Credit Party to cause, the prompt containment and removal of such Hazardous
Materials and the remediation of such real property or other assets as is necessary to comply with all Environmental Laws. Without limiting
the generality of the foregoing, each Credit Party shall, and shall cause each other Credit Party to, comply with each Environmental
Law requiring the performance at any real property by any Credit Party of activities in response to the release or threatened release
of a Hazardous Material.
(b) Credit
Parties will provide Agent within thirty (30) days after written demand therefor with a bond, letter of credit or similar financial assurance
evidencing to the reasonable satisfaction of Agent that sufficient funds are available to pay the cost of removing, treating and disposing
of any Hazardous Materials or Hazardous Materials Contamination as required by Environmental Law and discharging any assessment which
may be established on any property as a result thereof, such demand to be made, if at all, upon Agent’s reasonable business determination
that the failure to remove, treat or dispose of any such Hazardous Materials or Hazardous Materials Contamination, or the failure to
discharge any such assessment could reasonably be expected to have a Material Adverse Effect.
Section 4.11 Further
Assurances; Joinder.
(a) Each
Credit Party will, and will cause each Subsidiary to, at its own cost and expense, promptly and duly take, execute, acknowledge and deliver
all such further acts, documents and assurances as may from time to time be necessary or as Agent or the Required Lenders may from time
to time reasonably request in order to carry out the intent and purposes of the Financing Documents and the transactions contemplated
thereby, including all such actions to (i) establish, create, preserve, protect and perfect a first priority Lien (other than in
respect of Excluded Perfection Assets and subject only to Permitted Liens) in favor of Agent for itself and for the benefit of the Lenders
on the Collateral (including Collateral acquired after the date hereof), and (ii) unless Agent shall agree otherwise in writing,
cause all Subsidiaries of Credit Parties (other than Restricted Foreign Subsidiaries) to be jointly and severally obligated with the
other Credit Parties under all covenants and obligations under this Agreement, including the obligation to repay the Obligations.
(b) Upon
receipt of an affidavit of an authorized representative of Agent or a Lender as to the loss, theft, destruction or mutilation of any
Note or any other Financing Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation
of such Note or other applicable Financing Document, Borrowers will issue, in lieu thereof, a replacement Note or other applicable Financing
Document, dated the date of such lost, stolen, destroyed or mutilated Note or other Financing Document in the same principal amount thereof
and otherwise of like tenor.
(c) Credit
Parties shall timely and fully pay and perform its obligations under all material leases and other agreements with respect to each leased
location where any Collateral is or may be located.
(d) Credit
Parties shall provide Agent with at least thirty (30) days (or such shorter period as Agent may accept in its sole discretion) prior
written notice of its intention to create (or to the extent permitted under this Agreement, acquire) a new Subsidiary. Upon the formation
(or to the extent permitted under this Agreement, acquisition) of a new Subsidiary, Credit Parties shall (concurrently with the acquisition
or creation of such Subsidiary (as applicable)): (i) pledge, have pledged or cause or have caused to be pledged to Agent pursuant
to a pledge agreement in form and substance satisfactory to Agent, all of the outstanding Equity Interests of such new Subsidiary owned
directly or indirectly by any Credit Party (except to the extent constituting Excluded Property), along with undated stock or equivalent
powers for such certificates, executed in blank; (ii) unless Agent shall agree otherwise in writing, cause the new Subsidiary (other
than Restricted Foreign Subsidiaries) to take such other actions (including entering into or joining any Security Documents) as are necessary
or advisable in the reasonable opinion of Agent in order to grant Agent, acting on behalf of the Lenders, a first priority Lien (subject
to Permitted Liens which have priority by operation of Law) on all real and personal property (in the case of the perfection of the Liens
granted subject to the Excluded Perfection Assets) of such Subsidiary in existence as of such date and in all after acquired property
(in each case, other than Excluded Property), which first priority Liens are required to be granted pursuant to this Agreement; (iii) unless
Agent shall agree otherwise in writing, cause such new Subsidiary (other than Restricted Foreign Subsidiaries) to either (at the election
of Agent) become a Borrower hereunder with joint and several liability for all obligations of Borrowers hereunder and under the other
Financing Documents pursuant to a joinder agreement or other similar agreement in form and substance satisfactory to Agent or to become
a Guarantor of the obligations of Borrowers hereunder and under the other Financing Documents pursuant to a guaranty and suretyship agreement
in form and substance satisfactory to Agent; and (iv) cause the new Subsidiary (other than Restricted Foreign Subsidiaries) to deliver
certified copies of such Subsidiary’s certificate or articles of incorporation, together with good standing certificates, by-laws
(or other operating agreement or governing documents), resolutions of the Board of Directors or other governing body, approving and authorizing
the execution and delivery of the Security Documents, incumbency certificates and to execute and/or deliver such other documents and
legal opinions or to take such other actions as may be requested by Agent, in each case, in form and substance satisfactory to Agent
(the requirements set forth in clauses (i)-(iv), collectively, the “Joinder Requirements”).
(e) If,
at the end of any Defined Period ending after the date on which Post-Closing Guarantors become Credit Parties, the aggregate revenue
(as determined in accordance with GAAP) attributable solely to Restricted Foreign Subsidiaries for such Defined Period is greater than
twenty-five percent (25%) of the aggregate consolidated revenue (as determined in accordance with GAAP) of the Credit Parties and their
consolidated Subsidiaries for such Defined Period, then Borrowers shall promptly (and in any event within thirty (30) days (or such longer
period as Agent may agree in writing in its discretion) of the date on which the Compliance Certificate was delivered in respect of such
Defined Period pursuant to Section 4.1(i)) cause certain Restricted Foreign Subsidiaries designated by Agent, in its discretion,
to become Guarantors in accordance with the Joinder Requirements (as though such designated Subsidiaries were new Subsidiaries and no
longer Restricted Foreign Subsidiaries) pursuant to documentation (including any foreign law governed documentation, amendments to this
Agreement and other documentation as may be necessary or reasonably desirable) such that, following such joinder, the aggregate revenue
(as determined in accordance with GAAP) attributable solely to the Restricted Foreign Subsidiaries for such Defined Period is less than
or equal to twenty-five percent (25%) of the aggregate consolidated revenue (as determined in accordance with GAAP) of the Credit Parties
and their consolidated Subsidiaries for such Defined Period. Following any such joinder, such designated foreign Subsidiaries shall no
longer be Restricted Foreign Subsidiary and shall be Credit Parties for all purposes hereunder and under the other Financing Documents
and shall not be re-designated as Restricted Foreign Subsidiaries.
(f) If
Liquidity at any time is less than $10,000,000, upon Agent’s written request, Borrower shall no later than the date that is forty-five
(45) days after such request (or such later date as Agent agrees in writing in its sole discretion) (such date the “Kosciusko
County Mortgage Requirement Date”) (i) deliver to Agent evidence satisfactory to Agent that Borrower has paid in full
all Existing Kosciusko County Debt and other obligations evidenced by that certain Existing Kosciusko County Mortgage and that all Liens
on the Kosciusko County Property have been released and terminated, and (ii) deliver to Agent and Lenders all such documentation
required by and take such actions in accordance with the Real Estate Collateral Requirements with respect to the Kosciusko County Property
or as may otherwise be necessary for Agent, as determined in Agent’s reasonable discretion, to be granted a first priority perfected
security in the Kosciusko County Property.
Section 4.12 Reserved.
Section 4.13 Power
of Attorney. Each of the authorized representatives of Agent is hereby irrevocably made, constituted and appointed the true and lawful
attorney for Credit Parties (without requiring any of them to act as such) with full power of substitution, exercisable only upon the
occurrence and during the continuance of an Event of Default, to do the following: (a) endorse the name of Credit Parties upon any
and all checks, drafts, money orders, and other instruments for the payment of money that are payable to Credit Parties and constitute
collections on Credit Parties’ Accounts; (b) so long as Agent has provided not less than three (3) Business Days’
prior written notice to any Credit Party to perform the same and such Credit Party has failed to take such action, execute in the name
of Credit Parties any schedules, assignments, instruments, documents, and statements that Credit Parties are obligated to give Agent
under this Agreement; (c) take any action Credit Parties are required to take under this Agreement; (d) so long as Agent has
provided not less than three (3) Business Days’ prior written notice to any Credit Party to perform the same and such Credit
Party has failed to take such action, do such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary
or desirable to enforce any Account or other Collateral or perfect Agent’s security interest or Lien in any Collateral; and (e) do
such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary or desirable to enforce its rights
with regard to any Account or other Collateral. This power of attorney shall be irrevocable and coupled with an interest.
Section 4.14 Borrowing
Base Collateral Administration.
(a) A
copy of all data and other information relating to Accounts shall at all times be kept by Credit Parties, at their respective principal
offices and shall not fail to be available at such principal offices without obtaining the prior written consent of Agent, which
consent shall not be unreasonably withheld, conditioned or delayed.
(b) Borrowers
shall provide prompt written notice to each Person who either is currently an Account Debtor or becomes an Account Debtor at any time
following the date of this Agreement that directs each Account Debtor to make payments into the Lockbox or a Collections Account, and
hereby authorizes Agent, upon Borrowers’ failure to send such notices within ten (10) days after the initial borrowing of
the Revolving Loans (or ten (10) days after the Person becomes an Account Debtor), to send any and all similar notices to such Person.
Agent reserves the right to notify Account Debtors that Agent has been granted a Lien upon all Accounts.
(c) Borrowers
will conduct a physical count of the Inventory at least twice per year and at such other times as Agent requests, and Borrowers shall
provide to Agent a written accounting of such physical count in form and substance satisfactory to Agent. Each Borrower will use commercially
reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time,
Agent may require Borrowers to obtain and deliver to Agent appraisal reports in form and substance and from appraisers reasonably satisfactory
to Agent stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries; provided
that if no Event of Default has occurred and is continuing, such appraisal of Inventory shall be conducted not more often than once
a year.
Section 4.15 Schedule
Updates. Borrower shall, in the event of any information in the Schedule 3.19, Schedule 5.14, Schedule 9.2(b) or Schedule 9.2(d) becoming
outdated, inaccurate, incomplete or misleading, deliver to Agent, together with the next quarterly Compliance Certificate required to
be delivered under this Agreement after such event a proposed update to such Schedule correcting all outdated, inaccurate, incomplete
or misleading information.
Section 4.16 Intellectual
Property and Licensing.
(a) Together
with each Compliance Certificate required to be delivered pursuant to Section 4.1(i) with respect to the last month of a fiscal
quarter to the extent (i) any Credit Party or Subsidiary acquires and/or develops any new Registered Intellectual Property, (ii) any
Credit Party or Subsidiary enters into or becomes bound by any additional material in-bound license or sublicense agreement, any additional
exclusive out-bound license or sublicense agreement or other material agreement with respect to rights in Intellectual Property (other
than over-the-counter software, software that is commercially available to the public and open source licenses), or (iii) there
occurs any other material change in any Credit Party’s or Subsidiary’s Registered Intellectual Property, material in-bound
licenses or sublicenses or exclusive out-bound licenses or sublicenses from that listed on Schedule 3.19 together with such Compliance
Certificate, deliver to Agent an updated Schedule 3.19 reflecting such updated information. With respect to any updates to Schedule
3.19 involving exclusive out-bound licenses or sublicenses, such licenses shall be consistent with the definitions of and limitations
herein pertaining to Permitted Licenses.
(b) If
Credit Parties obtain any Registered Intellectual Property, Credit Parties shall promptly (and in any event within fifteen (15) days
of obtaining same) notify Agent and promptly execute such documents and provide such other information (including, without limitation,
copies of applications) and take such other actions as Agent shall reasonably request in its good faith business judgment to perfect
and maintain a first priority perfected security interest (subject to Permitted Liens) in favor of Agent, for the ratable benefit of
Lenders, in such Registered Intellectual Property.
(c) Credit
Parties and their Subsidiaries shall take such steps as Agent reasonably requests to obtain the consent of, or waiver by, any person
whose consent or waiver is necessary for (x) all material licenses or material agreements to be deemed “Collateral”
and for Agent to have a security interest in it that might otherwise be restricted or prohibited by Law or by the terms of any such material
license or agreement, whether now existing or entered into in the future, and (y) Agent to have the ability in the event of a liquidation
of any Collateral to dispose of such Collateral in accordance with Agent’s rights and remedies under this Agreement and the other
Financing Documents.
(d) Credit
Parties and each Subsidiary thereof shall own, or be licensed to use or otherwise have the right to use, all Material Intangible Assets,
subject to Permitted Liens. Credit Parties shall cause all Registered Intellectual Property to be duly and properly registered, filed
or issued in the appropriate office and jurisdictions for such registrations, filings or issuances, except where the failure to do so
would not reasonably be expected to result in a Material Adverse Effect. Credit Parties and their Subsidiaries shall at all times conduct
its business without material infringement or material claim of infringement of any valid Intellectual Property rights of others. Credit
Parties shall, and shall cause their Subsidiaries to, (i) protect, defend and maintain the validity and enforceability of its Material
Intangible Assets (ii) promptly advise Agent in writing of material infringements of its Material Intangible Assets, or of a material
claim of infringement by Credit Parties on the Intellectual Property rights of others; and (iii) not allow any of Credit Parties’
Material Intangible Assets to be abandoned, invalidated, forfeited or dedicated to the public or to become unenforceable. Credit Parties
shall not become a party to, nor become bound by, any material license or other agreement with respect to which any Credit Party is the
licensor or licensee (other than in-bound licenses of over-the-counter software and other software that is commercially available to
the public and open source licenses) that prohibits or otherwise restricts Credit Party from granting a security interest in Credit Party’s
interest in such license or agreement or other property.
Section 4.17 Regulatory
Covenants.
(a) Credit
Parties shall have, and shall ensure that it and each of its Subsidiaries has, each necessary Permit and other material rights from,
and have made all necessary declarations and filings with, all applicable Governmental Authorities, all self-regulatory authorities and
all courts and other tribunals necessary to engage in all material respects in the ownership, management and operation of the business
or the assets of any Credit Party and Subsidiaries thereof and Credit Parties shall take, and cause each of their Subsidiaries to take,
such reasonable actions to ensure that no Governmental Authority has taken action to limit, suspend or revoke any such Permit. Credit
Parties shall ensure, and cause each of their Subsidiaries to ensure, that all such necessary Permits are valid and in full force and
effect and Credit Parties and their Subsidiaries are in material compliance with the terms and conditions of all Permits, except where
failure to do so would not reasonably be expected to have a Material Adverse Effect.
(b) In
connection with the development, testing, manufacture, marketing or sale of each and any material Product by any Credit Party or any
Subsidiary thereof, each Credit Party shall have, and shall have caused each of its Subsidiaries to have, obtained and comply in all
material respects with all material Regulatory Required Permits at all times issued or required to be issued by any Governmental Authority,
specifically including the FDA, with respect to such development, testing, manufacture, marketing or sales of such Product by such Credit
Party or its Subsidiaries as such activities are at any such time being conducted by such Credit Party or its Subsidiaries.
(c) Except
where the failure to do so would not reasonably be expected to result in a Material Adverse Effect, Credit Parties will, and will cause
their Subsidiaries to, timely file or caused to be timely filed (after giving effect to any extension duly obtained), all material notifications,
reports, submissions, material Permit renewals and reports required by applicable Healthcare Laws (which reports will be materially accurate
and complete in all material respects and not misleading in any material respect and shall not remain open or unsettled).
Article 5
- NEGATIVE COVENANTS
Each Credit Party agrees
that:
Section 5.1 Debt;
Contingent Obligations.
(a) No
Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, incur, assume, guarantee or otherwise become or
remain directly or indirectly liable with respect to, any Debt, except for Permitted Debt.
(b) No
Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist any Contingent
Obligations, except for Permitted Contingent Obligations.
(c) No
Credit Party will, or will permit any Subsidiary to, directly or indirectly, purchase, redeem, defease or prepay any principal of, premium,
if any, interest or other amount payable in respect of any Debt prior to its scheduled date for payment (except (i) with respect
to the Obligations permitted under this Agreement, (ii) for Capital Lease obligations and (iii) for Subordinated Debt solely
to the extent permitted by Section 5.5).
Section 5.2 Liens.
No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by it, except for Permitted Liens.
Section 5.3 Distributions.
No Credit Party will, or will permit any Subsidiary to, directly or indirectly, declare, order, pay, make or set apart any sum for any
Distribution, except for Permitted Distributions.
Section 5.4 Restrictive
Agreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) enter into or assume any agreement
(other than the Financing Documents and any agreements for purchase money debt and Capital Leases permitted under clause (c) of
the definition of Permitted Debt) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned
or hereafter acquired, or (b) create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction
of any kind (except as provided by the Financing Documents) on the ability of any Subsidiary to: (i) pay or make Distributions to
any Credit Party or any Subsidiary; (ii) pay any Debt owed to any Credit Party or any Subsidiary; (iii) make loans or advances
to any Credit Party or any Subsidiary; or (iv) transfer any of its property or assets to any Credit Party or any Subsidiary.
Section 5.5 Payments
and Modifications of Subordinated Debt. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) declare,
pay, make or set aside any amount for payment in respect of Subordinated Debt, except for payments made in full compliance with and expressly
permitted under the Subordination Agreement, (b) amend or otherwise modify the terms of any Subordinated Debt, except for amendments
or modifications made in full compliance with the Subordination Agreement.
Section 5.6 Consolidations,
Mergers and Sales of Assets; Change in Control. No Credit Party will, or will permit any Subsidiary to, directly or indirectly:
(a) consolidate
or merge or amalgamate with or into any other Person other than (i) consolidations or mergers among Borrowers so long as in any
consolidation or merger involving OrthoPediatrics Corp., OrthoPediatrics Corp. is the surviving entity, (ii) consolidations or mergers
among a Guarantor and a Borrower so long as the Borrower is the surviving entity, (iii) consolidations or mergers among Guarantors,
(iv) consolidations or mergers among Subsidiaries that are not Credit Parties, (v) consolidations or mergers in connection
with any Permitted Acquisition so long as in any merger or consolidation involving a Borrower or a Guarantor, as applicable, such Borrower
or Guarantor, as applicable, is the surviving entity, and for any consolidation or merger involving OrthoPediatrics Corp., OrthoPediatrics
Corp. is the surviving entity, and (vi) so long as no Event of Default has occurred and is continuing, dissolutions or liquidations
of Restricted Foreign Subsidiaries so long as any assets of such dissolved or liquidated Person are transferred to a Credit Party; or
(b) make
or consummate any Asset Dispositions other than Permitted Asset Dispositions.
Section 5.7 Purchase
of Assets, Investments. No Credit Party will, or will permit any Subsidiary to, directly or indirectly:
(a) except
as permitted by Agent in writing, acquire, make, own, hold, or otherwise consummate any Investment (including for the avoidance of doubt,
any Acquisition) other than Permitted Investments, or enter into any agreement to acquire, make, own or hold any Investment other than
Permitted Investments;
(b) without
limiting clause (a) above, acquire any other assets other than Permitted Investments or otherwise (i) in the Ordinary Course
of Business, (ii) constituting capital expenditures, (iii) constituting replacement assets purchased with proceeds of property
insurance policies, awards or other compensation with respect to any eminent domain, condemnation or similar proceeding and for which
the requirements set forth in this Agreement have been satisfied and (iv) any acquisition by a Credit Party of assets of any other
Credit Party to the extent not otherwise prohibited by Article 5 of this Agreement;
(c) engage
in or establish any joint venture or partnership with any other Person; or
(d) without
limiting the foregoing, no Credit Party shall, nor will any Credit Party permit any Subsidiary to, purchase or carry Margin Stock.
Section 5.8 Transactions
with Affiliates. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any
Credit Party or any Subsidiary thereof, except for (a) transaction disclosed on Schedule 5.8 on the Closing Date, (b) transactions
that are in the Ordinary Course of Business upon fair and reasonable terms, and, in each case, which contain terms that are no less favorable
to the applicable Credit Party or any Subsidiary, as the case may be, than those which might be obtained from a third party not an Affiliate
of any Credit Party and which are disclosed to Agent in writing prior to the parties consummating such transaction, (c) transactions
among Credit Parties that are not otherwise prohibited by this Agreement, (d) transactions constituting (i) issuances of Subordinated
Debt to investors and (ii) issuance of Equity interests (other than Disqualified Equity Interests), in each case, not otherwise
in contravention of this Agreement, and (e) reasonable and customary director, officer and employee compensation (including bonuses)
and other benefits (including retirement, health, stock option and other benefit plans and indemnification arrangements approved by the
relevant board of directors, board managers or equivalent corporate body in the Ordinary Course of Business).
Section 5.9 Modification
of Organizational Documents. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify
any Organizational Documents of such Person, except for Permitted Modifications.
Section 5.10 Modification
of Certain Agreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify
any Material Contract, which amendment or modification in any case: (a) is contrary to the terms of this Agreement or any other
Financing Document; or (b) would reasonably be expected to be materially adverse to the rights, interests or privileges of Agent,
Term Loan Servicer or the Lenders or their ability to enforce the same.
Section 5.11 Conduct
of Business. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, engage in any line of business other
than those businesses engaged in on the Closing Date described on Schedule 5.11 and businesses reasonably related thereto. No Credit
Party will, or will permit any Subsidiary to, other than in the Ordinary Course of Business, change its normal billing payment and reimbursement
policies and procedures with respect to its Accounts in any material respect (including, without limitation, the amount and timing of
finance charges, fees and write-offs). If any Credit Party or any Subsidiary of a Credit Party acquires or comes to owns any assets or
Collateral located within the state of Tennessee or relocates or moves any assets or Collateral into the state of Tennessee, Credit Parties
shall (a) promptly (and in any event within three (3) Business Days) provide Agent written notice thereof, (b) cooperate
with Agent in connection with any amendments to any UCC financing statements as requested by Agent (including, without limitation, identifying
such assets and Collateral, delivering to Agent affidavits satisfactory to Agent regarding any Tennessee indebtedness tax or similar
tax and calculating any additional fees or tax that may be owed in connection therewith) and authorize Agent to record any such UCC financing
statement amendments, and (c) pay any and all taxes and fees due in connection with any such UCC financing statements and amendments
(including, without limitation, any Tennessee indebtedness tax or similar tax).
Section 5.12 [Reserved].
Section 5.13 Limitation
on Sale and Leaseback Transactions. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into any
arrangement with any Person whereby, in a substantially contemporaneous transaction, any Credit Party or any Subsidiaries sells or transfers
all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back the right
to use such asset; provided that the Credit Parties and their Subsidiaries may enter into sale leaseback transactions with respect
to equipment or Inventory (other than Eligible Inventory) with an aggregate fair market value not in excess of $2,000,000 in the aggregate
during the term of this Agreement.
Section 5.14 Deposit
Accounts and Securities Accounts; Payroll and Benefits Accounts.
(a) No
Credit Party will, directly or indirectly, establish any new Deposit Account or Securities Account (other than an Excluded Account) unless
such Credit Party and the bank, financial institution or securities intermediary at which the account is to be opened enter into a Deposit
Account Control Agreement or Securities Account Control Agreement prior to or concurrently with the establishment of such Deposit Account
or Securities Account. Without limiting the foregoing, subject to Section 7.4, Credit Parties shall ensure that each Deposit Account
or Securities Account of a Credit Party (other than Excluded Accounts) is subject to a Deposit Account Control Agreement or Securities
Account Control Agreement, as applicable.
