A.

The Borrower has requested that the Purchasers purchase an aggregate principal amount of $100,000,000 of the Borrower’s senior secured notes, each substantially in the form of Exhibit C hereto (the “Notes”), pursuant to and in accordance with the terms and conditions hereof.

B.

The Purchasers are willing to purchase the Notes described above upon the terms and subject to the conditions set forth in this Agreement.

1.1

Defined Terms. In addition to the words and terms defined elsewhere in this Agreement, the following terms when used herein have the following respective meanings:

(i)

a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other event (A) following which the holders of Common Stock immediately preceding such consolidation, merger, exchange, recapitalization, reorganization, combination or event either (x) no longer hold a majority of the shares of Common Stock or

(y)

no longer have the ability to elect a majority of the board of directors of the Borrower or

(B)

as a result of which shares of Common Stock shall be changed into (or the shares of

(ii)

the sale or transfer in one or a series of transactions of all or substantially all of the assets of the Borrower on a consolidated basis to any Person other than a Wholly Owned Subsidiary Guarantor;

(iii)

any Person or group, other than the Borrower and its Subsidiaries or any employee benefit plan of the Borrower or its Subsidiaries, files a Schedule 13D or Schedule TO (or any successor schedule, form or report) pursuant to the Exchange Act disclosing such Person has become the beneficial owner of shares with a majority of the total voting power of all outstanding voting securities that are entitled to vote generally in the election of the Borrower’s board of directors;

(iv)

the liquidation, dissolution or winding up of the Borrower; or

(v)

the occurrence of a “change of control,” “fundamental change” or other similar event or condition that results in the Borrower being required to repurchase, redeem or retire the Convertible Notes in whole or in part pursuant to the terms of the indenture or other governing instrument for the Convertible Notes.

(iii)

reasonable and customary accruals for third party rebates and chargebacks, and (iv) returns. “Notes” has the meaning set forth in the Background Statement above.

1.2

Accounting Terms. Except as specifically provided otherwise in this Agreement, all accounting terms used herein that are not specifically defined have the meanings customarily given them in accordance with GAAP as in effect from time to time, provided that if the Borrower notifies the Purchasers that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith; provided, further, that all terms of an accounting or financial nature (including the definitions of Capital Lease Obligations and Indebtedness) shall be construed without giving effect to (i) any changes to the current GAAP accounting model for leases of the type described in the FASB and IASB joint exposure draft published on August 17, 2010 entitled “Leases (Topic 840)” or otherwise arising out of the FASB project on lease accounting described in such exposure draft, (ii) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards

1.3

Interpretation. Whenever the context so requires, the neuter gender includes the masculine and feminine, the singular number includes the plural, and vice versa. The words “include,” “includes” and “including” shall in any event be deemed to be followed by the phrase “without limitation.” All references in this Agreement to “this Agreement”, “herein”, “hereunder”, “hereof” shall be deemed to refer to this Agreement in its entirety (including the exhibits (and their annexes) and schedules hereto) unless the context requires otherwise. All references in this Agreement to Articles, Sections, Exhibits, Annexes and Schedules shall be construed to refer to Articles and Sections of, and Exhibits, Annexes and Schedules to, this Agreement unless the context requires otherwise. Except as otherwise provided herein, any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified in accordance with any restrictions on such amendments, restatements, supplements or modifications set forth herein or in any other Credit Document. Any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

1.4

Register.

(a)

The Borrower shall establish and maintain at its address referred to in Section 9.5

(C)

any other payment received by the Purchasers pursuant to the Credit Documents.

(b)

Notwithstanding anything to the contrary contained in this Agreement, (i) each Note is a registered obligation, (ii) the right, title and interest of the Purchasers and their assignees in and to the Notes shall be transferable only upon notation of such transfer in the Register and (iii) no assignment thereof or participation therein shall be effective until recorded therein. This Section 1.4 and Sections 9.7 and 9.8 shall be construed so that each Note is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and Section 5f.103-1(c) of the United States Treasury Regulations.

(c)

The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Collateral Agent and the Purchasers shall treat each Person whose name is recorded in the Register as a Purchaser (and as the owner of the amounts owing to it under the Notes as reflected in the Register) for all purposes of this Agreement. Information contained in the Register with respect to any Purchaser shall be available for access by such Purchaser at any reasonable time and from time to time upon reasonable prior notice.

2.1

Notes and Commitments; Notice of Purchase.

