Startup Venture Debt Loan and Security Agreement Extended Form

Matter Completion Sheet

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (this Agreement) is entered into as of [DATE] (the Effective Date) by and between [LENDER LEGAL NAME], a [STATE] [ENTITY TYPE] (Lender), and [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE] (Borrower). Each Guarantor that becomes party to a Guaranty and Joinder is a Loan Party, and Borrower and each Guarantor are together the Loan Parties. The parties agree as follows.

1 Definitions and Accounting Terms

1.1 Defined Terms

As used in this Agreement, the following terms have the following meanings. Terms defined in the Code and not otherwise defined here have the meanings given in the Code.

Account is any account as defined in the Code, including all accounts receivable, health-care-insurance receivables and other rights to payment for goods sold, leased or licensed or services rendered.

Account Debtor is any Person obligated on an Account, chattel paper or general intangible.

Advance or Credit Extension is each disbursement of a Term Loan under Section 2.2, in whole or in part, under any Tranche.

Affiliate is, as to any Person, each other Person that owns or controls, directly or indirectly, the Person, each Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members. A holder of Equity Interests in Borrower acquired in a bona fide equity financing is not an Affiliate of Borrower solely by reason of that ownership or related board rights.

Amortization Date is [DATE], as extended to [EXTENDED DATE] under Section 2.3(b) if the Interest-Only Extension Conditions are satisfied.

Anti-Corruption Laws are the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and any other applicable anti-bribery or anti-corruption law.

Anti-Terrorism Laws are any laws relating to terrorism, trade sanctions, embargoes, money laundering or “know your customer” requirements, including the USA PATRIOT Act, the Bank Secrecy Act, the Trading with the Enemy Act and the International Emergency Economic Powers Act, and regulations administered by OFAC.

Applicable Rate is, for any day, a per annum rate equal to the greater of (a) [the Benchmark for the applicable Interest Period plus [MARGIN]%] [the Prime Rate plus [MARGIN]%] [[FIXED RATE]%] and (b) the Floor.

Approved Fund is any fund or account that is engaged in making, purchasing or holding commercial loans and that is advised, managed or controlled by Lender, an Affiliate of Lender or an entity that controls or is under common control with Lender.

Availability Period is, for each Tranche, the period stated for that Tranche on Schedule 1, during which Borrower may request Advances under that Tranche if the applicable conditions in Article 3 are satisfied.

Benchmark is, initially, [Term SOFR] [Daily Simple SOFR] [the Prime Rate]; provided that if a Benchmark Transition Event has occurred with respect to the then-current Benchmark, then Benchmark means the applicable Benchmark Replacement.

Benchmark Replacement is the first alternative set forth below that can be determined by Lender as of the Benchmark Replacement Date: (a) the sum of Daily Simple SOFR and the applicable Benchmark Replacement Adjustment, if the then-current Benchmark is Term SOFR; (b) the sum of the alternate benchmark rate that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for Dollar-denominated syndicated or bilateral credit facilities and the applicable Benchmark Replacement Adjustment; or (c) the sum of the alternate benchmark rate selected by Lender in good faith and in a commercially reasonable manner giving due consideration to any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated bilateral credit facilities to similarly situated borrowers, and the applicable Benchmark Replacement Adjustment; provided that if the Benchmark Replacement as so determined would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor.

Benchmark Replacement Adjustment is, for any replacement of the then-current Benchmark, 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 or recommended by the Relevant Governmental Body for the applicable replacement or, if none, that is determined by Lender in good faith giving due consideration to then-prevailing market convention, in each case so that the replacement, taken together with the adjustment, is intended to be economically neutral to both parties as of the Benchmark Replacement Date.

Benchmark Replacement Date is the earlier of (a) the date on which the administrator of the then-current Benchmark permanently or indefinitely ceases to provide it and (b) the date on which the then-current Benchmark is announced to be, and is, no longer representative, in each case as announced by the administrator, its regulatory supervisor, the central bank for the applicable currency or a court or regulator with jurisdiction over the administrator.

Benchmark Transition Event is a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, its regulatory supervisor, the central bank for the applicable currency, an insolvency official or resolution authority with jurisdiction over the administrator, or a court or entity with similar authority, announcing that the administrator has ceased or will cease to provide the Benchmark permanently or indefinitely or that the Benchmark is or will be no longer representative.

Board is Borrower’s board of directors, board of managers or equivalent governing body.

Borrowing Resolutions are, for any Person, the certified resolutions of that Person’s governing body (and, where required by Operating Documents, its equity holders) authorizing the Loan Documents to which it is party, in the form reasonably acceptable to Lender.

Business Day is any day that is not a Saturday, Sunday or a day on which banks in [CITY, STATE] are authorized or required to close; provided that, for purposes of determining Term SOFR or Daily Simple SOFR, Business Day also excludes any day that is not a U.S. Government Securities Business Day.

Cash Equivalents are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or state thereof maturing within one year; (b) commercial paper maturing no more than one year from the date of creation and rated at least A-2 by Standard & Poor’s or P-2 by Moody’s; (c) certificates of deposit, time deposits and bankers’ acceptances maturing no more than one year after issue, issued by a commercial bank organized under the laws of the United States or a state thereof having combined capital and surplus of at least $[500,000,000]; (d) money market funds at least 95% of whose assets constitute Cash Equivalents of the kinds described in clauses (a) through (c); and (e) other investments permitted under Borrower’s Board-approved investment policy as in effect on the Effective Date and delivered to Lender.

Change in Control is any event or series of related events by which (a) any Person or group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), other than the holders of Equity Interests in Borrower as of the Effective Date and their Affiliates and other than through a bona fide equity financing approved by the Board whose primary purpose is to raise capital, acquires beneficial ownership of more than [50]% of the ordinary voting power of Borrower’s Equity Interests; (b) Borrower ceases to own, directly or indirectly, 100% of the Equity Interests of each Subsidiary (other than directors’ qualifying shares or interests transferred in a Permitted Transfer); (c) a majority of the members of the Board as of the Effective Date (together with any new directors whose election or nomination was approved by a majority of the directors then in office who either were directors on the Effective Date or whose election was previously so approved) cease to constitute a majority of the Board; or (d) a sale, lease or other Transfer of all or substantially all of the assets of the Loan Parties, taken as a whole.

Claims has the meaning given in Section 12.3.

Code is the Uniform Commercial Code as adopted and in effect in the State of [GOVERNING LAW STATE]; provided that if, by reason of mandatory law, perfection, the effect of perfection or non-perfection, or priority of Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as in effect in another jurisdiction, then Code means that Uniform Commercial Code for those purposes.

Collateral is all property described in Section 4.2, other than Excluded Assets.

Collateral Account is any Deposit Account, Securities Account or Commodity Account of a Loan Party, other than an Excluded Account.

Commitment or Term Loan Commitment is Lender’s obligation to make Term Loans in an aggregate principal amount of up to $[TOTAL COMMITMENT], allocated among the Tranches as stated on Schedule 1.

Commodity Account is any commodity account as defined in the Code.

Compliance Certificate is a certificate in the form of Exhibit B, signed by a Responsible Officer.

Contingent Obligation is, for any Person, any direct or indirect liability of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another Person that it has guaranteed or is otherwise contingently liable for; (b) any obligation under any interest-rate, currency or commodity hedging agreement; and (c) any obligation to pay for property or services regardless of whether delivered; in each case in an amount equal to the stated or determinable amount of the primary obligation or, if not stated or determinable, the maximum reasonably anticipated liability as determined in good faith. Contingent Obligations exclude endorsements for collection or deposit in the ordinary course of business and customary indemnification obligations in commercial agreements entered into in the ordinary course.

Control Agreement is a deposit-account control agreement, securities-account control agreement or commodity-account control agreement, in each case among a Loan Party, Lender and the applicable depository bank or intermediary, in form reasonably acceptable to Lender, sufficient to perfect Lender’s security interest by control under the Code.

Copyrights are all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, and whether or not registered.

Daily Simple SOFR is, for any day, SOFR, with the conventions for this rate (including a lookback of [five] U.S. Government Securities Business Days) established by Lender in accordance with the conventions recommended by the Relevant Governmental Body for bilateral business loans.

Default is any event that, with the giving of notice, the passage of time or both, would constitute an Event of Default.

Default Rate is a per annum rate equal to the Applicable Rate plus [3.00]% [5.00]%.

Deposit Account is any deposit account as defined in the Code.

Designated Deposit Account is Borrower’s deposit account identified on Schedule 6 as the account into which Advances are to be funded and from which scheduled payments are to be debited.

Disqualified Institution is (a) any Person identified on Schedule 13 as of the Effective Date, (b) any Person that is a competitor of Borrower identified in writing by Borrower to Lender after the Effective Date and reasonably acceptable to Lender, and (c) any Affiliate of a Person described in clause (a) or (b) that is readily identifiable as such by name, in each case other than a bona fide debt fund that is not controlled by or acting at the direction of such Person.

Dollars, dollars and $ mean lawful money of the United States.

Domestic Subsidiary is a Subsidiary organized under the laws of the United States, any state thereof or the District of Columbia.

Equipment is all goods as defined in the Code other than Inventory, including machinery, equipment, furniture, fixtures, vehicles, tools, computers and related hardware, and all attachments, accessories, additions, substitutions and replacements.

Equity Interests are, for any Person, all shares, interests, participations or other equivalents of capital stock, membership interests, partnership interests or other ownership interests, and all warrants, options, convertible securities or other rights to acquire any of the foregoing, but excluding Indebtedness convertible into any of the foregoing until converted.

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

Event of Default has the meaning given in Article 8.

Excluded Accounts are (a) payroll, payroll tax, employee wage and benefit, and withholding tax accounts, in each case holding funds solely for those purposes in amounts not exceeding the next [two] payroll cycles’ requirements; (b) trust, escrow, fiduciary and customer-deposit accounts holding funds exclusively for the benefit of third parties; (c) zero-balance disbursement accounts that are swept daily to a Collateral Account; (d) accounts securing Permitted Liens described in clause (g) of the definition of Permitted Liens, to the extent of the cash collateral so pledged; (e) accounts of Foreign Subsidiaries; and (f) other accounts identified on Schedule 6 so long as the aggregate balance of all accounts under this clause (f) does not exceed $[AMOUNT] at any time.

Excluded Assets has the meaning given in Section 4.3.

Final Payment is a payment, due on the earliest of the Term Loan Maturity Date, acceleration under Section 9.1, or prepayment under Section 2.6 or 2.7 (and, in the case of a partial prepayment, pro rata based on the principal prepaid), equal to the original principal amount of the Term Loans funded multiplied by the Final Payment Percentage.

Final Payment Percentage is [●]% [range commonly seen: 3% to 8%].

Floor is [●]% per annum [range commonly seen: 0% to 4%].

Foreign Subsidiary is any Subsidiary that is not a Domestic Subsidiary.

Funding Date is any date on which an Advance is made to or for the account of Borrower.

GAAP is generally accepted accounting principles in the United States as in effect from time to time, consistently applied, subject to Section 1.3.

General Intangibles are all general intangibles as defined in the Code, including payment intangibles, software, Intellectual Property, contract rights, goodwill, franchises, licenses, permits, tax refunds, deposits, claims against carriers and shippers, insurance claims, choses in action, and all records and data relating to any of the foregoing.

Governmental Approval is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice of, with or to any Governmental Authority.

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

Guarantor is each Subsidiary or other Person that guarantees the Obligations under a Guaranty, including each Person that executes a Joinder in the form of Exhibit E.

Guaranty is each guaranty of the Obligations executed by a Guarantor in favor of Lender, in form reasonably acceptable to Lender, together with the security provisions of this Agreement as made applicable to that Guarantor by the Joinder.

Indebtedness is, for any Person, without duplication, (a) indebtedness for borrowed money or the deferred purchase price of property or services, including reimbursement and other obligations for surety bonds and letters of credit; (b) obligations evidenced by notes, bonds, debentures or similar instruments; (c) capital lease obligations as determined under GAAP; (d) obligations under any hedging agreement; (e) obligations under any merchant cash advance, revenue-based financing, receivables factoring or similar arrangement; and (f) Contingent Obligations in respect of any of the foregoing. Indebtedness excludes trade payables incurred in the ordinary course of business that are not more than [90] days past the invoice date (or that are being contested in good faith), deferred revenue, deferred compensation, and obligations under SAFEs or other instruments that are classified as equity or that convert solely into Equity Interests and have no cash repayment right other than in a liquidation or dissolution.

Indemnified Person has the meaning given in Section 12.3.

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

Intellectual Property is all of a Person’s right, title and interest in and to (a) Copyrights, Trademarks and Patents; (b) trade secrets, know-how, inventions (whether or not patentable), algorithms, models, data, databases and confidential information; (c) software, source code, object code, firmware, documentation and related materials; (d) mask works, design rights, domain names, social-media identifiers and URLs; (e) licenses and other rights to use any of the foregoing; (f) all amendments, renewals, extensions, continuations, divisionals, reissues and re-examinations of any of the foregoing; (g) all rights to sue for past, present and future infringement, misappropriation or dilution; and (h) all proceeds and goodwill associated with any of the foregoing.

Interest-Only Extension Conditions are the conditions stated on Schedule 1 for extension of the Amortization Date.

Interest-Only Period is the period from the Effective Date through the day before the Amortization Date.

Interest Period is, for Term SOFR, each one-month period commencing on the first day of a calendar month (or the Funding Date, for the initial period) and ending on the last day of that month, subject to the Business Day convention in Section 2.4(e).

Inventory is all inventory as defined in the Code, including all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products.

Investment is any beneficial ownership interest in any Person (including Equity Interests), any loan, advance or capital contribution to any Person, any guaranty of the obligations of any Person, and any acquisition of all or substantially all of the assets or a business line of any Person.

IP Agreement is the [Intellectual Property Security Agreement] [Intellectual Property Negative Pledge and Springing Lien Agreement] between the Loan Parties and Lender dated as of the Effective Date.

Joinder is a joinder agreement in the form of Exhibit E.

Key Person is each of [NAME AND TITLE] and [NAME AND TITLE].

Lender Expenses are all reasonable and documented out-of-pocket audit fees and expenses, costs and expenses (including reasonable and documented fees of one outside counsel and, if reasonably necessary, one local counsel in each relevant jurisdiction) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings), subject to the caps in Section 12.9.

Lien is any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, lien or charge of any kind, whether voluntary or involuntary, including any conditional sale or other title-retention agreement, any capital lease and any financing statement filing (other than precautionary filings for operating leases or consignments).

Liquidity is, at any date, the sum of (a) unrestricted and unencumbered cash and Cash Equivalents of the Loan Parties held in Collateral Accounts subject to Control Agreements (or, for the period permitted under Section 6.6, held in Collateral Accounts pending delivery of Control Agreements) plus, if elected on Schedule 1, (b) [●]% of the Loan Parties’ net billed Accounts not more than [90] days past invoice date and owing from Account Debtors that are not Affiliates or located outside the United States.

Loan Documents are, collectively, this Agreement, the Warrant, the IP Agreement, each Note, each Guaranty, each Joinder, each Control Agreement, each Subordination Agreement, the Perfection Certificate, each Compliance Certificate, each Payment/Advance Form, any fee letter, any landlord or bailee agreement, and every other present or future agreement, instrument or document executed by a Loan Party in favor of Lender in connection with this Agreement, as amended from time to time; provided that the Warrant and any equity documents are Loan Documents only for purposes of the definitions of Obligations (as to amounts actually owed), Lender Expenses and Article 12, and a breach of the Warrant is an Event of Default only as provided in Section 8.6.

Material Adverse Change is any of the following: (a) a material impairment in the perfection or priority of Lender’s Lien in the Collateral or in the value of the Collateral, taken as a whole, other than as a result of Lender’s action or failure to act or a Permitted Transfer; (b) a material adverse change in the business, operations or financial condition of the Loan Parties, taken as a whole; or (c) a material impairment of the prospect of repayment of any portion of the Obligations when due. For purposes of clause (b), the following do not constitute a Material Adverse Change except to the extent they have a disproportionate effect on the Loan Parties relative to similarly situated companies: changes in general economic, political, financial-market, industry or regulatory conditions; acts of war, terrorism, pandemic or natural disaster; changes in GAAP or applicable law; and the announcement or pendency of the transactions contemplated by the Loan Documents. For purposes of clause (c), the failure to meet financial projections or to close an equity financing on a particular timetable is not, by itself, a Material Adverse Change so long as Borrower is in compliance with Section 6.13.

Material Agreement is each agreement listed on Schedule 11 and each other agreement of a Loan Party (a) the termination or breach of which could reasonably be expected to result in a Material Adverse Change, (b) that is an inbound license of Intellectual Property material to the business (other than licenses of commercially available off-the-shelf software or open-source software), or (c) that represents more than [●]% of consolidated revenue for the trailing twelve months.

Milestone is each objective performance, financing or product condition stated on Schedule 1 as a condition to availability of a Tranche.

Net Cash Proceeds are the cash proceeds of any Transfer, equity issuance, Indebtedness incurrence, casualty or condemnation received by a Loan Party, net of reasonable and documented transaction costs, taxes payable as a result of the transaction, amounts required to repay Indebtedness secured by a Permitted Lien senior to Lender’s Lien on the affected asset, and reasonable reserves for post-closing adjustments and indemnities.

Note is each Secured Promissory Note in the form of Exhibit C, if requested by Lender under Section 2.1(c).

Obligations are all of Borrower’s and each other Loan Party’s obligations to pay when due any debts, principal, interest, Lender Expenses, the Final Payment, the Prepayment Premium, fees, indemnities and other amounts owed to Lender under the Loan Documents, and to perform its duties under the Loan Documents, including any Obligations that would be owed but for the automatic stay in an Insolvency Proceeding; provided that Obligations exclude (a) contingent indemnification obligations for which no claim has been asserted, (b) obligations under the Warrant or any other equity instrument, and (c) any obligation that applicable law prohibits from being secured by the Collateral.

OFAC is the Office of Foreign Assets Control of the United States Department of the Treasury.

Operating Documents are, for any Person, its formation documents as certified by the Secretary of State or equivalent of its jurisdiction of organization as of a recent date, and (a) if a corporation, its bylaws, (b) if a limited liability company, its operating agreement, and (c) if a partnership, its partnership agreement, in each case as amended and together with any stockholders’, voting, investors’ rights or similar agreements affecting the governance of that Person.

Patents are all patents, patent applications and like protections, including improvements, divisionals, continuations, renewals, reissues, extensions and continuations-in-part.

Payment/Advance Form is a request for an Advance in the form of Exhibit A.

Payment Date is the first calendar day of each month (or, if that day is not a Business Day, the next Business Day), commencing on the first such date after the initial Funding Date.

Perfection Certificate is the perfection certificate and collateral disclosure schedules delivered by the Loan Parties to Lender dated on or about the Effective Date, as updated under Section 6.2(f), the contents of which are incorporated into Schedule 2.

Permitted Indebtedness is the Indebtedness described in Section 7.4 and Schedule 3.

Permitted Investments are the Investments described in Section 7.7 and Schedule 5.