(b) Credit
Parties represent and warrant that Schedule 5.14 (as updated by the Compliance Certificate delivered to Agent from time to
time after the Closing Date) lists all of the Deposit Accounts and Securities Accounts of each Credit Party as of the Closing Date and
as of the date on which each Compliance Certificate is delivered. The provisions of this Section requiring Deposit Account
Control Agreements shall not apply to Governmental Account Debtor Collection Accounts; provided that in the case of Governmental
Account Debtor Collection Accounts, Borrowers shall cause such Deposit Accounts to be subject, at all times, to Deposit Account Restriction
Agreements.
(c) At
all times that any Obligations remain outstanding, Borrower shall maintain one or more separate Deposit Accounts to hold any and all
amounts to be used for payroll, payroll taxes and other employee wage and benefit payments, and shall not commingle any monies allocated
for such purposes with funds in any other Deposit Account; provided, however, that the aggregate balance in such accounts does
not exceed the amount necessary to make the immediately succeeding payroll, payroll tax or benefit payment (or such minimum amount as
may be required by any requirement of Law with respect to such accounts).
Section 5.15 Compliance
with Anti-Terrorism Laws. Agent hereby notifies Credit Parties that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s
policies and practices, Agent is required to obtain, verify and record certain information and documentation that identifies Credit Parties
and their principals, which information includes the name and address of each Credit Party and its principals and such other information
that will allow Agent to identify such party in accordance with Anti-Terrorism Laws. No Credit Party will, or will permit any Subsidiary
to, directly or indirectly, knowingly enter into any contracts or agreements or otherwise engage in transactions directly or indirectly
with or related to any Blocked Person or any Person listed on the OFAC Lists or any Sanctioned Country. Each Credit Party shall immediately
notify Agent if such Credit Party has knowledge that any Borrower, any additional Credit Party or any of their respective Affiliates
or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is or becomes a Blocked
Person or (a) is convicted on, (b) enters into a settlement agreement with a U.S. government agency, (c) pleads nolo contendere
to, (d) is indicted on, or (e) is arraigned and held over on charges involving money laundering or predicate crimes to money
laundering, Anti-Terrorism Laws or export control laws. No Credit Party will, or will permit any Subsidiary to, directly or indirectly,
(i) conduct any business or engage in any transaction or dealing directly or indirectly with or related to any Blocked Person or
Sanctioned Country, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for
the benefit of any Blocked Person or Sanctioned Country, (ii) deal in, or otherwise engage in any transaction relating to, any property
or interests in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law,
or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
Section 5.16 Change
in Accounting. No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (i) make any significant
change in accounting treatment or reporting practices, except as required by GAAP or required to be GAAP compliant or (ii) change
the fiscal year or method for determining fiscal quarters of any Credit Party or of any Consolidated Subsidiary.
Section 5.17 Investment
Company Act. No Credit Party shall, nor shall it permit any Subsidiary to, directly or indirectly, engage in any business, enter
into any transaction, use any securities or take any other action or permit any of its Subsidiaries to do any of the foregoing, that
would cause it or any of its Subsidiaries to become subject to the registration requirements of the Investment Company Act, by virtue
of being an “investment company” or a company “controlled” by an “investment company” not entitled
to an exemption within the meaning of the Investment Company Act.
Section 5.18 Agreements
Regarding Receivables. No Credit Party may backdate, postdate or redate any of its invoices. No Credit Party may make any sales on
extended dating or credit terms with respect to Eligible Accounts beyond that customary in such Credit Party’s industry and consented
to in advance by Agent. In addition to the Borrowing Base Certificate to be delivered in accordance with this Agreement, Borrower Representative
shall notify Agent promptly upon any Borrower’s learning thereof, in the event any Eligible Account becomes ineligible for any
reason, other than the aging of such Account, and of the reasons for such ineligibility. Borrower Representative shall also notify Agent
promptly of all material disputes and claims with respect to the Accounts of any Borrower, and such Borrower will settle or adjust such
material disputes and claims at no expense to Agent; provided, however, no Borrower may, without Agent’s consent, grant (a) any
discount, credit or allowance in respect of its Accounts (i) which is outside the Ordinary Course of Business or (ii) which
discount, credit or allowance exceeds an amount equal to $100,000 in the aggregate with respect to any individual Account of (b) any
materially adverse extension, compromise or settlement to any customer or account debtor with respect to any then Eligible Account. Nothing
permitted by this Section 5.16, however, may be construed to alter in any the criteria for Eligible Accounts, or Eligible Inventory
provided in Section 1.1.
Section 5.19 Restricted
Foreign Subsidiaries.
(a) No
Credit Party shall permit the total amount of cash and Cash Equivalents held by Restricted Foreign Subsidiaries to at any time exceed
(i) prior to the joinder of the Post-Closing Guarantors, $4,000,000 (or the equivalent thereof in any foreign currency), in the
aggregate, (ii) after the joinder of the Post-Closing Guarantors, $2,000,000 (or the equivalent thereof in any foreign currency),
in the aggregate.
(b) No
Credit Party shall permit the total amount of cash and Cash Equivalents held by Foreign Guarantors to at any time exceed $2,000,000,
in the aggregate.
(c) No
Credit Party shall make any Asset Disposition to or Investment in any Restricted Foreign Subsidiary other than Investments of cash and
Cash Equivalents permitted to be made pursuant to clause (i) of the definition of “Permitted Investment”.
(d) No
Credit Party shall make any Asset Disposition to or Investment in any Foreign Guarantor other than Investments of cash and Cash Equivalents
permitted to be made pursuant to clause (j) of the definition of “Permitted Investment”.
(e) (i) No
Credit Party will, or will permit any Subsidiary to, commingle any of its assets (including any bank accounts, cash or Cash Equivalents)
with the assets of any Person other than a Credit Party (other than a Foreign Guarantor), and (ii) no Credit Party will permit any
Restricted Foreign Subsidiary to commingle any of its assets (including any bank accounts, cash or Cash Equivalents) with the assets
of a Credit Party.
(f) Except
with respect to the Post-Closing Guarantors, no Credit Party shall permit any Restricted Foreign Subsidiary to own, or have an exclusive
license in respect of, any Material Intangible Assets.
Article 6
– FINANCIAL COVENANTS
Section 6.1 Minimum
Net Product Sales. Credit Parties shall not permit Net Product Sales for any applicable Defined Period, as tested quarterly on the
last day of each Defined Period commencing with the Defined Period ending on March 31, 2024, to be less than the Applicable Minimum
Net Product Sales Threshold for such Defined Period. For the avoidance of doubt, in no event shall any Net Product Sales attributable
to any entity or assets acquired pursuant to or in connection with an Acquisition be counted for purposes of determining Borrower's compliance
with the financial covenant set forth in Section 6.1.
Section 6.2 Minimum
Liquidity. Commencing on the Closing Date and at all times thereafter, Credit Parties shall not permit Liquidity to be less than
Ten Million Dollars ($10,000,000) at any time.
Section 6.3 Evidence
of Compliance. Borrowers shall furnish to Agent, as required by Section 4.1, a Compliance Certificate as evidence of (a) monthly
cash and Cash Equivalents, as of the date that is five (5) Business Days prior to the delivery of such Compliance Certificate of
(x) Borrowers, (y) Credit Parties taken as a whole, and (z) Restricted Foreign Subsidiaries, (b) as applicable, Borrowers’
compliance with the covenants in this Article, and (c) that no Event of Default specified in this Article has occurred. The
Compliance Certificate shall include, without limitation, (i) a statement and report, in form and substance reasonably satisfactory
to Agent, detailing Borrowers’ calculations, and (ii) if requested by Agent, back-up documentation (including, without limitation,
bank statements, invoices, receipts and other evidence of costs incurred during such month as Agent shall reasonably require) evidencing
the propriety of the calculations. A breach of a financial covenant contained in Section 6.1 shall be deemed to have occurred as
of the last day of any specified Defined Period, regardless of when the financial statements reflecting such breach are delivered to
Agent.
Article 7
– CONDITIONS
Section 7.1 Conditions
to Closing. The obligation of each Lender to make the initial Loans on the Closing Date shall be subject to the receipt by Agent
of each agreement, document and instrument set forth on the closing checklist attached hereto as Exhibit F, each in form and substance
satisfactory to Agent, and such other closing deliverables reasonably requested by Agent and Lenders, and to the satisfaction of the
following conditions precedent, each to the satisfaction of Agent and Lenders in their reasonable discretion:
(a) the
receipt by Agent of executed counterparts of this Agreement and the other Financing Documents;
(b) the
payment of all fees, expenses and other amounts due and payable under each Financing Document; and
(c) since
December 31, 2022, the absence of any material adverse change in any aspect of the business, operations, properties or condition
(financial or otherwise) of any Credit Party, or any event or condition which would reasonably be expected to result in such a material
adverse change.
Each Lender, by delivering
its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Financing
Document and each other document, agreement and/or instrument required to be approved by Agent, Required Lenders or Lenders, as applicable,
on the Closing Date.
Section 7.2 Conditions
to Each Loan. The obligation of the Lenders to make a Loan or an advance in respect of any Loan (including the initial Loans), is
subject to the satisfaction of the following additional conditions:
(a) (i) in
the case of the initial borrowing of Revolving Loans, receipt by Agent of a Notice of Borrowing and the initial Borrowing Base Certificate,
prepared as of the date of such initial borrowing of Revolving Loans and (ii) in the case of each subsequent borrowing of Revolving
Loans, receipt by Agent of a Notice of Borrowing and an updated Borrowing Base Certificate;
(b) in
the case of the initial borrowing of Revolving Loans, (i) the Collections Account Activation Date shall have occurred and Agent
shall have received a fully executed Deposit Account Control Agreement with respect to each Collections Account and (ii) Agent shall
have completed a reasonably satisfactory field exam and all other necessary or reasonably desirable audits and appraisals with respect
to Borrowing Base Collateral, the results of which are reasonably satisfactory to Agent and Lenders;
(c) in
the case of a Term Loan advance, receipt by Agent and Term Loan Servicer of a Notice of Borrowing in accordance with the provisions of
Section 2.1(a)(ii);
(d) the
fact that, immediately after such borrowing and after application of the proceeds thereof, the Revolving Loan Outstandings will not exceed
the Revolving Loan Limit;
(e) with
respect to any Term Loan Tranche 2, the Term Loan Tranche 2 Activation Date has occurred;
(f) with
respect to any Term Loan Tranche 3, the Term Loan Tranche 3 Activation Date has occurred;
(g) with
respect to Term Loan Tranche 2, (i) the most recent Compliance Certificate delivered (or required to be delivered) by Borrower pursuant
to Section 4.1(i) with respect to the last month of a calendar quarter prior to the proposed funding date for Term Loan Tranche
2 Loans demonstrates to Agent’s and each Lender’s satisfaction that the Net Product Sales for the Defined Period ending on
the last day of the applicable quarter for which such Compliance Certificate is required to be delivered are greater than or equal to
the Applicable Minimum Net Product Sales Threshold for such Defined Period, (ii) the most recent Compliance Certificate delivered
(or required to be delivered) by Borrower pursuant to Section 4.1(i) prior to the proposed funding date for Term Loan Tranche
2 Loans demonstrates to Agent’s and each Lender’s satisfaction that the Annual Cash Burn for the Defined Period ending on
the last day of the applicable month for which such Compliance Certificate is required to be delivered is less than the maximum Annual
Cash Burn amount set forth on Schedule 7.2 for the applicable period during which the Term Loan Tranche 2 funding occurs, (iii) Agent
has received evidence that demonstrates to Agent’s and each Lender’s satisfaction that Borrower is in compliance with the
financial covenant set forth in Section 6.2 as of the funding date for the Term Loan Tranche 2 Loans, and (iv) Borrower has
delivered to Agent a certificate of a Responsible Officer of Borrower certifying to the condition contained in clause (iii) above
and that no Default or Event of Default shall have occurred and be continuing;
(h) with
respect to Term Loan Tranche 3, (i) the most recent Compliance Certificate delivered (or required to be delivered) by Borrower pursuant
to Section 4.1(i) with respect to the last month of a calendar quarter prior to the proposed funding date for Term Loan Tranche
3 Loans demonstrates to Agent’s and each Lender’s satisfaction that the Net Product Sales for the Defined Period ending on
the last day of the applicable quarter for which such Compliance Certificate is required to be delivered are greater than or equal to
the Applicable Minimum Net Product Sales Threshold for such Defined Period, (ii) the most recent Compliance Certificate delivered
(or required to be delivered) by Borrower pursuant to Section 4.1(i) prior to the proposed funding date for Term Loan Tranche
3 Loans demonstrates to Agent’s and each Lender’s satisfaction that the Annual Cash Burn for the Defined Period ending on
the last day of the applicable month for which such Compliance Certificate is required to be delivered is less than the maximum Annual
Cash Burn amount set forth on Schedule 7.2 for the applicable period during which the Term Loan Tranche 3 funding occurs, (iii) Agent
has received evidence that demonstrates to Agent’s and each Lender’s satisfaction that Borrower is in compliance with the
financial covenant set forth in Section 6.2 as of the funding date for the Term Loan Tranche 3 Loans, and (iv) Borrower has
delivered to Agent a certificate of a Responsible Officer of Borrower certifying to the conditions contained in clause (iii) above
and that no Default or Event of Default shall have occurred and be continuing;
(i) the
fact that, immediately before and after such advance, no Default or Event of Default shall have occurred and be continuing;
(j) the
fact that the representations and warranties of each Credit Party contained in the Financing Documents shall be true, correct and complete
in all material respects on and as of the date of such borrowing, except to the extent that any such representation or warranty relates
to a specific earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such
specific earlier date; provided, however, in each case, such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof;
(k) with
respect to any Term Loan Tranche 2 borrowing and Term Loan Tranche 3 borrowing, as determined by Agent in its Permitted Discretion, there
has not been any material adverse deviation by Credit Parties and their Subsidiaries from the final financial projections delivered by
Borrower to Agent and Lenders prior to the Closing Date; and
(l) the
fact that no adverse change in the condition (financial or otherwise), properties, business, prospects, or operations of Borrowers or
any other Credit Party shall have occurred and be continuing with respect to Borrowers or any Credit Party since the date of this Agreement.
Each giving of a Notice of
Borrowing hereunder and each acceptance by any Borrower of the proceeds of any Loan made hereunder shall be deemed to be (y) a representation
and warranty by each Credit Party on the date of such notice or acceptance as to the facts specified in this Section, and (z) a
restatement by each Credit Party that each and every one of the representations made by it in any of the Financing Documents is true
and correct as of such date (except to the extent that such representations and warranties expressly relate solely to an earlier date).
Section 7.3 Searches.
Before the Closing Date, and thereafter (as and when determined by Agent in its discretion), Agent shall have the right to perform, all
at Borrowers’ expense, the searches described in clauses (a), (b), and (c) below against Borrowers and any other Credit Party,
the results of which are to be consistent with Credit Parties’ representations and warranties under this Agreement and the satisfactory
results of which shall be a condition precedent to all advances of Loan proceeds: (a) UCC searches with the Secretary of State of
the jurisdiction in which the applicable Person is organized; (b) judgment, pending litigation, federal tax lien, personal property
tax lien, and corporate and partnership tax lien searches, in each jurisdiction searched under clause (a) above; and (c) searches
of applicable corporate, limited liability company, partnership and related records to confirm the continued existence, organization
and good standing of the applicable Person and the exact legal name under which such Person is organized.
Section 7.4 Post-Closing
Requirements. Unless Agent shall otherwise consent in writing, Credit Parties shall complete each of the post-closing obligations
and/or provide to Agent each of the documents, instruments, agreements and information listed on Schedule 7.4 attached hereto
on or before the date set forth for each such item thereon, each of which shall be completed or provided in form and substance reasonably
satisfactory to Agent.
Article 8
– RESERVED
Article 9
– SECURITY AGREEMENT
Section 9.1 Generally.
As security for the payment and performance of the Obligations, and without limiting any other grant of a Lien and security interest
in any Security Document, each Credit Party hereby assigns, grants and pledges to Agent, for the benefit of itself and Lenders, and,
subject only to Permitted Liens that may have priority as a matter of applicable Law, a continuing first priority Lien on and security
interest in, upon, and to the property and assets set forth on Schedule 9.1 attached hereto and made a part hereof.
Section 9.2 Representations
and Warranties and Covenants Relating to Collateral.
(a) The
security interest granted pursuant to this Agreement constitutes a valid and, to the extent such security interest is required to be
perfected (except in respect of Excluded Perfection Assets) by this Agreement and any other Financing Document, continuing perfected
security interest in favor of Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in
the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion
of the filings and other actions specified on Schedule 9.2(b) (which, in the case of all filings and other documents referred
to on such schedule, have been delivered to Agent in completed and duly authorized form), (ii) with respect to any Deposit Account
for which Deposit Account Control Agreements are required pursuant to this Agreement, the execution of Deposit Account Control Agreements,
(iii) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a contractual obligation
granting control to Agent over such letter-of-credit rights, (iv) in the case of electronic chattel paper, the completion of all
steps necessary to grant control to Agent over such electronic chattel paper, (v) in the case of all certificated stock, debt instruments
and investment property, the delivery thereof to Agent of such certificated stock, debt instruments and investment property consisting
of instruments and certificates, in each case properly endorsed for transfer to Agent or in blank, (vi) in the case of all investment
property not in certificated form, the execution of control agreements with respect to such investment property and (vii) in the
case of all other instruments and tangible chattel paper that are not certificated stock, debt instructions or investment property, the
delivery thereof to Agent of such instruments and tangible chattel paper. Such security interest shall be prior to all other Liens on
the Collateral except for Permitted Liens. Except to the extent not required pursuant to the terms of this Agreement, all actions by
each Credit Party necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
(b) Schedule 9.2(b) (as
updated by the Compliance Certificates delivered to Agent from time to time after the Closing Date) sets forth (i) each chief executive
office and principal place of business of each Credit Party and each of their respective Subsidiaries, and (ii) all of the addresses
(including all warehouses) at which any of the Collateral is located and/or books and records of Credit Parties regarding any Collateral
or any of Credit Party’s assets, liabilities, business operations or financial condition are kept, which such Schedule 9.2(b) indicates
in each case which Credit Parties have Collateral and/or books and records located at such address, and, in the case of any such address
not owned by one or more of the Credit Parties, indicates the nature of such location (e.g., leased business location operated by Credit
Parties, third party warehouse, consignment location, processor location, etc.) and the name and address of the third party owning
and/or operating such location.
(c) Without
limiting the generality of Section 3.2, except as indicated on Schedule 3.19 with respect to any rights of any Credit
Party as a licensee under any license of Intellectual Property owned by another Person, and except for the filing of financing statements
under the UCC, no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or consent
of any other Person is required for (i) the grant by each Credit Party to Agent of the security interests and Liens in the Collateral
provided for under this Agreement and the other Security Documents (if any), or (ii) the granting of the security interest or the
exercise by Agent of its rights and remedies with respect to the Collateral provided for under this Agreement and the other Security
Documents or under any applicable Law, including the UCC and neither any such grant of Liens in favor of Agent or exercise of rights
by Agent shall violate or cause a default under any agreement between any Credit Party and any other Person relating to any such collateral,
including any license to which a Credit Party is a party, whether as licensor or licensee, with respect to any Intellectual Property,
whether owned by such Credit Party or any other Person.
(d) As
of the Closing Date, except as set forth on Schedule 9.2(d) and except to the extent constituting Excluded Perfection Assets,
no Credit Party has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights,
commercial tort claims, Instruments, documents or investment property (in each case, other than Excluded Perfection Assets or Equity
Interests in any Subsidiaries of such Credit Party disclosed on Schedule 3.4), and Credit Parties shall give notice to Agent
promptly (but in any event not later than the delivery by Credit Parties of the next quarterly Compliance Certificate required pursuant
to Section 4.1 above) upon the acquisition by any Credit Party of any such Chattel Paper, letter of credit rights, commercial tort
claims, Instruments, documents, investment property, in each case, other than Excluded Perfection Assets. No Person other than Agent
or (if applicable) any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment
property (including Securities Accounts and commodities account), letter of credit rights or electronic chattel paper in which any Credit
Party has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities
intermediary with whom any Deposit Account, Securities Account or commodities account of Credit Parties is maintained).
(e) Credit
Parties shall not take any of the following actions or make any of the following changes unless Credit Parties have given at least thirty
(30) days prior written notice to Agent of Credit Parties’ intention to take any such action (which such written notice shall include
an updated version of any Schedule impacted by such change) and have executed any and all documents, instruments and agreements
and taken any other actions which Agent may request after receiving such written notice in order to protect and preserve the Liens, rights
and remedies of Agent with respect to the Collateral: (i) change the legal name or organizational identification number of any Credit
Party as it appears in official filings in the jurisdiction of its organization, (ii) change the jurisdiction of incorporation or
formation of any Borrower or Credit Party or allow any Borrower or Credit Party to designate any jurisdiction as an additional jurisdiction
of incorporation for such Borrower or Credit Party, or change the type of entity that it is; provided that in no event shall a
Credit Party organized under the laws of the United States or any state thereof be reorganized under the laws of a jurisdiction other
than the United States or any State thereof or (iii) change its chief executive office, principal place of business, or the location
of its books and records or move any Collateral to or place any Collateral on any location that is not then listed on the Schedules,
as updated from time to time pursuant to the terms of this Agreement, and/or establish (other than Collateral that is in transit or out
for repair) any business location at any location that is not then listed on the Schedules.
(f) Credit
Parties shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor,
or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the Ordinary Course
of Business, made while no Default exists and in amounts that are otherwise not material with respect to the Account and which, after
giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loan Outstandings) without the prior written consent
of Agent. Without limiting the generality of this Agreement or any other provisions of any of the Financing Documents relating to the
rights of Agent after the occurrence and during the continuance of an Event of Default, Agent shall have the right at any time after
the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Credit Parties with respect to the
obligation of any Account Debtor to make payment or otherwise render performance to Credit Parties and with respect to any property that
secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise
the amount or payment of such Accounts.
(g) Without
limiting the generality of Sections 9.2(c) and 9.2(e):
(i) Credit
Parties shall deliver to Agent all tangible Chattel Paper and all Instruments and documents (other than any Excluded Perfection Assets)
owned by any Credit Party and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer
or assignment, all in form and substance satisfactory to Agent. Credit Parties shall provide Agent with “control” (as defined
in Article 9 of the UCC) of all electronic Chattel Paper (other than Excluded Perfection Assets) owned by any Credit Party and constituting
part of the Collateral by having Agent identified as the assignee on the records pertaining to the single authoritative copy thereof
and otherwise complying with the applicable elements of control set forth in the UCC. Credit Parties also shall deliver to Agent all
security agreements securing any such Chattel Paper and securing any such Instruments (other than Excluded Perfection Assets). Credit
Parties will mark conspicuously all such Chattel Paper and all such Instruments and documents (other than Excluded Perfection Assets)
with a legend, in form and substance satisfactory to Agent, indicating that such Chattel Paper and such instruments and documents are
subject to the security interests and Liens in favor of Agent created pursuant to this Agreement and the Security Documents. Credit Parties
shall comply with all the provisions of Section 5.14 with respect to the Deposit Accounts and Securities Accounts of Credit Parties.
(ii) Credit
Parties shall deliver to Agent all letters of credit (except to the extent constituting an Excluded Perfection Asset) on which any Credit
Party is the beneficiary and which give rise to letter of credit rights owned by such Credit Party which constitute part of the Collateral
in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory
to Agent. Except with respect to Excluded Perfection Assets, Credit Parties shall take any and all actions as may be necessary or desirable,
or that Agent may request, from time to time, to cause Agent to obtain exclusive “control” (as defined in Article 9
of the UCC) of any such letter of credit rights in a manner acceptable to Agent.