(a)

Each Purchaser severally agrees, subject to and on the terms and conditions set forth in this Agreement, to purchase, a Note from the Borrower on any Business Day (i) on or after the date that is three Business Days after date on which (x) the FDA Approval has been obtained and (y) the Heplisav-B Draw Condition has been satisfied (or the Required Purchasers have waived satisfaction of the Heplisav-B Draw Condition) but (ii) prior to the Termination Date, in a principal amount equal to such Purchaser’s Commitment. The Commitments shall be automatically and permanently terminated (A) concurrently with the purchase of the Notes on the Purchase Date, and (B) on the Termination Date. To the extent repaid, the principal amount under Notes may not be re-borrowed.

(b)

At least three Business Days prior to the expected Purchase Date, the Borrower shall deliver to the Purchasers a written notice (the “Purchase Notice”), which notice shall be irrevocable, shall be substantially in the form of Exhibit D hereto and shall specify (1) the account(s) to which the proceeds of the Notes are to be disbursed pursuant to Section 2.9 and (2) the requested Purchase Date.

2.2

Notes. The Notes shall be payable to the applicable Purchaser in an amount equal to the principal amount of such Purchaser’s Commitment. The terms of this Agreement shall be incorporated by reference into the Notes as if set forth therein and, in the event of any conflict between the terms of this Agreement and the Notes, the terms of this Agreement shall control.

2.3

Interest.

(a)

All outstanding principal amounts of the Notes shall bear interest at a rate per annum equal to 10.375% per annum (the “Interest Rate”).

(b)

Interest on the outstanding principal balance of each Note shall be due and payable (i) on the first Business Day of each March, June, September and December, commencing with the first such date after the Purchase Date (each an “Interest Payment Date”), and (ii) on each date when all or any amount of the unpaid principal balance of each such Note shall be due (whether at maturity, by acceleration, prepayment or otherwise), but only to the extent accrued and only with respect of the principal amount being paid.

(c)

Interest on the Notes and fees shall be computed on the basis of a 360-day year and the actual number of days elapsed.

(d)

If the Borrower shall default in the payment of any principal of or interest on any Note (in the case of interest, beyond the grace period applicable pursuant to Section 7.1(a)(ii)), by acceleration or otherwise (after expiration of all applicable grace periods), then, until such defaulted amount shall have been paid in full, all such overdue amounts shall bear interest (after as well as before judgment) at a rate per annum equal to the Interest Rate plus 10.00% per annum (the “Default Rate”).

(e)

Nothing contained in this Agreement or the Notes shall be deemed to establish or require the payment of interest to the Purchasers at a rate in excess of the maximum rate permitted by applicable law. In the event that the rate of interest required to be paid under this Agreement or the Notes exceeds the maximum rate permitted by applicable law, the rate of interest required to be paid hereunder and under the Notes shall be automatically reduced to the

2.4

Purchase Price and Fees.

(a)

The purchase price for the Notes shall be 100% of the principal amount thereof.

(b)

As additional consideration for the Commitments, the Borrower shall pay the following fees to the Purchasers:

(i)

An amount equal to 1.0% of the Commitment, payable in cash on the date of this Agreement;

(ii)

An amount equal to 1.0% of the Commitments (such amount, the “Approval Fee Amount”), payable on the third Trading Day after the later of (x) the announcement of the FDA Approval (such announcement, the “Approval Announcement”) and (y) satisfaction (or waiver by the Required Purchasers) of the Heplisav-B Draw Condition, which amount may be paid either (1) in cash or (2) by delivering to the Purchasers a number of shares of Common Stock equal to (x) the Approval Fee Amount divided by (y) the arithmetic average of the closing price per share of the Common Stock for the Trading Day immediately prior to the Approval Announcement and the closing price per share of the Common Stock for the Trading Day immediately following the Approval Announcement, rounded up to the nearest whole number (for the avoidance doubt, the parties agree that the shares of Common Stock delivered to the Purchasers under this section need not be Freely Tradeable Shares); provided, however, that the Borrower may not pay the Approval Fee Amount by delivering shares of Common Stock (A) during the occurrence of a Delisting Event, (B) at any time following a Major Transaction, (C) at any time following the occurrence, and during the continuance, of an Event of Default, (D) from and after the first date on which the Borrower determines it is or may be required to withhold any Taxes as a result of this Section 2.4(b)(ii) and a payment in the form contemplated by clause (2) hereof, or

(iii)

An amount equal to 1.5% of the Commitments, payable in cash on December 20, 2016 if the FDA Approval has not occurred prior to such date (the “Grace Fee”);

(iv)

In the event that the Purchase Date occurs any time after December 29, 2016 but on or prior to the Termination Date, an amount in cash equal to the amount of interest that would have accrued from, and including, such date to, but excluding the Purchase Date on $100,000,000, minus the Grace Fee, payable in cash on the Purchase Date; and

(v)

If the Borrower fails to issue Notes in an aggregate principal amount equal to the Purchasers’ aggregate Commitments within 10 Business Days of obtaining the FDA Approval and satisfying the Heplisav-B Draw Condition (or within 10 Business Days of obtaining the FDA Approval if the satisfaction of the Heplisav-B Draw

2.5

Maturity of Notes. If not sooner paid, the outstanding principal amount of the Notes and all accrued (and theretofore unpaid) interest shall be due and payable on the Maturity Date.