Permitted Licenses are (a) non-exclusive licenses of Intellectual Property granted in the ordinary course of business (including customer agreements, end-user licenses, reseller and distribution agreements and open-source licenses of non-material components); (b) exclusive licenses that are limited to a specific field of use, territory or customer, that do not include the right to sublicense except to the licensee’s Affiliates and service providers, and that do not cover Intellectual Property that is material to the Loan Parties’ core products; and (c) other licenses approved by Lender in writing.

Permitted Liens are the Liens described in Section 7.5 and Schedule 4.

Permitted Transfers are the Transfers described in Section 7.1 and Schedule 4.

Person is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public-benefit corporation, Governmental Authority or other entity.

Pledged Equity is all Equity Interests in each Subsidiary owned by a Loan Party, subject to the limitation in Section 4.7.

Prepayment Premium is, with respect to any principal amount of Term Loans prepaid (whether voluntarily, mandatorily or upon acceleration), an amount equal to that principal multiplied by (a) [3.00]% if the prepayment occurs on or before the first anniversary of the Effective Date; (b) [2.00]% if the prepayment occurs after the first anniversary and on or before the second anniversary of the Effective Date; (c) [1.00]% if the prepayment occurs after the second anniversary and before the date that is [six] months prior to the Term Loan Maturity Date; and (d) zero thereafter; in each case subject to the exclusions in Section 2.6(c).

Prime Rate is the rate of interest per annum published in The Wall Street Journal (or a successor publication selected by Lender) as the “prime rate” on the applicable day; if more than one rate is published, the highest rate; and if the Wall Street Journal ceases to publish the rate, a comparable published rate selected by Lender in good faith.

Registered IP is all Intellectual Property that is registered, issued or the subject of a pending application with the United States Patent and Trademark Office, the United States Copyright Office or any foreign or international equivalent.

Relevant Governmental Body is the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by either, or any successor.

Requirement of Law is, for any Person, its Operating Documents and any law, treaty, rule, regulation, order, judgment or determination of a Governmental Authority applicable to or binding on that Person or its property.

Responsible Officer is any of the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, General Counsel or Controller of Borrower, or any other officer designated in writing to Lender by one of the foregoing.

Restricted License is any material license or agreement under which a Loan Party is a licensee and that (a) prohibits or requires consent to the grant of a security interest in that license or in the licensed property, or (b) would be terminated or materially impaired by the grant of a security interest.

Sanctioned Person is any Person that is (a) listed on any sanctions list maintained by OFAC, the United Nations Security Council, the European Union, His Majesty’s Treasury or any other applicable sanctions authority; (b) organized, resident or located in a country or territory that is the subject of comprehensive Sanctions; or (c) owned 50% or more or controlled by any such Person.

Sanctions are economic or financial sanctions or trade embargoes administered or enforced by OFAC, the United States Department of State, the United Nations Security Council, the European Union or His Majesty’s Treasury.

Securities Account is any securities account as defined in the Code.

SOFR is the secured overnight financing rate published by the Federal Reserve Bank of New York (or a successor administrator) on its website.

Subordinated Debt is Indebtedness incurred by a Loan Party that is subordinated in right of payment and Lien priority to the Obligations under a Subordination Agreement.

Subordination Agreement is each subordination or intercreditor agreement between Lender and a holder of Subordinated Debt, in form and substance reasonably acceptable to Lender.

Subsidiary is, for any Person, any corporation, limited liability company, partnership or other entity in which more than 50% of the ordinary voting power or economic interests are owned or controlled, directly or indirectly, by that Person. Unless otherwise stated, Subsidiary means a Subsidiary of Borrower.

Term Loan is each term loan made under Section 2.2, and Term Loans are all of them collectively.

Term Loan Maturity Date is [DATE] [the date that is [36] [48] months after the Effective Date].

Term SOFR is, for any Interest Period, the forward-looking term rate based on SOFR for a one-month tenor published by CME Group Benchmark Administration Limited (or a successor administrator) two U.S. Government Securities Business Days before the first day of the Interest Period; if not so published, the rate most recently published, unless a Benchmark Transition Event has occurred.

Trademarks are all trademark and service mark rights, whether registered or not, applications to register and registrations of the same, and like protections, together with the goodwill of the business connected with and symbolized by them.

Tranche is each component of the Term Loan Commitment identified on Schedule 1 as Tranche A, Tranche B or Tranche C.

Transfer is any sale, lease, license, exclusive license, assignment, conveyance, contribution, abandonment or other disposition of property, including any disposition of Equity Interests in a Subsidiary.

U.S. Government Securities Business Day is any day other than a Saturday, 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.

Warrant is each warrant to purchase Equity Interests of Borrower issued to Lender or its designee on or after the Effective Date in connection with this Agreement, the principal terms of which are summarized on Exhibit D.

1.2 Accounting Terms

All accounting terms not specifically defined have the meanings assigned under GAAP, and all financial calculations and determinations under the Loan Documents are made in accordance with GAAP, consistently applied, except that (a) unaudited interim financial statements are subject to normal year-end adjustments and the absence of footnotes, and (b) for purposes of determining compliance with Section 6.13, the financial covenants are calculated as stated on Schedule 1 and Exhibit B.

1.3 Changes in GAAP

If at any time any change in GAAP (including the adoption of any new standard governing leases, revenue recognition or the classification of convertible instruments) would affect the computation of any financial covenant, basket, threshold or other requirement under the Loan Documents, and either party so requests, Lender and Borrower will negotiate in good faith to amend the affected provision to preserve its original intent in light of the change; until so amended, the provision will continue to be computed in accordance with GAAP as in effect before the change, and Borrower will deliver a reconciliation with each Compliance Certificate. Operating leases that would have been so classified under GAAP as in effect on December 15, 2018 are not treated as capital leases or Indebtedness regardless of any later change in GAAP.

1.4 Rules of Construction

1. Section, Article, Schedule and Exhibit references are to this Agreement unless stated otherwise. The Schedules and Exhibits are incorporated by reference. If a specific Schedule exception conflicts with a general covenant, the expressly identified Schedule exception controls.

2. “Including” means “including without limitation.” “Or” is not exclusive. “Shall” and “will” are mandatory. “Herein,” “hereof” and “hereunder” refer to this Agreement as a whole. Singular includes plural and vice versa. Headings are for convenience only and do not affect interpretation.

3. References to any agreement or document include that agreement or document as amended, restated, supplemented or otherwise modified in accordance with its terms and the Loan Documents. References to any law include that law as amended and any successor law and the rules and regulations under it. References to any Person include its successors and permitted assigns.

4. Any requirement that something be “satisfactory” or “acceptable” to Lender, or be determined by Lender, means reasonably satisfactory or acceptable to, or reasonably determined by, Lender in good faith, unless the provision expressly states “sole discretion.”

5. This Agreement is the product of negotiation between sophisticated parties represented by counsel, and no rule of construction against the drafter applies.

6. For purposes of any basket expressed as a dollar amount, amounts in other currencies are converted to Dollars at the spot rate published by [SOURCE] on the date of determination. A transaction that is permitted under more than one basket may be allocated among baskets by Borrower in its discretion, and reclassified later if the transaction would then be permitted under another basket.

7. Any reference to a time of day is to [CITY, STATE] time.

2 Loan and Terms of Payment

2.1 Promise to Pay

1. Borrower unconditionally promises to pay Lender the outstanding principal amount of all Term Loans, accrued and unpaid interest, the Final Payment, any Prepayment Premium, fees, Lender Expenses and all other Obligations as and when due in accordance with this Agreement.

2. Lender’s records of the Advances, payments and the outstanding Obligations are prima facie evidence of the amounts owed absent manifest error; failure to make a record does not affect Borrower’s Obligations. Borrower may request and Lender will deliver, within [five] Business Days, a statement of the outstanding principal, accrued interest and fees sufficient to permit Borrower to reproduce each amount.

3. At Lender’s request, Borrower will execute and deliver a Note for each Tranche in the form of Exhibit C. If a Note is lost, stolen or destroyed, Borrower will issue a replacement upon receipt of a customary lost-note affidavit and indemnity from Lender.

2.2 Term Loans and Advances

1. Tranche A. Subject to the terms and conditions of this Agreement, Lender agrees to make one or more Advances to Borrower under Tranche A in an aggregate principal amount not to exceed the Tranche A commitment on Schedule 1, during the Tranche A Availability Period. [Not less than $[●] of Tranche A will be advanced on the Effective Date.]

2. Tranche B. Subject to the terms and conditions of this Agreement and to the satisfaction of the Tranche B Milestone, Lender agrees to make one or more Advances to Borrower under Tranche B in an aggregate principal amount not to exceed the Tranche B commitment on Schedule 1, during the Tranche B Availability Period.

3. Tranche C. [Subject to the terms and conditions of this Agreement, Lender [agrees to] [may, in its sole discretion,] make Advances under Tranche C in an aggregate principal amount not to exceed the Tranche C commitment on Schedule 1, during the Tranche C Availability Period.] [Reserved.]

4. Minimum Advance; Number of Advances. Each Advance must be in a principal amount of at least $[●] (or the remaining commitment under the applicable Tranche, if less). Borrower may request no more than [●] Advances under any Tranche.

5. No Reborrowing. Amounts repaid or prepaid under any Term Loan may not be reborrowed. Any portion of a Tranche commitment not drawn by the end of its Availability Period terminates automatically.

6. Milestone Determination. Borrower will deliver written evidence of satisfaction of each Milestone to Lender. Lender will confirm or dispute satisfaction within [five] Business Days after receipt of that evidence; if Lender does not respond within that period, Borrower may escalate to Lender’s [TITLE], and Lender will respond within a further [three] Business Days. Any dispute is limited to whether the objective criteria on Schedule 1 are met. A Milestone deemed satisfied remains satisfied for the remainder of the applicable Availability Period notwithstanding later developments.

2.3 Repayment

1. Interest-Only Period. During the Interest-Only Period, Borrower will pay accrued interest only on each Payment Date.

2. Extension of Interest-Only Period. If, on or before [DATE], the Interest-Only Extension Conditions on Schedule 1 have been satisfied and no Event of Default has occurred and is continuing, the Amortization Date will be extended to [EXTENDED DATE] without further action by either party, and Lender will confirm the extension in writing on Borrower’s request.

3. Amortization. Commencing on the Amortization Date and on each Payment Date thereafter, Borrower will repay the outstanding principal of the Term Loans in [●] equal consecutive monthly installments of principal, plus accrued interest, each calculated so that the Term Loans are fully repaid on the Term Loan Maturity Date. Lender will deliver an amortization schedule after each Advance and after any prepayment; Borrower may rely on the most recent schedule delivered.

4. Maturity. All outstanding principal, accrued interest, the Final Payment and all other Obligations are due and payable in full on the Term Loan Maturity Date.

2.4 Interest

1. Rate. Each Term Loan bears interest on its outstanding principal at the Applicable Rate, from the Funding Date until paid in full.

2. Floor. Notwithstanding anything to the contrary, if the Benchmark (or the Prime Rate, if applicable) for any day would be less than the Floor, the Benchmark (or the Prime Rate) will be deemed to be the Floor for that day.

3. Default Rate. Upon the occurrence and during the continuance of an Event of Default, and upon written notice from Lender (except that no notice is required for an Event of Default under Section 8.1 or 8.5), all Obligations bear interest at the Default Rate. Interest at the Default Rate is payable on demand and ceases to accrue when the Event of Default is cured or waived in writing, unless the waiver states otherwise. Default interest is in lieu of, and not in addition to, any late charge for the same payment.

4. Computation. Interest is computed on the basis of a 360-day year for the actual number of days elapsed [a 365/366-day year for the actual number of days elapsed]. In computing interest, the Funding Date is included and the date of payment is excluded. Any change in the Applicable Rate resulting from a change in the Benchmark or Prime Rate takes effect on the first day of the next Interest Period (for Term SOFR) or on the day of the change (for Daily Simple SOFR or the Prime Rate).

5. Business Day Convention. If any Payment Date or the Term Loan Maturity Date falls on a day that is not a Business Day, payment is due on the next Business Day and interest accrues through that day, except that if the next Business Day falls in the next calendar month, payment is due on the preceding Business Day.

6. Rate Statements. Lender will deliver, with each Payment Date debit or at least [three] Business Days before each Payment Date, a statement showing the Benchmark, Applicable Rate, day count, principal and interest due. Borrower may dispute a statement within [30] days after receipt, and Lender will correct any error promptly. Payment of a disputed amount does not waive the dispute.

7. Maximum Lawful Rate. No provision of any Loan Document requires payment or permits collection of interest in excess of the maximum rate permitted by applicable law. If Lender receives interest in excess of that rate, the excess is applied to principal (without Prepayment Premium) or, if no principal is outstanding, refunded to Borrower.

2.5 Benchmark Replacement

1. Replacement. If a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the then-current Benchmark, the Benchmark Replacement will replace the then-current Benchmark for all purposes under the Loan Documents on and after the Benchmark Replacement Date, without any further amendment or action by any party.

2. Conforming Changes. Lender may make technical, administrative or operational changes (including changes to the definition of Business Day, Interest Period, timing and frequency of determining rates, rounding and lookback conventions) that Lender reasonably determines are appropriate to reflect the adoption and implementation of the Benchmark Replacement, in a manner consistent with market practice; provided that no such change may increase the margin, the Floor or any fee, or shift economic value to Lender beyond what is necessary to effect a neutral transition.

3. Notices. Lender will notify Borrower promptly of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement and (iii) the effectiveness of any conforming changes. Any determination by Lender under this Section is conclusive absent manifest error and may be made in Lender’s reasonable discretion without consent of Borrower, except as expressly provided.

4. Borrower Right. If the Applicable Rate after a Benchmark Replacement exceeds the Applicable Rate that would have applied immediately before the Benchmark Replacement Date by more than [●] basis points, and the parties do not agree on an alternative within [30] days after Borrower’s written request, Borrower may prepay the Term Loans in full without Prepayment Premium within the following [60] days; the Final Payment remains payable.

2.6 Voluntary Prepayment

1. Right to Prepay. Borrower may prepay the Term Loans, in whole or in part (in a minimum amount of $[●] and increments of $[●]), on at least [five] Business Days’ written notice to Lender, which notice may be conditioned on the closing of a financing, sale or refinancing and may be revoked if the condition is not met (subject to reimbursement of Lender’s reasonable breakage costs, if any, for a Term SOFR Term Loan).

2. Amounts Due. On the prepayment date Borrower will pay (i) the principal prepaid, (ii) accrued and unpaid interest on that principal, (iii) the Prepayment Premium on that principal, (iv) the Final Payment attributable to that principal, and (v) any other Obligations then due. A partial prepayment is applied to the remaining scheduled installments [in inverse order of maturity] [pro rata].

3. Exclusions from Prepayment Premium. No Prepayment Premium is payable with respect to (i) a prepayment funded with the proceeds of a new credit facility provided by Lender or an Affiliate of Lender; (ii) a prepayment required under Section 2.10 (illegality) or elected under Section 2.5(d) or Section 2.11(c); (iii) a prepayment made in connection with a Change in Control in which [the acquirer is a public company or has consolidated net worth of at least $[●]] [the prepayment occurs after the first anniversary of the Effective Date], in which case the Prepayment Premium is reduced to [●]%; (iv) a prepayment from casualty or condemnation proceeds under Section 2.7(b); or (v) a prepayment made within [30] days after Lender refuses a consent request that this Agreement states may not be unreasonably withheld, where that refusal is the reason for the refinancing.

2.7 Mandatory Prepayment

1. Acceleration or Change in Control. Upon acceleration under Section 9.1, or upon a Change in Control unless Lender has consented in writing to the continuation of the Term Loans, all Obligations, including the Prepayment Premium (as adjusted under Section 2.6(c)(iii)) and the Final Payment, are immediately due and payable.

2. Casualty and Condemnation. Within [10] Business Days after receipt of Net Cash Proceeds from any casualty or condemnation event affecting Collateral in excess of $[●] in the aggregate in any fiscal year, Borrower will prepay the Term Loans in the amount of those Net Cash Proceeds, without Prepayment Premium, unless Borrower has notified Lender of its intention to apply the proceeds to repair or replace the affected Collateral within [180] days and does so.

3. Asset Transfers Outside the Ordinary Course. Within [10] Business Days after receipt of Net Cash Proceeds from any Transfer not permitted under Section 7.1 (and to which Lender has consented), Borrower will prepay the Term Loans in the amount of those Net Cash Proceeds, together with the Prepayment Premium, unless Lender’s consent states otherwise.

4. No prepayment under this Section 2.7 reduces or terminates any unfunded Tranche commitment unless Lender so elects in writing after an Event of Default or unless Borrower so requests.

2.8 Fees

Borrower will pay Lender the following fees, each fully earned and non-refundable when paid, and no other fees except as stated in a fee letter signed by Borrower:

1. Facility Fee. A facility fee of $[●] [[●]% of the Term Loan Commitment], payable on the Effective Date [with [●]% payable on the first Funding Date of each later Tranche in respect of that Tranche].

2. Final Payment. The Final Payment, payable as provided in the definition of Final Payment.

3. Unused Fee. [An unused fee equal to [●]% per annum on the daily undrawn amount of each committed Tranche during its Availability Period, payable quarterly in arrears.] [None.]

4. Prepayment Premium. The Prepayment Premium, when and as provided in Sections 2.6 and 2.7.

5. Lender Expenses. Lender Expenses incurred through the Effective Date, payable on the Effective Date up to the cap in Section 12.9, and Lender Expenses incurred thereafter, payable within [30] days after Borrower’s receipt of a reasonably detailed invoice.

6. Good-Faith Deposit. The good-faith deposit of $[●] previously paid by Borrower is applied to the facility fee and Lender Expenses due on the Effective Date, and any excess is refunded to Borrower on the Effective Date or, if the Effective Date does not occur, within [10] Business Days after either party terminates negotiations.

2.9 Payments; Application; Taxes

1. Manner of Payment. All payments are made in Dollars in immediately available funds, without set-off, counterclaim or deduction, not later than [12:00 noon] on the date due. Borrower authorizes Lender to debit the Designated Deposit Account for each scheduled payment of principal, interest and fees on its due date and for Lender Expenses after the invoice period in Section 2.8(e); Lender will provide a statement of each debit. Lender will not debit for any disputed amount under Section 2.4(f) until the dispute is resolved. Payments received after the stated time are deemed received on the next Business Day.

2. Application Before Default. Before an Event of Default, payments are applied first to Lender Expenses then due, second to fees then due, third to accrued interest then due, fourth to principal then due, and fifth to other Obligations then due.

3. Application After Default. After an Event of Default has occurred and is continuing, Lender may apply payments and Collateral proceeds to the Obligations in any order Lender determines in its reasonable discretion, subject to Section 9.6 and any Subordination Agreement. Borrower will have no right to specify the application of any payment during that period.

4. Taxes. All payments by any Loan Party are made free and clear of and without deduction for any present or future taxes, levies, imposts, duties, charges or withholdings imposed by any Governmental Authority, excluding (i) taxes imposed on or measured by Lender’s net income, franchise taxes and branch profits taxes imposed by the jurisdiction under whose laws Lender is organized or has its principal office or lending office; (ii) United States federal withholding taxes imposed on amounts payable to Lender under law in effect when Lender becomes a party to this Agreement or changes its lending office (except to the extent Lender’s assignor was entitled to additional amounts); (iii) taxes attributable to Lender’s failure to deliver the forms required under Section 2.9(e); and (iv) taxes imposed under FATCA (together, Excluded Taxes). If any Loan Party is required by law to deduct any taxes other than Excluded Taxes from any payment, the sum payable is increased so that Lender receives an amount equal to the sum it would have received had no deduction been made, the Loan Party makes the deduction and timely pays the full amount deducted to the relevant Governmental Authority, and the Loan Party delivers the official receipt to Lender.