(iii) Credit
Parties shall promptly advise Agent upon any Credit Party becoming aware that it has any interests in any commercial tort claim (except
to the extent constituting an Excluded Perfection Asset), which such notice shall include descriptions of the events and circumstances
giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect
such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Credit
Parties shall, with respect to any such commercial tort claim, execute and deliver to Agent such documents as Agent shall request to
perfect, preserve or protect the Liens, rights and remedies of Agent with respect to any such commercial tort claim.
(iv) Subject
to Section 7.4, unless Agent shall otherwise consent, Credit Parties shall obtain a landlord’s agreement, mortgagee agreement,
or bailee agreement, as applicable, from the lessor of each leased property, the mortgagee of owned property or the warehouseman, consignee,
bailee at any business location, in each case, located in the United States and (a) which is a Credit Party’s chief executive
office or (b) where (i) any portion of the Collateral included in or proposed to be included in the Borrowing Base, or (ii) any
other portion of the Collateral with a value in excess of $2,000,000 in the aggregate, is located, in each case, which agreement or letter
shall be reasonably satisfactory in form and substance to Agent; provided that this clause (ii) shall not apply to any equipment
or inventory that is in-transit or that is located at hospitals or other non-warehouse or leased locations where consigned inventory
or equipment is held. Credit Parties shall timely and fully pay and perform its obligations under all leases and other agreements with
respect to each of the locations specified in the preceding sentence. In no event shall the Credit Parties maintain tangible Collateral
(other than Inventory with contract manufacturers and Inventory in transit in the Ordinary Course of Business) with a value in excess
of $250,000 outside of the United States without Agent’s prior consent.
(v) Credit
Parties shall cause all material Equipment and other material tangible personal property other than Inventory to be maintained and preserved
in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to
be made all repairs, replacements and other improvements in connection therewith that are reasonably necessary or desirable to such end.
Upon request of Agent, Credit Parties shall promptly deliver to Agent any and all certificates of title, applications for title or similar
evidence of ownership of all such tangible personal property (other than Excluded Perfection Assets) and shall cause Agent to be named
as lienholder on any such certificate of title or other evidence of ownership. Credit Parties shall not permit any such tangible personal
property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Agent.
(vi) Each
Credit Party hereby authorizes Agent to file without the signature of such Credit Party one or more UCC financing statements relating
to liens on personal property relating to all or any part of the Collateral, which financing statements may list Agent as the “secured
party” and such Credit Party as the “debtor” and which describe and indicate the collateral covered thereby as all
or any part of the Collateral under the Financing Documents (including an indication of the collateral covered by any such financing
statement as “all assets” of such Borrower now owned or hereafter acquired) in such jurisdictions as Agent from time to time
determines are appropriate, and to file without the signature of such Credit Party any continuations of or corrective amendments to any
such financing statements, in any such case in order for Agent to perfect, preserve or protect the Liens, rights and remedies of Agent
with respect to the Collateral. Each Credit Party also ratifies its authorization for Agent to have filed in any jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof.
(vii) As
of the Closing Date, no Credit Party holds, and after the Closing Date Credit Parties shall promptly notify Agent in writing upon creation
or acquisition by any Credit Party of, any Collateral which constitutes a claim against any Governmental Authority, including, without
limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted
by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. Upon the request
of Agent, Credit Parties shall take such steps as may be necessary or desirable, or that Agent may request, to comply with any such applicable
Law.
(viii) Credit
Parties shall furnish to Agent from time to time any statements and schedules further identifying or describing the Collateral and any
other information, reports or evidence concerning the Collateral as Agent may reasonably request from time to time.
Article 10
- EVENTS OF DEFAULT
Section 10.1 Events
of Default. For purposes of the Financing Documents, the occurrence of any of the following conditions and/or events, whether voluntary
or involuntary, by operation of law or otherwise, shall constitute an “Event of Default”:
(a) (i) any
Credit Party shall fail to pay when due any principal, interest, premium or fee under any Financing Document or any other amount payable
under any Financing Document, (ii) there shall occur any default in the performance of or compliance with any of the following sections or
articles of this Agreement: Section 2.11, Section 4.1, Section 4.2(b), Article 5, Article 6, or Section 7.4,
or (iii) there shall occur any default in the performance of or compliance with any of the following sections of this Agreement:
Section 4.4(c), Section 4.6, Section 4.9, Section 4.11, Section 4.16, Section 4.17 and such default
is not remedied by the Credit Party or waived by Agent within five (5) Business Days after the earlier of (i) receipt by Borrower
Representative of notice from Agent or Required Lenders of such default, or (ii) actual knowledge of any Responsible Officer of
the Borrower or any other Credit Party of such default;
(b) any
Credit Party defaults in the performance of or compliance with any term contained in this Agreement or in any other Financing Document
(other than occurrences described in other provisions of this Section 10.1 for which a different grace or cure period is specified
or for which no grace or cure period is specified and thereby constitute immediate Events of Default) and such default is not remedied
by the Credit Party or waived by Agent within thirty (30) days after the earlier of (i) receipt by Borrower Representative of notice
from Agent or Required Lenders of such default, or (ii) actual knowledge of any Responsible Officer of the Borrower or any other
Credit Party of such default;
(c) any
written representation, warranty, certification or statement made by any Credit Party or any other Person in any Financing Document or
in any certificate, financial statement or other document delivered pursuant to any Financing Document is incorrect in any respect (or
in any material respect if such representation, warranty, certification or statement is not by its terms already qualified as to materiality)
when made (or deemed made);
(d) (i) failure
of any Credit Party to pay when due or within any applicable grace period any principal, interest or other amount on Debt (other than
the Loans), or the occurrence of any breach, default, condition or event with respect to any Debt (other than the Loans), if the effect
of such failure or occurrence is to cause or to permit the holder or holders of any such Debt, or to cause, Debt or other liabilities
having an individual principal amount in excess of $250,000 or having an aggregate principal amount in excess of $500,000 to become or
be declared due prior to its stated maturity, or (ii) without limiting the foregoing, (A) the occurrence of any breach or default
under any terms or provisions of any Subordinated Debt Document or under any agreement subordinating the Subordinated Debt to all or
any portion of the Obligations or the occurrence of any event requiring (or that would allow the holders thereof to require) the prepayment
or mandatory redemption of any Subordinated Debt, or (B) the occurrence of any breach or default under the Existing Kosciusko County
Mortgage or under the terms of any other loan agreement or other document governing the Kosciusko County Mortgage Debt;
(e) any
Credit Party or any Subsidiary of a Credit Party shall commence a voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or any analogous procedure
or step is taken in any other jurisdiction) now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action
to authorize the foregoing;
(f) an
involuntary case or other proceeding shall be commenced against any Credit Party or any Subsidiary of a Credit Party seeking liquidation,
reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of forty-five
(45) days; or an order for relief shall be entered against any Credit Party or any Subsidiary of a Credit Party under applicable federal
bankruptcy, insolvency or other similar law in respect of (i) bankruptcy, liquidation, winding-up, dissolution or suspension of
general operations, (ii) composition, rescheduling, reorganization, arrangement or readjustment of, or other relief from, or stay
of proceedings to enforce, some or all of the debts or obligations, or (iii) possession, foreclosure, seizure or retention, sale
or other disposition of, or other proceedings to enforce security over, all or any substantial part of the assets of such Credit Party
or Subsidiary;
(g) (i) institution
of any steps by any Person to terminate a Pension Plan if as a result of such termination any Credit Party or any member of the Controlled
Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in
excess of $250,000, (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under
Section 303(k) of ERISA or Section 430(k) of the Code or an event occurs that could reasonably be expected to give
rise to a Lien under Section 4068 of ERISA, or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of such withdrawal (including any outstanding
withdrawal liability that any Credit Party or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds
$500,000;
(h) there
is entered against any Credit Party or any Subsidiary thereof (i) one or more judgments or orders for the payment of money or fines
or penalties issued by any Governmental Authority involving in the aggregate a liability (not fully covered or paid by insurance as to
which the relevant insurance company has acknowledged coverage) of $500,000 or more, or (ii) one or more non-monetary judgments
that have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case (i) or
(ii), (A) enforcement proceedings are commenced by any creditor or any such Governmental Authority, as applicable, upon such judgment,
order, penalty or fine, as applicable, or (B) such judgment, order, penalty or fine, as applicable, shall not have been vacated,
discharged, stayed or bonded, as applicable, pending appeal within 20 days from the entry or issuance thereof;
(i) except
solely as a result of any action or inaction of Agent or any Lenders (provided that such action or inaction is not caused by a Credit
Party’s failure to comply with the terms of the Financing Documents), any Lien created by any of the Security Documents shall at
any time fail to constitute a valid and perfected Lien on all of the Collateral purported to be encumbered thereby, subject to no prior
or equal Lien except Permitted Liens, or any Credit Party shall so assert;
(j) the
institution by any Governmental Authority of criminal proceedings against any Credit Party;
(k) a
default or event of default occurs under any other Financing Document and any applicable grace period under such Financing Document has
expired;
(l) if
any Credit Party is or becomes an entity whose equity is registered with the SEC, and/or is publicly traded on and/or registered with
a public securities exchange, such Credit Party’s equity fails to remain registered with the SEC in good standing, and/or such
equity fails to remain publicly traded on and registered with a public securities exchange;
(m) the
occurrence of any fact, event or circumstance that could reasonably be expected to result in a Material Adverse Effect;
(n) (i) the
voluntary withdrawal, Recall or cessation of production (other than any temporary cessation of production in the ordinary course of business)
or institution of any action or proceeding by the FDA or similar Governmental Authority to order the withdrawal or Recall of any material
Product or Product category from the market or to enjoin any Credit Party, its Subsidiaries or any representative of any Credit Party
or its Subsidiaries from manufacturing, marketing, selling or distributing any such Product or Product category, (ii) the institution
of any action or proceeding by FDA or any other Governmental Authority to revoke, suspend, reject, withdraw, limit, or restrict any Regulatory
Required Permit held by any Credit Party, its Subsidiaries or any representative of Borrower or its Subsidiaries, which, in each case
or in the aggregate, has or could reasonably be expected to result in Material Adverse Effect, (iii) the commencement of any enforcement
action against any Credit Party, its Subsidiaries or any representative of any Credit Party or its Subsidiaries (with respect to the
business of any Credit Party or its Subsidiaries) by FDA or any other Governmental Authority which has or could reasonably be expected
to result in a Material Adverse Effect, or (iv) the occurrence of adverse test results in connection with a Product, which, in each
case or in the aggregate, has or could reasonably be expected to result in Material Adverse Effect;
(o) any
Credit Party defaults under or breaches any Material Contract (after any applicable grace period contained therein), or a Material Contract
shall be terminated by a third party or parties party thereto prior to the expiration thereof, or there is a loss of a material right
of a Credit Party under any Material Contract to which it is a party;
(p) the
occurrence of a Change in Control; or
(q) any
of the Financing Documents shall for any reason fail to constitute the valid and binding agreement of any party thereto, or any Credit
Party shall so assert, in each case, unless such Financing Document terminates pursuant to the terms and conditions thereof without any
breach or default thereunder by any Credit Party thereto.
All cure periods provided
for in this Section 10.1 shall run concurrently with any cure period provided for in any applicable Financing Documents under which
the default occurred.
Section 10.2 Acceleration
and Suspension or Termination of Revolving Loan Commitment and Term Loan Commitment. Upon the occurrence and during the continuance
of an Event of Default, Agent may, and shall if requested by Required Lenders, (a) by notice to Borrower Representative suspend
or terminate the Revolving Loan Commitment and/or Term Loan Commitment and the obligations of Agent, Term Loan Servicer and the Lenders
with respect thereto, in whole or in part (and, if in part, each Lender’s Revolving Loan Commitment and/or Term Loan Commitment
shall be reduced in accordance with its Pro Rata Share), and/or (b) by notice to Borrower Representative declare all or any portion
of the Obligations to be, and the Obligations shall thereupon become, immediately due and payable, with accrued interest thereon, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party and Credit Parties will
pay the same; provided, however, that in the case of any of the Events of Default specified in Section 10.1(e) or
10.1(f) above, without any notice to any Credit Party or any other act by Agent or the Lenders, the Revolving Loan Commitment and
Term Loan Commitment and the obligations of Agent, Term Loan Servicer and the Lenders with respect thereto shall thereupon immediately
and automatically terminate and all of the Obligations shall become immediately and automatically due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party and Credit Parties will pay the same.
Section 10.3 UCC
Remedies.
(a) Upon
the occurrence of and during the continuance of an Event of Default under this Agreement or the other Financing Documents, Agent, in
addition to all other rights, options, and remedies granted to Agent under this Agreement or at law or in equity, may exercise, either
directly or through one or more assignees or designees, all rights and remedies granted to it under all Financing Documents and under
the UCC in effect in the applicable jurisdiction(s) and under any other applicable law; including, without limitation:
(i) the
right to take possession of, send notices regarding, and collect directly the Collateral, with or without judicial process;
(ii) the
right to (by its own means or with judicial assistance) enter any of Credit Parties’ premises and take possession of the Collateral,
or render it unusable, or to render it usable or saleable, or dispose of the Collateral on such premises in compliance with subsection
(iii) below and to take possession of Credit Parties’ original books and records, to obtain access to Credit Parties’
data processing equipment, computer hardware and software relating to the Collateral for the sole purposes of using all of the foregoing
and the information contained therein to enforce its rights in and exercise remedies against the Collateral as set forth in the Financing
Documents, without any liability for rent, storage, utilities, or other sums, and Credit Parties shall not resist or interfere with such
action (if Credit Parties’ books and records are prepared or maintained by an accounting service, contractor or other third party
agent, Credit Parties hereby irrevocably authorize such service, contractor or other agent, upon notice by Agent to such Person that
an Event of Default has occurred and is continuing, to deliver to Agent or its designees such books and records, and to follow Agent’s
instructions with respect to further services to be rendered);
(iii) the
right to require Credit Parties at Credit Parties’ expense to assemble all or any part of the Collateral and make it available
to Agent at any place designated by Lender;
(iv) the
right to notify postal authorities to change the address for delivery of Credit Parties’ mail to an address designated by Agent
and to receive, open and dispose of all mail addressed to any Credit Party; and/or
(v) the
right to enforce Credit Parties’ rights against Account Debtors and other obligors, including, without limitation, (i) the
right to collect Accounts directly in Agent’s own name (as agent for Lenders) and to charge the collection costs and expenses,
including documented out-of-pocket attorneys’ fees, to Credit Parties, and (ii) the right, in the name of Agent or any designee
of Agent or Credit Parties, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone, telegraph
or otherwise, including, without limitation, verification of Credit Parties’ compliance with applicable Laws. Credit Parties shall
cooperate fully with Agent in an effort to facilitate and promptly conclude such verification process. Such verification may include
contacts between Agent and applicable federal, state and local regulatory authorities having jurisdiction over the Credit Parties’
affairs, all of which contacts Credit Parties hereby irrevocably authorize.
(b) Each
Credit Party agrees that a notice received by it at least ten (10) days before the time of any intended public sale, or the time
after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale
or other disposition. If permitted by applicable law, any perishable Collateral which threatens to speedily decline in value or which
is sold on a recognized market may be sold immediately by Agent without prior notice to Credit Parties. At any sale or disposition of
Collateral, Agent may (to the extent permitted by applicable law) purchase all or any part of the Collateral, free from any right of
redemption by Credit Parties, which right is hereby waived and released. Each Credit Party covenants and agrees not to interfere with
or impose any obstacle to Agent’s exercise of its rights and remedies with respect to the Collateral. Agent shall have no obligation
to clean-up or otherwise prepare the Collateral for sale. Agent may comply with any applicable state or federal law requirements in connection
with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral. Agent may sell the Collateral without giving any warranties as to the Collateral. Agent may specifically disclaim
any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral. If Agent sells any of the Collateral upon credit, Credit Parties will be credited only with payments actually made
by the purchaser, received by Agent and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, Agent may resell the Collateral and Credit Parties shall be credited with the proceeds of the sale. Credit Parties shall
remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Obligations.
(c) Without
restricting the generality of the foregoing and for the purposes aforesaid, each Credit Party hereby appoints and constitutes Agent its
lawful attorney-in-fact with full power of substitution in the Collateral, upon the occurrence and during the continuance of an Event
of Default, to (i) use unadvanced funds remaining under this Agreement or which may be reserved, escrowed or set aside for any purposes
hereunder at any time, or to advance funds in excess of the face amount of the Notes, (ii) pay, settle or compromise all existing
bills and claims, which may be Liens or security interests, or to avoid such bills and claims becoming Liens against the Collateral,
(iii) execute all applications and certificates in the name of such Credit Party and to prosecute and defend all actions or proceedings
in connection with the Collateral, and (iv) do any and every act which such Credit Party might do in its own behalf; it being understood
and agreed that this power of attorney in this subsection (c) shall be a power coupled with an interest and cannot be revoked.
(d) Upon
the occurrence and during the continuance of an Event of Default, subject to any right of any third parties and/or any agreement between
any Borrower and any third party to the extent not granted or entered into in contravention of the terms of this Agreement, Agent and
each Lender is hereby granted a non-exclusive, royalty-free license or other right to use, upon the occurrence and during the continuance
of an Event of Default, without charge, Credit Parties’ labels, mask works, rights of use of any name, any other Intellectual Property
and advertising matter, and any similar property as it pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Agent’s exercise of its rights under this Article, Credit Parties’ rights
under all licenses (whether as licensor or licensee) and all franchise agreements inure to Agent’s and each Lender’s benefit,
subject to any rights of third party licensors or licensees, as applicable.
Section 10.4 Protective
Payments. If any Credit Party fails to pay or perform any covenant or obligation under this Agreement or any other Financing Document,
Agent may pay or perform such covenant or obligation, and all amounts so paid by Agent are Protective Advances and immediately due and
payable, constituting principal and bearing interest at the then highest applicable rate for the Loans hereunder, and secured by the
Collateral. No such payments or performance by Agent shall be construed as an agreement to make similar payments or performance in the
future or constitute Agent’s waiver of any Event of Default. Without limiting the foregoing, each Lender and Borrower hereby authorizes
Agent, without the necessity of any notice or further consent from any Lender, from time to time prior to a Default, to make any Protective
Advance with respect to any Collateral or the Financing Documents which may be necessary to protect the priority, validity or enforceability
of any lien on, and security interest in, any Collateral and the instruments evidencing or securing the obligations of Borrower under
the Financing Documents. Credit Parties agree to pay on demand all Protective Advances. The Lenders must reimburse Agent for any Protective
Advances (in accordance with their Pro Rata Shares) to the extent not reimbursed by Credit Parties.
Section 10.5 Default
Rate of Interest. At the election of Agent or Required Lenders, after the occurrence of an Event of Default and for so long as it
continues, the Loans and other Obligations shall bear interest at rates that are three percent (3.0%) per annum in excess of the rates
otherwise payable under this Agreement; provided, however, that in the case of any Event of Default specified in Section 10.1(e) or
10.1(f) above, such default rates shall apply immediately and automatically without the need for any election or action of any kind
on the part of Agent or any Lender.
Section 10.6 Setoff
Rights. During the continuance of any Event of Default, each Lender is hereby authorized by each Credit Party at any time or from
time to time, with reasonably prompt subsequent notice to such Credit Party (any prior or contemporaneous notice being hereby expressly
waived) to set off and to appropriate and to apply any and all (a) balances held by such Lender or any of such Lender’s Affiliates
at any of its offices for the account of such Credit Party or any of its Subsidiaries (regardless of whether such balances are then due
to such Credit Party or its Subsidiaries), and (b) other property at any time held or owing by such Lender to or for the credit
or for the account of such Credit Party or any of its Subsidiaries, against and on account of any of the Obligations (other than inchoate
indemnification obligations for which no claim has yet been made); except that no Lender shall exercise any such right without the prior
written consent of Agent. Any Lender exercising a right to set off shall purchase for cash (and the other Lenders shall sell) interests
in each of such other Lender’s Pro Rata Share of the Obligations as would be necessary to cause all Lenders to share the amount
so set off with each other Lender in accordance with their respective Pro Rata Share of the Obligations. Each Credit Party agrees, to
the fullest extent permitted by law, that any Lender and any of such Lender’s Affiliates may exercise its right to set off with
respect to the Obligations as provided in this Section 10.6.
Section 10.7 Application
of Proceeds.
(a) Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, each Credit
Party irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent
or Term Loan Servicer from or on behalf of such Borrower or any Guarantor of all or any part of the Obligations, and, as between Credit
Parties on the one hand and Agent, Term Loan Servicer and Lenders on the other, Agent shall have the continuing and exclusive right to
apply and to reapply any and all payments received by Agent or Term Loan Servicer against the Obligations in such manner as Agent may
deem advisable notwithstanding any previous application by Agent.
(b) Following
the occurrence and during the continuance of an Event of Default, but absent the occurrence and continuance of an Acceleration Event,
Agent and Term Loan Servicer, as applicable, shall apply any and all payments received by Agent or Term Loan Servicer (as applicable)
in respect of the Obligations, and any and all proceeds of Collateral received by Agent or Term Loan Servicer, in such order as Agent
or Term Loan Servicer, as applicable, may from time to time elect.
(c) Notwithstanding
anything to the contrary contained in this Agreement, if an Acceleration Event shall have occurred, and so long as it continues, Agent
or Term Loan Servicer, as applicable, shall apply any and all payments received by Agent or Term Loan Servicer, as applicable, in respect
of the Obligations, and any and all proceeds of Collateral received by Agent or Term Loan Servicer, in the following order: first,
to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent or Term Loan Servicer with respect
to this Agreement, the other Financing Documents or the Collateral; second, to all fees, costs, indemnities, liabilities, obligations
and expenses incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents or the Collateral; third,
to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the Bankruptcy Code, would
have accrued on such amounts); fourth, to the principal amount of the Obligations outstanding; and fifth to any other indebtedness
or obligations of Credit Parties owing to Agent, Term Loan Servicer or any Lender under the Financing Documents. Any balance remaining
shall be delivered to Credit Parties or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction
may direct. In carrying out the foregoing, (y) amounts received shall be applied in the numerical order provided until exhausted
prior to the application to the next succeeding category, and (z) each of the Persons entitled to receive a payment in any particular
category shall receive an amount equal to its Pro Rata Share of amounts available to be applied pursuant thereto for such category.
Section 10.8 Waivers.
(a) Except
as otherwise provided for in this Agreement and to the fullest extent permitted by applicable law, each Credit Party waives: (i) presentment,
demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all Financing Documents, the Notes or any other notes, commercial paper,
accounts, contracts, documents, Instruments, Chattel Paper and Guarantees at any time held by Lenders on which any Credit Party
may in any way be liable, and hereby ratifies and confirms whatever Lenders may lawfully do in this regard; (ii) all rights to notice
and a hearing prior to Agent’s or any Lender’s taking possession or control of, or to Agent’s or any Lender’s
replevy, attachment or levy upon, any Collateral or any bond or security which might be required by any court prior to allowing Agent
or any Lender to exercise any of its remedies; and (iii) the benefit of all valuation, appraisal and exemption Laws. Each Credit
Party acknowledges that it has been advised by counsel of its choices and decisions with respect to this Agreement, the other Financing
Documents and the transactions evidenced hereby and thereby.