2.6

Optional Prepayments.

(a)

The Borrower shall have the right to prepay the Notes at any time or from time to time, in whole or in part, together with accrued (and theretofore) unpaid interest on the principal amount prepaid plus (i) the applicable Prepayment Premium, and (ii) if such prepayment is prior to the third anniversary of the Purchase Date, an additional amount equal to the amount of interest that would have accrued from, and including, the date of prepayment to, but excluding, the third anniversary of the Purchase Date on the principal amount of the Notes outstanding immediately prior to such prepayment.

(b)

Any prepayment in part pursuant to this Section 2.6 must be made in a minimum principal amount of $5,000,000. If the Borrower wishes to make such a prepayment, it shall give the Purchasers notice in writing to that effect not later than 5 Business Days (or such shorter period as agreed to by the Required Purchasers) prior to the date of the prepayment, specifying the date on which the prepayment is to be made and the principal amount to be prepaid. Such notice shall constitute the Borrower’s irrevocable commitment to prepay that amount on that date, together with accrued (and theretofore) unpaid interest on the principal amount prepaid to but excluding the prepayment date plus, if applicable, the Prepayment Premium and any additional amounts owed under clause (ii) of Section 2.6(a); provided, that any such notice with respect to a prepayment under Section 2.6(a) may be contingent upon the consummation of a financing, Major Transaction or other specified event.

2.7

Major Transaction Redemption. If the Borrower gives (or is required to give) the Purchasers notice of a Major Transaction pursuant to Section 5.2(b), the Required Purchasers may, by written notice to the Borrower, require the Borrower to prepay the Notes in whole. Such prepayment notice shall be delivered to the Borrower at least 10 Business Days prior to the effective date of such Major Transaction or, in the event that notice of such Major Transaction is given by the Borrower less than 20 Business Days prior to the effective date of such Major Transaction, at least 7 calendar days prior to such effective date and shall specify the date of prepayment, which (x) shall be a Business Day and (y) may not be earlier than the date of

2.8

General Provisions as to Payments; Payments in Shares. Any payments and other amounts owing under this Agreement shall be made at the applicable Purchaser’s address as set forth in Section 9.5, prior to 11:00 a.m., New York City time, on the date when due, unless otherwise designated by the Purchasers in writing.  Each payment hereunder shall be applied

2.9

Disbursement of Note Proceeds. The Borrower hereby authorizes and directs the Purchasers to disburse, for and on behalf of the Borrower and for the Borrower’s account, the proceeds of the Notes made by the Purchasers pursuant to this Agreement (i) to such Person or Persons as the Borrower shall direct in writing and (ii) to pay the Purchasers any fees pursuant to Section 2.4 and any reasonable and documented out-of-pocket expenses payable pursuant to Section 9.1; provided that, without prejudice to the Borrower’s obligations pursuant to Section 9.1, such costs and expenses shall have been invoiced to the Borrower at least one Business Day prior to the Purchase Date.

2.10

Use of Proceeds.  The proceeds of the Notes shall be used by the Borrower solely

2.11

Taxes.

(a)

Any and all payments hereunder or under any other Credit Document by the Credit Parties shall be made, in accordance with this Section 2.11, free and clear of and without deduction for any and all present or future Taxes except as required by applicable law. If any Credit Party shall be required by applicable law to deduct or withhold any Taxes from or in respect of any sum payable hereunder or under any other Credit Document, (i) such Credit Party shall make such deduction or withholding, (ii) such Credit Party shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and (iii) to the extent that the deduction or withholding is made on account of any Indemnified Tax, the sum payable by the applicable Credit Party shall be increased by as much as shall be necessary so that after making all required deduction or withholding (including deduction or withholding for Taxes applicable to additional sums payable under this Section 2.11), each Purchaser shall receive an amount equal to the sum it would have received had no such deduction or withholding for Indemnified Taxes been made (any and all such additional amounts payable shall hereinafter be referred to as the “Additional Amounts”). Within thirty (30) days after the date of any payment of such Taxes by the applicable Credit Party, such Credit Party

(b)

The Borrower agrees to pay and authorizes each Purchaser to pay in its name, all Other Taxes. If the Borrower directly pays such Other Taxes, within 30 days after the date of any payment of Other Taxes the Borrower shall furnish to the applicable Purchaser the original or a certified copy of a receipt (if any is provided to the Borrower) evidencing payment thereof or other evidence of such payment reasonably satisfactory to such Purchaser.