5. Lender Tax Forms. Lender (and each assignee and participant) will deliver to Borrower, on or before the date it becomes a party and when reasonably requested, a properly completed and executed IRS Form W-9 or applicable Form W-8 (and, for a non-United States lender claiming the portfolio-interest exemption, a certificate of non-bank status), and will update those forms when they expire or become inaccurate. Lender will use reasonable efforts to designate a different lending office or take other reasonable steps to eliminate or reduce any withholding tax if doing so is not disadvantageous to Lender.

6. Refunds. If Lender determines in good faith that it has received a refund of taxes for which a Loan Party paid additional amounts under this Section, Lender will pay the refund (net of reasonable out-of-pocket expenses and without interest other than interest paid by the Governmental Authority) to the Loan Party.

2.10 Illegality

If Lender determines that any Requirement of Law adopted after the Effective Date makes it unlawful for Lender to make or maintain any Term Loan bearing interest by reference to the Benchmark, Lender will notify Borrower, and (a) the Benchmark-based interest rate will be replaced by the Prime Rate plus [the margin, adjusted by Lender in good faith to preserve the all-in rate] until Lender determines the illegality no longer exists, and (b) if a Prime Rate-based loan is also unlawful, Borrower will prepay the affected Term Loans within [60] days after Lender’s notice (or earlier if required by law), without Prepayment Premium but with the Final Payment.

2.11 Increased Costs

1. If any change in law after the Effective Date (including any change in reserve, capital adequacy or liquidity requirements, and treating the Dodd-Frank Act and Basel III and all rules thereunder as adopted after the Effective Date only to the extent not in effect or scheduled on the Effective Date) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against assets of Lender, or imposes on Lender any other condition affecting this Agreement or the Term Loans, and the result is to increase Lender’s cost of making or maintaining the Term Loans or to reduce any amount received by Lender, then Borrower will pay Lender, within [30] days after receipt of a certificate setting forth in reasonable detail the amount and calculation, such additional amounts as will compensate Lender for the increased cost or reduction; provided that Lender may not recover amounts incurred more than [180] days before its demand, and Lender will not treat Borrower less favorably than similarly situated borrowers in applying this Section.

2. Lender will use reasonable efforts to designate a different lending office or assign its rights to an Affiliate if doing so would eliminate or reduce amounts payable under this Section and would not be disadvantageous to Lender.

3. If Lender demands payment under this Section in an amount exceeding $[●] in any twelve-month period, Borrower may prepay the Term Loans in full without Prepayment Premium within [60] days after the demand.

2.12 Payments Free of Set-Off; No Marshaling

Borrower’s obligation to make each payment is absolute and unconditional and is not subject to any set-off, counterclaim, recoupment, defense or deduction Borrower may have against Lender or any other Person, all of which Borrower may pursue only by separate action. Lender is not required to marshal any Collateral or guaranty or to resort to any particular Collateral before exercising any remedy.

3 Conditions of Loans

3.1 Conditions Precedent to Initial Advance

Lender’s obligation to make the initial Advance is subject to Lender’s receipt, in form and substance reasonably satisfactory to Lender, of each of the following, or Lender’s written waiver or deferral under Section 3.4:

1. Loan Documents. This Agreement, each Note (if requested), the IP Agreement, the Warrant, each Guaranty and Joinder, each Subordination Agreement, and any fee letter, each duly executed by every party other than Lender.

2. Perfection Certificate. The Perfection Certificate, duly completed and executed by a Responsible Officer of each Loan Party.

3. Organizational Documents. For each Loan Party, its Operating Documents certified by its secretary or equivalent, a certificate of good standing (or equivalent) from its jurisdiction of organization dated within [30] days before the Effective Date, and certificates of foreign qualification from each jurisdiction where failure to qualify could reasonably be expected to result in a Material Adverse Change.

4. Authority. Borrowing Resolutions for each Loan Party, including any investor, stockholder or member approval required under its Operating Documents (including any approval required for the incurrence of Indebtedness, the grant of Liens, the issuance of the Warrant and the reservation of shares issuable on exercise of the Warrant), and an incumbency certificate identifying each officer signing a Loan Document.

5. Searches and Lien Matters. UCC, tax lien, judgment and litigation searches against each Loan Party in its jurisdiction of organization and each jurisdiction identified in the Perfection Certificate, together with searches of the United States Patent and Trademark Office and Copyright Office, in each case showing no Liens other than Permitted Liens, and payoff letters, lien releases and UCC termination authorizations for all Indebtedness and Liens to be repaid or released on the Effective Date.

6. Filings. Evidence that UCC-1 financing statements against each Loan Party have been filed or are in a position to be filed on the Effective Date in each applicable jurisdiction, and, if the IP Agreement grants a present Lien, the IP Agreement in recordable form.

7. Control Agreements. Control Agreements for each Collateral Account, or, for any Collateral Account identified on Schedule 12, Borrower’s agreement to deliver the Control Agreement within the post-closing period stated there.

8. Insurance. Certificates of insurance and endorsements evidencing the coverage required by Section 6.5, naming Lender as lender’s loss payee and additional insured, with the notice-of-cancellation provisions required by that Section.

9. Legal Opinion. [A legal opinion of counsel to the Loan Parties addressing due organization, authority, enforceability, no conflict with Operating Documents, creation of the security interest and perfection by filing, in customary form.] [Not required.]

10. Officer’s Certificate. A certificate of a Responsible Officer of Borrower certifying that the representations and warranties in Article 5 are true and correct in all material respects, no Default or Event of Default exists, and the conditions in this Section 3.1 have been satisfied (other than those within Lender’s exclusive knowledge).

11. Financial Information. Borrower’s most recent monthly financial statements, Board-approved annual operating budget and projections, and a capitalization table certified by a Responsible Officer.

12. Payment/Advance Form and Funds Flow. A Payment/Advance Form for the initial Advance and a funds-flow memorandum, with wire instructions verified through a dual-control callback procedure.

13. Know-Your-Customer. All documentation and information reasonably requested by Lender at least [five] Business Days before the Effective Date under applicable Anti-Terrorism Laws, including a beneficial-ownership certification if Borrower qualifies as a legal-entity customer under 31 C.F.R. § 1010.230.

14. Fees and Expenses. Payment of the fees due on the Effective Date under Section 2.8 and Lender Expenses invoiced at least [two] Business Days before the Effective Date, which may be netted from the initial Advance at Borrower’s election.

15. Landlord and Bailee Agreements. [Landlord consents and bailee acknowledgments for each location listed on Schedule 7 holding Collateral with a book value exceeding $[●], or inclusion of the location on Schedule 12 as a post-closing item.] [Not required.]

16. Due Diligence. Completion of Lender’s business, legal and financial due diligence with results reasonably satisfactory to Lender, [provided that this condition is deemed satisfied on execution of this Agreement by Lender].

3.2 Conditions Precedent to All Advances

Lender’s obligation to make each Advance, including the initial Advance, is subject to the following:

1. timely receipt of a Payment/Advance Form executed by a Responsible Officer, delivered by [12:00 noon] at least [three] Business Days before the proposed Funding Date (or such shorter period as Lender may agree);

2. the representations and warranties in Article 5 being true and correct in all material respects (or in all respects, for any representation already qualified by materiality) on the Funding Date, except to the extent a representation relates expressly to an earlier date (in which case it is true as of that date) or has been updated by a schedule supplement accepted by Lender under Section 5.2;

3. no Default or Event of Default having occurred and continuing or resulting from the Advance;

4. for Tranche B and Tranche C, satisfaction of the applicable Milestone and any additional conditions on Schedule 1, and the Funding Date falling within the applicable Availability Period;

5. [no Material Adverse Change having occurred since the date of the most recent financial statements delivered under Section 6.2]; and

6. payment of any fee due in connection with the Advance under Section 2.8.

Each Payment/Advance Form constitutes a representation by Borrower that the conditions in clauses (b) through (e) are satisfied as of the Funding Date, to the extent within Borrower’s knowledge.

3.3 Procedures for Borrowing

Subject to Section 3.2, Lender will fund each Advance by wire transfer of immediately available funds to the Designated Deposit Account (or, for the initial Advance, as directed in the funds-flow memorandum) on the Funding Date, net of amounts Borrower has elected to net under Section 3.1(n). Any new or changed wire instruction must be verified by Lender through a callback to a Responsible Officer at a previously established telephone number before funds are released. Lender will promptly identify any facial deficiency in a Payment/Advance Form and will not decline an Advance based on a condition not stated in the Loan Documents.

3.4 Waiver and Deferral of Conditions

Only Lender may waive a condition to its obligation to fund, and only in writing. A waiver or deferral of a condition for one Advance is not a waiver for any later Advance unless so stated. A condition deferred in writing becomes a post-closing obligation under Section 3.5.

3.5 Post-Closing Obligations

Borrower will deliver or complete each item listed on Schedule 12 by the deadline stated there (as extended by Lender in writing, which extension Lender will not unreasonably withhold if Borrower is diligently pursuing completion and the delay is attributable to a third party). Failure to complete a Schedule 12 item by its deadline is a breach of Section 6.11 subject to the cure period in Section 8.2(c), and does not by itself constitute a Material Adverse Change or a failure of a condition to a later Advance unless Schedule 12 expressly so states.

4 Creation of Security Interest

4.1 Grant of Security Interest

As security for the prompt and complete payment and performance of all Obligations, each Loan Party grants to Lender a continuing security interest in, and Lien on, all of its right, title and interest in, to and under the Collateral, wherever located, whether now owned or existing or hereafter acquired or arising. Each Loan Party acknowledges that the security interest is granted in consideration of the Advances and other accommodations under this Agreement and attaches on the Effective Date (or, for later-acquired Collateral, when the Loan Party acquires rights in it) without further act.

4.2 Description of Collateral

The Collateral consists of all of each Loan Party’s right, title and interest in and to the following personal property, in each case as the Code defines the capitalized terms below:

1. all Accounts, including health-care-insurance receivables;
   
2. all chattel paper, including tangible and electronic chattel paper;
   
3. all Commodity Accounts, Deposit Accounts and Securities Accounts (other than Excluded Accounts), and all cash, Cash Equivalents, financial assets, security entitlements and other property credited to or held in them;
   
4. all documents;
   
5. all Equipment, including fixtures to the extent a Loan Party has rights in them;
   
6. all General Intangibles, including payment intangibles, software and, subject to Section 4.6, Intellectual Property;
   
7. all goods;
   
8. all instruments, including promissory notes;
   
9. all Inventory;
   
10. all investment property, including the Pledged Equity, subject to Section 4.7;
    
11. all letter-of-credit rights, whether or not the letter of credit is evidenced by a writing;
    
12. all commercial tort claims described on Schedule 2 or later identified under Section 6.2(g);
    
13. all supporting obligations;
    
14. all books, records, data, files and software (including source code and object code) relating to any of the foregoing, in whatever medium; and
    
15. all proceeds, products, accessions, rents, profits, income, benefits, substitutions and replacements of any of the foregoing, including insurance proceeds, condemnation awards, claims against third parties for loss of or damage to any Collateral, and any property received in exchange for any Collateral.

4.3 Excluded Assets

Notwithstanding Section 4.2, the Collateral does not include any of the following (the Excluded Assets):

1. any Excluded Account and the funds in it (but not the proceeds of any other Collateral deposited into it, to the extent traceable);

2. more than 65% of the issued and outstanding voting Equity Interests of any Foreign Subsidiary (or of any Domestic Subsidiary substantially all of whose assets consist of Equity Interests of Foreign Subsidiaries) that is a “controlled foreign corporation” within the meaning of Section 957 of the Internal Revenue Code, if and for so long as a pledge of more than 65% would result in material adverse tax consequences to the Loan Parties as reasonably determined by Borrower in consultation with its tax advisers and notified to Lender;

3. any lease, license, contract, permit or agreement (and the property subject to it) to the extent the grant of a security interest would (i) be prohibited by a Requirement of Law, (ii) constitute a breach or default under, or result in termination of or a right of termination under, the lease, license, contract, permit or agreement, or (iii) require a consent of a Governmental Authority or third party that has not been obtained after commercially reasonable efforts, in each case only to the extent and for so long as the prohibition, breach, termination or consent requirement is effective and is not rendered ineffective by Sections 9-406, 9-407, 9-408 or 9-409 of the Code or any other Requirement of Law; provided that the Collateral includes all proceeds, substitutions and replacements of any such property to the extent their assignment is not similarly prohibited;

4. any intent-to-use trademark application filed under 15 U.S.C. § 1051(b) before the filing and acceptance of an amendment to allege use or a statement of use, to the extent that a grant of a security interest in the application before that filing would impair its validity or enforceability under federal law;

5. Equipment and other property subject to a purchase-money Lien or capital lease that is a Permitted Lien, to the extent the documents governing that Lien prohibit a junior Lien (but only for so long as that prohibition is effective and the Permitted Lien remains outstanding);

6. motor vehicles and other assets subject to a certificate-of-title statute, to the extent a Lien cannot be perfected by filing a UCC financing statement, with an aggregate book value not exceeding $[●];

7. [the Intellectual Property, to the extent provided in Section 4.6(b)]; and

8. any other property identified as excluded on Schedule 2.

Any Excluded Asset that ceases to meet the applicable criteria automatically becomes Collateral without further act. Excluded Assets are not excluded from the covenants in Articles 6 and 7.

4.4 Priority of Security Interest

Each Loan Party represents, warrants and covenants that the security interest granted under this Agreement is and will remain a first-priority perfected security interest in the Collateral (subject only to Permitted Liens that are expressly permitted to have priority under the definition of Permitted Liens or under a Subordination Agreement), to the extent perfection may be achieved by filing a financing statement under the Code, by control under Sections 8-106, 9-104, 9-105, 9-106 or 9-107 of the Code, by possession, or by recordation with the United States Patent and Trademark Office or Copyright Office, in each case to the extent required by this Agreement. If a Loan Party acquires any commercial tort claim with a reasonably estimated value exceeding $[●], it will promptly notify Lender in writing describing the claim with sufficient specificity to satisfy Section 9-108(e) of the Code, and the claim becomes Collateral upon that notice.

4.5 Authorization to File Financing Statements

Each Loan Party authorizes Lender to file financing statements, amendments and continuation statements in any jurisdiction, without notice to or signature of the Loan Party, describing the Collateral as “all assets” or “all personal property” of the Loan Party or using words of similar effect, together with a description of Excluded Assets consistent with Section 4.3, and to file the IP Agreement (or a short-form notice of it) with the United States Patent and Trademark Office and Copyright Office if the IP Agreement grants a present Lien. Lender will deliver to Borrower a copy of each filing within [10] Business Days after filing. Each Loan Party ratifies any financing statement filed by Lender before the Effective Date in anticipation of this Agreement. Lender will promptly amend or terminate any filing that describes property that is not Collateral or that is otherwise inconsistent with this Agreement upon Borrower’s reasonable request.

4.6 Intellectual Property

1. Structure. The parties have selected the following structure for Intellectual Property, as documented in the IP Agreement: [PRESENT LIEN] [NEGATIVE PLEDGE WITH SPRINGING LIEN] [PRESENT LIEN ON PROCEEDS AND LICENSE RECEIVABLES ONLY, WITH NEGATIVE PLEDGE ON UNDERLYING IP].

2. Negative Pledge Alternative. If the selected structure is a negative pledge with a springing Lien, then notwithstanding Section 4.2(f), Intellectual Property (other than Accounts, royalties, license fees and other proceeds arising from Intellectual Property, which are Collateral) is an Excluded Asset until the earlier of (i) the occurrence of an Event of Default [under Section 8.1, 8.3, 8.5 or 8.11] and Lender’s written election to cause the Lien to attach, and (ii) the date on which any Loan Party grants a Lien on any Intellectual Property to any other Person other than a Permitted Lien; upon either event the security interest in Section 4.1 attaches automatically to all Intellectual Property without further act, and each Loan Party will execute the short-form filings described in the IP Agreement within [three] Business Days after Lender’s request. The negative pledge in Section 7.5 applies to Intellectual Property at all times.

3. Present Lien Alternative. If the selected structure is a present Lien, Intellectual Property is Collateral from the Effective Date, and each Loan Party will execute and deliver the IP Agreement in recordable form and such confirmatory grants as Lender reasonably requests for recordation against Registered IP. Lender will not record against any application or registration that the Loan Party does not own or against any intent-to-use application described in Section 4.3(d).

4. No Assignment. Nothing in the Loan Documents constitutes a present assignment of any Intellectual Property to Lender. Each Loan Party retains the sole right to prosecute, maintain, license (subject to Section 7.1) and enforce its Intellectual Property before an Event of Default. Lender’s rights with respect to Intellectual Property after an Event of Default are set out in Section 9.3.

4.7 Pledged Equity

1. The Pledged Equity includes all Equity Interests in each Domestic Subsidiary and, subject to Section 4.3(b), 65% of the voting Equity Interests and 100% of the non-voting Equity Interests in each first-tier Foreign Subsidiary, together with all dividends, distributions, rights and proceeds in respect of them. Schedule 10 identifies each Subsidiary and the Equity Interests pledged.

2. Each Loan Party will deliver to Lender all certificates representing Pledged Equity, together with undated stock powers or transfer instruments executed in blank, within [10] Business Days after the Effective Date (or after acquisition, for later-acquired certificated Pledged Equity). For uncertificated Pledged Equity, the Loan Party will cause the issuer to register Lender’s security interest in its books or execute an issuer control acknowledgment, as Lender reasonably requests. No Loan Party will permit a Subsidiary to elect to have its Equity Interests treated as securities under Article 8 of the Code unless the certificates are delivered to Lender.

3. Before an Event of Default, each Loan Party may exercise all voting and other rights pertaining to the Pledged Equity for purposes not inconsistent with the Loan Documents and may receive and retain all distributions permitted under Section 7.7. After an Event of Default has occurred and is continuing and Lender has given written notice, Lender may exercise voting rights and receive distributions as provided in Section 9.3(f).

4.8 Perfection by Control

Each Loan Party will cause each Collateral Account to be subject to a Control Agreement in accordance with Section 6.6. Each Control Agreement will provide that the depository bank or intermediary will comply with instructions from Lender without further consent of the Loan Party only after Lender has delivered a notice of exclusive control, and that Lender will not deliver a notice of exclusive control unless an Event of Default has occurred and is continuing. Lender will rescind any notice of exclusive control within [three] Business Days after the applicable Event of Default is cured or waived in writing.

4.9 Further Assurances; Power of Attorney

1. Each Loan Party will, at its expense, execute and deliver such further instruments, and take such further actions, as Lender may reasonably request to create, perfect, protect or enforce Lender’s Lien on the Collateral with the priority required by this Agreement, including delivering possession of instruments, chattel paper and certificated securities with a value exceeding $[●], obtaining landlord and bailee agreements as required by Section 6.10, and making foreign-law filings for Collateral located outside the United States with a value exceeding $[●].