(b) Each
Credit Party for itself and all its successors and assigns, (i) agrees that its liability shall not be in any manner affected by
any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Lender and made in accordance with the
terms of any Financing Document; (ii) consents to any indulgences and all extensions of time, renewals, waivers, or modifications
that may be granted by Agent, Term Loan Servicer or any Lender with respect to the payment or other provisions of the Financing Documents
and made in accordance with the terms of any Financing Document, and to any substitution, exchange or release of the Collateral, or any
part thereof, with or without substitution, and agrees to the addition or release of any Credit Party, endorsers, guarantors, or sureties,
or whether primarily or secondarily liable, without notice to any other Credit Party and without affecting its liability hereunder; (iii) agrees
that its liability shall be unconditional and without regard to the liability of any other Credit Party, Agent, Term Loan Servicer or
any Lender for any tax on the indebtedness; and (iv) to the fullest extent permitted by law, expressly waives the benefit of any
statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in
conflict with the foregoing.
(c) To
the extent that Agent, Term Loan Servicer or any Lender may have acquiesced in any noncompliance with any requirements or conditions
precedent to the closing of the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute
a waiver by Agent, Term Loan Servicer or any Lender of such requirements with respect to any future disbursements of Loan proceeds and
Agent, Term Loan Servicer or any Lender may at any time after such acquiescence require Credit Parties to comply with all such requirements.
Any forbearance by Agent, Term Loan Servicer or Lender in exercising any right or remedy under any of the Financing Documents, or otherwise
afforded by applicable law, including any failure to accelerate the maturity date of the Loans, shall not be a waiver of or preclude
the exercise of any right or remedy nor shall it serve as a novation of the Notes or as a reinstatement of the Loans or a waiver of such
right of acceleration or the right to insist upon strict compliance of the terms of the Financing Documents. Agent’s, Term Loan
Servicer’s or any Lender’s acceptance of payment of any sum secured by any of the Financing Documents after the due date
of such payment shall not be a waiver of Agent’s, Term Loan Servicer’s and such Lender’s right to either require prompt
payment when due of all other sums so secured or to declare a default for failure to make prompt payment. The procurement of insurance
or the payment of taxes or other Liens or charges by Agent as the result of an Event of Default shall not be a waiver of Agent’s
right to accelerate the maturity of the Loans, nor shall Agent’s receipt of any condemnation awards, insurance proceeds, or damages
under this Agreement operate to cure or waive any Credit Party’s default in payment of sums secured by any of the Financing Documents.
(d) Without
limiting the generality of anything contained in this Agreement or the other Financing Documents, each Credit Party agrees that if an
Event of Default is continuing (i) Agent, Term Loan Servicer and Lenders shall not be subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights, remedies or privileges provided to Agent, Term
Loan Servicer or Lenders shall remain in full force and effect until Agent, Term Loan Servicer or Lenders have exhausted all remedies
against the Collateral and any other properties owned by Credit Parties and the Financing Documents and other security instruments or
agreements securing the Loans have been foreclosed, sold and/or otherwise realized upon in satisfaction of Credit Parties’ obligations
under the Financing Documents.
(e) Nothing
contained herein or in any other Financing Document shall be construed as requiring Agent, Term Loan Servicer or any Lender to resort
to any part of the Collateral for the satisfaction of any of Credit Parties’ obligations under the Financing Documents in preference
or priority to any other Collateral, and Agent may seek satisfaction out of all of the Collateral or any part thereof, in its absolute
discretion in respect of Credit Parties’ obligations under the Financing Documents. In addition, Agent shall have the right from
time to time to partially foreclose upon any Collateral in any manner and for any amounts secured by the Financing Documents then due
and payable as determined by Agent in its sole discretion, including, without limitation, the following circumstances: (i) in the
event any Credit Party defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and/or
interest, Agent may foreclose upon all or any part of the Collateral to recover such delinquent payments, or (ii) in the event Agent
elects to accelerate less than the entire outstanding principal balance of the Loans, Agent may foreclose all or any part of the Collateral
to recover so much of the principal balance of the Loans as Lender may accelerate and such other sums secured by one or more of the Financing
Documents as Agent may elect. Notwithstanding one or more partial foreclosures, any unforeclosed Collateral shall remain subject to the
Financing Documents to secure payment of sums secured by the Financing Documents and not previously recovered.
(f) To
the fullest extent permitted by law, each Credit Party, for itself and its successors and assigns, waives in the event of foreclosure
of any or all of the Collateral any equitable right otherwise available to any Credit Party which would require the separate sale of
any of the Collateral or require Agent, Term Loan Servicer or Lenders to exhaust their remedies against any part of the Collateral before
proceeding against any other part of the Collateral; and further in the event of such foreclosure each Credit Party does hereby expressly
consent to and authorize, at the option of Agent, the foreclosure and sale either separately or together of each part of the Collateral.
Section 10.9 Reserved.
Section 10.10 Marshalling;
Payments Set Aside. Neither Agent, Term Loan Servicer nor any Lender shall be under any obligation to marshal any assets in payment
of any or all of the Obligations. To the extent that any Credit Party makes any payment or Agent enforces its Liens or Agent, Term Loan
Servicer, or any Lender exercises its right of set-off, and such payment or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by anyone, then to the extent of such recovery,
the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred.
Article 11
- AGENT
Section 11.1 Appointment
and Authorization.
(a) Each
Lender hereby irrevocably appoints and authorizes Agent to enter into each of the Financing Documents to which it is a party (other than
this Agreement) on its behalf and to take such actions as Agent on its behalf and to exercise such powers under the Financing Documents
as are delegated to Agent by the terms thereof, together with all such powers as are reasonably incidental thereto.
(b) Each
Lender hereby irrevocably appoints and authorizes Term Loan Servicer to take such actions as Term Loan Servicer on its behalf and to
exercise such powers under the Financing Documents as are delegated to Term Loan Servicer by the terms thereof, together with all such
powers as are reasonably incidental thereto.
(c) Subject
to the terms of Section 11.16 and to the terms of the other Financing Documents, Agent is authorized and empowered to amend, modify,
or waive any provisions of this Agreement or the other Financing Documents on behalf of Lenders and Term Loan Servicer.
(d) The
provisions of this Article 11 are solely for the benefit of Agent, Term Loan Servicer and Lenders and neither any Borrower nor any
other Credit Party shall have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, Agent and Term Loan Servicer shall each act solely as agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation toward or relationship of agency or trust with or for any Borrower or any other Credit Party.
(e) Each
of Agent and Term Loan Servicer may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies
under, and delegate or perform any of its duties or any other action with respect to, any Financing Document by or through any agents,
servicers, trustees, investment managers, employees, attorney-in-fact or any other Person (including any Lender). Any such Person shall
benefit from this Article 11 to the extent provided by Agent or Term Loan Servicer, as applicable.
Section 11.2 Agents
and Affiliates. Agent and Term Loan Servicer shall have the same rights and powers under the Financing Documents as any other Lender
and may exercise or refrain from exercising the same as though it were not Agent, and Agent and Term Loan Servicer and their respective
Affiliates may lend money to, invest in and generally engage in any kind of business with each Credit Party or Affiliate of any Credit
Party as if it were not Agent or Term Loan Servicer, as applicable, hereunder.
Section 11.3 Action
by Agents. The duties of Agent and Term Loan Servicer shall be mechanical and administrative in nature. Neither Agent nor Term Loan
Servicer shall have by reason of this Agreement a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any of
the Financing Documents is intended to or shall be construed to impose upon Agent or Term Loan Servicer any obligations in respect of
this Agreement or any of the Financing Documents except as expressly set forth herein or therein.
Section 11.4 Consultation
with Experts. Agent and Term Loan Servicer may consult with legal counsel, independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 11.5 Liability
of Agent. None of Agent, Term Loan Servicer nor any of their directors, officers, agents, trustees, investment managers, servicers
or employees shall be liable to any Lender for any action taken or not taken by it in connection with the Financing Documents, except
that Agent and Term Loan Servicer shall each be liable with respect to its specific duties set forth hereunder but only to the extent
of its own gross negligence or willful misconduct in the discharge thereof as determined by a final non-appealable judgment of a court
of competent jurisdiction. None of Agent, Term Loan Servicer nor any of their directors, officers, agents, trustees, investment managers,
servicers or employees shall be responsible for or have any duty to ascertain, inquire into or verify (a) any statement, warranty
or representation made in connection with any Financing Document or any borrowing hereunder; (b) the performance or observance of
any of the covenants or agreements specified in any Financing Document; (c) the satisfaction of any condition specified in any Financing
Document; (d) the validity, effectiveness, sufficiency or genuineness of any Financing Document, any Lien purported to be created
or perfected thereby or any other instrument or writing furnished in connection therewith; (e) the existence or non-existence of
any Default or Event of Default; or (f) the financial condition of any Credit Party. Neither Agent nor Term Loan Servicer shall
incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire,
facsimile or electronic transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties.
Neither Agent nor Term Loan Servicer shall be liable for any apportionment or distribution of payments made by it in good faith and if
any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount to which they are determined
to be entitled (and such other Lenders hereby agree to return to such Lender any such Erroneous Payments received by them).
Section 11.6 Indemnification.
Each Lender shall, in accordance with its Pro Rata Share, indemnify Agent and Term Loan Servicer (to the extent not reimbursed by Credit
Parties) upon demand against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except
such as result from Agent’s or Term Loan Servicer’s, as applicable, gross negligence or willful misconduct as determined
by a final non-appealable judgment of a court of competent jurisdiction) that Agent or Term Loan Servicer, as applicable, may suffer
or incur in connection with the Financing Documents or any action taken or omitted by Agent or Term Loan Servicer, as applicable, hereunder
or thereunder. If any indemnity furnished to Agent or Term Loan Servicer for any purpose shall, in the opinion of Agent or Term Loan
Servicer (as applicable), be insufficient or become impaired, Agent or Term Loan Servicer, as applicable, may call for additional indemnity
and cease, or not commence, to do the acts indemnified against even if so directed by Required Lenders until such additional indemnity
is furnished.
Section 11.7 Right
to Request and Act on Instructions. Agent and Term Loan Servicer may at any time request instructions from Lenders with respect to
any actions or approvals which by the terms of this Agreement or of any of the Financing Documents Agent or Term Loan Servicer is permitted
or desires to take or to grant, and if such instructions are promptly requested, Agent or Term Loan Servicer, as applicable, shall be
absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from any action or withholding any approval under any of the Financing Documents until it shall have received
such instructions from Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without
limiting the foregoing, no Lender shall have any right of action whatsoever against Agent or Term Loan Servicer as a result of Agent
or Term Loan Servicer, as applicable, acting or refraining from acting under this Agreement or any of the other Financing Documents in
accordance with the instructions of Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement)
and, notwithstanding the instructions of Required Lenders (or such other applicable portion of the Lenders), neither Agent nor Term Loan
Servicer shall have any obligation to take any action if it believes, in good faith, that such action would violate applicable Law or
exposes Agent or Term Loan Servicer, as appliable, to any liability for which it has not received satisfactory indemnification in accordance
with the provisions of Section 11.6.
Section 11.8 Credit
Decision. Each Lender acknowledges that it has, independently and without reliance upon Agent, Term Loan Servicer or any other Lender,
and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Agent, Term Loan Servicer or any other
Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under the Financing Documents.
Section 11.9 Collateral
Matters. Lenders irrevocably authorize Agent, at its option and in its discretion, to (a) release any Lien granted to or held
by Agent under any Security Document (i) upon termination of the Revolving Loan Commitment and Term Loan Commitment and payment
in full of all Obligations (other than inchoate indemnification obligations for which no claim has yet been made); or (ii) constituting
property sold or disposed of as part of or in connection with any disposition permitted under any Financing Document (it being understood
and agreed that Agent may conclusively rely without further inquiry on a certificate of a Responsible Officer as to the sale or other
disposition of property being made in full compliance with the provisions of the Financing Documents); and (b) subordinate any Lien
granted to or held by Agent under any Security Document to a Permitted Lien that is allowed to have priority over the Liens granted to
or held by Agent pursuant to the definition of “Permitted Liens”. Upon request by Agent at any time, Lenders will confirm
Agent’s authority to release and/or subordinate particular types or items of Collateral pursuant to this Section 11.9.
Section 11.10 Agency
for Perfection. Agent and each Lender hereby appoint each other Lender as agent for the purpose of perfecting Agent’s security
interest in assets which, in accordance with the Uniform Commercial Code in any applicable jurisdiction, can be perfected by possession
or control. Should any Lender (other than Agent) obtain possession or control of any such assets, such Lender shall notify Agent thereof,
and, promptly upon Agent’s request therefor, shall deliver such assets to Agent or in accordance with Agent’s instructions
or transfer control to Agent in accordance with Agent’s instructions. Each Lender agrees that it will not have any right individually
to enforce or seek to enforce any Security Document or to realize upon any Collateral for the Loan unless instructed to do so by Agent
(or consented to by Agent), it being understood and agreed that such rights and remedies may be exercised only by Agent.
Section 11.11 Notice
of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default except with
respect to defaults in the payment of principal, interest and fees required to be paid to Agent for the account of Lenders, unless Agent
shall have received written notice from a Lender or a Credit Party referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default”. Agent will notify each Lender of its receipt of any such notice. Agent
shall take such action with respect to such Default or Event of Default as may be requested by Required Lenders (or all or such other
portion of the Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof. Unless and until Agent has received
any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interests of Lenders.
Section 11.12 Assignment
by Agent; Resignation of Agent; Successor Agent.
(a) Agent
and/or Term Loan Servicer may at any time assign its rights, powers, privileges and duties hereunder to (i) another Lender or an
Affiliate of Agent or any Lender or any Approved Fund, or (ii) any Eligible Assignee to whom Agent or Term Loan Servicer, in its
capacity as a Lender, has assigned (or will assign, in conjunction with such assignment of agency rights hereunder) 50% or more of its
Loan, in each case without the consent of the Lenders or Credit Parties. Following any such assignment, Agent or Term Loan Servicer,
as appliable, shall endeavor to give notice to the Lenders and Borrowers. Failure to give such notice shall not affect such assignment
in any way or cause the assignment to be ineffective. An assignment by Agent or Term Loan Servicer, as appliable, pursuant to this subsection (a) shall
not be deemed a resignation by Agent for purposes of subsection (b) below.
(b) Without
limiting the rights of Agent or Term Loan Servicer to designate an assignee pursuant to subsection (a) above, Agent or Term Loan
Servicer may at any time give notice of its resignation to the Lenders and Borrowers. Upon receipt of any such notice of resignation,
Required Lenders shall have the right to appoint a successor Agent or Term Loan Servicer, as applicable, which successor Agent or Term
Loan Servicer shall be an Eligible Assignee. If no such successor shall have been so appointed by Required Lenders and shall have accepted
such appointment within ten (10) Business Days after the retiring Agent or Term Loan Servicer gives notice of its resignation, then
the retiring Agent or Term Loan Servicer may on behalf of the Lenders, appoint a successor Agent or Term Loan Servicer; provided,
however, that if Agent or Term Loan Servicer shall notify Borrowers and the Lenders that no Person has accepted such appointment,
then such resignation shall nonetheless become effective in accordance with such notice from Agent or Term Loan Servicer that no Person
has accepted such appointment and, from and following delivery of such notice, (i) the retiring Agent or Term Loan Servicer shall
be discharged from its duties and obligations hereunder and under the other Financing Documents, and (ii) all payments, communications
and determinations provided to be made by, to or through Agent or Term Loan Servicer, as applicable, shall instead be made by or to each
Lender directly, until such time as Required Lenders appoint a successor Agent or Term Loan Servicer, as appliable, as provided for above
in this paragraph.
(c) Upon
(i) an assignment permitted by subsection (a) above, or (ii) the acceptance of a successor’s appointment as Agent
or Term Loan Servicer, as applicable, pursuant to subsection (b) above, such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring (or retired) Agent or Term Loan Servicer, and the retiring Agent or Term
Loan Servicer shall be discharged from all of its duties and obligations hereunder and under the other Financing Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by Borrowers to a successor Agent or Term Loan Servicer shall
be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Agent’s
resignation or retiring Term Loan Servicer’s resignation (as applicable) hereunder and under the other Financing Documents, the
provisions of this Article 11 and Section 11.12 shall continue in effect for the benefit of such retiring Agent or Term Loan
Servicer and its sub-agents in respect of any actions taken or omitted to be taken by any of them while the retiring Agent or Term Loan
Servicer was acting or was continuing to act as Agent or Term Loan Servicer, as applicable.
Section 11.13 Payment
and Sharing of Payment.
(a) Revolving
Loan Advances, Payments and Settlements; Interest and Fee Payments.
(i) Agent
shall have the right, on behalf of Revolving Lenders to disburse funds to Borrowers for all Revolving Loans requested or deemed requested
by Borrowers pursuant to the terms of this Agreement. Agent shall be conclusively entitled to assume, for purposes of the preceding sentence,
that each Revolving Lender, other than any Non-Funding Lenders, will fund its Pro Rata Share of all Revolving Loans requested by Borrowers.
Each Revolving Lender shall reimburse Agent on demand, in accordance with the provisions of the immediately following paragraph, for
all funds disbursed on its behalf by Agent pursuant to the first sentence of this clause (i), or if Agent so requests, each Revolving
Lender will remit to Agent its Pro Rata Share of any Revolving Loan before Agent disburses the same to a Borrower. If Agent elects to
require that each Revolving Lender make funds available to Agent, prior to a disbursement by Agent to a Borrower, Agent shall advise
each Revolving Lender by telephone, facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of the Revolving
Loan requested by such Borrower no later than noon (Eastern time) on the date of funding of such Revolving Loan, and each such Revolving
Lender shall pay Agent on such date such Revolving Lender’s Pro Rata Share of such requested Revolving Loan, in same day funds,
by wire transfer to the Revolving Loan Payment Account, or such other account as may be identified by Agent to Revolving Lenders from
time to time. If any Lender fails to pay the amount of its Pro Rata Share of any funds advanced by Agent pursuant to the first sentence
of this clause (i) within one (1) Business Day after Agent’s demand, Agent shall promptly notify Borrower Representative,
and Borrowers shall immediately repay such amount to Agent. Any repayment required by Borrowers pursuant to this Section 11.13 shall
be accompanied by accrued interest thereon from and including the date such amount is made available to a Borrower to but excluding the
date of payment at the rate of interest then applicable to Revolving Loans. Nothing in this Section 11.13 or elsewhere in this Agreement
or the other Financing Documents shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights that Agent or any Borrower may have against any Lender
as a result of any default by such Lender hereunder.
(ii) On
a Business Day of each week as selected from time to time by Agent, or more frequently (including daily), if Agent so elects (each such
day being a “Settlement Date”), Agent will advise each Revolving Lender by telephone, facsimile or e-mail of the amount
of each such Revolving Lender’s percentage interest of the Revolving Loan balance as of the close of business of the Business Day
immediately preceding the Settlement Date. In the event that payments are necessary to adjust the amount of such Revolving Lender’s
actual percentage interest of the Revolving Loans to such Lender’s required percentage interest of the Revolving Loan balance as
of any Settlement Date, the Revolving Lender from which such payment is due shall pay Agent, without setoff or discount, to the Payment
Account before 1:00 p.m. (Eastern time) on the Business Day following the Settlement Date the full amount necessary to make
such adjustment. Any obligation arising pursuant to the immediately preceding sentence shall be absolute and unconditional and shall
not be affected by any circumstance whatsoever. In the event settlement shall not have occurred by the date and time specified in the
second preceding sentence, interest shall accrue on the unsettled amount at the rate of interest then applicable to Revolving Loans.
(iii) On
each Settlement Date, Agent shall advise each Revolving Lender by telephone, facsimile or e-mail of the amount of such Revolving Lender’s
percentage interest of principal, interest and fees paid for the benefit of Revolving Lenders with respect to each applicable Revolving
Loan, to the extent of such Revolving Lender’s Revolving Loan Exposure with respect thereto, and shall make payment to such Revolving
Lender before 1:00 p.m. (Eastern time) on the Business Day following the Settlement Date of such amounts in accordance with
wire instructions delivered by such Revolving Lender to Agent, as the same may be modified from time to time by written notice to Agent;
provided, however, that, in the case such Revolving Lender is a Defaulted Lender, Agent shall be entitled to set off the funding
short-fall against that Defaulted Lender’s respective share of all payments received from any Borrower.
(iv) On
the Closing Date, Agent, on behalf of Lenders, may elect to advance to Borrowers the full amount of the initial Loans to be made on the
Closing Date prior to receiving funds from Lenders, in reliance upon each Lender’s commitment to make its Pro Rata Share of such
Loans to Borrowers in a timely manner on such date. If Agent elects to advance the initial Loans to Borrower in such manner, Agent shall
be entitled to receive all interest that accrues on the Closing Date on each Lender’s Pro Rata Share of such Loans unless Agent
receives such Lender’s Pro Rata Share of such Loans before 3:00 p.m. (Eastern time) on the Closing Date.
(v) It
is understood that for purposes of advances to Borrowers made pursuant to this Section 11.13, Agent will be using the funds of Agent,
and pending settlement, (A) all funds transferred from the Revolving Loan Payment Account to the outstanding Revolving Loans shall
be applied first to advances made by Agent to Borrowers pursuant to this Section 11.13, and (B) all interest accruing on such
advances shall be payable to Agent.
(vi) The
provisions of this Section 11.13(a) shall be deemed to be binding upon Agent and Lenders notwithstanding the occurrence of
any Default or Event of Default, or any insolvency or bankruptcy proceeding pertaining to any Borrower or any other Credit Party.
(b) Term
Loan Payments. Payments of principal, interest and fees in respect of the Term Loans will be settled on the date of receipt if received
by Term Loan Servicer on the last Business Day of a month or on the Business Day immediately following the date of receipt if received
on any day other than the last Business Day of a month; provided, however, that, in the case such Lender is a Defaulted Lender,
Term Loan Servicer shall be entitled to set off the funding short-fall against that Defaulted Lender’s respective share of all
payments received from any Credit Party.
(c) Return
of Payments.
(i) If
Agent or Term Loan Servicer pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been
or will be received by Agent or Term Loan Servicer, as applicable, from a Credit Party and such related payment is not received by Agent,
then Agent or Term Loan Servicer, as applicable, will be entitled to recover such amount from such Lender on demand without setoff, counterclaim
or deduction of any kind, together with interest accruing on a daily basis at the Federal Funds Rate.
(ii) If
Agent or Term Loan Servicer determines at any time that any amount received by Agent or Term Loan Servicer, as applicable, under this
Agreement must be returned to any Credit Party or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Financing Document, Agent or Term Loan Servicer, as applicable, will not be
required to distribute any portion thereof to any Lender. In addition, each Lender will repay to Agent or Term Loan Servicer, as applicable,
on demand any portion of such amount that Agent or Term Loan Servicer, as applicable, has distributed to such Lender, together with interest
at such rate, if any, as Agent or Term Loan Servicer, as applicable, is required to pay to any Credit Party or such other Person, without
setoff, counterclaim or deduction of any kind.
(d) Defaulted
Lenders. The failure of any Defaulted Lender to make any payment required by it hereunder shall not relieve any other Lender of its
obligations to make payment, but neither any other Lender nor Agent nor Term Loan Servicer shall be responsible for the failure of any
Defaulted Lender to make any payment required hereunder. Notwithstanding anything set forth herein to the contrary, a Defaulted Lender
shall not have any voting or consent rights under or with respect to any Financing Document or constitute a “Lender” (or
be included in the calculation of “Required Lenders” hereunder) for any voting or consent rights under or with respect to
any Financing Document.