(c)

Without duplication with respect to any Additional Amounts, the Credit Parties shall reimburse and indemnify, within 10 days after receipt of demand therefor, each Purchaser for all Indemnified Taxes (including all Indemnified Taxes imposed on amounts payable under this Section 2.11(c)) paid or payable by such Purchaser , whether or not such Indemnified Taxes were correctly asserted; provided, that the Credit Parties shall not be required to compensate any Purchaser pursuant to this Section 2.11(c) for any Indemnified Taxes incurred more than 180 days prior to the date that such Purchaser notifies the Borrower in writing of the increased costs and of Purchaser’s intention to claim compensation thereof; provided further, that if circumstances giving rise to such Indemnified Taxes is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. A certificate of the applicable Purchaser(s) setting forth the amounts to be paid thereunder and delivered to Borrower shall be conclusive, absent manifest error.

(d)

At the time or times reasonably requested by the Borrower, any Purchaser that is legally entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Purchaser, if reasonably requested by the Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower as will enable the Borrower to determine whether or not such Purchaser is subject to backup withholding.

(i)

Without limiting the generality of the foregoing:

(A)

Each Purchaser that is a U.S. Person for United States federal income tax purposes shall, on or before the date on which the Purchaser becomes a party to this Agreement, provide to Borrower a properly completed and executed IRS Form W-9 certifying that such Purchaser is not subject to backup withholding tax.

(B)

Each Purchaser that is not a United States person for United States federal income tax purposes (a “Foreign Purchaser”) and is entitled to an exemption from or reduction of United States withholding tax with respect to payments under this Agreement shall, on or before the date on which the Purchaser becomes a party to this Agreement, provide Borrower with a properly completed and executed IRS Form W 8ECI, W-8BEN, W-BEN-E, W-8IMY or other applicable forms (together with any required supporting documentation), or

(ii)

Each Purchaser shall provide new forms or certifications (or successor forms) as reasonably requested by the Borrower from time to time, and shall notify the Borrower in writing within a reasonable time after becoming aware of any event requiring a change in the most recent forms or certifications previously delivered by such Purchaser to the Borrower.

(e)

If a payment to a Purchaser under this Agreement would be subject to United States withholding tax imposed by FATCA if such Purchaser were to fail to comply with the applicable reporting requirements of FATCA, such Purchaser shall deliver to Borrower, at the times prescribed by law and as reasonably requested by Borrower, such documentation prescribed by applicable law and such documentation reasonably requested by the Borrower as may be necessary in order for Borrower to comply with its obligations under FATCA and to determine that such Purchaser has or has not complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.

(f)

If a Purchaser determines in its sole discretion, exercised in good faith, that it has received a refund from a Governmental Authority relating to Taxes in respect of which the applicable Credit Party paid Additional Amounts or made a payment pursuant to

2.12

Other Additional Costs. In the event that any applicable Change in Law:

(a)

imposes, modifies or holds applicable any reserve, capital requirement, special deposit, compulsory loan or similar requirements against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any Purchaser; or

(b)

imposes on any Purchaser any other condition (other than Indemnified Taxes or Excluded Taxes); and the result of any of the foregoing is to increase the cost to such Purchaser (as determined by such Purchaser in good faith using calculation methods customary in the industry) of making, renewing or maintaining any extension of credit hereunder or to reduce any amount receivable in respect thereof or to reduce the rate of return on the capital of such Purchaser or any Person controlling such Purchaser, then, in any such case, Borrower shall promptly pay to such Purchaser, upon its receipt of the certificate described below, any additional amounts necessary to compensate such Purchaser for such additional cost or reduced amounts receivable or rate of return as reasonably determined by such Purchaser with respect to this Agreement or the Notes purchased hereunder. If a Purchaser becomes entitled to claim any additional amounts pursuant to this Section 2.12, it shall promptly notify Borrower of the event by reason of which it has become so entitled, and a certificate as to any additional amounts payable pursuant to the foregoing sentence containing the calculation thereof in reasonable detail submitted by such Purchaser to Borrower shall be conclusive in the absence of manifest error. Failure or delay on the part of a Purchaser to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital under this Section

2.13

Pro Rata Treatment.

(a)

The purchase of Notes on the Purchase Date shall be made by the Purchasers pro rata on the basis of their respective Commitments. All payments on account of principal of or interest on any Notes, fees or any other Obligations owing to or for the account of any one or more Purchasers shall be apportioned ratably among such Purchasers in proportion to the amounts of such principal, interest, fees or other Obligations owed to them respectively.