2. Each Loan Party irrevocably appoints Lender (and any officer or agent Lender designates) as its attorney-in-fact, coupled with an interest, with full power of substitution, to execute and file financing statements and amendments as authorized by Section 4.5 at any time, and, only after an Event of Default has occurred and is continuing, to take the actions described in Section 9.5. This appointment terminates when the Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated.

4.10 Termination and Release

1. When all Obligations (other than inchoate indemnity obligations for which no claim has been asserted and obligations under the Warrant) have been indefeasibly paid in full in cash and the Term Loan Commitment has terminated, the security interest granted under this Agreement terminates automatically, and Lender will, at Borrower’s expense and within [10] Business Days after Borrower’s request, deliver UCC-3 termination statements, terminations of Control Agreements, releases of any recorded IP Lien, returned certificates and stock powers, and any other release documents Borrower reasonably requests, each without recourse, representation or warranty other than that Lender has not assigned the Lien.

2. Lender will release its Lien on any Collateral that is Transferred in a Permitted Transfer or in a Transfer consented to by Lender, and on the Equity Interests and assets of any Guarantor that is released under its Guaranty, and will deliver evidence of the release within [five] Business Days after Borrower’s request accompanied by an officer’s certificate that the Transfer is permitted.

3. If any payment to Lender is rescinded or must be returned in an Insolvency Proceeding, the Obligations and the security interest are reinstated to the extent of that payment as if it had never been made.

4.11 Ordinary-Course Rights; No Duty of Lender

Before an Event of Default has occurred and is continuing, each Loan Party may use, collect, license, sell and otherwise deal with the Collateral in the ordinary course of business and as otherwise permitted by this Agreement. Lender has no duty to collect, preserve or protect any Collateral or any rights against third parties, except the duty to use reasonable care in the custody of Collateral in its actual possession, which duty is satisfied if Lender treats the Collateral substantially as it treats its own similar property. Lender has no operational duty with respect to Collateral and will not access any Loan Party’s systems, personal data, source code or trade secrets except in the exercise of remedies under Article 9 in accordance with applicable law and a documented access protocol.

5 Representations and Warranties

5.1 Representations

Each Loan Party represents and warrants to Lender, as of the Effective Date and as of each Funding Date (subject to Section 3.2(b)), as follows:

1. Due Organization, Authorization and Power. Each Loan Party and each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, is qualified and licensed to do business in each jurisdiction where qualification is required except where failure to qualify could not reasonably be expected to result in a Material Adverse Change, and has all requisite power and authority to own its property, conduct its business and execute, deliver and perform the Loan Documents to which it is party. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary corporate, investor and other action and do not (i) conflict with any Loan Party’s Operating Documents, (ii) contravene or constitute a default under any Material Agreement or Requirement of Law, (iii) require any Governmental Approval or third-party consent that has not been obtained, other than filings to perfect Lender’s Lien, or (iv) result in the creation of any Lien other than in favor of Lender. Each Loan Document is a legal, valid and binding obligation of each Loan Party party to it, enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws and general principles of equity.

2. Collateral; Perfection Certificate. Each Loan Party has good title to, or a valid leasehold or license interest in, the Collateral, free of Liens other than Permitted Liens. The Perfection Certificate is true, correct and complete in all material respects as of its date and as updated under Section 6.2(f), including each Loan Party’s exact legal name, jurisdiction and type of organization, organizational identification number, chief executive office, the locations of Collateral with a book value exceeding $[●], all Deposit Accounts, Securities Accounts and Commodity Accounts, all commercial tort claims exceeding $[●], all legal names used within the past five years, and all Registered IP. Upon filing of the financing statements described in Section 4.5, delivery of the Control Agreements and certificates described in Sections 4.7 and 4.8, and recordation of the IP Agreement (if applicable), Lender’s security interest in the Collateral will be a perfected first-priority security interest, subject only to Permitted Liens expressly permitted to have priority, to the extent perfection may be achieved by those methods.

3. Litigation. Except as described on Schedule 8 (as updated under Section 6.8), there are no actions, suits, investigations or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing against any Loan Party or Subsidiary (i) involving more than $[●] individually or $[●] in the aggregate, (ii) seeking injunctive relief that could reasonably be expected to result in a Material Adverse Change, (iii) alleging infringement, misappropriation or violation of any Person’s Intellectual Property that is material to the business, or (iv) by or before any Governmental Authority relating to the business, in each case that could reasonably be expected to result in a Material Adverse Change.

4. Financial Statements; No Material Adverse Change. All consolidated financial statements delivered to Lender fairly present in all material respects the consolidated financial condition and results of operations of Borrower and its Subsidiaries as of the dates and for the periods indicated, in accordance with GAAP consistently applied, subject (for unaudited statements) to normal year-end adjustments and the absence of footnotes. Since the date of the most recent annual financial statements delivered to Lender, there has not been any Material Adverse Change. The projections and budgets delivered to Lender were prepared in good faith based on assumptions believed by Borrower to be reasonable when made; projections are not guarantees of future performance and actual results may differ materially.

5. Solvency. Immediately after giving effect to each Advance and the use of its proceeds, (i) the fair salable value of the Loan Parties’ consolidated assets exceeds their consolidated liabilities (including contingent liabilities, valued at the amount reasonably expected to become due), (ii) the Loan Parties are able to pay their debts as they become due, and (iii) the Loan Parties do not have unreasonably small capital to conduct their business as currently conducted and as proposed to be conducted in the then-current Board-approved budget.

6. Subsidiaries; Equity Interests. Schedule 10 correctly lists each Subsidiary, its jurisdiction of organization, the holders of its Equity Interests and the percentage held. Except as listed on Schedule 10, no Loan Party owns any Equity Interests in any Person other than Cash Equivalents and Permitted Investments. All Pledged Equity has been duly authorized and validly issued, is fully paid and non-assessable, and is not subject to any purchase option, call, right of first refusal or similar right other than under the Operating Documents of the issuer in favor of a Loan Party.

7. Taxes. Each Loan Party and Subsidiary has timely filed all material federal, state and foreign tax returns and reports required to be filed and has timely paid all material taxes, assessments, deposits and contributions owed, except (i) taxes being contested in good faith by appropriate proceedings for which adequate reserves have been established under GAAP and for which no Lien (other than a Permitted Lien) has attached, and (ii) taxes not exceeding $[●] in the aggregate. No Loan Party is aware of any proposed tax assessment that could reasonably be expected to result in a Material Adverse Change. Each Loan Party has paid all amounts required to be paid under any employee benefit plan and has not incurred any liability under Title IV of ERISA other than premiums.

8. Compliance with Laws; Sanctions; Anti-Corruption. Each Loan Party and Subsidiary is in compliance with all Requirements of Law except where non-compliance could not reasonably be expected to result in a Material Adverse Change. No Loan Party, Subsidiary or, to the knowledge of any Responsible Officer, any director, officer, employee or agent acting on their behalf, is a Sanctioned Person, is located in or organized under the laws of a country that is the subject of comprehensive Sanctions, or has in the past five years engaged in any dealing or transaction with or for the benefit of a Sanctioned Person in violation of Sanctions. Each Loan Party and Subsidiary has conducted its business in compliance with Anti-Corruption Laws and Anti-Terrorism Laws and has instituted policies reasonably designed to promote compliance. No Loan Party is an “investment company” under the Investment Company Act of 1940, is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, or is subject to regulation under any law limiting its ability to incur Indebtedness.

9. Intellectual Property. Each Loan Party is the sole owner of, or has a valid and enforceable license to use, all Intellectual Property material to the conduct of its business as currently conducted, free of Liens other than Permitted Liens. Schedule 9 lists all Registered IP owned by any Loan Party and all Material Agreements under which a Loan Party is an inbound licensee of Intellectual Property material to the business (other than off-the-shelf and open-source licenses). To the knowledge of any Responsible Officer, (i) each item of owned Registered IP is valid and subsisting and no owned Registered IP has been adjudged invalid or unenforceable in whole or in part, (ii) the conduct of the business does not infringe, misappropriate or violate the Intellectual Property of any Person in any respect that could reasonably be expected to result in a Material Adverse Change, and (iii) no Person is infringing any material Intellectual Property owned by a Loan Party. No Loan Party has received any written claim in the past [three] years alleging material infringement that remains unresolved, except as described on Schedule 8 or Schedule 9.

10. Employee and Contractor IP Assignments. Each current and former employee, founder, consultant and contractor who has contributed to the creation or development of any Intellectual Property material to the business has executed a written agreement assigning to a Loan Party all right, title and interest in that Intellectual Property and containing customary confidentiality obligations, except for failures that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change and that are described on Schedule 9. To the knowledge of any Responsible Officer, no such Person is in material breach of that agreement or has asserted any ownership claim in any such Intellectual Property.

11. Open-Source Software. No Loan Party has used, modified or distributed open-source software in a manner that (i) requires the disclosure, licensing or distribution of any source code of proprietary software material to the business, (ii) grants any third party any rights in proprietary Intellectual Property material to the business, or (iii) imposes any restriction on the consideration a Loan Party may charge for its products, in each case except as described on Schedule 9. Each Loan Party maintains a policy governing the use of open-source software and is in material compliance with the licenses applicable to open-source software it uses.

12. Accounts and Locations. Schedule 6 lists each Deposit Account, Securities Account and Commodity Account of each Loan Party, identifying the institution, the type of account, the purpose, whether it is a Collateral Account or an Excluded Account, and the status of any Control Agreement. Schedule 7 lists each location at which a Loan Party maintains Collateral (other than mobile equipment, inventory in transit and Collateral with an aggregate book value at any single location of less than $[●]), together with the owner, landlord or bailee of each location.

13. Material Agreements. Schedule 11 lists each Material Agreement. Each Material Agreement is in full force and effect, and no Loan Party or, to the knowledge of any Responsible Officer, any counterparty is in material default under any Material Agreement, except as described on Schedule 11. No Material Agreement contains a Restricted License or a negative pledge, debt restriction or change-of-control provision that would be breached by the Loan Documents, except as described on Schedule 11.

14. Indebtedness and Liens. No Loan Party or Subsidiary has any Indebtedness other than Permitted Indebtedness, and no Liens exist on any property of any Loan Party or Subsidiary other than Permitted Liens.

15. Insurance. The insurance required by Section 6.5 is in full force and effect, and all premiums due have been paid.

16. Use of Proceeds. The proceeds of the Term Loans will be used solely for working capital, growth capital and general corporate purposes of the Loan Parties, including [refinancing of the Indebtedness described on Schedule 3 as being repaid on the Effective Date], and will not be used (i) to purchase or carry margin stock, (ii) in violation of Sanctions, Anti-Corruption Laws or Anti-Terrorism Laws, (iii) to make any distribution or repurchase of Equity Interests other than as permitted by Section 7.7, or (iv) to repay Indebtedness owed to any Affiliate or insider except as permitted by Section 7.4.

17. Investor Support; No Undisclosed Obligations. Borrower has delivered to Lender a true and complete capitalization table as of the Effective Date and copies of its current Operating Documents, including all investor rights, voting and side-letter agreements that restrict Indebtedness, Liens or the issuance of the Warrant. No Loan Party has any outstanding SAFE, convertible note, revenue-share, merchant cash advance or similar instrument except as described on Schedule 3 or the capitalization table. No Loan Party makes any representation that its existing investors will provide additional equity financing.

18. Full Disclosure. No written representation, warranty or other statement made by or on behalf of any Loan Party in the Loan Documents or in any certificate or written statement furnished to Lender under them, taken together with all other such statements and as of the date made, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements, in light of the circumstances in which they were made, not misleading; provided that with respect to projections, forecasts and other forward-looking information, each Loan Party represents only that the information was prepared in good faith based on assumptions believed to be reasonable when made.

5.2 Schedule Updates

Borrower may update Schedules 6, 7, 8, 9, 10 and 11 by delivering a supplement to Lender with any Compliance Certificate or with a Payment/Advance Form. A supplement does not cure any breach of a covenant existing when the supplement is delivered, does not expand any Permitted basket, and does not operate as a waiver of any Event of Default; but if Lender does not object in writing within [10] Business Days after receipt, the supplement is deemed accepted for purposes of Section 3.2(b) and the representations in Section 5.1 are thereafter made by reference to the supplemented Schedule. No supplement may add a Lien, Indebtedness or Investment that is not independently permitted under Article 7.

6 Affirmative Covenants

Until all Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated, each Loan Party will, and will cause each Subsidiary to:

6.1 Government Compliance; Existence

1. Maintain its legal existence and good standing in its jurisdiction of organization and maintain qualification and good standing in each other jurisdiction in which failure to qualify could reasonably be expected to result in a Material Adverse Change, except in connection with a transaction permitted under Section 7.3.

2. Comply with all Requirements of Law, and obtain and maintain all Governmental Approvals, in each case except where failure to comply or maintain could not reasonably be expected to result in a Material Adverse Change.

3. Maintain and comply with policies and procedures reasonably designed to ensure compliance by the Loan Parties and their directors, officers, employees and agents with Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions.

6.2 Financial Statements, Reports and Certificates

Deliver to Lender each of the following, by electronic delivery to the address designated under Article 10 or by posting to a secure data site to which Lender has access with notice of posting:

1. Each set of financial statements must be accompanied by a management discussion of material variances from budget.

2. Lender may request, and Borrower will accommodate, a call with a Responsible Officer not more than [quarterly] to discuss the financial statements, at a mutually convenient time.

3. Borrower may satisfy the Board-materials deliverable by granting Lender’s designated representative observer-level access to Board materials through Borrower’s board portal, subject to the same exclusions.

4. Borrower will deliver, within [five] Business Days after any Responsible Officer obtains knowledge, written notice of any event, circumstance or condition that constitutes a Default or Event of Default, specifying its nature and the action Borrower proposes to take.

5. Borrower will deliver, promptly after filing, copies of any filings with the Securities and Exchange Commission or any securities exchange.

6. Borrower will deliver updated Perfection Certificate schedules as described in the table above and in Section 5.2, and in any event within [10] Business Days before any change in legal name, jurisdiction of organization, type of organization or chief executive office.

7. Borrower will notify Lender in writing within [10] Business Days after any Loan Party acquires a commercial tort claim with an estimated value exceeding $[●], describing the claim in reasonable detail.

6.3 Taxes; Pensions

Timely file all required material tax returns and reports and timely pay all material foreign, federal, state and local taxes, assessments, deposits and contributions owed, except for taxes (a) being contested in good faith by appropriate proceedings for which adequate reserves have been established under GAAP, and (b) for which no Lien (other than a Permitted Lien) has attached. Pay all amounts necessary to fund all present pension, profit-sharing and deferred-compensation plans in accordance with their terms. Deliver to Lender on demand appropriate certificates attesting to the payment of material taxes.

6.4 Protection of Intellectual Property

1. Protect, defend and maintain the validity and enforceability of all Intellectual Property material to the business; (b) promptly advise Lender in writing of any material infringement, misappropriation or dilution of such Intellectual Property by any Person, and of any claim that a Loan Party’s business infringes any Person’s Intellectual Property, in each case that could reasonably be expected to result in a Material Adverse Change; (c) not allow any Registered IP material to the business to be abandoned, forfeited or dedicated to the public without Lender’s prior written consent, except for Registered IP that Borrower determines in its reasonable business judgment is no longer useful to the business; (d) within [30] days after the end of each fiscal quarter, deliver a report of any new Registered IP applied for or registered during that quarter, and, if the IP Agreement grants a present Lien, execute any supplement to the IP Agreement reasonably required to perfect Lender’s Lien on that new Registered IP; (e) require each new employee, founder, consultant and contractor who will contribute to Intellectual Property material to the business to execute a written agreement assigning that Intellectual Property to a Loan Party and containing customary confidentiality obligations; and (f) maintain an open-source software policy and comply with the licenses applicable to open-source software it uses, except where failure to comply could not reasonably be expected to result in a Material Adverse Change.

6.5 Insurance

1. Keep its business and the Collateral insured for risks and in amounts standard for companies in its industry, stage and location, and as Lender may reasonably request, including (i) commercial general liability, (ii) property insurance covering the Collateral on a replacement-cost basis, (iii) business-interruption insurance where customary, (iv) workers’ compensation as required by law, (v) directors’ and officers’ liability insurance with limits of not less than $[●], (vi) technology errors-and-omissions and cyber liability insurance with limits of not less than $[●], and (vii) [key-person life insurance on each Key Person in the amount of $[●], if required on Schedule 1]. Insurance policies must be issued by insurers rated at least [A-] by A.M. Best or otherwise reasonably acceptable to Lender.

2. All property policies must name Lender as lender’s loss payee, and all liability policies (other than directors’ and officers’ and workers’ compensation) must name Lender as additional insured. Each policy must provide that the insurer will give Lender at least [30] days’ (or [10] days’ for non-payment of premium) prior written notice before cancellation or non-renewal, and that Lender’s interest is not invalidated by any act or omission of the insured. Borrower will deliver certificates and endorsements evidencing this coverage on the Effective Date, within [10] Business Days after each renewal and on Lender’s reasonable request.

3. So long as no Event of Default has occurred and is continuing, proceeds of property insurance up to $[●] per occurrence may be retained by Borrower and applied to repair or replace the affected property or to its general corporate purposes; proceeds above that amount are subject to Section 2.7(b). After an Event of Default has occurred and is continuing, Lender may, at its option, apply proceeds to the Obligations or permit Borrower to apply them to repair or replacement.

4. If a Loan Party fails to obtain insurance required by this Section, Lender may, after [10] Business Days’ notice, obtain it at Borrower’s expense, and the cost is a Lender Expense.

6.6 Operating Accounts; Control Agreements

1. Maintain all Deposit Accounts, Securities Accounts and Commodity Accounts (other than Excluded Accounts) with [Lender or Lender’s Affiliates] [depository banks and intermediaries located in the United States], and cause each such account to be subject to a Control Agreement within [30] [60] days after the Effective Date (for accounts existing on the Effective Date) or within [30] days after opening (for later-opened accounts), as extended under Section 3.5.

2. [Maintain at all times not less than [●]% of the Loan Parties’ consolidated cash and Cash Equivalents in accounts maintained with Lender or its Affiliates.] [Reserved.]

3. Provide Lender at least [10] Business Days’ prior written notice before opening any new Collateral Account and update Schedule 6 accordingly.

4. Not maintain in any Excluded Account funds other than those for which the Excluded Account is designated, and not permit the aggregate balance of Excluded Accounts under clause (f) of that definition to exceed the stated limit.

5. Hold Collateral Accounts only at institutions that are not Sanctioned Persons and that are members of the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation, as applicable.