(e) Sharing
of Payments. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Section 2.8(d)) in excess of its Pro Rata Share of payments
entitled pursuant to the other provisions of this Section 11.13, such Lender shall purchase from the other Lenders such participations
in extensions of credit made by such other Lenders (without recourse, representation or warranty) as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter required to be returned or otherwise recovered from such purchasing Lender,
such portion of such purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay
to the purchasing Lender the purchase price to the ratable extent of such return or recovery, without interest. Each Credit Party agrees
that any Lender so purchasing a participation from another Lender pursuant to this clause (e) may, to the fullest extent permitted
by law, exercise all its rights of payment (including pursuant to Section 10.6) with respect to such participation as fully as if
such Lender were the direct creditor of Credit Parties in the amount of such participation). If under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu of a setoff to which this clause (e) applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this clause (e) to share in the benefits of any recovery on such secured claim.
Section 11.14 Right
to Perform, Preserve and Protect. If any Credit Party fails to perform any obligation hereunder or under any other Financing Document,
Agent itself may, but shall not be obligated to, cause such obligation to be performed at Credit Parties’ expense. Agent is further
authorized by the Credit Parties and the Lenders to make expenditures from time to time which Agent, in its reasonable business judgment,
deems necessary or desirable to (a) preserve or protect the business conducted by the Credit Parties, the Collateral, or any portion
thereof, and/or (b) enhance the likelihood of, or maximize the amount of, repayment of the Loan and other Obligations. Each Credit
Party hereby agrees to reimburse Agent on demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this
Section 11.14. Each Lender hereby agrees to indemnify Agent upon demand for any and all costs, liabilities and obligations incurred
by Agent pursuant to this Section 11.14, in accordance with the provisions of Section 11.6.
Section 11.15 Additional
Titled Agents. Except for rights and powers, if any, expressly reserved under this Agreement to any bookrunner, arranger or to any
titled agent named on the cover page of this Agreement, other than Agent and Term Loan Servicer (collectively, the “Additional
Titled Agents”), and except for obligations, liabilities, duties and responsibilities, if any, expressly assumed under this
Agreement by any Additional Titled Agent, no Additional Titled Agent, in such capacity, has any rights, powers, liabilities, duties or
responsibilities hereunder or under any of the other Financing Documents. Without limiting the foregoing, no Additional Titled Agent
shall have nor be deemed to have a fiduciary relationship with any Lender. At any time that any Lender serving as an Additional Titled
Agent shall have transferred to any other Person (other than any Affiliates) all of its interests in the Loan, such Lender shall be deemed
to have concurrently resigned as such Additional Titled Agent.
Section 11.16 Amendments
and Waivers.
(a) No
provision of this Agreement or any other Financing Document may be amended, waived or otherwise modified unless such amendment, waiver
or other modification is in writing and is signed or otherwise approved by Borrowers, the Required Lenders and any other Lender to the
extent required under Section 11.16(b); provided, however, the Fee Letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto.
(b) In
addition to the required signatures under Section 11.16(a), no provision of this Agreement or any other Financing Document may be
amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise approved
by the following Persons:
(i) if
any amendment, waiver or other modification would increase a Lender’s funding obligations in respect of any Loan, by such Lender;
and/or
(ii) if
the rights or duties of Agent are affected thereby, by Agent; and/or
(iii) if
the rights or duties of Term Loan Servicer are affected thereby, by Term Loan Servicer,
provided,
however, that, in each of (i) and (ii) above, no such amendment, waiver or other modification shall, unless signed
or otherwise approved in writing by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on
or any fees with respect to any Loan or forgive any principal, interest (other than default interest) or fees (other than late charges)
with respect to any Loan; (B) postpone the date fixed for, or waive, any payment (other than any mandatory prepayment pursuant to
Section 2.1(b)(ii)) of principal of any Loan, or of interest on any Loan (other than default interest) or any fees provided for
hereunder (other than late charges) or postpone the date of termination of any commitment of any Lender hereunder; (C) change the
definition of the term Required Lenders or the percentage of Lenders which shall be required for Lenders to take any action hereunder;
(D) release all or substantially all of the Collateral, authorize any Credit Party to sell or otherwise dispose of all or substantially
all of the Collateral, release any Guarantor of all or any portion of the Obligations or its Guarantee obligations with respect thereto,
or consent to a transfer of any of the Intellectual Property, except, in each case with respect to this clause (D), as otherwise
may be provided in this Agreement or the other Financing Documents (including in connection with any disposition permitted hereunder);
(E) amend, waive or otherwise modify this Section 11.16(b) or the definitions of the terms used in this Section 11.16(b) insofar
as the definitions affect the substance of this Section 11.16(b); (F) consent to the assignment, delegation or other transfer
by any Credit Party of any of its rights and obligations under any Financing Document or release any Credit Party of its payment obligations
under any Financing Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted
pursuant to this Agreement; or (G) amend any of the provisions of Section 10.7 or amend any of the definitions Pro Rata Share,
Revolving Loan Commitment, Term Loan Commitment, Term Loan Tranche 1 Commitments, Term Loan Tranche 2 Commitments, Term Loan Tranche
3 Commitments, Revolving Loan Commitment Amount, Term Loan Commitment Amount, Term Loan Tranche 1 Commitment Amount, Term Loan Tranche
2 Commitment Amount, Term Loan Tranche 3 Commitment Amount, Revolving Loan Commitment Percentage, Term Loan Commitment Percentage or
that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder. It
is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the
type described in the preceding clauses (C), (D), (E), (F) and (G) of the preceding sentence.
Section 11.17 Assignments
and Participations.
(a) Assignments.
(i) Any
Lender may at any time assign to one or more Eligible Assignees all or any portion of such Lender’s Loan together with all related
obligations of such Lender hereunder. Except as Agent may otherwise agree, the amount of any such assignment (determined as of the date
of the applicable Assignment Agreement or, if a “Trade Date” is specified in such Assignment Agreement, as of such Trade
Date) shall be in a minimum aggregate amount equal to $1,000,000 or, if less, the assignor’s entire interests in the outstanding
Loan; provided, however, that, in connection with simultaneous assignments to two or more related Approved Funds, such Approved
Funds shall be treated as one assignee for purposes of determining compliance with the minimum assignment size referred to above. Credit
Parties, Agent and Term Loan Servicer shall be entitled to continue to deal solely and directly with such Lender in connection with the
interests so assigned to an Eligible Assignee until Agent shall have received and accepted an effective Assignment Agreement executed,
delivered and fully completed by the applicable parties thereto and a processing fee of $3,500 to be paid by the assigning Lender; provided,
however, that only one processing fee shall be payable in connection with simultaneous assignments to two or more related Approved
Funds.
(ii) From
and after the date on which the conditions described above have been met, (A) such Eligible Assignee shall be deemed automatically
to have become a party hereto and, to the extent of the interests assigned to such Eligible Assignee pursuant to such Assignment Agreement,
shall have the rights and obligations of a Lender hereunder, and (B) the assigning Lender, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights and obligations hereunder
(other than those that survive termination pursuant to Section 13.1). Upon the request of the Eligible Assignee (and, as applicable,
the assigning Lender) pursuant to an effective Assignment Agreement, each Borrower shall execute and deliver to Agent for delivery to
the Eligible Assignee (and, as applicable, the assigning Lender) Notes in the aggregate principal amount of the Eligible Assignee’s
Loan (and, as applicable, Notes in the principal amount of that portion of the principal amount of the Loan retained by the assigning
Lender). Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to Borrower Representative any prior Note
held by it.
(iii) Agent,
acting solely for this purpose as an agent of Borrower, shall maintain at the office of its servicer located in Bethesda, Maryland a
copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of each Lender, and the
commitments of, and principal amount of the Loan owing to, such Lender pursuant to the terms hereof (the “Register”).
The entries in such Register shall be conclusive, absent manifest error, and Borrower, Agent, Term Loan Servicer and Lenders may treat
each Person whose name is recorded therein pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. Such Register shall be available for inspection by Borrower, Term Loan Servicer and any Lender, at any reasonable
time upon reasonable prior notice to Agent. Each Lender that sells a participation shall, acting solely for this purpose as an agent
of Borrower maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest)
of each participant’s interest in the Obligations (each, a “Participant Register”). The entries in the Participant
Registers shall be conclusive, absent manifest error. Each Participant Register shall be available for inspection by Borrower, Agent
and Term Loan Servicer at any reasonable time upon reasonable prior notice to the applicable Lender; provided, that no Lender shall have
any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information
relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Financing Document)
to any Person (including Borrower) except to the extent that such disclosure is necessary to establish that such commitment, loan, letter
of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. For
the avoidance of doubt, Agent (in its capacity as Agent) and Term Loan Servicer (in its capacity as Term Loan Servicer) shall have no
responsibility for maintaining a Participant Register.
(iv) Notwithstanding
the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank; provided, however, that no such pledge or assignment
shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(v) Notwithstanding
the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, Agent has the right, but not the
obligation, to effectuate assignments of Loan via an electronic settlement system acceptable to Agent as designated in writing from time
to time to the Lenders by Agent (the “Settlement Service”). At any time when Agent elects, in its sole discretion,
to implement such Settlement Service, each such assignment shall be effected by the assigning Lender and proposed assignee pursuant to
the procedures then in effect under the Settlement Service, which procedures shall be consistent with the other provisions of this Section 11.17(a).
Each assigning Lender and proposed Eligible Assignee shall comply with the requirements of the Settlement Service in connection with
effecting any assignment of Loan pursuant to the Settlement Service. With the prior written approval of Agent, Agent’s approval
of such Eligible Assignee shall be deemed to have been automatically granted with respect to any transfer effected through the Settlement
Service. Assignments and assumptions of the Loan shall be effected by the provisions otherwise set forth herein until Agent notifies
Lenders of the Settlement Service as set forth herein.
(b) Participations.
Any Lender may at any time, without the consent of, or notice to, any Credit Party, Agent or Term Loan Servicer, sell to one or more
Persons (other than any Credit Party or any Credit Party’s Affiliates) participating interests in its Loan, commitments or other
interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a participating interest
to a Participant, (i) such Lender’s obligations hereunder shall remain unchanged for all purposes, (ii) Credit Parties,
Agent and Term Loan Servicer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations hereunder, and (iii) all amounts payable by each Credit Party shall be determined as if such Lender had not sold
such participation and shall be paid directly to such Lender. Each Credit Party agrees that if amounts outstanding under this Agreement
are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect
of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement; provided, however, that such right of set-off shall be subject to
the obligation of each Participant to share with Lenders, and Lenders agree to share with each Participant, as provided in Section 11.5.
(c) Replacement
of Lenders. Within thirty (30) days after: (i) receipt by Agent of notice and demand from any Lender for payment of additional
costs as provided in Section 2.8(h), which demand shall not have been revoked, (ii) any Credit Party is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8(a) through
(h), (iii) any Lender is a Defaulted Lender, and the circumstances causing such status shall not have been cured or waived; or (iv) any
failure by any Lender to consent to a requested amendment, waiver or modification to any Financing Document in which Required Lenders
have already consented to such amendment, waiver or modification but the consent of each Lender, or each Lender affected thereby, is
required with respect thereto (each relevant Lender in the foregoing clauses (i) through (iv) being an “Affected
Lender”) each of Borrower Representative and Agent may, at its option, notify such Affected Lender and, in the case of Borrowers’
election, Agent, of such Person’s intention to obtain, at Borrowers’ expense, a replacement Lender (“Replacement
Lender”) for such Lender, which Replacement Lender shall be an Eligible Assignee and, in the event the Replacement Lender is
to replace an Affected Lender described in the preceding clause (iv), such Replacement Lender consents to the requested amendment,
waiver or modification making the replaced Lender an Affected Lender. In the event Borrowers or Agent, as applicable, obtains a Replacement
Lender within ninety (90) days following notice of its intention to do so, the Affected Lender shall sell, at par, and assign all
of its Loan and funding commitments hereunder to such Replacement Lender in accordance with the procedures set forth in Section 11.17(a);
provided, however, that (A) Borrowers shall have reimbursed such Lender for its increased costs and additional payments for
which it is entitled to reimbursement under Section 2.8(a) through (h), as applicable, of this Agreement through the date of
such sale and assignment, and (B) Borrowers shall pay to Agent the $3,500 processing fee in respect of such assignment. In the event
that a replaced Lender does not execute an Assignment Agreement pursuant to Section 11.17(a) within five (5) Business
Days after receipt by such replaced Lender of notice of replacement pursuant to this Section 11.17(c) and presentation to such
replaced Lender of an Assignment Agreement evidencing an assignment pursuant to this Section 11.17(c), such replaced Lender shall
be deemed to have consented to the terms of such Assignment Agreement, and any such Assignment Agreement executed by Agent, the Replacement
Lender and, to the extent required pursuant to Section 11.17(a), Credit Parties, shall be effective for purposes of this Section 11.17(c) and
Section 11.17(a). Upon any such assignment and payment, such replaced Lender shall no longer constitute a “Lender”
for purposes hereof, other than with respect to such rights and obligations that survive termination as set forth in Section 13.1.
(d) Credit
Party Assignments. No Credit Party may assign, delegate or otherwise transfer any of its rights or other obligations hereunder or
under any other Financing Document without the prior written consent of Agent and each Lender.
Section 11.18 Funding
and Settlement Provisions Applicable When Non-Funding Lenders Exist. So long as Agent has not waived the conditions to the funding
of Loans set forth in Section 7.2 or Section 2.1, any Lender may deliver a notice to Agent stating that such Lender shall cease
making Revolving Loans or not fund any tranche of the Term Loan, as applicable, due to the non-satisfaction of one or more conditions
to funding Loans set forth in Section 7.2 or Section 2.1, and specifying any such non-satisfied conditions. Any Lender delivering
any such notice shall become a non-funding Lender (a “Non-Funding Lender”) for purposes of this Agreement commencing
on the Business Day following receipt by Agent of such notice, and shall cease to be a Non-Funding Lender on the date on which such Lender
has either revoked the effectiveness of such notice or acknowledged in writing to each of Agent the satisfaction of the condition(s) specified
in such notice, or Required Lenders waive the conditions to the funding of such Loans giving rise to such notice by Non-Funding Lender.
Each Non-Funding Lender shall remain a Lender for purposes of this Agreement to the extent that such Non-Funding Lender has Revolving
Loan Outstanding in excess of Zero Dollars ($0) or Term Loans outstanding in excess of Zero Dollars ($0); provided, however, that
during any period of time that any Non-Funding Lender exists, and notwithstanding any provision to the contrary set forth herein, the
following provisions shall apply:
(a) For
purposes of determining the Pro Rata Share of each Lender under clauses (a) and (b) of the definition of such term, each Non-Funding
Lender shall be deemed to have a Revolving Loan Commitment Amount and Term Loan Commitment Amount as in effect immediately before such
Lender became a Non-Funding Lender.
(b) Except
as provided in clause (a) above, the Revolving Loan Commitment Amount and Term Loan Commitment Amount of each Non-Funding Lender
shall be deemed to be Zero Dollars ($0).
(c) The
Revolving Loan Commitment at any date of determination during such period shall be deemed to be equal to the sum of (i) the aggregate
Revolving Loan Commitment Amounts of all Lenders, other than the Non-Funding Lenders as of such date plus (ii) the aggregate
Revolving Loan Outstandings of all Non-Funding Lenders as of such date.
(d) The
Term Loan Commitment at any date of determination during such period shall be deemed to be equal to the sum of (i) the aggregate
Term Loan Commitment Amounts of all Lenders, other than the Non-Funding Lenders as of such date plus (ii) the aggregate principal
amount outstanding under the Term Loans of all Non-Funding Lenders as of such date.
(e) Agent
shall have no right to make or disburse Revolving Loans for the account of any Non-Funding Lender pursuant to Section 2.1(b)(i) to
pay interest, fees, expenses and other charges of any Credit Party.
(f) To
the extent that Agent applies proceeds of Collateral or other payments received by Agent to repayment of Revolving Loans or Term Loans
pursuant to Section 10.7, such payments and proceeds shall be applied first in respect of Revolving Loans or Term Loans made at
the time any Non-Funding Lenders exist, and second in respect of all other outstanding Revolving Loans or Term Loans, as applicable.
Article 12
– Guaranty
Section 12.1 Guaranty.
Each Guarantor hereby unconditionally guarantees, as a primary obligor and not merely as a surety, jointly and severally with each other
Guarantor when and as due, whether at maturity, by acceleration, by notice of prepayment or otherwise, the due and punctual performance
of all of the Obligations, including payment in full of the principal, accrued but unpaid interest and all other amounts due and owing
to the Agent, Term Loan Servicer and Lenders under the Loans and (b) indemnifies each Lender immediately on demand against any cost,
loss or liability suffered by such Lender if any obligations guaranteed by it are or become unenforceable, invalid, voided, avoid or
illegal, the amount of which such cost, loss or liability shall be equal to the amount which such Lender would otherwise be entitled
to recover. Each payment made by any Guarantor pursuant to this Article 12 shall be made in lawful money of the United States in
immediately available funds. Each Guarantor hereby acknowledges and agrees that it is an Affiliate of a Borrower or other interested
party and will derive significant economic benefit from the Loans.
Section 12.2 Payment
of Amounts Owed. The Guarantee hereunder is an absolute, unconditional and continuing guarantee of the full and punctual payment
and performance of all of the Obligations and not of their collectability only and is in no way conditioned upon any requirement that
the Agent, Term Loan Servicer or any Lender first attempt to collect any of the Obligations from any Borrower or resort to any collateral
security or other means of obtaining payment. In the event of any default by Borrowers in the payment of the Obligations, after the expiration
of any applicable cure or grace period, each Guarantor agrees, on demand by Agent (which demand may be made concurrently with notice
to Borrowers that the Borrowers are in default of their obligations), to pay the Obligations, regardless of any defense, right of set-off
or recoupment or claims which any Borrower or Guarantor may have against Agent, Term Loan Servicer or Lenders or the holder of the Notes.
All of the remedies set forth in this Agreement, in any other Financing Document or at law or equity shall be equally available to Agent,
Term Loan Servicer and Lenders, and the choice by Agent, Term Loan Servicer or Lenders of one such alternative over another shall not
be subject to question or challenge by any Guarantor or any other person, nor shall any such choice be asserted as a defense, setoff,
recoupment or failure to mitigate damages in any action, proceeding, or counteraction by Agent, Term Loan Servicer or Lenders to recover
or seeking any other remedy under this Guarantee, nor shall such choice preclude Agent, Term Loan Servicer or Lenders from subsequently
electing to exercise a different remedy.
Section 12.3 Certain
Waivers by Guarantor. To the fullest extent permitted by law, each Guarantor does hereby: (a) (a) waive
notice of acceptance of this Agreement by Agent, Term Loan Servicer and Lenders and any and all notices and demands of every kind which
may be required to be given by any statute, rule or law;
(b) agree
to refrain from asserting, until after repayment in full of the Obligations, any defense, right of set-off, right of recoupment or other
claim which such Guarantor may have against any Borrower;
(c) waive
any defense, right of set-off, right of recoupment or other claim which such Guarantor may have against Agent, Term Loan Servicer, Lenders
or the holder of the Notes;
(d) waive
any and all rights such Guarantor may have under any anti-deficiency statute or other similar protections;
(e) waive
all rights at law or in equity to seek subrogation, contribution, indemnification or any other form of reimbursement or repayment from
any Borrower, any other Guarantor or any other person or entity now or hereafter primarily or secondarily liable for any of the Obligations
until the Obligations have been paid in full;
(f) waive
presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection
and any and all formalities which otherwise might be legally required to charge such Guarantor with liability;
(g) waive
the benefit of all appraisement, valuation, marshalling, forbearance, stay, extension, redemption, homestead, exemption and moratorium
laws now or hereafter in effect;
(h) waive
any defense based on the incapacity, lack of authority, death or disability of any other person or entity or the failure of Agent, Term
Loan Servicer or Lenders to file or enforce a claim against the estate of any other person or entity in any administrative, bankruptcy
or other proceeding;
(i) waive
any defense based on an election of remedies by Agent, Term Loan Servicer or Lenders, whether or not such election may affect in any
way the recourse, subrogation or other rights of such Guarantor against any Borrower, any other Guarantor or any other person in connection
with the Obligations;
(j) waive
any defense based on the failure of the Agent or Lenders to (i) provide notice to such Guarantor of a sale or other disposition
of any of the security for any of the Obligations, or (ii) conduct such a sale or disposition in a commercially reasonable manner;
(k) waive
any defense based on the negligence of Agent, Term Loan Servicer or Lenders in administering this Agreement or the other Financing Documents
(including, but not limited to, the failure to perfect any security interest in any Collateral), or taking or failing to take any action
in connection therewith, provided, however, that such waiver shall not apply to the gross negligence or willful misconduct of
the Agent, Term Loan Servicer or Lenders, as determined by the final, non-appealable decision of a court having proper jurisdiction;
(l) waive
the defense of expiration of any statute of limitations affecting the liability of such Guarantor hereunder or the enforcement hereof;
(m) waive
any right to file any Claim (as defined below) as part of, and any right to request consolidation of any action or proceeding relating
to a Claim with, any action or proceeding filed or maintained by Agent, Term Loan Servicer or Lenders to collect any Obligations of such
Guarantor to Agent, Term Loan Servicer or Lenders hereunder or to exercise any rights or remedies available to Agent, Term Loan Servicer
or Lenders under the Financing Documents, at law, in equity or otherwise;
(n) agree
that neither Agent, Term Loan Servicer nor Lenders shall have any obligation to obtain, perfect or retain a security interest in any
property to secure any of the Obligations (including any mortgage or security interest contemplated by the Financing Documents), or to
protect or insure any such property;
(o) waive
any obligation Agent, Term Loan Servicer or Lenders may have to disclose to such Guarantor any facts the Agent, Term Loan Servicer or
Lenders now or hereafter may know or have reasonably available to it regarding the Borrowers or Borrowers’ financial condition,
whether or not the Agent, Term Loan Servicer or Lenders have a reasonable opportunity to communicate such facts or have reason to believe
that any such facts are unknown to such Guarantor or materially increase the risk to such Guarantor beyond the risk such Guarantor intends
to assume hereunder;
(p) agree
that neither Agent, Term Loan Servicer nor Lenders shall be liable in any way for any decrease in the value or marketability of any property
securing any of the Obligations which may result from any action or omission of the Agent, Term Loan Servicer or Lenders in enforcing
any part of this Agreement;
(q) waive
any defense based on any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Financing Documents;
(r) waive
any defense based on any change in the composition of Borrowers, and
(s) waive
any defense based on any representations and warranties made by such Guarantor herein or by any Borrower herein or in any of the Financing
Documents.
For purposes of this section, the term “Claim”
shall mean any claim, action or cause of action, defense, counterclaim, set-off or right of recoupment of any kind or nature against
the Agent, Term Loan Servicer or Lenders, its officers, directors, employees, agents, members, actuaries, accountants, trustees or attorneys,
or any affiliate of the Agent, Term Loan Servicer or Lenders in connection with the making, closing, administration, collection or enforcement
by the Agent, Term Loan Servicer or Lenders of the Obligations.