(b)

If any Purchaser shall, by exercising any right of setoff (including in accordance with Section 7.2(c)) or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Notes or other Obligations hereunder resulting in such Purchaser’s receiving payment of a proportion of the aggregate amount of its Notes and accrued interest

3.1

Conditions to Effectiveness. This Agreement shall be effective when the Purchasers shall have received from each of the parties hereto, a duly executed counterpart of this Agreement, dated as of the date hereof, signed by such party.

3.2

Conditions to Purchase of the Notes.  The obligation of each Purchaser to purchase any Notes hereunder is subject to the satisfaction of the following conditions precedent:

(a)

Credit Documents. The Collateral Agent shall have received the following, each dated as of the Purchase Date (unless otherwise specified) and in such number of copies as the Collateral Agent shall have requested:

(i)

a duly executed Note for the account of each Purchaser;

(ii)

the Guaranty, duly completed and executed by each Subsidiary of the Borrower (other than Excluded Foreign Subsidiaries), in form and substance satisfactory to the Purchasers;

(iii)

a pledge agreement with respect to Dynavax GmbH pledging as security for the Obligations65% of the outstanding voting Capital Stock and 100% of the outstanding non-voting Capital Stock of Dynavax GmbH, governed in each case by the

(iv)

the Security Agreement, duly completed and executed by each Credit Party, in form and substance satisfactory to the Purchasers;

(v)

duly completed and executed grants of security interest in form required by or acceptable to the U.S. Copyright Office or the U.S. Patent and Trademark Office in respect of registered intellectual property included in the collateral granted under the Security Agreement;

(vi)

[Reserved];

(vii)

the Deposit Account Control Agreements, duly completed and executed by the applicable Credit Party and depository institution, covering each Deposit Account maintained by the Borrower and the Subsidiary Guarantors (other than Excluded Deposit Accounts (as defined in the Security Agreement)), in form and substance satisfactory to the Purchasers;

(viii)

a control agreement with respect to each securities account maintained by the Borrower and the Subsidiary Guarantors (other than Excluded Subsidiary Accounts (as defined in the Security Agreement)), in form and substance satisfactory to the Purchasers; and

(ix)

an opinion of counsel to the Credit Parties dated as of the Purchase Date and addressed to the Purchasers, in the form agreed on the date hereof with the Required Purchasers.

(b)

Notice of Purchase. The Purchasers shall have received a Purchase Notice in accordance with Section 2.1(b).

(c)

Officer’s Certificate. The Collateral Agent shall have received a certificate, signed by an authorized officer of the Borrower, dated as of the Purchase Date and in form and substance satisfactory to the Purchasers, that all the conditions set forth in this Section 3.2 shall have been satisfied as required hereunder.

(d)

Secretary’s Certificate. The Collateral Agent shall have received a certificate of the secretary or an assistant secretary of each Credit Party, dated as of the Purchase Date and in form and substance reasonably satisfactory to the Collateral Agent, certifying (i) that attached thereto is a true and complete copy of the articles or certificate of incorporation, certificate of formation or other organizational document and all amendments thereto of such party, certified as of a recent date by the Secretary of State (or comparable Governmental Authority) of its jurisdiction of organization, and that the same has not been amended since the date of such certification, (ii) that attached thereto is a true and complete copy of the bylaws, operating agreement or similar governing document of such party, as then in effect and as in effect at all times from the date on which the resolutions referred to in clause (iii) below were adopted to and including the date of such certificate, (iii) that attached thereto is a true and complete copy of

(e)

[Reserved].

(f)

Good Standings. The Collateral Agent shall have received a certificate as of a recent date of the good standing of each Credit Party as of the Purchase Date, under the laws of its jurisdiction of organization, from the Secretary of State (or comparable Governmental Authority) of such jurisdiction.

(g)

Recording and Filing. The Collateral Agent shall have received evidence that UCC financing statements naming the Credit Parties as debtors and the Collateral Agent as secured party and describing the collateral encumbered by the Security Documents have been duly filed in each jurisdiction necessary to perfect the Liens created by the Security Documents.

(h)

Stock Certificates. The Collateral Agent shall have received certificates evidencing the Capital Stock being pledged under the Security Agreement as of the Purchase Date and undated assignments separate from certificate for any such certificate, duly executed in blank; provided that no stock certificate shall be required to the extent such Capital Stock is not certificated.

(i)

Insurance. The Collateral Agent shall have received certificates of insurance evidencing the insurance coverages maintained by the Credit Parties, naming the Collateral Agent as loss payee or additional insured, as its interests may appear, and providing that the applicable insurer will provide to the Collateral Agent written notice no less than 30 days prior to any cancellation, termination or modification of such coverage.

(j)

Representations and Warranties. Each of the representations and warranties made by the Credit Parties shall be true and correct in all material respects on and as of the Purchase Date with the same effect as if made on and as of such date (except to the extent any such representation or warranty relates to a specific date, in which case such representation or warranty shall be true and correct as of such date.