6.7 Notices

Within [five] Business Days after a Responsible Officer obtains knowledge of the event, notify Lender in writing of: (a) any Default or Event of Default; (b) the commencement of, or any material development in, any action, suit, proceeding or investigation against a Loan Party or Subsidiary that could reasonably be expected to result in liability exceeding $[●] or a Material Adverse Change; (c) any written notice of default or termination received under a Material Agreement or with respect to Indebtedness exceeding $[●]; (d) any event that has resulted in, or could reasonably be expected to result in, a Material Adverse Change; (e) any security breach or unauthorized access to a Loan Party’s systems or data that requires notice to any Governmental Authority or to more than [●] individuals under applicable law; (f) the formation or acquisition of any Subsidiary; (g) any Change in Control or any binding agreement for a transaction that would constitute a Change in Control; (h) the resignation or termination of any Key Person; and (i) any ERISA event or tax assessment that could reasonably be expected to result in a Material Adverse Change. Notices under this Section are not required to contain legal conclusions, and delivery of a notice is not an admission.

6.8 Litigation Cooperation

Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Lender, without expense to Lender, the Loan Parties’ officers, employees and agents and the Loan Parties’ books and records, to the extent Lender reasonably deems necessary to prosecute or defend any third-party suit or proceeding instituted by or against Lender with respect to any Collateral or relating to a Loan Party, subject to privilege and confidentiality. Update Schedule 8 with each Compliance Certificate.

6.9 Access to Collateral; Books and Records; Audits

Allow Lender, or its agents, at reasonable times during normal business hours and on at least [five] Business Days’ prior notice (or without notice after an Event of Default has occurred and is continuing), to visit and inspect any Loan Party’s properties, to inspect and audit the Collateral, and to examine and make copies of its books and records, not more than [once] per fiscal year unless an Event of Default has occurred and is continuing. The reasonable cost of one such inspection per year (not exceeding $[●]) is a Lender Expense; additional inspections are at Lender’s expense unless an Event of Default has occurred and is continuing. Inspections are subject to the Loan Parties’ reasonable security, confidentiality, privilege and competitive-sensitivity safeguards and to Section 12.8. Maintain proper books of record and account in accordance with GAAP.

6.10 Landlord and Bailee Agreements

Use commercially reasonable efforts to obtain and deliver to Lender a landlord consent, bailee acknowledgment or warehouse agreement, in form reasonably acceptable to Lender, for each location at which Collateral with an aggregate book value exceeding $[●] is located (other than the Loan Parties’ chief executive office if a consent cannot be obtained after commercially reasonable efforts), within [60] days after the Effective Date (for existing locations) or within [60] days after Collateral exceeding that value is first located there, and provide Lender with at least [10] Business Days’ prior written notice before Collateral exceeding that value is moved to a new location. Failure to obtain a third-party agreement after commercially reasonable efforts is not an Event of Default, but Lender may establish a reasonable reserve against availability of later Advances equal to [three] months’ rent for the affected location.

6.11 Further Assurances; Post-Closing Items

Execute any further instruments and take further action as Lender reasonably requests to perfect or continue Lender’s Lien in the Collateral or to effect the purposes of this Agreement, and complete each post-closing item on Schedule 12 by its deadline.

6.12 Formation or Acquisition of Subsidiaries

1. Within [30] days after forming or acquiring any Domestic Subsidiary (or any Foreign Subsidiary that is not a controlled foreign corporation or whose joinder would not result in material adverse tax consequences), cause that Subsidiary to execute a Joinder in the form of Exhibit E, becoming a Guarantor and granting Lender a security interest in its assets on the terms of Article 4, and deliver the Operating Documents, Borrowing Resolutions, good-standing certificates, Perfection Certificate supplements, Control Agreements (within the period in Section 6.6) and other items described in Section 3.1 with respect to that Subsidiary.

2. Pledge, or cause the applicable Loan Party to pledge, the Equity Interests of each new Subsidiary as Pledged Equity under Section 4.7, subject to Section 4.3(b) for Foreign Subsidiaries.

3. A Foreign Subsidiary that is not required to become a Guarantor may hold assets with an aggregate book value not exceeding $[●] and may receive Investments from the Loan Parties only to the extent permitted under Section 7.7 and Schedule 5.

6.13 Financial Covenants

Maintain, tested as stated on Schedule 1 and reported in each Compliance Certificate:

1. Minimum Liquidity. Liquidity of not less than the greater of (i) $[●] and (ii) [●] times the Loan Parties’ trailing [three]-month average net cash burn (as defined on Schedule 1), tested [at all times] [as of the last day of each month].

2. Minimum Revenue. [Trailing [three]-month recognized revenue, measured as of the last day of each fiscal quarter, of not less than the amount set forth for that quarter on Schedule 1, which amounts represent [●]% of the Board-approved projections delivered to Lender on the Effective Date.] [Reserved.]

3. Performance to Plan. [Reserved.] [Other covenant as stated on Schedule 1.]

4. Equity Cure. If Borrower fails to comply with Section 6.13(a) or (b) for any test period, Borrower may, within [15] Business Days after the date the Compliance Certificate for that period is due, receive net cash proceeds of an issuance of Equity Interests or Subordinated Debt and designate those proceeds as a cure contribution, in which case Liquidity (or, for Section 6.13(b), revenue in the amount of the cure contribution) will be recalculated giving effect to the proceeds as if received on the last day of the test period. Borrower may exercise this right not more than [two] times in any trailing twelve-month period and not more than [four] times during the term, and not in consecutive quarters. Lender may not accelerate or exercise remedies solely on the basis of a covenant breach during the cure period if Borrower has notified Lender in writing of its intention to exercise the cure right.

5. Covenant Reset. Within [30] days after delivery of each annual Board-approved budget, the parties will negotiate in good faith to reset the covenant levels for the following fiscal year on Schedule 1 at [●]% of that budget. If the parties do not agree, the levels for the final quarter of the prior year continue to apply[, increased by [●]% per quarter].

6.14 Anti-Money-Laundering; Beneficial Ownership

Promptly provide any information or documentation Lender reasonably requests to comply with Anti-Terrorism Laws and the beneficial-ownership regulation at 31 C.F.R. § 1010.230, and notify Lender within [10] Business Days after any change that would render any beneficial-ownership certification previously delivered inaccurate.

6.15 Use of Proceeds

Use the proceeds of the Term Loans solely as provided in Section 5.1(p).

7 Negative Covenants

Until all Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated, no Loan Party will, and no Loan Party will permit any Subsidiary to, without Lender’s prior written consent (which, where this Article states that consent may not be unreasonably withheld, Lender will grant or deny in writing within [10] Business Days after receipt of a complete written request, and which is deemed granted if Lender does not respond within a further [five] Business Days after a second written request referring to this sentence):

7.1 Dispositions

Transfer all or any part of its business or property, except for the following (Permitted Transfers): (a) sales of Inventory in the ordinary course of business; (b) Permitted Licenses; (c) Transfers of worn-out, obsolete or surplus Equipment, and of Equipment replaced by Equipment of equal or greater value and utility; (d) Transfers consisting of Permitted Liens and Permitted Investments; (e) use of cash and Cash Equivalents in the ordinary course of business and as otherwise permitted by this Agreement; (f) Transfers among Loan Parties; (g) Transfers from a Subsidiary that is not a Loan Party to a Loan Party or to another such Subsidiary; (h) leases, subleases and licenses of real property not materially interfering with the business; (i) the abandonment or lapse of Intellectual Property that Borrower reasonably determines is no longer useful to the business, in accordance with Section 6.4(c); (j) settlements of Accounts in the ordinary course consistent with past practice and write-offs of uncollectible Accounts; (k) Transfers listed on Schedule 4 under the heading “Permitted Transfers”; and (l) other Transfers of property (other than Intellectual Property material to the business and Equity Interests of Subsidiaries) with an aggregate fair market value not exceeding $[●] in any fiscal year, provided that at least [75]% of the consideration is cash or Cash Equivalents and no Event of Default exists or would result. An exclusive license that is economically equivalent to a sale of the licensed Intellectual Property is a Transfer subject to this Section and is not a Permitted License unless it falls within clause (b) of that definition.

7.2 Changes in Business, Management, Control or Location

1. Engage in or permit any Subsidiary to engage in any business other than the businesses currently engaged in by the Loan Parties and businesses reasonably related, ancillary or complementary to them, or a natural extension of them.

2. Liquidate or dissolve, except for the liquidation or dissolution of a Subsidiary that has no material assets and whose assets (if any) are transferred to a Loan Party.

3. Permit a Change in Control, except a Change in Control in connection with which all Obligations are repaid in full in accordance with Section 2.7(a) concurrently with the closing.

4. Permit any Key Person to cease to be actively engaged in the management of Borrower in the capacity held on the Effective Date, unless Borrower (i) notifies Lender within [five] Business Days under Section 6.7(h), and (ii) appoints a replacement reasonably acceptable to the Board within [90] [120] days (an interim appointment satisfies this clause during that period).

5. Change its legal name, jurisdiction of organization, type of organization, organizational identification number or chief executive office, or relocate Collateral with an aggregate book value exceeding $[●] to a location not listed on Schedule 7, without at least [10] Business Days’ prior written notice to Lender and delivery of such amendments to financing statements and other documents as Lender reasonably requests to maintain perfection.

6. Change its fiscal year end, or make any material change in its accounting policies except as required by GAAP and disclosed in the next Compliance Certificate.

7.3 Mergers and Acquisitions

Merge or consolidate with any Person, or acquire all or substantially all of the capital stock or property of another Person, or acquire any business line or division, except that (a) a Subsidiary may merge or consolidate into another Subsidiary or into a Loan Party (with the Loan Party surviving), (b) a Loan Party may merge with another Loan Party so long as Borrower survives, (c) a Loan Party may make Permitted Investments, and (d) a Loan Party may make acquisitions (Permitted Acquisitions) that satisfy each of the following: (i) no Default or Event of Default exists or would result; (ii) the acquired business is in a line of business permitted under Section 7.2(a); (iii) the total consideration (including assumed Indebtedness, earn-outs valued at the maximum amount and deferred payments, but excluding Equity Interests of Borrower) for all Permitted Acquisitions does not exceed $[●] in the aggregate during the term; (iv) Borrower is in pro forma compliance with Section 6.13 after giving effect to the acquisition and has delivered a certificate so demonstrating at least [10] Business Days before closing; (v) the acquisition is consensual and approved by the board of the target; (vi) the acquired Person becomes a Loan Party under Section 6.12 or its assets are acquired by a Loan Party; and (vii) Borrower delivers copies of the acquisition documents to Lender promptly after closing.

7.4 Indebtedness

Create, incur, assume or be liable for any Indebtedness, or permit any Subsidiary to do so, other than the following (Permitted Indebtedness): (a) the Obligations; (b) Indebtedness existing on the Effective Date and listed on Schedule 3, and any refinancing, extension or renewal that does not increase the principal amount (other than by accrued interest, fees and expenses), shorten the maturity, or add obligors or collateral; (c) Subordinated Debt; (d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business; (e) Indebtedness consisting of capital lease obligations and purchase-money Indebtedness secured by Permitted Liens described in clause (d) of that definition, not exceeding $[●] in the aggregate outstanding at any time; (f) Indebtedness consisting of corporate credit cards, purchasing cards, merchant-services, treasury-management, automated-clearing-house and similar cash-management obligations incurred in the ordinary course, not exceeding $[●] in the aggregate at any time; (g) Indebtedness under hedging agreements entered into for non-speculative purposes; (h) intercompany Indebtedness among Loan Parties, and intercompany Indebtedness owed by a Subsidiary that is not a Loan Party to a Loan Party to the extent permitted as an Investment under Section 7.7; (i) Indebtedness consisting of the financing of insurance premiums in the ordinary course; (j) guaranties of Permitted Indebtedness of other Loan Parties; (k) Indebtedness consisting of unsecured letters of credit, surety and performance bonds, and deposits in connection with real property leases, in an aggregate amount not exceeding $[●] at any time; (l) Indebtedness in respect of netting services, overdraft protection and similar arrangements in the ordinary course, repaid within [five] Business Days; (m) Indebtedness consisting of deferred purchase price, earn-outs or similar obligations incurred in a Permitted Acquisition to the extent counted against the basket in Section 7.3(d)(iii); (n) convertible notes and SAFEs that are expressly subordinated to the Obligations [or that are Subordinated Debt] and that are issued in a bona fide equity-related financing, not exceeding $[●] in aggregate principal outstanding, provided that no cash payment of principal or interest is made before the Term Loan Maturity Date other than on conversion; (o) extensions, refinancings and renewals of any item of Permitted Indebtedness, provided that the principal amount is not increased (other than by accrued interest, fees and expenses) and the terms are not less favorable in any material respect to the Loan Parties; and (p) other unsecured Indebtedness not exceeding $[●] in the aggregate outstanding at any time.

7.5 Encumbrances

Create, incur, allow or suffer any Lien on any of its property, or assign or convey any right to receive income (including the sale of any Accounts), or permit any Subsidiary to do so, other than the following (Permitted Liens): (a) Liens in favor of Lender; (b) Liens existing on the Effective Date and listed on Schedule 4, and Liens securing any permitted refinancing of the Indebtedness secured by those Liens, provided that the Lien does not extend to additional property; (c) Liens for taxes, fees, assessments or other governmental charges not yet delinquent or being contested in good faith by appropriate proceedings with adequate reserves under GAAP, provided no notice of Lien has been filed or recorded under the Internal Revenue Code; (d) purchase-money Liens and capital-lease Liens (i) on Equipment acquired or held in the ordinary course to secure the purchase price or lease of that Equipment, or (ii) existing on Equipment when acquired, in each case if the Lien is confined to the Equipment financed and its proceeds and the Indebtedness is permitted under Section 7.4(e); (e) Liens of carriers, warehousemen, mechanics, materialmen, landlords and other similar Liens arising by operation of law in the ordinary course for amounts not yet delinquent or being contested in good faith; (f) Liens arising from judgments, decrees or attachments that do not constitute an Event of Default under Section 8.7; (g) Liens on cash collateral securing Indebtedness permitted under Sections 7.4(f) and 7.4(k), not exceeding $[●] in the aggregate; (h) pledges or deposits in the ordinary course in connection with workers’ compensation, unemployment insurance and other social-security legislation, and deposits securing bids, tenders, leases, statutory obligations and surety bonds (other than for Indebtedness); (i) easements, rights of way, zoning restrictions and other similar encumbrances on real property that do not materially interfere with the business; (j) Liens consisting of Permitted Licenses; (k) Liens securing Subordinated Debt, to the extent permitted by the applicable Subordination Agreement; (l) Liens in favor of financial institutions arising in connection with deposit or securities accounts maintained in the ordinary course, consisting of customary rights of set-off and bankers’ Liens and Liens securing customary account fees; (m) Liens arising from precautionary UCC financing statements for operating leases and consignments; (n) Liens on insurance proceeds securing the financing of insurance premiums under Section 7.4(i); (o) Liens incurred in the extension, renewal or refinancing of Permitted Liens, provided the property is not changed and the Indebtedness is not increased; and (p) other Liens on property (other than Intellectual Property, Collateral Accounts and Equity Interests of Subsidiaries) securing obligations not exceeding $[●] in the aggregate at any time. No Loan Party will enter into any agreement with any Person (other than Lender) that prohibits or restricts the grant of a Lien in favor of Lender on any of its property, other than (i) customary restrictions in leases, licenses and purchase-money arrangements that are Permitted Liens and that apply only to the property subject to them, (ii) customary anti-assignment provisions in Material Agreements entered into in the ordinary course, and (iii) restrictions in Subordination Agreements.

7.6 Maintenance of Collateral Accounts

Maintain any Collateral Account except in accordance with Section 6.6, or permit any Excluded Account to hold funds other than those for which it is designated.

7.7 Distributions; Investments

1. Distributions. Pay any dividend or make any distribution on, or purchase, redeem, retire or otherwise acquire for value, any of its Equity Interests, or permit any Subsidiary to do so, except that (i) a Subsidiary may pay dividends or distributions to a Loan Party; (ii) Borrower may convert any convertible securities, SAFEs or Subordinated Debt into Equity Interests under their terms, and may pay cash in lieu of fractional shares; (iii) Borrower may repurchase Equity Interests from current or former employees, directors and consultants under repurchase rights in equity plans or agreements, (A) at cost or the lower of cost and fair market value upon termination of service, (B) by cancellation of Indebtedness owed by the holder, or (C) for cash not exceeding $[●] in any fiscal year, provided in each case that no Default or Event of Default exists or would result; (iv) Borrower may pay dividends solely in its Equity Interests; (v) Borrower may make payments in connection with the net exercise or net settlement of options, warrants and restricted stock units, including tax withholding; (vi) Borrower may make distributions to permit holders to pay taxes attributable to pass-through income, if Borrower is a pass-through entity; and (vii) Borrower may make payments under the Warrant.

2. Investments. Directly or indirectly make any Investment, or permit any Subsidiary to do so, other than the following (Permitted Investments): (i) Investments existing on the Effective Date and listed on Schedule 5; (ii) Cash Equivalents and Investments under the Board-approved investment policy delivered to Lender, held in Collateral Accounts; (iii) Investments consisting of the endorsement of negotiable instruments for deposit or collection in the ordinary course; (iv) Investments consisting of deposit accounts in which Lender has a perfected security interest, and Excluded Accounts; (v) Investments consisting of (A) travel advances and employee relocation loans and other employee loans and advances in the ordinary course, not exceeding $[●] in the aggregate at any time, and (B) loans to employees, officers or directors relating to the purchase of Equity Interests of Borrower under equity plans approved by the Board, not exceeding $[●] in the aggregate at any time; (vi) 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; (vii) 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, not exceeding $[●] in the aggregate at any time; (viii) Investments by a Loan Party in another Loan Party, and by a Subsidiary that is not a Loan Party in a Loan Party or another such Subsidiary; (ix) Investments by Loan Parties in Subsidiaries that are not Loan Parties, in an aggregate amount (net of returns) not exceeding $[●] in any fiscal year, solely to fund the operating expenses of those Subsidiaries under the Board-approved budget; (x) Permitted Acquisitions; (xi) Investments consisting of Permitted Licenses, Permitted Transfers and hedging agreements permitted under Section 7.4(g); (xii) joint ventures and strategic alliances in the ordinary course consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided any cash Investment does not exceed $[●] in the aggregate at any time; (xiii) deposits for leases, utilities and similar ordinary-course obligations; and (xiv) other Investments not exceeding $[●] in the aggregate outstanding at any time, provided no Default or Event of Default exists or would result.

7.8 Transactions with Affiliates

Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of a Loan Party, except for (a) transactions in the ordinary course of business on fair and reasonable terms no less favorable to the Loan Party than would be obtained in an arm’s-length transaction with a non-Affiliate; (b) transactions among Loan Parties; (c) equity financings with existing or new investors approved by the Board, including the payment of customary expense reimbursement to investors; (d) Permitted Indebtedness and Permitted Investments expressly involving Affiliates; (e) reasonable and customary director, officer and employee compensation (including equity awards), indemnification and expense reimbursement arrangements approved by the Board or a committee of it; (f) transactions under agreements listed on Schedule 11; and (g) distributions permitted under Section 7.7(a).

7.9 Subordinated Debt

1. Make or permit any payment on any Subordinated Debt, except under the terms of the applicable Subordination Agreement; or (b) amend any provision of any document evidencing Subordinated Debt in a manner that would be adverse to Lender (including any increase in principal, interest or fees, any shortening of maturity or amortization, any addition of collateral or guarantors, or any change to the subordination terms), except as permitted by the applicable Subordination Agreement; or (c) amend any convertible note or SAFE permitted under Section 7.4(n) to provide for cash repayment before the Term Loan Maturity Date.