Section 12.4 Guarantor’s
Obligations Not Affected by Modifications of Financing Documents. Each Guarantor further agrees that such Guarantor’s liability
as guarantor shall not be impaired or affected by any renewals or extensions which may be made from time to time, with or without the
knowledge or consent of Guarantor for the time for payment of interest or principal or by any forbearance or delay in collecting interest
or principal hereunder, or by any waiver by Agent or Lenders under this Agreement or any other Financing Documents, or by Agent’s,
Term Loan Servicer’s or Lenders’ failure or election not to pursue any other remedies it may have against any Borrower or
Guarantor, or by any change or modification in the Notes, this Agreement or any other Financing Document, or by the acceptance by Agent
or Lenders of any additional security or any increase, substitution or change therein, or by the release by Agent or Lenders of any security
or any withdrawal thereof or decrease therein, or by the application of payments received from any source to the payment of any obligation
other than the Obligations even though Agent, Term Loan Servicer or Lenders might lawfully have elected to apply such payments to any
part or all of the Obligations, it being the intent hereof that, subject to Agent’s, Term Loan Servicer’s or Lenders’
compliance with the terms of this Article 12 and the Financing Documents, each Guarantor shall remain liable for the payment of
the Obligations, until the Obligations have been paid in full, notwithstanding any act or thing which might otherwise operate as a legal
or equitable discharge of a surety. Each Guarantor further understands and agrees that Agent or Lenders may at any time enter into agreements
with Borrowers to amend, modify and/or increase the principal amount of, interest rate applicable to or other economic and non-economic
terms of this Agreement or the other Financing Documents, and may waive or release any provision or provisions of this Agreement or the
other Financing Documents, and, with reference to such instruments, may make and enter into any such agreement or agreements as Agent,
Lenders and Borrowers may deem proper and desirable, without in any manner impairing this Guarantee or any of Agent’s, Term Loan
Servicer’s or Lenders’ rights hereunder or each Guarantor’s obligations hereunder, and each Guarantor’s obligations
hereunder shall apply to the this Agreement and other Financing Documents as so amended, modified, extended, renewed or increased.
Section 12.5 Reinstatement;
Deficiency. This guaranty shall continue to be effective or be reinstated (as the case may be) if at any time payment of all or any
part of any sum payable pursuant to this Agreement or any other Financing Document is rescinded or otherwise required to be returned
by Agent, Term Loan Servicer or Lenders upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization of any Borrower,
or upon or as a result of the appointment of a receiver, intervenor, custodian or conservator of or trustee or similar officer for, any
Borrower or any substantial part of its property, or otherwise, all as though such payment to Agent, Term Loan Servicer or Lenders had
not been made, regardless of whether Agent, Term Loan Servicer or Lenders contested the order requiring the return of such payment. In
the event of the foreclosure of the Financing Documents and of a deficiency, each Guarantor hereby promises and agrees forthwith to pay
the amount of such deficiency notwithstanding the fact that recovery of said deficiency against Borrowers would not be allowed by applicable
law; however, the foregoing shall not be deemed to require that Agent, Term Loan Servicer or Lenders institute foreclosure proceedings
or otherwise resort to or exhaust any other collateral or security prior to or concurrently with enforcing this guaranty.
Section 12.6 Subordination
of Borrowers’ Obligations to Guarantors; Claims in Bankruptcy.
(a) Any
indebtedness of any Borrower to any Guarantor (including, but not limited to, any right of such Guarantor to a return of any capital
contributed to a Borrower), whether now or hereafter existing, is hereby subordinated to the payment of the Obligations. Each Guarantor
agrees that, until the Obligations have been paid in full, such Guarantor will not seek, accept, or retain for its own account, any payment
from any Borrower on account of such subordinated debt. Any payments to any Guarantor on account of such subordinated debt shall be collected
and received by such Guarantor in trust for Agent and Lenders and shall be immediately paid over to Agent, for the benefit of Agent and
Lenders, on account of the Obligations without impairing or releasing the obligations of such Guarantor hereunder.
(b) Each
Guarantor shall promptly file in any bankruptcy or other proceeding in which the filing of claims is required by law, all claims and
proofs of claims that such Guarantor may have against any Borrower or any other Guarantor and does hereby assign to Agent or its nominee
(and will, upon request of Agent, reconfirm in writing the assignment to Agent or its nominee of) all rights of such Guarantor under
such claims. If such Guarantor does not file any such claim, Agent, as attorney-in-fact for such Guarantor, is hereby irrevocably authorized
to do so in the name of such Guarantor, or in Agent’s discretion, to assign the claim to a designee and cause proof of claim to
be filed in the name of Agent’s designee. In all such cases, whether in administration, bankruptcy or otherwise, the person or
persons authorized to pay such claim shall pay to Agent, for the benefit of Agent and Lenders, the full amount thereof and, to the full
extent necessary for that purpose, each Guarantor hereby assigns to the Lenders all of such Guarantor’s rights to any such payments
or distributions to which such Guarantor would otherwise be entitled, such assignment being a present and irrevocable assignment of all
such rights.
Section 12.7 Maximum
Liability. The provisions of this Article 12 are severable, and in any action or proceeding involving any state corporate law,
or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if
the obligations of any Guarantor under this Article 12 would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of such Guarantor’s liability under this Article 12, then, notwithstanding any other provision of
this Article 12 to the contrary, the amount of such liability shall, without any further action by the Guarantors or the Agent,
Term Loan Servicer or any Lender, be automatically limited and reduced to the highest amount that is valid and enforceable as determined
in such action or proceeding (such highest amount determined hereunder being the relevant Guarantor’s “Maximum Liability”).
This Section 12.7 with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Agent,
Term Loan Servicer and the Lenders to the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other
Person shall have any right or claim under this Section 12.7 with respect to such Maximum Liability, except to the extent necessary
so that the obligations of any Guarantor hereunder shall not be rendered voidable under applicable law. Each Guarantor agrees that the
Obligations may at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing this guaranty or affecting
the rights and remedies of the Agent, Term Loan Servicer or the Lenders hereunder, provided that, nothing in this sentence shall be construed
to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.
Section 12.8 Guarantor’s
Investigation. Each Guarantor acknowledges receipt of a copy of each of this Agreement and the other Financing Documents. Each Guarantor
has made an independent investigation of the other Credit Parties and of the financial condition of the other Credit Parties. Neither
Agent, Term Loan Servicer nor any Lender has made and neither Agent, Term Loan Servicer nor any Lender does make any representations
or warranties as to the income, expense, operation, finances or any other matter or thing affecting any Credit Party nor has Agent, Term
Loan Servicer or any Lender made any representations or warranties as to the amount or nature of the Obligations of any Credit Party
to which this Article 12 applies as specifically herein set forth, nor has Agent, Term Loan Servicer or any Lender or any officer,
agent or employee of Agent, Term Loan Servicer or any Lender or any representative thereof, made any other oral representations, agreements
or commitments of any kind or nature, and each Guarantor hereby expressly acknowledges that no such representations or warranties have
been made and such Guarantor expressly disclaims reliance on any such representations or warranties.
Section 12.9 Termination.
The provisions of this Article 12 shall remain in effect until this Agreement has terminated pursuant to its terms and all Obligations
(other than inchoate indemnity obligations for which no claim has been made and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been paid and satisfied in full.
Section 12.10 Representative.
Each Guarantor hereby designates Borrower Representative and its representatives and agents on its behalf for the purpose of giving and
receiving all notices and other consents hereunder or under any other Financing Document and taking all other actions on behalf of such
Guarantor under the Financing Documents. Borrower Representative hereby accepts such appointment.
Section 12.11 Guarantor
Acknowledgement. Without limiting the generality of the foregoing, each Guarantor, by its acceptance of this Guaranty, hereby confirms
that it is a Subsidiary of a Borrower and each Guarantor further confirms that it will materially benefit from the Loans made hereunder
and the parties hereto intend that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law
(as defined below), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal, state or foreign
law to the extent applicable to this Guaranty. In furtherance of that intention, the liabilities of each Guarantor under this Guaranty
(the “Liabilities”) shall be limited to the maximum amount that will, after giving effect to such maximum amount and
all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of any other Person with respect to the Liabilities, result
in the Liabilities of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance. For purposes hereof, “Bankruptcy
Law” means the United States Bankruptcy Code, or any similar federal, state or foreign law for the relief of debtors. This
paragraph with respect to the maximum liability of each Guarantor is intended solely to preserve the rights of the holders, to the maximum
extent not subject to avoidance under applicable law, and neither a Guarantor nor any other Person shall have any right or claim under
this paragraph with respect to such maximum liability, except to the extent necessary so that the obligations of a Guarantor hereunder
shall not be rendered voidable under applicable law. Each Guarantor agrees that the Obligations guaranteed hereunder may at any time
and from time to time exceed the maximum liability of such Guarantor without impairing this Guaranty or affecting the rights and remedies
of the holders hereunder; provided that nothing in this sentence shall be construed to increase such Guarantor’s obligations hereunder
beyond its maximum liability.
Article 13
- MISCELLANEOUS
Section 13.1 Survival.
All agreements, representations and warranties made herein and in every other Financing Document shall survive the execution and delivery
of this Agreement and the other Financing Documents. The provisions of Section 2.10 and Articles 11 and 13 shall survive the payment
of the Obligations (both with respect to any Lender and all Lenders collectively) and any termination of this Agreement and any judgment
with respect to any Obligations, including any final foreclosure judgment with respect to any Security Document, and no unpaid or unperformed,
current or future, Obligations will merge into any such judgment.
Section 13.2 No
Waivers. No failure or delay by Agent, Term Loan Servicer or any Lender in exercising any right, power or privilege under any Financing
Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. Any reference in any Financing Document to the “continuing” nature of
any Event of Default shall not be construed as establishing or otherwise indicating that any Borrower or any other Credit Party has the
independent right to cure any such Event of Default, but is rather presented merely for convenience should such Event of Default be waived
in accordance with the terms of the applicable Financing Documents.
Section 13.3 Notices.
(a) All
notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier, email or
similar writing) and shall be given to such party at its address or e-mail address set forth below or on the signature pages hereof
(or, in the case of any such Lender who becomes a Lender after the date hereof, in an Assignment Agreement or in a notice delivered to
Borrower Representative and Agent by the assignee Lender forthwith upon such assignment) or at such other address or e-mail address as
such party may hereafter specify for the purpose by notice to Agent and Borrower Representative; provided, however, that
notices, requests or other communications shall be permitted by electronic means only in accordance with the provisions of Section 13.3(b) and
(c). Each such notice, request or other communication shall be effective (i) if given by electronic means, in accordance with the
provisions of Section 13.3(b) and (c), or (ii) if given by mail, prepaid overnight courier or any other means, when received
or when receipt is refused at the applicable address specified by this Section 13.3(a).
If to any Credit Party:
OrthoPediatrics Corp., as Borrower Representative
2850 Frontier Drive
Warsaw, Indiana 46582
Telephone: (574) 268-6379
Facsimile: (574) 269-3692
| Attention: | David Bailey, Chief Executive Officer |
| | Daniel Gerritzen, General Counsel and
Executive Vice President of Legal |
| Email: | dbailey@orthopediatrics.com |
| | dgerritzen@orthopediatrics.com |
If to Agent or to MCF (or any of its Affiliates
or Approved Funds) as a Lender:
MidCap Funding IV Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Account Manager for OrthoPediatrics transaction
| Email: | notices@midcapfinancial.com |
With a copy to:
MidCap Funding IV Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Legal
| Email: | legalnotices@midcapfinancial.com |
If to Term Loan Servicer:
MidCap Financial Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Account Manager for OrthoPediatrics transaction
| Email: | notices@midcapfinancial.com |
With a copy to:
MidCap Financial Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Legal
| Email: | legalnotices@midcapfinancial.com |
If
to any Lender other than MidCap: at the address set forth on the signature pages to this Agreement or provided as a notice
address for such in connection with any assignment hereunder.
(b) Notices
and other communications to the parties hereto may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites) pursuant to procedures approved from time to time by Agent, provided, however, that the foregoing
shall not apply to notices sent directly to any Lender if such Lender has notified Agent that it is incapable of receiving notices by
electronic communication. Agent, Term Loan Servicer or Borrower Representative may, in their discretion, agree to accept notices and
other communications to them hereunder by electronic communications pursuant to procedures approved by it, provided, however,
that approval of such procedures may be limited to particular notices or communications.
(c) Unless
Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s
receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the website address therefor, provided, however,
that if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall
be deemed to have been sent at the opening of business on the next Business Day.
Section 13.4 Severability.
In case any provision of or obligation under this Agreement or any other Financing Document shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 13.5 Headings.
Headings and captions used in the Financing Documents (including the Exhibits, Schedules and Annexes hereto and thereto) are included
for convenience of reference only and shall not be given any substantive effect.
Section 13.6 Confidentiality.
(a) Agent,
Term Loan Servicer and each Lender shall hold all non-public information regarding the Credit Parties and their respective businesses
identified as such by Credit Parties and obtained by Agent, Term Loan Servicer or any Lender pursuant to the requirements hereof in accordance
with such Person’s customary procedures for handling information of such nature, except that disclosure of such information may
be made (i) to their respective agents, employees, Subsidiaries, Affiliates, attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services, (ii) to prospective transferees or purchasers of any
interest in the Loans, Agent, Term Loan Servicer or a Lender, provided, however, that any such Persons are bound by obligations
of confidentiality, (iii) as required by applicable Law, subpoena, judicial order or similar order and in connection with any litigation,
(iv) as may be required in connection with the examination, audit or similar investigation of such Person, (v) as Agent, Term
Loan Servicer or any Lender considers appropriate in exercising remedies under the Financing Documents or at any time an Event of Default
exists hereunder, and (v) to a Person that is a trustee, investment advisor or investment manager, collateral manager, servicer
(including any Term Loan Servicer), noteholder or secured party in a Securitization (as hereinafter defined) in connection with the administration,
servicing and reporting on the assets serving as collateral for such Securitization. For the purposes of this Section, “Securitization”
means (A) the pledge of the Loans as collateral security for loans to a Lender, or (B) a public or private offering by a Lender
or any of its Affiliates or their respective successors and assigns, of securities which represent an interest in, or which are collateralized,
in whole or in part, by the Loans. Confidential information shall include only such information identified as such at the time provided
to Agent and shall not include information that either: (y) is in the public domain, or becomes part of the public domain after
disclosure to such Person through no fault of such Person, or (z) is disclosed to such Person by a Person other than a Credit Party,
provided, however, Agent does not have actual knowledge that such Person is prohibited from disclosing such information.
The obligations of Agent, Term Loan Servicer and Lenders under this Section 13.6 shall supersede and replace the obligations of
Agent, Term Loan Servicer and Lenders under any confidentiality agreement in respect of this financing executed and delivered by Agent,
Term Loan Servicer or any Lender prior to the date hereof.
Section 13.7 Waiver
of Consequential and Other Damages. To the fullest extent permitted by applicable law, no Credit Party shall assert, and each Credit
Party hereby waives, any claim against any Indemnitee (as defined below), on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of this Agreement, any
other Financing Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Financing Documents or the transactions contemplated hereby or thereby.
Section 13.8 GOVERNING
LAW; SUBMISSION TO JURISDICTION.
(a) THIS
AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL DISPUTES AND OTHER MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM
(WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW).
(b) EACH
PARTY HERETO HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED in the
State of New York in the City of New York, Borough of Manhattan, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HERETO HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED
OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
Section 13.9 WAIVER
OF JURY TRIAL.
(a) EACH
CREDIT PARTY, AGENT, TERM LOAN SERVICER, AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH CREDIT PARTY, AGENT, TERM LOAN SERVICER, AND EACH LENDER
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH CREDIT PARTY, AGENT, TERM LOAN SERVICER AND EACH LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS
JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
Section 13.10 Publication;
Advertisement.
(a) Publication.
No Credit Party will directly or indirectly publish, disclose or otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any trademark of MCF or any of its Affiliates or any reference
to this Agreement or the financing evidenced hereby, in any case except (i) as required by Law, subpoena or judicial or similar
order, in which case the applicable Credit Party shall give Agent prior written notice of such publication or other disclosure, or (ii) with
MCF’s prior written consent.
(b) Advertisement.
Each Lender and each Credit Party hereby authorizes MCF to publish the name of such Lender and Credit Party, the existence of the financing
arrangements referenced under this Agreement, the primary purpose and/or structure of those arrangements, the amount of credit extended
under each facility, the title and role of each party to this Agreement, and the total amount of the financing evidenced hereby in any
“tombstone”, comparable advertisement or press release which MCF elects to submit for publication. In addition, each Lender
and each Credit Party agrees that MCF may provide lending industry trade organizations with information necessary and customary for inclusion
in league table measurements after the Closing Date. With respect to any of the foregoing, MCF shall provide Borrowers with an opportunity
to review and confer with MCF regarding the contents of any such tombstone, advertisement or information, as applicable, prior to its
submission for publication and, following such review period, MCF may, from time to time, publish such information in any media form
desired by MCF, until such time that Borrowers shall have requested MCF cease any such further publication.
Section 13.11 Counterparts;
Integration. This Agreement and the other Financing Documents may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures by facsimile or by
electronic mail delivery of an electronic version of any executed signature page shall bind the parties hereto. In furtherance of
the foregoing, the words “execution”, “signed”, “signature”, “delivery” and words of
like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or
thereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall
be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based
on the Uniform Electronic Transactions Act. As used herein, “Electronic Signature” means an electronic sound,
symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate
or accept such contract or other record. This Agreement and the other Financing Documents constitute the entire agreement and understanding
among the parties hereto and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter
hereof.
Section 13.12 No
Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto
and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of
this Agreement.
Section 13.13 Lender
Approvals. Unless expressly provided herein to the contrary, any approval, consent, waiver or satisfaction of Agent, Term Loan Servicer
or Lenders with respect to any matter that is the subject of this Agreement, the other Financing Documents may be granted or withheld
by Agent, Term Loan Servicer and Lenders in their sole and absolute discretion and credit judgment.
Section 13.14 Expenses;
Indemnity
(a) Except
with respect to Indemnified Taxes, Other Taxes and Excluded Taxes, which shall be governed exclusively by Section 2.8, Credit Parties
hereby agree to promptly pay (i) all reasonable costs and expenses of Agent and Term Loan Servicer (including, without limitation,
the fees, costs and expenses of counsel to, and independent appraisers and consultants retained by Agent) in connection with the examination,
review, due diligence investigation, documentation, negotiation, closing and syndication of the transactions contemplated by the Financing
Documents, in connection with the performance by Agent or Term Loan Servicer of its rights and remedies under the Financing Documents
and in connection with the continued administration of the Financing Documents including (A) any amendments, modifications, consents
and waivers to and/or under any and all Financing Documents, and (B) any periodic public record searches conducted by or at the
request of Agent (including, without limitation, title investigations, UCC searches, fixture filing searches, judgment, pending litigation
and tax lien searches and searches of applicable corporate, limited liability, partnership and related records concerning the continued
existence, organization and good standing of certain Persons); (ii) without limitation of the preceding clause (i), all reasonable
costs and expenses of Agent in connection with the creation, perfection and maintenance of Liens pursuant to the Financing Documents
other than disputes solely among Lenders and/or Agent (other than any claims against such person in its capacity or in fulfilling its
role as Agent, arranger or any similar role hereunder) to the extent such disputes do not arise from any act or omission of any Credit
Party or of any Affiliate of a Credit Party; (iii) without limitation of the preceding clause (i), all costs and expenses of Agent
and/or Term Loan Servicer in connection with (A) protecting, storing, insuring, handling, maintaining or selling any Collateral,
(B) any litigation, dispute, suit or proceeding relating to any Financing Document, and (C) any workout, collection, bankruptcy,
insolvency and other enforcement proceedings under any and all of the Financing Documents; (iv) without limitation of the preceding
clause (i), all reasonable costs and expenses of Agent in connection with Agent’s reservation of funds in anticipation of the funding
of the initial Loans to be made hereunder; and (v) all costs and expenses incurred by Lenders in connection with any litigation,
dispute, suit or proceeding relating to any Financing Document, other than disputes solely among Lenders and/or Agent and/or Term Loan
Servicer (other than any claims against such person in its capacity or in fulfilling its role as Agent, Term Loan Servicer, arranger
or any similar role hereunder) to the extent such disputes do not arise from any act or omission of any Credit Party or of any Affiliate
of a Credit Party, and in connection with any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any
and all Financing Documents, whether or not Agent, Term Loan Servicer or Lenders are a party thereto.
(b) Each
Credit Party hereby agrees to indemnify, pay and hold harmless Agent, Term Loan Servicer and Lenders and the officers, directors, employees,
trustees, agents, investment advisors and investment managers, collateral managers, servicers, and counsel of Agent, Term Loan Servicer
and Lenders (collectively called the “Indemnitees”) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including
the documented out-of-pocket fees and disbursements of counsel for such Indemnitee) in connection with any investigative, response, remedial,
administrative or judicial matter or proceeding, whether or not such Indemnitee shall be designated a party thereto and including any
such proceeding initiated by or on behalf of a Credit Party, and the reasonable expenses of investigation by engineers, environmental
consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained
by Agent or Lenders) asserting any right to payment for the transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the transactions contemplated hereby or by the other Financing
Documents (including (i)(A) as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge,
emission or release from, any property now or previously owned, leased or operated by a Credit Party, any Subsidiary or any other Person
of any Hazardous Materials, (B) arising out of or relating to the offsite disposal of any materials generated or present on any
such property, or (C) arising out of or resulting from the environmental condition of any such property or the applicability of
any governmental requirements relating to Hazardous Materials, whether or not occasioned wholly or in part by any condition, accident
or event caused by any act or omission of a Credit Party or any Subsidiary, and (ii) proposed and actual extensions of credit under
this Agreement) and the use or intended use of the proceeds of the Loans, except that Credit Parties shall have no obligation hereunder
to an Indemnitee with respect to any liability resulting from the gross negligence or willful misconduct of such Indemnitee, as determined
by a final non-appealable judgment of a court of competent jurisdiction. To the extent that the undertaking set forth in the immediately
preceding sentence may be unenforceable, Credit Parties shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable Law to the payment and satisfaction of all such indemnified liabilities incurred by the Indemnitees or any of them.
This Section 13.14(b) shall not apply with respect to Taxes other than any Taxes that represent liabilities, obligations, losses,
damages, claims etc. arising from any non-Tax claim.
(c) Notwithstanding
any contrary provision in this Agreement, the obligations of Credit Parties under this Section 13.14 shall survive the payment in
full of the Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE RESPONSIBLE OR LIABLE TO THE CREDIT PARTIES OR
TO ANY OTHER PARTY TO ANY FINANCING DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
Section 13.15 reserved.
Section 13.16 Reinstatement.
This Agreement shall remain in full force and effect and continue to be effective should any petition or other proceeding be filed by
or against any Credit Party for liquidation or reorganization, should any Credit Party become insolvent or make an assignment for the
benefit of any creditor or creditors or should an interim receiver, receiver, receiver and manager or trustee be appointed for all or
any significant part of any Credit Party’s assets, and shall continue to be effective or to be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced
in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a fraudulent preference reviewable
transaction or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof,
is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not
so rescinded, reduced, restored or returned.
Section 13.17 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the Credit Parties and Agent, Term Loan Servicer and
each Lender and their respective successors and permitted assigns.
Section 13.18 USA
PATRIOT Act Notification. Agent (for itself and not on behalf of any Lender), Term Loan Servicer (for itself and not on behalf of
any Lender), and each Lender hereby notifies Credit Parties that pursuant to the requirements of the USA PATRIOT Act, it is required
to obtain, verify and record certain information and documentation that identifies Credit Parties, which information includes the name
and address of the Credit Parties and such other information that will allow Agent, Term Loan Servicer, or such Lender, as applicable,
to identify Credit Parties in accordance with the USA PATRIOT Act.
Section 13.19 Acknowledgement
and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Financing Document or
in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any
Affected Financial Institution arising under any Financing Document, to the extent such liability is unsecured, may be subject to the
Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be
bound by:
(a) the
application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the
effects of any Bail-In Action on any such liability, including, if applicable:
(i) a
reduction in full or in part or cancellation of any such liability;
(ii) a
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other
instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any
other Financing Document; or
(iii) the
variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution
Authority.
Section 13.21 Erroneous
Payments.