(k)

No Default. No Default shall have occurred and be continuing on the Purchase Date or after giving effect to the purchase of Notes to be made on such date.

(l)

Fees; Expenses. The Borrower shall have paid all reasonable documented and out-of-pocket expenses required hereunder or under any other Credit Document to be paid on or prior to the Purchase Date (including reasonable fees and expenses of counsel) in connection with this Agreement and the other Credit Documents.

4.1

Corporate Organization and Power. Each Credit Party (i) is a corporation or a limited liability company duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be; (ii) is duly qualified or licensed to do business in every other jurisdiction where the nature of its business or its properties makes such qualification or licensing necessary (except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect);

4.2

Corporate Authority; No Conflict with Other Instruments or Law. The execution, delivery and performance of this Agreement and the other Credit Documents and the consummation of the transactions contemplated hereby and thereby (i) are within the corporate or limited liability company power and authority of each Credit Party; (ii) have been duly authorized by all necessary corporate or limited liability company action on the part of each Credit Party; (iii) do not and will not conflict with, contravene or violate any provision of, or result in a breach of or default under, or require the waiver (not already obtained) of any provision of or the consent (not already given) of any Person under the terms of any Credit Party’s articles or certificate of incorporation or formation, its bylaws or operating agreement, or other applicable formation or organizational documents, or any Material Contract (other than to the extent of customary non-assignment provisions permitted under Section 6.14); (iv) will not violate, conflict with, give rise to any liability under, or constitute a default under any Requirement of Law; and (v) will not result in the creation, imposition, or acceleration of any indebtedness or tax or any Lien that is not a Permitted Lien of any nature upon, or with respect to, any Credit Party or any properties thereof.

4.3

Due Execution and Delivery. Each Credit Document to which any Credit Party is a party has been duly executed and delivered to the Purchasers by an officer of such Credit Party who has been duly authorized to perform such acts.

4.4

Enforceability. Each Credit Document to which any Credit Party is a party constitutes the valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws, statutes or rules of general application affecting the enforcement of creditor’s rights or general principles of equity.

4.5

Governmental Approval. The execution, delivery and performance of each Credit Document to which any Credit Party is a party and the transactions contemplated thereby do not require any authorization, exemption, consent or approval of, notice to, or declaration or filing with, any Governmental Authority other than those obtained on or before the date hereof and filings required in connection with the perfection of any liens granted pursuant to the Credit Documents.

4.6

Margin Stock. No Consolidated Entity is engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U or X of the Board of Governors of the Federal Reserve System). The execution, delivery and performance of this Agreement and the use of the proceeds of the Notes or any extension of credit hereunder, do not and will not constitute a violation of such Regulations.

4.7

Investment Company. No Credit Party is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940.

4.8

Litigation. As of the Effective Date, except as disclosed in Item 3 (Legal Proceedings) of the Form 10-K filed by the Borrower for the 2015 fiscal year, there are no suits or proceedings pending or threatened against or affecting any Consolidated Entity and no proceedings before any Governmental Authority are pending or threatened against any such Person of a type that (i) would need to be reported in a Form 8-K, 10-K or 10-Q filed with the SEC pursuant to the Securities Act, (ii) challenges the right of any Consolidated Entity to commercialize, market or distribute any Material Product, or (iii) would reasonably be expected to have a Material Adverse Effect.

4.9

Financial Statements.

(a)

The Borrower has filed with the SEC (i) the audited consolidated balance sheets of the Borrower as of December 31, 2015, 2014 and 2013, in each case with the related statements of income, cash flows and stockholders’ equity for the fiscal years then ended, together with the opinion of an independent certified public accounting firm thereon, and (ii) the unaudited consolidated balance sheet of the Consolidated Entities as of June 30, 2016 and the related statements of income, cash flows and stockholders’ equity for the six-month period then ended. Such financial statements fairly present, in all material respects, the financial position, assets and liabilities of the Consolidated Entities for the respective periods then ended in accordance with GAAP.

(b)

Each Credit Party is Solvent.

4.10

No Material Adverse Effect. Since December 31, 2015, there has been no Material Adverse Effect and there exists no event, condition or state of facts that would reasonably be expected to result in a Material Adverse Effect.

4.11

Capitalization; Subsidiaries.  Schedule 4.11 of the Disclosure Letter sets forth

4.12

Laws and Taxes.

(a)

Each Consolidated Entity is in compliance with all laws, regulations, rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon such Credit Party by any law or by any Governmental Authority, except where the failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect. Each Consolidated Entity is in compliance in all material respects with all applicable material Regulatory Approvals.