7.10 Compliance

1. Become an “investment company” or a company controlled by an “investment company” under the Investment Company Act of 1940; (b) become engaged principally, or as one of its important activities, in extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Advance for that purpose; (c) fail to meet the minimum funding requirements of ERISA, permit a “reportable event” or “prohibited transaction” (as defined in ERISA) to occur, or withdraw from a multiemployer plan, in each case that could reasonably be expected to result in liability exceeding $[●]; (d) fail to comply with the Federal Fair Labor Standards Act or any other Requirement of Law, in each case where failure could reasonably be expected to result in a Material Adverse Change; (e) use any proceeds of any Advance, or lend, contribute or otherwise make available any proceeds to any Subsidiary, joint-venture partner or other Person, (i) to fund any activity or business of or with any Sanctioned Person or in any country or territory that is the subject of comprehensive Sanctions, or (ii) in any manner that would result in a violation of Sanctions, Anti-Corruption Laws or Anti-Terrorism Laws by any Person; or (f) permit any of its property to become subject to any Lien in favor of the United States Pension Benefit Guaranty Corporation.

7.11 Amendments to Operating Documents and Material Agreements

Amend its Operating Documents in any manner that is materially adverse to Lender’s rights under the Loan Documents or the Warrant (including any amendment that imposes additional restrictions on the incurrence of Indebtedness or the grant of Liens, or that adversely affects the shares issuable under the Warrant other than as permitted by the Warrant), or terminate, or amend in any manner materially adverse to the Loan Parties, any Material Agreement that is an inbound license of Intellectual Property material to the business, in each case without Lender’s prior written consent, not to be unreasonably withheld. Amendments to Operating Documents in connection with a bona fide equity financing that do not specifically target Lender’s rights are permitted on notice to Lender.

7.12 Permitted Baskets Cross-Reference

8 Events of Default

Any one of the following is an Event of Default:

8.1 Payment Default

Borrower fails to (a) make any payment of principal when due, or (b) pay any interest, fee or other Obligation (other than principal) within [three] Business Days after the date due. Failure to pay an amount that is the subject of a good-faith dispute under Section 2.4(f) is not an Event of Default under clause (b) so long as Borrower has timely paid the undisputed portion and delivered its calculation.

8.2 Covenant Default

1. Borrower fails or neglects to perform any obligation in Section 6.2 (reporting), 6.5 (insurance), 6.6 (accounts), 6.13 (financial covenants, subject to Section 6.13(d)) or 6.14 (anti-money-laundering), or violates any covenant in Article 7, and (i) for Section 6.2, the failure continues for [10] Business Days after the date the deliverable was due; (ii) for Section 6.5 and 6.6, the failure continues for [10] Business Days after the earlier of a Responsible Officer’s knowledge and written notice from Lender; (iii) for Section 6.13, the cure period in Section 6.13(d) has expired without cure; and (iv) for Article 7, [the violation continues for [five] Business Days after the earlier of a Responsible Officer’s knowledge and written notice from Lender, if the violation is capable of cure] [immediately upon occurrence]; or

2. Any Loan Party fails or neglects to perform, keep or observe any other term, provision, condition, covenant or agreement in any Loan Document (other than those addressed in Sections 8.1, 8.2(a) and 8.3 through 8.13), and the failure continues for [30] days after the earlier of (i) a Responsible Officer’s knowledge of the failure and (ii) written notice from Lender; provided that if the failure is capable of cure but cannot by its nature be cured within that period, and the Loan Party has commenced and is diligently pursuing a cure, the period is extended for up to an additional [30] days; or

3. Borrower fails to complete any post-closing item on Schedule 12 by its deadline (as extended under Section 3.5), and the failure continues for [10] Business Days after written notice from Lender.

8.3 Material Adverse Change

[A Material Adverse Change occurs[, and Lender has delivered written notice to Borrower stating in reasonable detail the basis for Lender’s determination, and the circumstances giving rise to the Material Adverse Change have not been remedied to Lender’s reasonable satisfaction within [30] days after that notice].] [Reserved — Material Adverse Change operates only as a condition to Advances under Section 3.2(e).]

8.4 Attachment; Levy; Restraint on Business

1. Any material portion of a Loan Party’s assets is attached, seized, levied on or comes into the possession of any trustee, receiver or Governmental Authority, or a Loan Party’s accounts holding in the aggregate more than $[●] are frozen or attached, and the same is not removed, discharged, stayed or bonded within [10] Business Days (provided that no Advance will be made during that period); or (b) any court order enjoins, restrains or prevents a Loan Party from conducting any material part of its business for more than [10] Business Days; or (c) any Governmental Authority revokes or fails to renew any material Governmental Approval, and the revocation or failure could reasonably be expected to result in a Material Adverse Change.

8.5 Insolvency

1. Any Loan Party is unable to pay its debts (including trade debts) as they become due or admits in writing its inability to pay its debts generally; (b) any Loan Party begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against any Loan Party and is not dismissed or stayed within [45] [60] days (provided that no Advance will be made while an involuntary Insolvency Proceeding is pending).

8.6 Other Agreements; Cross-Default

1. There is a default in any agreement to which a Loan Party is a party with a third party or parties resulting in a right by the third party to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of $[●] [and the Indebtedness is actually accelerated]; (b) there is a default under any Subordination Agreement by a Loan Party, or any holder of Subordinated Debt takes any enforcement action in violation of a Subordination Agreement that is not cured or reversed within [10] Business Days; (c) any Loan Party breaches any material term of the Warrant, and the breach continues for [30] days after written notice; or (d) there is a default in any Material Agreement that results in the termination of that Material Agreement by the counterparty and the termination could reasonably be expected to result in a Material Adverse Change; provided that in the case of clause (a), the Event of Default is cured or waived if the third-party default is cured or waived before Lender has exercised remedies under Article 9, and no Event of Default arises under clause (a) by reason of a default under Indebtedness that is being contested in good faith and that the third party has not accelerated.

8.7 Judgments; Penalties

One or more final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, exceeding $[●] (not covered by independent third-party insurance as to which the insurer has not denied coverage or by indemnification from a creditworthy third party that has acknowledged its obligation) is rendered against any Loan Party and remains unsatisfied, unvacated, unbonded or unstayed for a period of [30] [45] days after entry (provided that no Advance will be made before the judgment is satisfied, vacated, bonded or stayed), or any Governmental Authority imposes a fine or penalty exceeding $[●] that is not paid or contested in good faith within [30] days.

8.8 Misrepresentation

Any representation, warranty or certification made or deemed made by or on behalf of any Loan Party in any Loan Document or in any certificate, report or financial statement delivered under a Loan Document is incorrect or misleading in any material respect (or in any respect, if already qualified by materiality) when made or deemed made; provided that if the inaccuracy relates to a matter that is capable of cure and does not result from willful misconduct or bad faith, it is an Event of Default only if the underlying circumstance is not cured within [15] Business Days after the earlier of a Responsible Officer’s knowledge and written notice from Lender.

8.9 Subordinated Debt

Any document governing Subordinated Debt is amended in violation of Section 7.9, any payment is made on Subordinated Debt in violation of the applicable Subordination Agreement, or any Subordination Agreement ceases to be in full force and effect or is declared null and void, or any holder of Subordinated Debt contests the validity or enforceability of its subordination.

8.10 Guaranty; Lien Failure

1. Any Guaranty terminates or ceases for any reason to be in full force and effect (other than in accordance with its terms or with Lender’s written consent), or any Guarantor does not perform any obligation or covenant under its Guaranty (subject to the cure periods in Section 8.2 as applied to the equivalent covenant), or any circumstance described in Sections 8.3 through 8.8 or 8.11 occurs with respect to any Guarantor; or (b) any Loan Document ceases to be valid and binding on any Loan Party or is declared null and void, or any Loan Party contests in writing the validity or enforceability of any Loan Document; or (c) Lender’s Lien on any material portion of the Collateral ceases to be a valid and perfected first-priority Lien (subject to Permitted Liens) as a result of any act or omission of a Loan Party, and the failure is not cured within [10] Business Days after the earlier of a Responsible Officer’s knowledge and written notice from Lender; provided that a failure of perfection caused solely by Lender’s failure to file a continuation statement or to maintain possession of Collateral delivered to it is not an Event of Default.

8.11 Change in Control

A Change in Control occurs, other than a Change in Control in connection with which all Obligations are repaid in full under Section 2.7(a) concurrently with its closing.

8.12 Delisting; Governmental Action

[If Borrower’s Equity Interests are listed on a securities exchange, the Equity Interests are delisted or suspended from trading for more than [five] consecutive trading days.] Any Governmental Authority takes action (including the commencement of a criminal proceeding or the imposition of a material civil penalty) against any Loan Party or any Key Person in his or her capacity as such that could reasonably be expected to result in a Material Adverse Change, or any Loan Party or Key Person is indicted for a felony involving fraud, dishonesty or breach of trust in connection with the business.

8.13 Investor Abandonment

[Reserved.] [Lender determines in good faith, based on written communications from Borrower’s investors or on Borrower’s own written statements to Lender, that Borrower’s existing institutional investors have ceased to support the business with additional equity capital, and Borrower does not, within [45] days after Lender’s written notice stating the basis for that determination, deliver to Lender evidence reasonably satisfactory to Lender of (a) a binding commitment for equity or Subordinated Debt financing of at least $[●], or (b) Liquidity sufficient to fund the Board-approved budget for the following [six] months.]

8.14 Notice of Default; Remedies During Cure

Lender will not exercise remedies under Article 9 with respect to an Event of Default under Section 8.2, 8.3, 8.6, 8.7, 8.8 or 8.13 until any applicable cure period has expired. No Advance will be made while any Default or Event of Default exists, regardless of whether a cure period is running.

9 Lender’s Rights and Remedies

9.1 Acceleration; Termination of Commitment

Upon the occurrence and during the continuance of an Event of Default, Lender may, by written notice to Borrower (except that upon an Event of Default under Section 8.5 all Obligations are automatically and immediately due and payable and the Term Loan Commitment automatically terminates without notice or demand), (a) declare all Obligations immediately due and payable, including the Final Payment and the Prepayment Premium calculated as of the date of acceleration (which Borrower acknowledges is a reasonable estimate of Lender’s damages and is payable as liquidated damages and not as a penalty, and is payable whether the acceleration results from a voluntary or involuntary Insolvency Proceeding or otherwise, to the fullest extent permitted by law), and (b) terminate the Term Loan Commitment and cease making Advances.

9.2 Rights Under the Code

Upon the occurrence and during the continuance of an Event of Default, Lender has all rights and remedies of a secured party under the Code and other applicable law, and may, without notice except as required by law or this Agreement: (a) take possession of the Collateral and, for that purpose, enter any premises where Collateral is located, subject to applicable law and to the access protocol in Section 9.3(g); (b) require each Loan Party to assemble the Collateral and make it available to Lender at a place Lender designates that is reasonably convenient to both parties; (c) sell, lease, license or otherwise dispose of any Collateral at public or private sale, with or without having the Collateral at the place of sale, on such terms as Lender determines are commercially reasonable; and (d) exercise all other rights and remedies under the Loan Documents. Each Loan Party agrees that [10] days’ prior written notice of the time and place of any public sale, or of the time after which any private sale may be made, is commercially reasonable notice. Lender may be the purchaser at any public sale and may credit bid the Obligations. Each disposition must comply with Part 6 of Article 9 of the Code, including the commercial-reasonableness requirements of Section 9-610.

9.3 Collection; Account Debtors; Intellectual Property; Pledged Equity

Upon the occurrence and during the continuance of an Event of Default, Lender may:

1. notify any Account Debtor, licensee or other obligor on any Collateral to make payment directly to Lender, and verify Accounts directly with Account Debtors;

2. settle, adjust or compromise disputes and claims directly with Account Debtors for amounts and on terms Lender considers reasonable, and notify Account Debtors that Lender has a security interest in the Accounts;

3. demand, collect, receive, sue for and give receipts for amounts due on Collateral, and endorse any Loan Party’s name on checks and other instruments received in payment;

4. deliver a notice of exclusive control under any Control Agreement and apply funds in Collateral Accounts to the Obligations in accordance with Section 9.6;

5. to the extent Intellectual Property is Collateral, (i) use, license or sublicense any Intellectual Property for the purpose of disposing of or realizing on the Collateral, without charge, and each Loan Party grants Lender a non-exclusive, royalty-free license (exercisable only after an Event of Default) to use the Intellectual Property for that purpose, subject to any license or quality-control obligations binding on the Loan Party; (ii) sell or assign the Intellectual Property together with the goodwill of the business; and (iii) take control of any trade secrets, source code and technical documentation to the extent necessary to preserve or realize value, under a protocol that limits access to Lender’s advisers and prospective purchasers who have signed confidentiality agreements;

6. with respect to Pledged Equity, after written notice to the applicable Loan Party, exercise all voting, consensual and other rights, receive all distributions, and transfer the Pledged Equity into Lender’s name or the name of its nominee;

7. in exercising any right of access to systems or data, comply with applicable privacy, data-protection and export-control laws, use only personnel and advisers bound by confidentiality, limit access to what is reasonably necessary to preserve or realize value, and refrain from accessing attorney-client privileged material; and

8. place a “hold” on any account maintained with Lender and apply balances to the Obligations.

9.4 Set-Off

Upon the occurrence and during the continuance of an Event of Default, Lender and each of its Affiliates may, without notice (any notice being waived to the fullest extent permitted by law), set off and apply any deposits (general or special, time or demand, provisional or final, other than trust, escrow and payroll accounts) and any other indebtedness owing by Lender or its Affiliate to any Loan Party against the Obligations then due, whether or not Lender has made demand. Lender will promptly notify Borrower after any set-off, but failure to give notice does not affect the validity of the set-off.

9.5 Protective Payments; Power of Attorney

1. If a Loan Party fails to obtain the insurance required by Section 6.5, or fails to pay any amount or furnish any required proof of payment to third persons as required by the Loan Documents, Lender may, after [10] Business Days’ notice (or without notice if an Event of Default has occurred and is continuing or if delay could impair the Collateral), make all or part of the payment or obtain the insurance and take any action it deems prudent to protect the Collateral. Any amounts so paid are Lender Expenses, bear interest at the Default Rate from the date paid and are secured by the Collateral. No payment by Lender is an agreement to make similar payments in the future or a waiver of any Event of Default.

2. Each Loan Party irrevocably appoints Lender (and any of Lender’s designated officers or agents) as its true and lawful attorney-in-fact, coupled with an interest, to, upon the occurrence and during the continuance of an Event of Default: (i) endorse the Loan Party’s name on any checks, instruments or other forms of payment or security received by Lender in respect of Collateral; (ii) sign the Loan Party’s name on any invoice, bill of lading, document of title, notice to Account Debtors, verification of Accounts and notice to Governmental Authorities relating to Collateral; (iii) make, settle and adjust all claims under the Loan Parties’ insurance policies covering Collateral; (iv) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Lender determines reasonable; (v) transfer the Collateral into the name of Lender or a third party as the Code permits; and (vi) execute and deliver any assignment, license or other instrument necessary to dispose of Intellectual Property that is Collateral. Lender’s appointment as attorney-in-fact, and all of Lender’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated. Lender may not use the power of attorney to operate the business, to hold itself out as the Loan Party or its personnel, to access privileged material, or to make public statements on the Loan Party’s behalf.

9.6 Application of Payments and Proceeds

Lender will apply any funds received from the exercise of remedies or set-off, or the proceeds of Collateral, in the following order unless a Subordination Agreement or applicable law requires otherwise: (a) first, to Lender Expenses, including costs of collection, enforcement and disposition of Collateral; (b) second, to accrued interest, including interest at the Default Rate; (c) third, to the principal of the Term Loans; (d) fourth, to the Final Payment and Prepayment Premium; (e) fifth, to all other Obligations; and (f) sixth, any surplus to Borrower or to whomever is lawfully entitled to it. Borrower remains liable for any deficiency. If Lender, in its good-faith business judgment, directly or indirectly enters into a deferred-payment or other credit transaction with any purchaser at a sale of Collateral, Lender may, at its option, reduce the Obligations by the principal amount of the purchase price or defer the reduction until the actual receipt of cash.

9.7 Lender’s Liability for Collateral

So long as Lender complies with reasonable banking or lending practices regarding the safekeeping of Collateral in its possession or control, Lender is not liable or responsible for (a) the safekeeping of the Collateral, (b) any loss or damage to the Collateral, (c) any diminution in the value of the Collateral, or (d) any act or default of any carrier, warehouseman, bailee or other third party. Each Loan Party bears all risk of loss, damage or destruction of the Collateral, except to the extent caused by Lender’s gross negligence or willful misconduct.

9.8 No Waiver; Remedies Cumulative

Lender’s failure or delay in exercising any right or remedy, or in requiring satisfaction of any condition, is not a waiver of that right or remedy or of any Default or Event of Default. No single or partial exercise of any right precludes any other or further exercise. Any waiver must be in writing and signed by Lender, and applies only to the specific instance and purpose for which it is given. Lender’s rights and remedies under the Loan Documents and applicable law are cumulative and may be exercised singly or concurrently, in any order and at any time. Lender has no obligation to exercise any remedy or to marshal assets, and Lender’s acceptance of any partial payment after an Event of Default does not constitute a waiver of the Event of Default or of Lender’s right to accelerate.

9.9 Demand Waiver

Each Loan Party waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension or renewal of accounts, documents, instruments, chattel paper and guaranties held by Lender on which the Loan Party is liable, and any right to require Lender to proceed against any other Person or any Collateral before proceeding against it; except that nothing in this Section waives any notice expressly required by this Agreement or any notice that cannot be waived under the Code.

9.10 Borrower Liability

Each Loan Party is jointly and severally liable for the Obligations. Each Loan Party waives any right to require Lender to institute suit against or exhaust remedies against any other Loan Party or any Collateral, and waives any defense arising from Lender’s dealings with any other Loan Party or the Collateral, including any defense based on suretyship, impairment of collateral or any statute of limitations, in each case to the fullest extent permitted by law. Each Loan Party waives any right of subrogation, reimbursement, indemnification or contribution against any other Loan Party until the Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated.

10 Notices

10.1 Manner of Delivery

All notices, consents, requests, approvals, demands and other communications under the Loan Documents (each, a Communication) must be in writing and delivered by hand, by nationally recognized overnight courier, by certified or registered mail (return receipt requested) or by electronic mail, to the address or electronic mail address stated below (or as changed by notice under this Section). A Communication is effective (a) if delivered by hand or courier, when delivered; (b) if mailed, three Business Days after deposit; and (c) if sent by electronic mail, when sent, if sent before [5:00 p.m.] on a Business Day, and otherwise on the next Business Day, provided that a Communication sent by electronic mail that is a notice of Default, Event of Default, acceleration or exercise of remedies must also be delivered by one of the other methods, and no Communication to Lender is effective until actually received by Lender.