(a) Each
Lender and any other party hereto hereby severally agrees that if (i) the Agent or Term Loan Servicer notifies (which such
notice shall be conclusive absent manifest error) such Lender (or the Lender which is an Affiliate of a Lender) or any other Person that
has received funds from the Agent, the Term Loan Servicer or any of their Affiliates, either for its own account or on behalf of a Lender
(each such recipient, a “Payment Recipient”) that the Agent or Term Loan Servicer, as applicable, has determined in
its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly
received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives
any payment from the Agent or Term Loan Servicer (or any of their Affiliates) (x) that is in a different amount than, or on a different
date from, that specified in a notice of payment, prepayment or repayment sent by the Agent or the Term Loan Servicer (or any of their
Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not preceded or accompanied by a
notice of payment, prepayment or repayment sent by the Agent or Term Loan Servicer (or any of their Affiliates) with respect to such
payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received
in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts
specified in clauses (i) or (ii) of this Section 13.20(a), whether received as a payment, prepayment or repayment of principal,
interest, fees, distribution or otherwise; individually and collectively, an “Erroneous Payment”), then, in each case,
such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided
that nothing in this Section shall require the Agent or Term Loan Servicer to provide any of the notices specified in clauses (i) or
(ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives
any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Agent or
Term Loan Servicer, as applicable, for the return of any Erroneous Payments, including without limitation waiver of any defense based
on “discharge for value” or any similar doctrine.
(b) Without
limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall
promptly notify the Agent and Term Loan Servicer in writing of such occurrence.
(c) In
the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of the Agent
or Term Loan Servicer, as applicable, and shall be segregated by the Payment Recipient and held in trust for the benefit of the Agent
or Term Loan Servicer, as applicable, and upon demand from the Agent or Term Loan Servicer, as applicable, such Payment Recipient shall
(or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later
than one Business Day thereafter, return to the Agent or Term Loan Servicer, as applicable, the amount of any such Erroneous Payment
(or portion thereof) as to which such a demand was made in same day funds and in the currency so received, together with interest
thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient
to the date such amount is repaid to the Agent or Term Loan Servicer, as applicable, at the greater of the Federal Funds Rate and a rate
determined by the Agent or Term Loan Servicer, as applicable, in accordance with banking industry rules on interbank compensation
from time to time in effect.
(d) In
the event that an Erroneous Payment (or portion thereof) is not recovered by the Agent or Term Loan Servicer for any reason, after demand
therefor by the Agent or Term Loan Servicer, as applicable, in accordance with immediately preceding clause (c), from any Lender that
is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Lender, an “Erroneous Payment
Return Deficiency”), then at the sole discretion of the Agent or Term Loan Servicer, as applicable, and upon the Agent’s
or Term Loan Servicer’s, as applicable, written notice to such Lender (i) such Lender shall be deemed to have made a cashless
assignment of the full face amount of the portion of its Loans (but not its Term Loan Commitment Amount or Revolving Loan Commitment
Amount, as applicable) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Loans”)
to the Agent or Term Loan Servicer or, at the option of the Agent or Term Loan Servicer (as applicable), the Agent’s or Term Loan
Servicer’s applicable lending affiliate (such assignee, the “Agent Assignee”) in an amount that is equal to
the Erroneous Payment Return Deficiency (or such lesser amount as the Agent or Term Loan Servicer, as applicable, may specify) (such
assignment of the Loans (but not its Term Loan Commitment Amount or Revolving Loan Commitment Amount, as applicable) of the Erroneous
Payment Impacted Loans, the “Erroneous Payment Deficiency Assignment”) plus any accrued and unpaid interest on such
assigned amount, without further consent or approval of any party hereto and without any payment by the Agent Assignee as the assignee
of such Erroneous Payment Deficiency Assignment. Without limitation of its rights hereunder, following the effectiveness of the Erroneous
Payment Deficiency Assignment, the Agent or Term Loan Servicer, as applicable, may make a cashless reassignment to the applicable assigning
Lender of any Erroneous Payment Deficiency Assignment at any time by written notice to the applicable assigning Lender and upon such
reassignment all of the Loans assigned pursuant to such Erroneous Payment Deficiency Assignment shall be reassigned to such Lender without
any requirement for payment or other consideration. The parties hereto acknowledge and agree that (1) any assignment contemplated
in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee
or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms
and conditions of Section 11.17 and (3) the Agent may reflect such assignments in the Register without further consent or action
by any other Person.
(e) Each
party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient
that has received such Erroneous Payment (or portion thereof) for any reason, the Agent or Term Loan Servicer, as applicable (1) shall
be subrogated to all the rights of such Payment Recipient and (2) is authorized to set off, net and apply any and all amounts at
any time owing to such Payment Recipient under any Financing Document, or otherwise payable or distributable by the Agent or Term Loan
Servicer, as applicable, to such Payment Recipient from any source, against any amount due to the Agent or Term Loan Servicer, as applicable,
under this Section 13.20 or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment
by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other
satisfaction of any Obligations owed by the Borrower or any other Credit Party, except, in each case, to the extent such Erroneous Payment
is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Agent or the Term Loan
Servicer, as applicable, from the Borrower or any other Credit Party for the purpose of making for a payment on the Obligations and (z) to
the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Obligations, the
Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated
and continue in full force and effect as if such payment or satisfaction had never been received.
(f) Each
party’s obligations under this Section 13.20 shall survive the resignation or replacement of the Agent or Term Loan Servicer,
as applicable, or any transfer of right or obligations by, or the replacement of, a Lender, the termination of the Term Loan Commitments,
the Revolving Loan Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Financing
Document.
(g) The
provisions of this Section 13.20 to the contrary notwithstanding, (i) nothing in this Section 13.20 will constitute a
waiver or release of any claim of any party hereunder arising from any Payment Recipient’s receipt of an Erroneous Payment and
(ii) there will only be deemed to be a recovery of the Erroneous Payment to the extent that Agent or Term Loan Servicer, as applicable,
has received payment from the Payment Recipient in immediately available funds the Erroneous Payment Return Deficiency, whether directly
from the Payment Recipient, as a result of the exercise by Agent or Term Loan Servicer, as applicable, of its rights of subrogation or
set off as set forth above in clause (e) or as a result of the receipt by Agent Assignee of a payment of the outstanding principal
balance of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment, but excluding any other amounts
in respect thereof (it being agreed that any payments of interest, fees, expenses or other amounts (other than principal) received by
Agent Assignee in respect of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment shall be the
sole property of the Agent Assignee and shall not constitute a recovery of the Erroneous Payment).
[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]
IN
WITNESS WHEREOF, intending to be legally bound, each of the parties have caused this Agreement to be executed as of the day
and year first above mentioned.
BORROWERS:
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ORTHOPEDIATRICS CORP.
ORTHOPEDIATRICS US DISTRIBUTION CORP. VILEX IN TENNESSEE, INC.
TELOS PARTNERS, LLC
MD ORTHOPAEDICS, INC.
MD INTERNATIONAL, INC.
ORTHOPEDIATRICS US L.P.
ORTHOPEDIATRICS GP LLC
ORTHOPEDIATRICS IOWA HOLDCO, INC.
MEDTECH CONCEPTS LLC
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By: |
/s/ Fred Hite |
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Name: |
Fred Hite |
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Title: |
CFO |
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By: |
/s/ Fred Hite |
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Name: |
Fred Hite |
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Title: |
Manager |
AGENT: |
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MIDCAP FUNDING IV TRUST |
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By: |
Apollo Capital Management, L.P., its investment manager |
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By: |
Apollo Capital Management GP, LLC, its general partner |
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By: |
/s/ Maurice Amsellem |
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Name: |
Maurice Amsellem |
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Title: |
Authorized Signatory |
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Address:
c/o MidCap Financial Services, LLC, as servicer
7255
Woodmont Avenue, Suite 300
Bethesda, Maryland 20814
Attn: Account Manager for OrthoPediatrics transaction
E-mail: notices@midcapfinancial.com
with a copy to:
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Avenue, Suite 300
Bethesda, Maryland 20814
Attn: General Counsel
E-mail: legalnotices@midcapfinancial.com
Revolving Loan Payment Account Designation:
Wells Fargo Bank, N.A. (McLean, VA)
ABA #: 121-000-248
Account Name: MidCap Funding IV Trust – Collections
Account #: 2000036282803
Attention:
OrthoPediatrics Facility |
TERM LOAN SERVICER: |
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MIDCAP FINANCIAL TRUST |
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By: |
Apollo Capital Management, L.P., its investment manager |
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By: |
Apollo Capital Management GP, LLC, its general partner |
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By: |
/s/ Maurice Amsellem |
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Name: |
Maurice Amsellem |
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Title: |
Authorized Signatory |
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Address:
c/o MidCap Financial Services, LLC, as servicer
7255
Woodmont Avenue, Suite 300
Bethesda, Maryland 20814
Attn: Account Manager for OrthoPediatrics transaction
E-mail: notices@midcapfinancial.com
with a copy to:
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Avenue, Suite 300
Bethesda, Maryland 20814
Attn: General Counsel
E-mail: legalnotices@midcapfinancial.com
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Term Loan Payment Account Designation:
SunTrust Bank, N.A.
ABA #: 061000104
Account Name: MidCap Financial Trust – Collections
Account #: 1000113400435
Attention:
OrthoPediatrics Facility |
LENDER: |
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MIDCAP FINANCIAL TRUST |
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By: |
Apollo Capital Management, L.P., its investment manager |
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By: |
Apollo Capital Management GP, LLC, its general partner |
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By: |
/s/ Maurice Amsellem |
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Name: |
Maurice Amsellem |
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Title: |
Authorized Signatory |
LENDER: |
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MIDCAP FUNDING XIII TRUST |
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By: |
Apollo Capital Management, L.P., its investment manager |
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By: |
Apollo Capital Management GP, LLC, its general partner |
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By: |
/s/ Maurice Amsellem |
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Name: |
Maurice Amsellem |
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Title: |
Authorized Signatory |
LENDER: |
APOLLO ALSTER LENDING FUND (LUX) SCSp |
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an alternative investment fund in the form of a Luxembourg special limited partnership (societe en commandite speciale), acting through
its managing general partner Alster Lending GP (Lux) S.ar.l. and represented by its delegate portfolio manager Apollo Alster Management,
LLC |
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By: Apollo Alster Management, LLC, acting through its sole member |
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By: Apollo Capital Management, L.P., acting through its general partner |
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By: Apollo Capital Management GP, LLC |
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By: |
/s/ William Kuesel |
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Name: William Kuesel |
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Title: Vice President |
ANNEXES,
EXHIBITS AND SCHEDULES
ANNEXES |
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Annex A |
Commitment Annex |
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EXHIBITS |
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Exhibit A |
[Reserved] |
Exhibit B |
Form of Compliance Certificate |
Exhibit C |
Borrowing Base Certificate |
Exhibit D |
Form of Notice of Borrowing |
Exhibit E-1 |
Form of U.S. Tax Compliance
Certificate |
Exhibit E-2 |
Form of U.S. Tax Compliance
Certificate |
Exhibit E-3 |
Form of U.S. Tax Compliance
Certificate |
Exhibit E-4 |
Form of U.S. Tax Compliance
Certificate |
Exhibit F |
Closing Checklist |
Exhibit G |
Form of Assignment Agreement |
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SCHEDULES |
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Schedule 2.1 |
Scheduled Principal Payments
for Term Loan |
Schedule 3.1 |
Existence, Organizational ID
Numbers, Foreign Qualification, Prior Names |
Schedule 3.4 |
Capitalization |
Schedule 3.6 |
Litigation |
Schedule 3.18 |
Environmental Compliance |
Schedule 3.19 |
Intellectual Property |
Schedule 4.9 |
Litigation, Governmental Proceedings
and Other Notice Events |
Schedule 4.17 |
Products; Regulatory Required
Permits |
Schedule 5.1 |
Debt; Contingent Obligations |
Schedule 5.2 |
Liens; |
Schedule 5.7 |
Permitted Investments |
Schedule 5.8 |
Affiliate Transactions |
Schedule 5.11 |
Business Description |
Schedule 5.14 |
Deposit Accounts and Securities
Accounts |
Schedule 6.1 |
Minimum Net Product Sales |
Schedule 7.2 |
Maximum Annual Cash Burn |
Schedule 7.4 |
Post-Closing Obligations |
Schedule 9.1 |
Collateral |
Schedule 9.2(b) |
Location of Collateral |
Schedule 9.2(d) Chattel
Paper, Letter of Credit Rights, Commercial Tort Claims, Instruments, Documents, Investment Property
Annex A to Credit Agreement (Commitment Annex)
Lender | |
Term Loan Tranche 1 Commitment Amount | | |
Term Loan Tranche 1 Commitment
Percentage | | |
Term Loan Tranche 2 Commitment Amount | | |
Term Loan Tranche 2 Commitment Percentage | | |
Term Loan Tranche 3 Commitment Amount | | |
Term Loan Tranche 3 Commitment Percentage | |
MidCap Financial Trust | |
$ | 0 | | |
| 0.00 | % | |
$ | 9,125,000 | | |
| 91.25 | % | |
$ | 9,125,000 | | |
| 91.25 | % |
MidCap Funding XIII Trust | |
$ | 9,125,000 | | |
| 91.25 | % | |
$ | 0 | | |
| 0.00 | % | |
$ | 0 | | |
| 0.00 | % |
Apollo Alster Lending Fund (Lux) SCSp | |
$ | 875,000 | | |
| 8.75 | % | |
$ | 875,000 | | |
| 8.75 | % | |
$ | 875,000 | | |
| 8.75 | % |
TOTALS | |
$ | 10,000,000 | | |
| 100 | % | |
$ | 10,000,000 | | |
| 100 | % | |
$ | 10,000,000 | | |
| 100 | % |
Lender | |
Revolving Loan Commitment Amount | | |
Revolving Loan Commitment Percentage | |
MidCap Financial Trust | |
$ | 45,625,000 | | |
| 91.25 | % |
Apollo Alster Lending Fund (Lux) SCSp | |
$ | 4,375,000 | | |
| 8.75 | % |
TOTALS | |
$ | 50,000,000 | | |
| 100 | % |
Exhibit A to Credit Agreement (Reserved)
Exhibit B to Credit Agreement (Form of
Compliance Certificate)
COMPLIANCE
CERTIFICATE
This Compliance Certificate
is given by _____________________, a Responsible Officer of ORTHOPEDIATRICS CORP., a Delaware corporation (the “Borrower Representative”),
pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023 among the Borrower Representative,
all the Borrowers from time to time party thereto (collectively, “Borrowers”), the Guarantors party thereto, MidCap
Funding IV Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions or other entities from time
to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.
The undersigned Responsible
Officer hereby certifies to Agent and Lenders that:
(a) [the
financial statements delivered with this certificate in accordance with Section 4.1 of the Credit Agreement fairly present in all
material respects the results of operations and financial condition of Credit Parties and their Consolidated Subsidiaries as of the dates
and the accounting period covered by such financial statements;]1
(b) the
representations and warranties of each Credit Party contained in the Financing Documents are true, correct and complete in all material
respects on and as of the date hereof, except to the extent that any such representation or warranty relates to a specific date in which
case such representation or warranty shall be true and correct in all material respects as of such earlier date; provided, however, in
each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified
by materiality in the text thereof;
(c) I
have reviewed the terms of the Credit Agreement and have made, or caused to be made under my supervision, a review in reasonable detail
of the transactions and conditions of Credit Parties and their Consolidated Subsidiaries during the accounting period covered by such
financial statements, and such review has not disclosed the existence during or at the end of such accounting period, and I have no knowledge
of the existence as of the date hereof, of any condition or event that constitutes a Default or an Event of Default, except as set forth
in Schedule 1 hereto, which includes a description of the nature and period of existence of such Default or an Event
of Default and what action Credit Parties have taken, are undertaking and propose to take with respect thereto;
(d) [except
as noted on Schedule 2 attached hereto, Schedule 9.2(b) to the Credit Agreement contains a complete and
accurate list of all business locations of Borrowers and Guarantors and all names under which Borrowers and Guarantors currently conduct
business and required to be disclosed pursuant to Article 9 of the Credit Agreement; Schedule 2 specifically notes any
changes in the names under which any Borrower or Guarantors conduct business;]2
1 To be included only with quarterly compliance certificates.
2 To be included only with quarterly compliance certificates.
(e) except
as noted on Schedule 3 attached hereto, the undersigned has no knowledge of (i) any federal or state tax liens
having been filed against any Borrower, Guarantor or any Collateral, or (ii) any failure of any Borrower or any Guarantors to make
required payments of withholding or other tax obligations of any Borrower or any Guarantors during the accounting period to which the
attached statements pertain or any subsequent period that are required to be made in accordance with Section 4.2 of the Credit Agreement;
(f) [except
as noted on Schedule 4 attached hereto, or as the Borrower Representative may have notified Agent on any Schedule
4 to any previous Compliance Certificate, Schedule 5.14 to the Credit Agreement contains a complete and accurate
statement of all deposit accounts or investment accounts maintained by Borrowers and Guarantors;]3
(g) [except
as noted on Schedule 5 attached hereto, or as the Borrower Representative may have notified Agent on any Schedule
5 to any previous Compliance Certificate, Schedule 3.19 to the Credit Agreement is true and correct in all material respects;]4
(h) [except
as noted on Schedule 6 attached hereto, or as the Borrower Representative may have notified Agent on any Schedule
6 to any previous Compliance Certificate, no Borrower or Guarantor has acquired, by purchase or otherwise, any Chattel Paper,
Letter of Credit Rights, Instruments, Documents or Investment Property that is required to be disclosed pursuant to Section 9.2
of the Credit Agreement;]5
(i) [except
as noted on Schedule 7 attached hereto, or as the Borrower Representative may have notified Agent on any Schedule
7 to any previous Compliance Certificate, no Borrower or Guarantor is aware of any commercial tort claim that is required to
be disclosed pursuant to Section 9.2 of the Credit Agreement;]6
(j) The
aggregate amount of Borrower Unrestricted Cash held by Credit Parties (taken as whole) as of the date that is five (5) Business
Days prior to the date hereof is $[__________];
(k) The
aggregate amount of cash and Cash Equivalents held by all Restricted Foreign Subsidiaries (taken as a whole) as of the date that is five
(5) Business Days prior to the date hereof is $[__________];
3 To be included only with quarterly
compliance certificates.
4
To be included only with quarterly compliance certificates.
5 To be included only with quarterly
compliance certificates.
6 To be included only with quarterly compliance certificates.
(l) The
aggregate amount of cash and Cash Equivalents held by all Foreign Guarantors (taken as a whole) as of the date that is five (5) Business
Days prior to the date hereof is $[__________];
(m) (i) Liquidity
as of the date that is five (5) Business Days prior to the date hereof is $[__________] and (ii) at all times during the period
for which this Compliance Certificate is being delivered Liquidity [WAS / WAS NOT] equal to or greater than $10,000,000;
(n) Net
Product Sales of Borrowers and their Subsidiaries for the relevant Defined Period is equal to $[__________];
(o) The
aggregate revenue (as determined in accordance with GAAP) of the Restricted Foreign Subsidiaries for the relevant Defined Period is equal
to $[__________];
(p) The
aggregate revenue (as determined in accordance with GAAP) of the Credit Parties and their Consolidated Subsidiaries for the relevant
Defined Period is equal to $[__________];]
(q) Annual
Cash Burn for the relevant Defined Period is equal to $[__________]; and
(r) Credit
Parties are [NOT] in compliance with the covenants contained in Article 6 of the Credit Agreement, as demonstrated by the
calculation attached hereto. Such calculations and the certifications contained therein are true, correct and complete.
The foregoing certifications
and computations are made as of ________________, 202__ (end of month) and as of _____________, 202__.
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Sincerely, |
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[______] |
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By: |
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Name: |
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Title: |
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Exhibit C to Credit Agreement (Borrowing
Base Certificate)
[See attached.]
Exhibit D to Credit Agreement (Form of
Notice of Borrowing)
NOTICE
OF BORROWING
This Notice of Borrowing
is given by _____________________, a Responsible Officer of OrthoPediatrics Corp., a Delaware corporation (the “Borrower Representative”),
pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023 among the Borrower Representative,
the Borrowers party thereto and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”),
the Guarantors party thereto, MidCap Funding IV Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions
or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.
The undersigned Responsible
Officer hereby gives notice to [Agent] / [Agent and Term Loan Servicer] of Borrower Representative’s request to borrow $____________________
of [Revolving Loans][Term Loan Tranche [__]] on _______________, 202__. [Attached is a Borrowing Base Certificate complying
in all respects with the Credit Agreement and confirming that, after giving effect to the requested advance, the Revolving Loan Outstandings
will not exceed the Revolving Loan Limit.]
The undersigned officer hereby
certifies that, both before and after giving effect to the request above (a) each of the conditions precedent set forth in Section 7.2
have been satisfied, (b) all of the representations and warranties contained in the Credit Agreement and the other Financing Documents
are true, correct and complete as of the date hereof, except to the extent such representation or warranty relates to a specific date,
in which case such representation or warranty is true, correct and complete as of such earlier date, and (c) no Default or Event
of Default has occurred and is continuing on the date hereof.
IN
WITNESS WHEREOF, the undersigned officer has executed and delivered this Notice of Borrowing this ____ day of ___________,
202__.
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Sincerely, |
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[BORROWER REPRESENTATIVE] |
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By: |
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Name: |
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Title: |
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Exhibit E-1 to Credit Agreement (Form of
U.S. Tax Compliance Certificate)
U.S.
TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
This U.S. Tax Compliance Certificate
is given by _____________________, pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023
among the Borrower Representative, the Borrowers from time to time party thereto (collectively, “Borrowers”), the
Guarantors party thereto, MidCap Funding IV Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions
or other entities from time to time parties thereto, each as a Lender (as such agreement may have been amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions
of Section 2.8(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation
related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished
Agent, Term Loan Servicer and the Borrower Representative with a certificate of its non-U.S. Person status on IRS Form W-8BEN or
IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform the Borrower Representative, Agent and Term Loan Servicer, and (2) the undersigned
shall have at all times furnished the Borrower Representative, Term Loan Servicer and Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.
[NAME
OF LENDER] |
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By: |
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Name: |
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Title: |
Date: ________ __, 20[ ]
Exhibit E-2 to Credit Agreement (Form of
U.S. Tax Compliance Certificate)
U.S.
TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
This U.S. Tax Compliance Certificate
is given pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023 among the Borrower Representative,
the Borrowers from time to time party (collectively, “Borrowers”), the Guarantors party thereto, MidCap Funding IV
Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions or other entities from time to time parties
thereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit
Agreement.
Pursuant to the provisions
of Section 2.8(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of
the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the
Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of
the Code.
The undersigned has furnished
its participating Lender with a certificate of its non-U.S. Person status on IRS Form -8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall
promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or
in either of the two calendar years preceding such payments.
[NAME
OF PARTICIPANT] |
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By: |
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Name: |
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Title: |
Date: ________ __, 20[ ]
Exhibit E-3 to Credit Agreement (Form of
U.S. Tax Compliance Certificate)
U.S.
TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships
For U.S. Federal Income Tax Purposes)
This U.S. Tax Compliance Certificate
is given pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023 among the Borrower Representative,
the Borrowers from time to time party (collectively, “Borrowers”), the Guarantors party thereto, MidCap Funding IV
Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions or other entities from time to time parties
thereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit
Agreement.
Pursuant to the provisions
of Section 2.8(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial
owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members
is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning
of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished
its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is
claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that
is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at
all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
[NAME
OF PARTICIPANT] |
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By: |
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Name: |
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Title: |
Date: ________ __, 20[ ]
Exhibit E-4 to Credit Agreement (Form of
U.S. Tax Compliance Certificate)
U.S.
TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For
U.S. Federal Income Tax Purposes)
This U.S. Tax Compliance Certificate
is given pursuant to that certain Credit, Security and Guaranty Agreement dated as of December 29, 2023 among the Borrower Representative,
the Borrowers from time to time party (collectively, “Borrowers”), the Guarantors party thereto, MidCap Funding IV
Trust, as Agent, MidCap Financial Trust, as Term Loan Servicer, and the financial institutions or other entities from time to time parties
thereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit
Agreement.
Pursuant to the provisions
of Section 2.8(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Financing Document, neither
the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into
in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its
direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of
the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as
described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished
Agent, Term Loan Servicer and the Borrower Representative with IRS Form W-8IMY accompanied by one of the following forms from each
of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E
or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if
the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower Representative, Term Loan
Servicer and Agent, and (2) the undersigned shall have at all times furnished the Borrower Representative, Term Loan Servicer and
Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.
[NAME
OF LENDER] |
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Date: ________ __, 20[ ]
Exhibit G to Credit Agreement (Form of
Assignment Agreement)
ASSIGNMENT AGREEMENT
This Assignment Agreement (this
“Assignment Agreement”) is entered into as of __________ by and between the Assignor named on the signature page hereto
(“Assignor”) and the Assignee named on the signature page hereto (“Assignee”). Reference is
made to the Credit, Security and Guaranty Agreement dated as of December 29, 2023 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), the Borrowers from time to time party to the Credit
Agreement (each individually as a “Borrower”, and collectively and any entities that become party thereto as Borrower
and each of their successors and permitted assigns, the “Borrowers”), the Guarantors party thereto from time to time,
the financial institutions from time to time party thereto, as Lenders, MIDCAP FUNDING IV
TRUST, as Agent, and MIDCAP FINANCIAL TRUST, as Term Loan Servicer. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Credit Agreement.
Assignor and Assignee hereby
agree as follows:
1. Assignor
hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from Assignor the interests set forth on the schedule attached
hereto (the “Schedule”), in and to Assignor’s rights and obligations under the Credit Agreement as of the effective
date set forth on the Schedule (the “Effective Date”). Such purchase and sale is made without recourse, representation
or warranty except as expressly set forth herein. On the Effective Date, Assignee shall pay to Assignor an amount equal to the aggregate
amounts assigned pursuant to the Schedule.
2. Assignor
(i) represents that as of the Effective Date, it is the legal and beneficial owner of the interests assigned hereunder free and
clear of any adverse claim; (ii) makes no other representation or warranty and assumes no responsibility with respect to any statement,
warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Financing Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition
of any other Credit Party or any other Person or the performance or observance by any Credit Party of its Obligations under the Credit
Agreement or any other Financing Documents or any other instrument or document furnished pursuant thereto.
3. Assignee
(i) confirms that it has received a copy of the Credit Agreement and the other Financing Documents, together with copies of the
most recent financial statements delivered pursuant thereto and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment Agreement; (ii) agrees that it will, independently and without
reliance upon Agent, Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes
Agent to take such action as Agent on its behalf and to exercise such powers under the Credit Agreement and the other Financing Documents
as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) appoints and
authorizes Term Loan Servicer to take such action as Term Loan Servicer on its behalf and to exercise such powers under the Credit Agreement
and the other Financing Documents as are delegated to Term Loan Servicer by the terms thereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their terms all obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; (vi) represents that on the date of this Assignment Agreement it is not
presently aware of any facts that would cause it to make a claim under the Credit Agreement; (vii) represents and warrants that
Assignee is not a Foreign Lender or, if it is a Foreign Lender, that it has delivered to Agent the documentation required to be delivered
to Agent by Section 13 below; (viii) represents and warrants that Assignee is (or, upon receipt of any required consents
hereto by Agent and Borrower, will be) an Eligible Assignee and (ix) represents and warrants that it has experience and expertise
in the making or the purchasing of loans such as the Loans, and that it has acquired the interests described herein for its own account
and without any present intention of selling all or any portion of such interests.
4. Each
of Assignor and Assignee represents and warrants to the other party hereto that it has full power and authority to enter into this Assignment
Agreement and to perform its obligations hereunder in accordance with the provisions hereof, that this Assignment Agreement has been
duly authorized, executed and delivered by such party and that this Assignment Agreement constitutes a legal, valid and binding obligation
of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of
equity.
5. Upon
the effectiveness of this Assignment Agreement pursuant to Section 13 below, (i) Agent shall register Assignee as a
Lender, pursuant to the terms of the Credit Agreement, (ii) Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment Agreement, have the rights and obligations of a Lender thereunder, (iii) Assignor shall, to the extent
provided in this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and (iv) Agent
or Term Loan Servicer, as applicable, shall thereafter make all payments in respect of the interest assigned hereby (including payments
of principal, interest, fees and other amounts) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments
for periods prior to the Effective Date by Agent or Term Loan Servicer or with respect to the making of this assignment directly between
themselves.
6. Each
of Assignor and Assignee hereby agrees from time to time, upon request of the other such party hereto, to take such additional actions
and to execute and deliver such additional documents and instruments as such other party may reasonably request to effect the transactions
contemplated by, and to carry out the intent of, this Assignment Agreement.
7. Neither
this Assignment Agreement nor any term hereof may be changed, waived, discharged or terminated, except by an instrument in writing signed
by the party (including, if applicable, any party required to evidence its consent to or acceptance of this Assignment Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought.
8. For
the purposes hereof and for purposes of the Credit Agreement, the notice address of Assignee shall be as set forth on the Schedule. Any
notice or other communication herein required or permitted to be given shall be in writing and delivered in accordance with the notice
provisions of the Credit Agreement.
9. In
case any provision in or obligation under this Assignment Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
10. THIS
ASSIGNMENT AGREEMENT AND ALL DISPUTES AND OTHER MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT
LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
11. This
Assignment Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and
assigns.
12. This
Assignment Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same agreement.
13. This
Assignment Agreement shall become effective as of the Effective Date upon the satisfaction of each of the following conditions: (i) the
execution of a counterpart hereof by each of Assignor and Assignee, (ii) the execution of a counterpart hereof by Agent as evidence
of its consent hereto, (iii) the receipt by Agent of the administrative fee referred to in Section 11.17(a) of
the Credit Agreement, (iv) in the event Assignee is a Foreign Lender, the receipt by Agent of a U.S. Tax Compliance Certificate
and United States Internal Revenue Service Forms W-8ECI, W-8BEN, W-8BEN-E or W-8IMY (as applicable), or such other forms, certificates
or documents prescribed by the United States Internal Revenue Service, properly completed and executed by Assignee, certifying as to
Assignee’s entitlement to exemption from withholding or deduction of Taxes in accordance with Sections 2.8(c) and (e) of
the Credit Agreement, and (v) the receipt by Agent of originals or telecopies of the counterparts described above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
The parties hereto have caused
this Assignment Agreement to be executed and delivered as of the date first written above.
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ASSIGNOR: |
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By: |
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Title: |
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ASSIGNEE: |
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By: |
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Consented to: |
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[MIDCAP FUNDING
IV TRUST], as Agent |
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By: |
Apollo Capital Management, L.P., its investment manager |
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By: |
Apollo Capital Management GP, LLC, its general partner |
Schedule to Assignment Agreement
Assignor: |
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Assignee: |
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Effective
Date: |
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Credit, Security and Guaranty Agreement
dated as of December 29, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among the Borrowers from time to time party to the Credit Agreement (each individually as
a “Borrower”, and collectively and any entities that become party thereto as Borrower and each of their successors
and permitted assigns, the “Borrowers”), the Guarantors party thereto from time to time, the financial institutions
from time to time party thereto, as Lenders, MIDCAP FUNDING IV TRUST, as Agent, and MIDCAP FINANCIAL TRUST, as Term Loan
Servicer. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Credit Agreement.
Interests Assigned:
Commitment/Loan |
[Revolving
Loan
Commitments] |
Term
Loan Tranche
[__] |
Assignor
Amounts |
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Amounts
Assigned |
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Assignor
Amounts
(post-assignment) |
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Schedule 2.1 - Amortization
Term Loan Tranche 1
Commencing on January 1,
2028 (the “Initial Amortization Start Date”) and continuing on the first day of each calendar month thereafter, Borrower
shall pay to Term Loan Servicer as a principal payment on the Term Loan Tranche 1 an amount equal to the total principal amount of the
Term Loan Tranche 1 made to Borrower divided by twelve (12), for a twelve (12) month straight-line amortization of equal monthly
principal payments.
Term Loan Tranche 2
Commencing on the Initial
Amortization Start Date and continuing on the first day of each calendar month thereafter, Borrower shall pay to Term Loan Servicer as
a principal payment on the Term Loan Tranche 2 an amount equal to the total principal amount of the Term Loan Tranche 2 made to Borrower
divided by twelve (12), for a twelve (12) month straight-line amortization of equal monthly principal payments.
Term Loan Tranche 3
Commencing on the Initial
Amortization Start Date and continuing on the first day of each calendar month thereafter, Borrower shall pay to Term Loan Servicer as
a principal payment on the Term Loan Tranche 3 an amount equal to the total principal amount of the Term Loan Tranche 3 made to Borrower
divided by twelve (12), for a twelve (12) month straight-line amortization of equal monthly principal payments.
Notwithstanding anything
to the contrary contained in the foregoing, the entire remaining outstanding principal balance under the Term Loans shall mature and
be due and payable upon the Termination Date.
Schedule 3.1 – Existence, Organizational
ID Numbers, Foreign Qualification, Prior Names
Credit
Party |
Prior
Names |
Type
of Entity /
State of
Formation |
States
Qualified |
State
Org. ID
Number |
Federal
Tax ID
Number |
Location of Credit
Party (address)
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Schedule
3.4 – Capitalization
Schedule 3.6 – Litigation
Schedule 3.18 – Environmental Compliance
Schedule
3.19 – Intellectual Property
INTANGIBLE ASSETS SCHEDULE
Intellectual
Property (registrations and applications)
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Credit
Party
that is Owner
of IP |
Name
/ Identifier
of IP |
Type
of IP
(e.g., patent,
TM, ©, mask
work) |
Registration/Publication
or Application Number |
Filing
Date/Expiration
Date |
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INTANGIBLE ASSETS SCHEDULE (CONTINUED)
LICENSE AND SIMILAR AGREEMENTS
INBOUND
LICENSE # 1 [COMPLETE FOR EACH AGREEMENT] |
Name
and Date of License Agreement: |
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Credit
Party that is Licensee: |
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Name
and address of Licensor: |
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Expiration
Date of License |
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Exclusive
License [Y/N]? |
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Describe
Licensed Intellectual Property For This License |
Name
/ Identifier of IP |
Type
of IP (e.g., patent, TM, ©, mask work) |
Registration/
Publication or Application Number |
Filing Date/Expiration Date
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[REPEAT ABOVE FOR EACH INBOUND LICENSE AGREEMENT]
OUTBOUND
LICENSE # 1 [COMPLETE FOR EACH AGREEMENT] |
Name
and Date of License Agreement: |
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Credit
Party that is Licensor: |
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Name
and address of Licensee: |
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Expiration
Date of License |
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Exclusive
License [Y/N]? |
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Describe
Licensed Intellectual Property For This License |
Name
/ Identifier of IP |
Type
of IP (e.g., patent, TM, ©, mask work) |
Registration/
Publication or Application Number |
Filing Date/Expiration Date
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[REPEAT ABOVE FOR EACH OUTBOUND LICENSE AGREEMENT]
Schedule 4.9 – Litigation, Governmental
Proceedings and Other Notice Events
Schedule 4.17 – Products; Regulatory
Required Permits
Schedule 5.1 – Debt; Contingent Obligations
Debt
Contingent Obligations
Schedule 5.2 – Liens
Schedule 5.7 – Permitted Investments
Schedule 5.8 – Affiliate Transactions
Schedule 5.11 –Business Description
Schedule 5.14 – Deposit Accounts
and Securities Accounts
Bank
Name |
Account
Number |
Account
Type |
Branch
Address |
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Schedule 6.1– Minimum Net Product
Sales
Defined Period Ending | |
Minimum Net Product Sales Amount | |
March 31, 2024 | |
$ | 150,000,000 | |
June 30, 2024 | |
$ | 155,000,000 | |
September 30, 2024 | |
$ | 160,000,000 | |
December 31, 2024 | |
$ | 164,000,000 | |
March 31, 2025 | |
$ | 164,000,000 | |
June 30, 2025 | |
$ | 169,000,000 | |
September 30, 2025 | |
$ | 174,000,000 | |
December 31, 2025 | |
$ | 180,000,000 | |
March 31, 2026 | |
$ | 180,000,000 | |
June 30, 2026 | |
$ | 186,000,000 | |
September 30, 2026 | |
$ | 192,000,000 | |
December 31, 2026 | |
$ | 198,000,000 | |
March 31, 2027 | |
$ | 198,000,000 | |
June 30, 2027 | |
$ | 205,000,000 | |
September 30, 2027 | |
$ | 212,000,000 | |
December 31, 2027 | |
$ | 218,000,000 | |
March 31, 2028 | |
$ | 218,000,000 | |
June 30, 2028 | |
$ | 225,000,000 | |
September 30, 2028 | |
$ | 232,000,000 | |
December 31, 2028 | |
$ | 240,000,000 | |
Schedule 7.2– Maximum Annual Cash
Burn
Funding Date | |
Maximum Annual Cash
Burn Amount | |
July 1, 2024 – September 30, 2024 | |
$ | 27,100,000 | |
October 1, 2024 – December 31, 2024 | |
$ | 25,000,000 | |
January 1, 2025 – March 31, 2025 | |
$ | 23,800,000 | |
April 1, 2025 – June 30, 2025 | |
$ | 22,500,000 | |
Schedule 7.4 – Post-Closing Requirements
Credit Parties shall satisfy
and complete each of the following obligations, or provide Agent each of the items listed below, as applicable, on or before the date
indicated below, all to the satisfaction of Agent in its sole and absolute discretion:
1. | Within forty-five (45) days of the Closing
Date (or such later date as Agent may agree in its sole discretion), Credit Parties shall
have provided to Agent (i) fully executed Deposit Account Control Agreements and Deposit
Account Restriction Agreements (as applicable), in form and substance reasonably satisfactory
to Agent, with respect to all Deposit Accounts, including with respect to all Collections
Accounts, of Credit Parties (other than Excluded Accounts) and (ii) fully executed Securities
Account Control Agreements, in form and substance reasonably satisfactory to Agent, with
respect to all Securities Accounts of Credit Parties (other than Excluded Accounts). |
2. | Within forty-five (45) days of the Closing
Date (or such later date as Agent may agree in its sole discretion), Agent shall have received
a reasonably satisfactory field exam and all other necessary or reasonably desirable audits
and appraisals with respect to Borrowing Base Collateral, the results of which are reasonably
satisfactory to Agent and Lenders. |
3. | Within sixty (60) days of the Closing Date
(or such later date as Agent may agree in its sole discretion), Agent shall have received
(i) a landlord’s agreement, mortgagee agreement, or bailee agreement, as applicable,
from the lessor of each leased property, the mortgagee of owned property or the warehouseman,
consignee, bailee at any business location, in each case, located in the United States and
(a) which is a Credit Party’s chief executive office, (b) where any portion
of the Collateral included in or proposed to be included in the Borrowing Base, or (c) any
portion of the Collateral (other than any equipment or inventory that is in-transit or that
is located at hospitals or other non-warehouse or leased locations where cosigned inventory
or equipment is held) with a value in excess of $2,000,000 in the aggregate, is located,
which agreement or letter shall be reasonably satisfactory in form and substance to Agent,
and (ii) with respect to the Kosciusko County Property, a non-disturbance and access
agreement from the mortgagee of the Kosciusko County Property, which agreement shall be reasonably
satisfactory in form and substance to Agent. |
4. | Within ninety (90) days of the Closing Date
(or such later date as Agent may agree in its sole discretion), with respect to each of the
Mortgaged Properties designated by Agent in Agent’s discretion, Credit Parties shall
deliver to Agent and Lenders all such documentation required by and take such actions in
accordance with the Real Estate Collateral Requirements or as may otherwise be necessary
for Agent, as determined in Agent’s reasonable discretion, to be granted a first priority
perfected security in such Mortgaged Properties. |
5. | By the date that is sixty (60) days following
the Closing Date (or such later date as Agent may agree in writing, in its sole discretion),
Credit Parties shall deliver to Agent (i) a duly executed share pledge or other equivalent
document, governed under the applicable laws of Canada or a Province thereof and otherwise
in form and substance reasonably acceptable to Agent, pursuant to which 100% of the issued
and outstanding voting equity interests (and 100% of the issued and outstanding non-voting
equity interests) of the Canadian Guarantor are pledged to Agent for the benefit of Lenders
(the “Canadian Pledge Agreement”), (ii) all such other documents,
instruments, fillings, agreements, share certificates and stock powers, each in form and
substance reasonably satisfactory to Agent, as are reasonably necessary to create and perfect
a security interest in such equity interests pursuant to Canadian law (including any applicable
Province thereof), and (iii) reasonably satisfactory Canadian legal opinion with respect
to the Canadian Pledge Agreement. |
6. | By the date that is sixty (60) days following
the Closing Date (or such later date as Agent may agree in writing, in its sole discretion),
Credit Parties shall deliver to Agent (i) a duly executed share pledge or other equivalent
document, governed under the applicable laws of Israel and otherwise in form and substance
reasonably acceptable to Agent, pursuant to which 100% of the issued and outstanding voting
equity interests (and 100% of the issued and outstanding non-voting equity interests) of
the Israeli Guarantor are pledged to Agent for the benefit of Lenders (the “Israeli
Pledge Agreement”), (ii) all such other documents, instruments, fillings,
agreements, share certificates and stock powers, each in form and substance reasonably satisfactory
to Agent, as are reasonably necessary to create and perfect a security interest in such equity
interests pursuant to Canadian law (including any applicable Province thereof), and (iii) reasonably
satisfactory Israeli legal opinion with respect to the Israeli Pledge Agreement. |
7. | By the date that is sixty (60) days following
the Closing Date (or such later date as Agent may agree in writing, in its sole discretion),
Credit Parties shall (i) cause each of the Post-Closing Guarantors to become Guarantors
in accordance with the Joinder Requirements (as though such designated Subsidiaries were
new Subsidiaries and no longer Restricted Foreign Subsidiaries) pursuant to reasonable documentation
(including all Israeli law and Canadian Law governed documentation as may be necessary or
reasonably desirable), (ii) deliver to Agent security agreements or debentures, as applicable,
and all such other documents, instruments, fillings, agreements, each in form and substance
reasonably satisfactory to Agent, as are reasonably necessary to create and perfect a security
interest in all the assets of each Post-Closing Guarantor (other than Excluded Property)
under Canadian or Israeli law, as applicable, (iii) deliver a reasonably satisfactory
Canadian and Israeli legal opinions with respect to the applicable Security Documents and
all other authorizations and customary condition precedent documents as may be reasonably
requested by Agent, and (iv) enter into such amendments and modifications to this Agreement
and the other Financing Documents, as Agent may reasonably request in order to reflect the
joinder of the Post-Closing Guarantors as Foreign Guarantors. Following any such joinder,
such Post-Closing Guarantors shall no longer be Restricted Foreign Subsidiary and shall be
Credit Parties and Foreign Guarantors for all purposes hereunder and under the other Financing
Documents (the obligations of the Credit Parties set forth in paragraphs (5)-(7), collectively,
the “Post-Closing Joinder Obligations”). |
8. | Within sixty (60) days of the Closing Date
(or such later date as Agent may agree in its sole discretion), Agent shall have received
from Borrower (i) a certificate of good standing (or equivalent) issued by the Secretary
of State of Tennessee in respect of OrthoPediatrics Corp. and (ii) a certificate of
good standing (or equivalent) issued by the Secretary of State of Maryland in respect of
OrthoPediatrics US Distribution Corp. and (iii) evidence satisfactory to Agent that
OrthoPediatrics Corp. has paid all franchise taxes owed by OrthoPediatrics Corp. to the Tennessee
Department of Revenue for 2020, 2021 and 2022. |
9. | By the date that is ten (10) Business
Days after the Closing Date (or such later date as Agent may agree in its sole discretion),
Credit Parties shall deliver to Agent (i) original share certificates representing the
Pledged Equity (as defined in the Pledge Agreement), together with undated stock powers with
respect thereto, duly executed in blank, and (ii) original instruments (if any) representing
the Pledged Debt (as defined in the Pledge Agreement), together with allonges with respect
thereto, duly executed in blank. |
10. | Within thirty (30) days of the Closing Date
(or such later date as Agent may agree in its sole discretion) with respect to the insurance
policies required by Section 4.4, Credit Parties shall provide Agent with appropriate
evidence from Credit Parties’ insurance broker showing loss payable and/or additional
insured clauses or endorsements in favor of Agent, for the ratable benefit of the Lenders. |
11. | Within thirty (30) days of the Closing Date
(or such later date as Agent may agree in its sole discretion) Credit Parties shall deliver
to Agent effective file-stamped UCC-3 termination statement satisfactory to Agent evidencing
the termination of the UCC-1 financing statement filed with the Secretary of State of Iowa
on February 2, 2021 by Hills Bank and Trust Company as Secured Party and MD Orthopaedics, Inc.
as Debtor with filing number E21015285-7. |
12. | Within ten (10) Business Days of the
Closing Date (or such later date as Agent may agree in its sole discretion) Credit Parties
shall deliver to Agent evidence satisfactory to Agent that the release of PPSA registered
security interests granted by Orthopediatrics Aus Pty Ltd in favor of Squadron Capital LLC
has been properly recorded by the appropriate Australian recording office. |
13. | Within five (5) Business Days of the
Closing Date (or such later date as Agent may agree in its sole discretion) Credit Parties
shall deliver to Agent evidence satisfactory to Agent that the Deed of Release releasing
the security interest granted by OrthoPediatrics EU Limited in favor of Squadron Capital
LLC has been properly recorded by the appropriate recording office in the United Kingdom. |
14. | Within thirty (30) days of the Closing Date
(or such later date as Agent may agree in its sole discretion) Credit Parties shall deliver
to Agent evidence that the United States Patent and Trademark Office records do not indicate
any security interest recorded against Patent No. 9,984,591 owned by MD OrthoPaedics, Inc.
identified as Model for Practicing Cutting with an expiration date of January 10, 2035
other than the security interest in favor of Agent. |
Credit Parties’ failure
to complete and satisfy any of the above obligations on or before the date indicated above, or Credit Parties’ failure to deliver
any of the above listed items on or before the date indicated above, shall constitute an immediate an automatic Event of Default.
Schedule 9.1 – Collateral
The Collateral consists of
all of each Credit Party’s assets, including without limitation, all of each Credit Party’s right, title and interest in
and to the following, whether now owned or hereafter created, acquired or arising, but in all cases excluding Excluded Property:
| (a) | all goods, Accounts (including health-care
insurance receivables), Equipment, Inventory, contracts together with all contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, Intellectual Property, commercial tort claims (including each such claim
listed on Schedule 9.2(d)), documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), vehicles and title documents with respect to vehicles,
cash, deposit accounts, securities accounts, real property, fixtures, letter of credit rights
(whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; |
| (b) | each Credit Party’s books and records
relating to any of the foregoing and all rights of access to such Credit Party’s books
and records; and |
| (c) | any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions
and improvements to and replacements, products, proceeds and insurance proceeds of any or
all of the foregoing. |
Schedule 9.2(b) – Collateral
Information
Schedule 9.2(d) – Chattel Paper,
Letter of Credit Rights, Commercial Tort Claims, Instruments, Documents, Investment Property
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- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
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