(b)

Each Consolidated Entity has filed all required federal income tax returns and reports that are now required to be filed by it, and all other tax returns (including state, local and foreign tax returns) that are required to be filed by it in connection with any material tax, duty or charge levied, assessed or imposed upon such Person or its assets, including any material unemployment, social security, and real estate taxes. Each Consolidated Entity has paid all federal income Taxes and all other material Taxes (including material state, local and foreign Taxes) now due and payable other than any Tax that is being diligently contested in good faith for which adequate reserves have been established in accordance with GAAP. There is no ongoing audit or examination or, to the knowledge of any Credit Party, other investigation by any Governmental Authority of any material tax liability of any Consolidated Entity, and there is no material unresolved claim by any Governmental Authority concerning the tax liability of any Consolidated Entity for any period for which tax returns have been or were required to have been filed, other than claims for which adequate reserves have been established in accordance with GAAP.  No Consolidated Entity has waived or extended or has been requested to waive or extend the statute of limitations relating to the payment of any taxes.  Proper and accurate amounts have been withheld by each Consolidated Entity from their respective employees for all periods in all material respects with the Tax, social security and unemployment withholding provisions of applicable laws and such withholdings have been timely paid to the respective Governmental Authorities. No Consolidated Entity has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) or has been a member of an affiliated, combined or unitary group other than the group of which a Consolidated Entity is the common parent.

4.13

Environmental Compliance. The Borrower has not generated, used, released, treated, disposed of or stored Hazardous Materials, or otherwise located, in, on or under any property owned, leased or operated by any Consolidated Entity or any portion thereof except in material compliance with all applicable laws, and, to the Borrower’s knowledge, no part of the property owned, leased or operated by any Consolidated Entity (now or in the past), including the soil and groundwater located thereon and thereunder, has been contaminated by any Hazardous Material.  To the knowledge of Borrower, no property owned, leased or operated by

4.14

Ownership of Properties. As of the Effective Date, no Consolidated Entity owns any real property. Each Consolidated Entity (i) holds interests as lessee under valid leases in full force and effect with respect to all material leased real and personal property used in connection with its business and (ii) has good title to all of its other material properties and assets reflected in the financial statements referred to in Section 4.9 (except as sold or otherwise disposed of since the date thereof in the ordinary course of business), in each case free and clear of all Liens other than Permitted Liens. Schedule 4.14 of the Disclosure Letter lists, as of the date hereof, all real property leased and/or licensed by any Credit Party, indicating in each case the identity of the owner, the address of the property, the nature of use of the premises and the nature of such interest (including whether such interest is a license or leasehold).

4.15

Intellectual Property. Each Consolidated Entity owns, or has the right to use, all Intellectual Property reasonably necessary for it to conduct its business as currently conducted or to commercialize, market or distribute any Material Product (including Heplisav-B Units upon FDA Approval). Except as disclosed in the Form 10-K filed by the Borrower for the fiscal year 2015, No claim has been asserted or is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does any Credit Party know of any such claim, and, to the knowledge of each Credit Party, the use of such Intellectual Property by does not infringe on the rights of any Person.

4.16

Insurance. The assets, properties and business of the Credit Parties are insured against such hazards and liabilities, under such coverages and in such amounts, as are customarily maintained by prudent companies similarly situated and under policies issued by insurers of recognized responsibility.

4.17

Material Contracts. To the knowledge of the Borrower, each Material Contract is in full force and effect and is enforceable by each Consolidated Entity that is a party thereto in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws, statutes or rules of general application affecting the enforcement of creditor’s rights or general principles of equity, and no Consolidated Entity or, to the knowledge of any Consolidated Entity, any other party thereto is in material breach of or default under any Material Contract or has given notice of termination or cancellation of any Material Contract.

4.18

ERISA.

(a)

The Borrower and each member of the Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan in all material respects. The Borrower and each member of the Controlled Group are in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to the maintenance and operation of each Plan, and have not incurred any material liability to the PBGC or a Plan under Title IV of ERISA with respect to any Plan.

(b)

Neither the Borrower nor any member of the Controlled Group has incurred any withdrawal liability with respect to any Multiemployer Plan under Title IV of ERISA, and no such liability is reasonably expected to be incurred.

(c)

Neither the Borrower nor any member of the Controlled Group has participated in a non-exempt prohibited transaction, as defined in Section 406 of ERISA or Section 4975(c) of the Code with respect to any Plan, which is reasonably expected to subject the Borrower to any material civil penalty under ERISA or material tax under the Code.