10.2 Addresses

If to Borrower or any other Loan Party: [BORROWER LEGAL NAME]
[STREET ADDRESS]
[CITY, STATE ZIP]
Attention: [NAME, TITLE]
Email: [●]
with a copy (which does not constitute notice) to:
[BORROWER COUNSEL]
[ADDRESS]
Attention: [●]
Email: [●]

If to Lender: [LENDER LEGAL NAME]
[STREET ADDRESS]
[CITY, STATE ZIP]
Attention: [NAME, TITLE]
Email: [●]
with a copy (which does not constitute notice) to:
[LENDER COUNSEL]
[ADDRESS]
Attention: [●]
Email: [●]

10.3 Electronic Communications

Borrower consents to Lender’s delivery of Communications and the posting of statements, Compliance Certificate acknowledgments and other materials through an electronic platform designated by Lender, provided Lender notifies Borrower of each posting of a notice of Default or Event of Default by electronic mail. Lender may rely on any Communication reasonably believed by it to be from a Responsible Officer, and Borrower bears the risk of any Communication that Lender reasonably believes to be genuine, except where Lender has failed to follow the wire-verification protocol in Section 3.3.

11 Choice of Law, Venue, Jury Trial Waiver and Judicial Reference

11.1 Governing Law

This Agreement and the other Loan Documents (other than any Loan Document that expressly states a different governing law) and all claims or disputes arising out of or relating to them are governed by the laws of the State of [GOVERNING LAW STATE], without regard to conflict-of-laws principles that would require application of the laws of another jurisdiction, except to the extent the Code mandates the application of the law of another jurisdiction to matters of perfection, the effect of perfection or non-perfection, or priority.

11.2 Venue; Service of Process

Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the state and federal courts located in [COUNTY], [STATE] for any action arising out of or relating to the Loan Documents, and waives any objection to venue or any claim of inconvenient forum; provided that nothing in this Section limits Lender’s right to bring proceedings against any Loan Party or any Collateral in any other jurisdiction where the Collateral is located or where necessary to enforce a judgment or to realize on Collateral, and provided further that a Loan Party may assert a compulsory counterclaim in any action brought by Lender. Each Loan Party consents to service of process by registered mail to its address under Article 10 and agrees that service so made is effective [10] days after mailing. Each party agrees that a final judgment in any such action is conclusive and may be enforced in any other jurisdiction.

11.3 Jury Trial Waiver

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED BY THEM OR THE RELATIONSHIP OF THE PARTIES. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THE LOAN DOCUMENTS AND THAT IT HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THIS WAIVER.

11.4 Judicial Reference

[Include if the governing law is California or another jurisdiction in which pre-dispute jury waivers are unenforceable.] If the jury trial waiver in Section 11.3 is not enforceable, the parties agree that any claim or cause of action arising out of or relating to the Loan Documents will be resolved by a judicial reference proceeding under [California Code of Civil Procedure Sections 638 through 645.1] [APPLICABLE STATUTE], before a single referee who is a retired judge or justice selected by the parties or, failing agreement within [15] days, appointed by the court. The referee will have the power to decide all issues of fact and law and to report a statement of decision to the court, which will enter judgment on the decision. The parties will share the referee’s fees equally, subject to reallocation by the referee as part of the costs of the proceeding. Nothing in this Section limits any party’s right to obtain provisional remedies, including injunctive relief, writs of attachment or possession, or the appointment of a receiver, from a court of competent jurisdiction before, during or after the pendency of a reference proceeding.

11.5 Equitable Relief

Each Loan Party acknowledges that a breach of Article 4 or Article 7 may cause irreparable harm to Lender for which monetary damages would be inadequate, and agrees that Lender is entitled to seek specific performance and injunctive relief without the necessity of posting a bond, in addition to any other remedy.

12 General Provisions

12.1 Successors and Assigns

This Agreement binds and benefits the parties and their respective successors and permitted assigns. No Loan Party may assign this Agreement or any rights or obligations under it without Lender’s prior written consent, which may be granted or withheld in Lender’s sole discretion; any attempted assignment without consent is void, except that a Loan Party may assign its rights and obligations to a successor in a transaction permitted under Section 7.3 that assumes the Obligations in writing.

12.2 Assignments and Participations by Lender

1. Assignments. Lender may assign all or a portion of its rights and obligations under the Loan Documents to one or more assignees, provided that (i) each assignee is an Affiliate of Lender, an Approved Fund, or a commercial bank, finance company, insurance company or institutional investor that is regularly engaged in making or purchasing commercial loans; (ii) no assignee may be a Disqualified Institution, a Sanctioned Person, or (unless an Event of Default has occurred and is continuing) a Person that is a competitor of Borrower or a natural person; (iii) unless an Event of Default under Section 8.1 or 8.5 has occurred and is continuing, each assignment (other than to an Affiliate or Approved Fund) requires Borrower’s consent, not to be unreasonably withheld, conditioned or delayed, and deemed given if Borrower does not object within [10] Business Days after written notice; (iv) each assignment (other than of the entire remaining commitment and Term Loans) must be in a minimum amount of $[●]; and (v) Lender gives Borrower written notice of the assignment and the assignee’s address for notices. Upon an assignment, the assignee becomes a “Lender” to the extent of the interest assigned and the assignor is released from obligations to that extent. Borrower will not be required to pay any amount under Section 2.9(d) or 2.11 to an assignee in excess of what would have been payable to the assignor at the time of the assignment, unless the assignment was made at Borrower’s request or while an Event of Default was continuing.

2. Participations. Lender may sell participations to one or more Persons (other than Disqualified Institutions, Sanctioned Persons or competitors of Borrower) in all or a portion of its rights and obligations, provided that (i) Lender remains solely responsible for performance of its obligations and Borrower continues to deal solely with Lender; (ii) no participant has any direct rights against Borrower or any voting rights other than the right to approve amendments that reduce principal, interest or fees owed to it, extend scheduled payment dates, or release all or substantially all of the Collateral or Guarantors; and (iii) Borrower’s costs are not increased by reason of the participation, and no participant may claim any amount under Section 2.9(d) or 2.11 in excess of what Lender would have been entitled to claim. Lender will maintain a register of participants and the principal amounts of their participations, as a non-fiduciary agent of Borrower, solely for purposes of Treasury Regulation Section 5f.103-1(c).

3. Register. Lender, acting solely as a non-fiduciary agent of Borrower, will maintain a register of the names and addresses of each assignee and the principal and interest owing to each, which is conclusive absent manifest error. Borrower, Lender and each assignee may treat each Person recorded in the register as the owner of the interest for all purposes.

4. Pledges. Lender may pledge or assign a security interest in its rights under the Loan Documents to secure its obligations to a Federal Reserve Bank or other lender to Lender, without Borrower’s consent, provided that no such pledge releases Lender from its obligations or substitutes the pledgee as a party.

5. Disclosure. Lender may disclose Confidential Information to any actual or prospective assignee or participant that has agreed to be bound by confidentiality obligations at least as protective as Section 12.8, other than to a Disqualified Institution.

12.3 Indemnification

Borrower agrees to indemnify, defend and hold harmless Lender and its Affiliates, and their respective directors, officers, employees, agents, attorneys and advisers (each, an Indemnified Person), from and against all losses, claims, damages, liabilities, penalties, judgments and reasonable and documented out-of-pocket expenses (including reasonable and documented fees of one outside counsel and, if reasonably necessary, one local counsel in each relevant jurisdiction, and, in the case of an actual or perceived conflict of interest, one additional counsel for the affected Indemnified Persons) (collectively, Claims) incurred by any Indemnified Person arising out of or relating to (a) the Loan Documents, the Term Loans or the use of their proceeds, (b) any Collateral, or (c) any actual or threatened action, suit, investigation or proceeding relating to any of the foregoing, whether or not any Indemnified Person is a party and regardless of whether brought by a third party or by a Loan Party; except to the extent a Claim (i) is determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of the Indemnified Person or its Affiliates, (ii) results from a material breach of a Loan Document by the Indemnified Person, (iii) arises from a dispute solely among Indemnified Persons not arising from any act or omission of a Loan Party, or (iv) consists of Excluded Taxes or taxes otherwise addressed by Section 2.9(d). No Indemnified Person may settle any Claim for which indemnification is sought without Borrower’s consent (not to be unreasonably withheld) unless the settlement involves only the payment of money that is fully indemnified and includes a full release of the Loan Parties. This Section does not apply to any loss arising from Lender’s own default in funding or from any Claim brought by a Loan Party against Lender for breach of the Loan Documents, as to which the Loan Party’s rights are determined by the Loan Documents and applicable law.

12.4 Limitation of Liability

To the fullest extent permitted by law, no party or Indemnified Person is liable to any other party for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) arising out of or relating to the Loan Documents or the transactions they contemplate, except (a) to the extent those damages are included in a third-party Claim for which indemnification is owed under Section 12.3, and (b) for damages resulting from a party’s willful misconduct or bad faith. Nothing in this Section limits any Loan Party’s obligation to pay the Obligations or any Indemnified Person’s rights under Section 12.3. No Indemnified Person is liable for any damages arising from the unauthorized use by others of information or materials transmitted through electronic or telecommunications systems, except to the extent resulting from that Indemnified Person’s gross negligence or willful misconduct.

12.5 Time of Essence

Time is of the essence for the performance of all Obligations in the Loan Documents.

12.6 Severability; Correction of Documents

1. Each provision of this Agreement is severable. If any provision is held unenforceable in any jurisdiction, the remaining provisions remain in effect, and the parties will negotiate in good faith a replacement provision that most nearly achieves the original intent in that jurisdiction; the unenforceability does not affect enforceability in any other jurisdiction.

2. Lender may correct patent errors and fill in blanks in the Loan Documents consistent with the agreement of the parties, provided Lender delivers a copy of each correction to Borrower within [five] Business Days and Borrower does not object in writing within [10] Business Days. Any disputed correction is resolved under Section 12.7.

12.7 Amendments in Writing; Waiver; Integration

1. No amendment, modification, termination or waiver of any provision of any Loan Document, and no consent to any departure by any Loan Party from any provision, is effective unless in writing and signed by Lender and (for amendments and modifications) Borrower, and each such waiver or consent is effective only in the specific instance and for the specific purpose for which it is given. No course of dealing, delay or failure to act by Lender operates as a waiver.

2. Lender will respond to any request for a consent, waiver or amendment within [10] Business Days after receipt of a complete written request, and where a provision of this Agreement states that Lender’s consent may not be unreasonably withheld, Lender will state its reasons for any denial in writing. Lender may condition any consent or amendment on the payment of its reasonable and documented Lender Expenses in connection with it, but may not require any fee for a consent or waiver that this Agreement states may not be unreasonably withheld unless the request requires Lender to re-underwrite the facility.

3. The Loan Documents represent the entire agreement about this subject matter and supersede all prior negotiations, term sheets, commitment letters and agreements, except that any confidentiality agreement between Borrower and Lender entered into before the Effective Date continues in effect to the extent its terms are more protective of Borrower than Section 12.8. All prior agreements, understandings, representations, warranties and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents. If any Loan Document conflicts with this Agreement, this Agreement controls, except that (i) the IP Agreement controls as to the mechanics of Lien attachment and recordation for Intellectual Property, (ii) any Subordination Agreement controls as to priority among creditors, and (iii) any Control Agreement controls as between Lender and the depository bank or intermediary.

12.8 Confidentiality

1. In handling any confidential information of the Loan Parties, including financial statements, projections, Board materials, customer lists, source code, product roadmaps, cap tables, Perfection Certificate contents and the terms of the Loan Documents (Confidential Information), Lender will exercise the same degree of care it exercises for its own proprietary information, but not less than reasonable care, and will use Confidential Information only in connection with the Loan Documents and the administration, enforcement and syndication of the facility. Lender may disclose Confidential Information (i) to its Affiliates, and to its and their directors, officers, employees, auditors, counsel and other professional advisers who need to know it and are bound by confidentiality obligations; (ii) to prospective assignees and participants under Section 12.2(e), other than Disqualified Institutions; (iii) as required by law, regulation, subpoena or court order, or as requested by any regulatory or self-regulatory authority having jurisdiction over Lender (in which case Lender will, to the extent lawful and practicable, notify Borrower in advance and cooperate with Borrower’s reasonable efforts to obtain protective treatment); (iv) to the extent the information becomes generally available to the public other than through Lender’s breach; (v) to the extent the information was available to Lender on a non-confidential basis from a source not known by Lender to be bound by confidentiality; (vi) in connection with the exercise of remedies, to prospective purchasers of Collateral who have signed confidentiality agreements; (vii) to any rating agency or to the CUSIP Service Bureau or similar organization; and (viii) with Borrower’s consent.

2. Lender will not disclose Confidential Information to, or use it for the benefit of, any portfolio company or Affiliate of Lender that is a competitor of Borrower, and will not use Confidential Information in connection with any investment decision concerning any Person other than Borrower.

3. Lender’s obligations under this Section survive for [two] years after termination of this Agreement, and indefinitely as to trade secrets and source code.

4. Lender may, with Borrower’s prior written consent (not to be unreasonably withheld), publicly disclose the existence of the facility, Borrower’s name and logo, and the facility size in customary tombstone or marketing materials; Lender will not disclose pricing, covenant levels or other economic terms.

5. Data security, retention and incident-notice requirements applicable to Confidential Information held by Lender are stated on Schedule 13, Part B.

12.9 Attorneys’ Fees, Costs and Expenses

Borrower will pay Lender Expenses as provided in Section 2.8(e), including the reasonable and documented fees and expenses of outside counsel incurred in connection with the preparation, negotiation and closing of the Loan Documents, which through the Effective Date will not exceed $[●] (exclusive of filing fees, search fees and lien-release costs), and in connection with any amendment, consent, waiver, enforcement, workout or Insolvency Proceeding. In any action to enforce or interpret the Loan Documents, the prevailing party is entitled to recover its reasonable attorneys’ fees and costs, including on appeal, to the extent permitted by law.

12.10 Survival

All covenants, representations and warranties made in the Loan Documents continue in full force until the Obligations (other than inchoate indemnity obligations) have been paid in full and the Term Loan Commitment has terminated. The obligations of Borrower under Sections 2.9(d), 2.11, 12.3, 12.4, 12.8 and 12.9, and the obligations of Lender under Section 12.8, survive termination of this Agreement and repayment of the Obligations, and the obligation to indemnify survives until all statutes of limitation with respect to any Claims have run.

12.11 Counterparts; Electronic Signatures

This Agreement and the other Loan Documents may be executed in any number of counterparts, each of which is an original and all of which together constitute one instrument. Delivery of an executed counterpart by facsimile, portable document format or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the Uniform Electronic Transactions Act as adopted in the governing-law state (including DocuSign or a similar platform) is as effective as delivery of a manually executed original, and each party waives any defense to enforceability based on electronic execution; provided that any Note will be delivered as a manually signed original if Lender so requests.

12.12 Right of First Refusal on Future Debt

[Reserved.] [If, during the term of this Agreement, Borrower proposes to incur any Indebtedness for borrowed money (other than Permitted Indebtedness under clauses (b) through (p) of Section 7.4) from any Person other than Lender, Borrower will first deliver to Lender a written summary of the proposed material terms, and Lender will have [10] Business Days to notify Borrower whether it is willing to provide financing on substantially those terms. If Lender does not so notify Borrower within that period, or if Lender and Borrower do not execute definitive documentation within [30] days after Lender’s notice, Borrower may proceed with any other lender. This Section does not restrict equity financings, Subordinated Debt from existing investors, or financings in connection with a Change in Control, and does not require Borrower to accept Lender’s offer.]

12.13 USA PATRIOT Act Notice

Lender notifies each Loan Party that, under the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56) and 31 C.F.R. § 1010.230, Lender is required to obtain, verify and record information that identifies each Loan Party, including its legal name, address, tax identification number and other information that will allow Lender to identify the Loan Party and its beneficial owners in accordance with those laws. Each Loan Party will provide that information promptly on request.

12.14 Relationship of the Parties

The relationship between the Loan Parties and Lender is solely that of borrower and lender. Lender is not a partner, joint venturer, fiduciary or adviser of any Loan Party, and no term of any Loan Document (including Lender’s consent rights, information rights and Warrant) creates any fiduciary or advisory relationship. Each Loan Party has consulted its own legal, tax and financial advisers and is not relying on Lender for advice.

12.15 Publicity

Except as permitted by Section 12.8(d), neither party will issue any press release or public announcement concerning the Loan Documents without the other party’s prior written consent, except as required by law.

12.16 Captions; Construction

Captions and headings are for convenience only. The rules of construction in Section 1.4 apply to all Loan Documents.

13 Definitions Index

[Signature page follows]

IN WITNESS WHEREOF, the parties have executed this Loan and Security Agreement as of the Effective Date.

BORROWER: [BORROWER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

LENDER: [LENDER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

[GUARANTOR (if executing on the Effective Date): [GUARANTOR LEGAL NAME]
By: [●]
Name: [●]
Title: [●]]

SCHEDULES

Each Schedule is part of the Agreement. Complete every row; where a Schedule has no items, write “None” rather than leaving the Schedule blank, so that the Schedule operates as a representation that nothing is omitted. Schedules 2, 6, 7, 8, 9, 10 and 11 should be prepared from, and reconciled line-by-line to, the Perfection Certificate.

Schedule 1 — Facility Terms: Commitments, Tranches, Pricing and Covenant Levels

Part A — Tranches

Instructions: State each Milestone as an objectively verifiable fact with its source document. If a Tranche is discretionary, say so in the “Committed or discretionary” column and confirm that no unused fee applies to it under Section 2.8(c).

Part B — Pricing

Part C — Repayment

Part D — Financial Covenant Levels and Definitions

Part E — Key-Metrics Report Contents (Section 6.2)

Part F — Key-Person Insurance (Section 6.5(a)(vii))

Schedule 2 — Perfection Certificate Reference and Loan Party Information

This Schedule incorporates by reference the Perfection Certificate dated [DATE] delivered by the Loan Parties, as supplemented under Section 5.2 and 6.2(f). Complete the summary below from the Perfection Certificate and attach the Perfection Certificate as an annex to the closing binder; the summary controls in case of conflict only as to items expressly marked “controls.”

Part A — Loan Parties

Part B — Organizational History and Prior Transactions

Part C — Commercial Tort Claims (Section 4.4)

Part D — Instruments, Chattel Paper and Letter-of-Credit Rights Exceeding $[●]

Part E — Additional Excluded Assets (Section 4.3(h))

Instructions: The Perfection Certificate must be executed by a Responsible Officer and updated quarterly. Any change in a Loan Party’s exact legal name, jurisdiction, type of organization or chief executive office requires 10 Business Days’ prior notice under Section 7.2(e), because each of those changes may require a UCC amendment to maintain perfection.

Schedule 3 — Permitted Indebtedness

Part A — Existing Indebtedness (Section 7.4(b))

Part B — Agreed Basket Amounts

Part C — Convertible Instruments and SAFEs

Instructions: List every instrument that could require a cash payment before the Term Loan Maturity Date, including instruments that convert into equity but have a cash-out right on a Change in Control or at maturity. An instrument with a cash repayment right that is not subordinated must be addressed by a Subordination Agreement or repaid at closing.

Schedule 4 — Permitted Liens and Permitted Transfers

Part A — Existing Liens (Section 7.5(b))

Part B — Permitted Transfers Specifically Scheduled (Section 7.1(k)) and General Basket

Part C — Agreed Lien Basket Amounts

Instructions: Reconcile Part A to the UCC, tax-lien and judgment search results delivered under Section 3.1(e). Each Lien that remains must correspond to Permitted Indebtedness on Schedule 3. Precautionary filings for operating leases should be listed and identified as such; equipment-lessor filings describing “all assets” must be amended or terminated at closing.

Schedule 5 — Permitted Investments, Distributions and Acquisitions

Part A — Existing Investments and Agreed Investment Baskets (Section 7.7(b))

Part B — Distribution Baskets (Section 7.7(a))

Part C — Permitted Acquisitions (Section 7.3(d))

Part D — Board-Approved Investment Policy

Instructions: Attach the Board-approved investment policy. Investments permitted under the policy must be held in Collateral Accounts to count toward Liquidity.

Schedule 6 — Collateral Accounts and Excluded Accounts

Part A — Collateral Accounts

Part B — Excluded Accounts

Part C — Payment Processors and Merchant Accounts

Instructions: Full account numbers belong in the secure closing workspace, not in this Schedule. Clause (f) Excluded Accounts are subject to the aggregate cap in that definition, which is $[●]. Any account not listed in Part A or Part B is in breach of Section 6.6 and must be added by supplement under Section 5.2 or closed.

Schedule 7 — Collateral Locations

Instructions: List every location holding tangible Collateral exceeding $[●] in aggregate book value, including locations of remote employees’ equipment if material in aggregate, and every location of books and records. Cloud-hosted data and software are not “located” at the provider’s facility for Code purposes, but list the provider so that the account-access and data-portability terms can be reviewed under Section 9.3(g). Movement of Collateral above the threshold to a new location requires 10 Business Days’ notice under Section 7.2(e).

Schedule 8 — Litigation

Threatened Claims (Written)

Governmental Inquiries and Investigations

Instructions: Include matters below the Section 5.1(c) dollar thresholds only if they seek injunctive relief, allege IP infringement, or involve a Governmental Authority. Update with each Compliance Certificate under Section 6.8. Descriptions should be factual and should not characterize the merits in a manner that waives privilege; the parties may agree a common-interest arrangement for sensitive matters.

Schedule 9 — Intellectual Property

Part A — Registered IP Owned by Loan Parties

Part B — Material Unregistered IP

Part C — Inbound Licenses Material to the Business (excluding off-the-shelf and open source)

Part D — Outbound Licenses Other Than Ordinary-Course Non-Exclusive Customer Licenses

Part E — Open-Source Exceptions (Section 5.1(k))

Part F — Employee and Contractor Assignment Exceptions (Section 5.1(j))

Part G — IP Structure Elections (Section 4.6)

Instructions: Reconcile Part A to USPTO, Copyright Office and registrar records as of a date within 10 Business Days before the Effective Date. Each application listed as an intent-to-use application is an Excluded Asset until a statement of use is accepted, and must be re-examined at each quarterly update. Every entry in Part C marked as a Restricted License must be analyzed under Section 4.3(c) and either carved out or addressed by consent.

Schedule 10 — Subsidiaries and Equity Interests

Part A — Subsidiaries

Part B — Pledged Equity (Section 4.7)

Part C — Other Equity Interests Held by Loan Parties (Section 5.1(f))

Part D — Borrower Capitalization Summary (Section 5.1(q))

Instructions: Attach the fully diluted capitalization table delivered under Section 3.1(k). Confirm that the Operating Documents authorize sufficient Equity Interests for the Warrant and that any investor approval for the Warrant has been obtained under Section 3.1(d).

Schedule 11 — Material Agreements

Part A — Material Agreements (Section 1.1 definition)

Part B — Affiliate Agreements (Section 7.8(f))

Part C — Investor and Governance Agreements Affecting the Facility

Instructions: Any agreement in Part A with a negative pledge or anti-Lien provision must be reconciled to Section 7.5 (last sentence) and Section 4.3(c). Any agreement with a change-of-control provision should be reviewed against the Change in Control definition so that an equity financing does not trigger counterparty termination rights that would in turn affect covenant compliance.

Schedule 12 — Post-Closing Obligations

Instructions: Every condition in Section 3.1 that is waived or deferred in writing under Section 3.4 must be entered here with a deadline. Mark “Blocks later Advances” as “Y” only where the parties have expressly so agreed. Extension requests should be made in writing before the deadline and should state the third-party cause of delay.

Schedule 13 — Disqualified Institutions, Competitors and Information Controls

Part A — Disqualified Institutions and Competitors (Sections 1.1, 12.2 and 12.8)

Instructions: Borrower may add competitors after the Effective Date by written notice under clause (b) of the definition; additions take effect prospectively and do not unwind completed assignments. Keep the list to actual competitors and strategic acquirers whose access to Confidential Information would be commercially harmful.

Part B — Information Security, Retention and Incident Notice (Section 12.8(e))

EXHIBITS

Exhibit A — Form of Payment/Advance Form (Borrowing Request)

PAYMENT/ADVANCE FORM

To: [LENDER LEGAL NAME], Attention: [●] — Email: [●]
From: [BORROWER LEGAL NAME]
Date of request: [DATE]
Reference: Loan and Security Agreement dated as of [DATE] (the Agreement). Capitalized terms have the meanings given in the Agreement.

Part 1 — Advance Requested

Part 2 — Funding Instructions

Part 3 — Certifications

The undersigned Responsible Officer certifies to Lender, on behalf of Borrower and not individually, that as of the date of this request and as of the requested Funding Date:

1. The representations and warranties in Article 5 of the Agreement are true and correct in all material respects (or in all respects, if already qualified by materiality), except as to representations expressly made as of an earlier date (which were true as of that date) and except as disclosed in the schedule supplements delivered under Section 5.2 of the Agreement and listed below: [None] [List].
2. No Default or Event of Default has occurred and is continuing or would result from the Advance.
3. [For Tranche B or C:] The applicable Milestone has been satisfied, as evidenced by the attached materials.
4. The requested Funding Date is within the Availability Period for the applicable Tranche.
5. Borrower is in compliance with Section 6.13 of the Agreement as of the most recent test date, as shown in the most recent Compliance Certificate delivered on [DATE].
6. [No Material Adverse Change has occurred since the date of the most recent financial statements delivered under Section 6.2.]

The certifications in this Part 3 are made to the knowledge of the undersigned after reasonable inquiry of the officers of Borrower responsible for the relevant matters. This form does not constitute a legal opinion.

BORROWER: [BORROWER LEGAL NAME]
By: [●]
Name: [●]
Title: [RESPONSIBLE OFFICER TITLE]

For Lender Use

Exhibit B — Form of Compliance Certificate

COMPLIANCE CERTIFICATE

To: [LENDER LEGAL NAME]
From: [BORROWER LEGAL NAME]
Period covered: [Month / quarter] ended [DATE] (the Reporting Period)
Date delivered: [DATE]

The undersigned, a Responsible Officer of Borrower, certifies on behalf of Borrower (and not individually) under the Loan and Security Agreement dated as of [DATE] (the Agreement) that:

Part 1 — Reporting Deliverables

Part 2 — Financial Covenant Calculations (Section 6.13; definitions on Schedule 1, Part D)

Liquidity calculation

Revenue calculation (quarter-end only)

Equity cure (if applicable)

Part 3 — Basket Usage (Article 7; Section 7.12 cross-reference)

Part 4 — Events and Changes During the Reporting Period

Part 5 — Certification

The undersigned certifies that (a) the financial statements delivered with this certificate fairly present in all material respects the consolidated financial condition and results of operations of Borrower and its Subsidiaries for the Reporting Period in accordance with GAAP consistently applied, subject to normal year-end adjustments and the absence of footnotes; (b) the calculations in Part 2 are accurate and were prepared in accordance with the definitions on Schedule 1; (c) the representations and warranties in Article 5 of the Agreement are true and correct in all material respects as of the date of this certificate, except as disclosed in the schedule supplements attached; and (d) no Default or Event of Default has occurred and is continuing, except as described below together with the action Borrower has taken or proposes to take: [None] [Describe].

This certificate is delivered to the knowledge of the undersigned after reasonable inquiry, in the undersigned’s capacity as a Responsible Officer and not individually, and does not constitute a legal opinion.

BORROWER: [BORROWER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]
Date: [●]

Lender Acknowledgment (optional)

Received and reviewed by: [●] Date: [●] Comments: [None] [●]

Exhibit C — Form of Secured Promissory Note

SECURED PROMISSORY NOTE

$[PRINCIPAL AMOUNT] — [Tranche [A/B/C]]
Dated: [DATE]
[CITY, STATE]

FOR VALUE RECEIVED, [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE] (Borrower), promises to pay to the order of [LENDER LEGAL NAME] or its registered assigns (Lender) the principal amount of [AMOUNT IN WORDS] DOLLARS ($[●]), or so much as has been advanced and remains outstanding under Tranche [●] of the Loan and Security Agreement dated as of [DATE] between Borrower and Lender (as amended, the Agreement), together with interest on the unpaid principal at the rates and at the times provided in the Agreement. Capitalized terms used but not defined in this Note have the meanings given in the Agreement.

1. Agreement. This Note is one of the Notes referred to in Section 2.1(c) of the Agreement and is entitled to its benefits, including the security interest granted under Article 4 and the Guaranties. The Agreement provides for the acceleration of the maturity of this Note upon an Event of Default, for prepayment on the terms stated in it, for the payment of the Final Payment and any Prepayment Premium, and for the application of payments. In case of any conflict between this Note and the Agreement, the Agreement controls.

2. Payments. Principal and interest are payable in Dollars in immediately available funds at the place and in the manner provided in the Agreement. Interest is computed as provided in Section 2.4 of the Agreement. Payments are applied as provided in Section 2.9 of the Agreement.

3. Maturity. All outstanding principal, accrued interest and other amounts owing under this Note are due and payable on the Term Loan Maturity Date, or earlier upon acceleration under Section 9.1 of the Agreement.

4. Record of Advances. Lender is authorized to record the date and amount of each Advance and each payment on the schedule attached to this Note or in its records; such records are prima facie evidence of the amounts owing absent manifest error, but failure to record does not affect Borrower’s obligations.

5. Waivers. Borrower waives presentment, demand, protest, notice of dishonor, notice of acceleration and notice of intent to accelerate, to the extent permitted by law and except as expressly required by the Agreement.

6. Governing Law; Jury Waiver; Judicial Reference. This Note is governed by the laws of the State of [GOVERNING LAW STATE], and Sections 11.1 through 11.4 of the Agreement apply to this Note as if set out in full.

7. Registered Form; Transfer. This Note is a registered obligation and may be transferred only upon surrender and registration of the transfer in the register maintained under Section 12.2(c) of the Agreement, in accordance with the assignment provisions of the Agreement.

8. Replacement. Upon receipt of evidence reasonably satisfactory to Borrower of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, an indemnity reasonably satisfactory to Borrower, Borrower will execute and deliver a replacement Note of like tenor.

BORROWER: [BORROWER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

Schedule of Advances and Payments

Exhibit D — Summary of Warrant Terms

This Exhibit summarizes the principal commercial terms of the Warrant for reference. The Warrant is a separate instrument and controls in case of conflict. The Warrant is not an Obligation, and its terms do not affect the computation of interest or fees under the Agreement.

Exhibit E — Form of Joinder Agreement

JOINDER AGREEMENT

This Joinder Agreement (this Joinder) is entered into as of [DATE] by [NEW SUBSIDIARY LEGAL NAME], a [STATE] [ENTITY TYPE] (New Loan Party), in favor of [LENDER LEGAL NAME] (Lender), under the Loan and Security Agreement dated as of [DATE] between Lender and [BORROWER LEGAL NAME] (Borrower) (as amended, the Agreement). Capitalized terms used but not defined have the meanings given in the Agreement.

1. Joinder as Loan Party and Guarantor. New Loan Party joins the Agreement as a Loan Party and Guarantor, and agrees to be bound by all terms of the Agreement applicable to a Loan Party and Guarantor as if an original signatory, including Articles 4 through 9 and Article 12.

2. Guaranty. New Loan Party unconditionally and irrevocably guarantees to Lender, as primary obligor and not merely as surety, the full and punctual payment and performance when due of all Obligations. This guaranty is a continuing guaranty of payment and not of collection, and is subject to the waivers in Sections 9.9 and 9.10 of the Agreement. New Loan Party’s liability under this guaranty is limited to the maximum amount that can be guaranteed without rendering the guaranty voidable under applicable fraudulent-transfer or fraudulent-conveyance law.

3. Grant of Security Interest. As security for the Obligations, New Loan Party grants to Lender a continuing security interest in all of its right, title and interest in and to the Collateral (as defined in Section 4.2 of the Agreement, applied to New Loan Party), whether now owned or hereafter acquired, other than Excluded Assets, and authorizes Lender to file financing statements under Section 4.5 of the Agreement.

4. Representations. New Loan Party makes each representation and warranty in Article 5 of the Agreement as to itself as of the date of this Joinder, and has delivered a supplement to the Perfection Certificate with respect to itself, attached as Annex 1.

5. Deliverables. New Loan Party delivers with this Joinder: (a) its Operating Documents and Borrowing Resolutions; (b) a good-standing certificate dated within [30] days; (c) the Perfection Certificate supplement; (d) certificates and stock powers for any Pledged Equity it owns; (e) updated Schedules 2, 6, 7, 9, 10 and 11 reflecting New Loan Party; (f) Control Agreements for each of its Collateral Accounts, or a Schedule 12 supplement stating the deadline for delivery; (g) insurance certificates and endorsements under Section 6.5; (h) [a joinder or supplement to the IP Agreement]; and (i) beneficial-ownership and know-your-customer information reasonably requested by Lender.

6. Pledge by Parent. [PARENT LOAN PARTY LEGAL NAME] confirms that the Equity Interests of New Loan Party it owns are Pledged Equity under Section 4.7 of the Agreement and has delivered or will deliver the certificates and stock powers (or issuer acknowledgment) required by that Section, and Schedule 10 is supplemented accordingly.

7. Notices. New Loan Party’s address for notices under Article 10 of the Agreement is: [ADDRESS; EMAIL], or, if none is stated, Borrower’s address.

8. Governing Law; Miscellaneous. Article 11 and Sections 12.1, 12.6, 12.10 and 12.11 of the Agreement apply to this Joinder as if set out in full. This Joinder may be executed in counterparts and by electronic signature.

NEW LOAN PARTY: [NEW SUBSIDIARY LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

ACKNOWLEDGED AND AGREED:
BORROWER: [BORROWER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

[PARENT LOAN PARTY (if different): [●]
By: [●]
Name: [●]
Title: [●]]

LENDER: [LENDER LEGAL NAME]
By: [●]
Name: [●]
Title: [●]

Annex 1 — Perfection Certificate Supplement for New Loan Party

Website Posting README — Not Part of the Agreement

What this form is for

This integrated founder-side loan and security agreement is the core operative document for a bilateral venture-debt facility. It is organized as thirteen Articles (definitions and accounting terms; loan and terms of payment; conditions; security interest; representations; affirmative covenants; negative covenants; events of default; remedies; notices; governing law and dispute resolution; general provisions; definitions index), followed by thirteen fully drafted Schedules and five Exhibits (Payment/Advance Form, Compliance Certificate, Secured Promissory Note, Warrant term summary and Joinder). Every Permitted basket in Article 7 is cross-referenced to the Schedule where the agreed amount is recorded, and every Schedule and Exhibit referenced in the body is drafted with column headers, instructions and bracketed fields. Drafting notes identify the lender’s typical ask, the range commonly seen in the market and the founder-protective position on the provisions that drive economics and default risk: the Material Adverse Change definition and default, investor-abandonment defaults, cure periods, basket sizing, prepayment premiums, the Final Payment, warrant coverage, the IP collateral structure and control-agreement mechanics. The form is designed to be separated into a credit agreement, security agreement and ancillary documents if the lender’s form, a collateral agent, a guarantor structure or local law requires it.

Completion checklist

• Complete the Matter Completion Sheet and confirm every bracketed election in Articles 1 and 2 against the signed term sheet.
• Populate Schedule 1 (Tranches, pricing, repayment, covenant levels) and model the all-in cost including facility fee, Final Payment, Prepayment Premium and Warrant coverage.
• Prepare Schedules 2, 6, 7, 8, 9, 10 and 11 from the Perfection Certificate and reconcile each line to the lien, IP and litigation searches.
• Size every Permitted basket on Schedules 3, 4 and 5 against the Board-approved budget and the next twelve months of planned transactions; complete the Section 7.12 cross-reference table.
• Select the Intellectual Property structure in Section 4.6 and Schedule 9, Part G, and confirm the UCC collateral description matches it.
• Decide the Material Adverse Change position (Section 8.3), the investor-abandonment position (Section 8.13), the Key Person covenant (Section 7.2(d)) and the right of first refusal on future debt (Section 12.12); delete or complete each bracketed alternative.
• Set cure periods in Article 8 and confirm each runs from the earlier of knowledge and notice.
• Confirm Excluded Accounts, Control Agreement deadlines and the Designated Deposit Account on Schedule 6; enter every deferred condition on Schedule 12 with an owner and deadline.
• Confirm Board and investor approvals for the Indebtedness, Liens and the Warrant, and reserve the Warrant shares (Schedule 10, Part D; Exhibit D).
• Conform Exhibits A through E to the final defined terms, section numbers and thresholds.
• Confirm usury, lender-licensing, judicial-reference and electronic-signature rules under the governing law selected in Article 11.

AI completion prompt

Three pass review

Pass 1 Completeness. Confirm every defined term in Article 1 is used and every term used is defined; every Section cross-reference resolves; each of Schedules 1 through 13 and Exhibits A through E is referenced in the body and fully populated; the Section 7.12 table matches Schedules 3 through 5; the Exhibit B calculations match Schedule 1, Part D; and the signature blocks, notice addresses and Designated Deposit Account are complete.
Pass 2 Risk. Run the following scenarios against the completed form: delayed equity round at the Amortization Date; missed Tranche B Milestone by one quarter; Liquidity covenant miss with an equity cure; a vendor Lien filed without notice; a new foreign sales Subsidiary; an exclusive license to a strategic partner; a change of depository bank; a key-executive departure; an acquisition offer; a lender assignment to a fund; and enforcement access to source code and customer data. Confirm each scenario produces the intended consequence (consent, notice, cure, draw block or default) and no unintended one.
Pass 3 Publication. Remove party facts, pricing, account identifiers, capitalization data, private schedules, search results and internal comments; confirm the frontmatter, single opening h1, practitioner banner, Matter Completion Sheet, ## N Heading and ### N.N Heading numbering, Schedule and Exhibit headings, pipe tables and README structure render correctly in Word and HTML; and confirm the educational warning and all drafting notes remain.

Attorney review warning

This form is not a legal opinion, commitment, term sheet or execution-ready loan document. The drafting notes describe negotiating positions and ranges commonly observed in the market; they are not predictions of outcome in any transaction and do not account for the leverage, stage, jurisdiction or lender type in a particular matter. The actual parties, lender licensing, governing law, usury limits, rate structure, collateral description, perfection steps, tax treatment of the Warrant and Final Payment, securities-law compliance, insolvency considerations and all corporate and investor approvals must be reviewed by responsible counsel before any version of this document is signed.