4.19

Labor Relations. No Consolidated Entity is engaged in any unfair labor practice within the meaning of the National Labor Relations Act of 1947. There is (i) no unfair labor practice complaint before the National Labor Relations Board, or grievance or arbitration proceeding arising out of or under any collective bargaining agreement, pending or, to the knowledge of any Credit Party, threatened, against any Consolidated Entity; (ii) no strike, lock- out, slowdown, stoppage, walkout or other labor dispute pending or, to the knowledge of any Credit Party, threatened, against any Consolidated Entity; (iii) to the knowledge of any Credit Party, no petition for certification or union election or union organizing activities taking place with respect to any Consolidated Entity; and (iv) no collective bargaining agreement or Multiemployer Plan covering the employees of any Consolidated Entity.

4.20

No Default.  No Default has occurred and is continuing.

4.21

OFAC; Anti-Terrorism Laws.

(a)

None of the Borrower, any Subsidiary of the Borrower or, to the knowledge of the Borrower, any Affiliate of the Borrower (i) is a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned Countries or (iii) derives more than 10% of its operating income from investments in, or transactions with, Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any Note hereunder will be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.

(b)

Each Consolidated Entity is in compliance in all material respects with the PATRIOT Act. No part of the proceeds of the Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

5.1

Financial and Business Information.  Deliver to the Purchasers:

(a)

Within 45 days after the close of each fiscal quarter (excluding the last fiscal quarter of each fiscal year) of the Borrower commencing with the fiscal quarter ending September 30, 2016, a consolidated balance sheet of the Consolidated Entities as of the close of such fiscal quarter and consolidated statements of income and cash flows for the Borrower for the fiscal quarter then ended and for that portion of the fiscal year then ended, including the notes to each, all in reasonable detail setting forth in comparative form the corresponding figures for the corresponding period or periods of (or in the case of the balance sheet, as of the end of) the preceding fiscal year, certified by the Borrower’s chief or other most senior financial officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject only to audit and year-end adjustments and the absence of footnotes;

(b)

Within 90 days after the close of each fiscal year of the Borrower, an audited consolidated balance sheet of the Borrower as of the close of such fiscal year and audited consolidated statements of income and cash flows for the Borrower for the fiscal year then ended, including the notes to each, all in reasonable detail setting forth in comparative form the corresponding figures for the preceding fiscal year, accompanied by a report thereon by such certified public accountant containing an opinion that is not qualified with respect to scope limitations imposed by the Borrower to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; and

(c)

Within a reasonable time, upon any Purchaser’s request, such other information about the financial condition and operations of the Consolidated Entities as the Purchasers may from time to time reasonably request.

5.2

Notice of Certain Events.

(a)

Promptly upon obtaining knowledge thereof, give notice in writing to the Purchasers of:

(i)

Any Default;

(ii)

The occurrence of any circumstance, event or condition that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect;

(iii)

All claims, litigation, arbitration, or administrative or regulatory proceedings that are instituted or threatened against any Consolidated Entity and of a type that would need to be reported in a Form 8-K, 10-K or 10-Q filed with the SEC pursuant to the Securities Act or any written notice of alleged infringement received by any Credit Party related to material Intellectual Property of any Credit Party;

(iv)

The receipt of any complaint, notifications or other material correspondence from any Regulatory Agency in the United States, limiting, suspending or revoking any Regulatory Approval or otherwise materially restricting the manufacture or sale of any Material Product;

(v)

The creation by any Consolidated Entity of any Excluded Foreign Subsidiary; or

(vi)

Any circumstance, event or condition that has resulted in, or would reasonably be expect to result in, (A) within the United States a recall of any Material Product or (B) a material default or event of default under, or the termination or cancellation outside the ordinary course of business of, any Material Contract.

(b)

The Borrower shall give notice in writing to the Purchasers of any Major Transaction at least 20 Business Days prior to the anticipated effective date for such Major Transaction, which notice shall provide reasonable detail with respect to the terms of the transactions pursuant to which such Major Transaction is to be effected; provided, that if such Major Transaction is not publicly announced in time for the Borrower to comply with the foregoing notice requirement, the Borrower shall give the Purchasers notice of such Major Transaction no later than two days following the public announcement thereof but in no event less than 10 calendar days prior to the effective date of such Major Transaction.

(c)

The Borrower shall (i) with respect to each fiscal quarter in which it achieves a Reduction Milestone as described in Section 6.10 or has Net Sales of at least $25,000,000 for two consecutive fiscal quarters such that it does not have to comply with Section 6.10, include such information in the 10-Q or 10-K, as applicable, filed by the Borrower with the SEC with respect to such fiscal quarter, and (ii) with respect to each Event of Default due to a failure to

(d)

Notwithstanding anything set forth above to the contrary, if any notice required to be furnished pursuant to this Agreement other than a notice required to be furnished pursuant to Section 5.2(a)(i) contains material non-public information (any such notice, a “MNPI Notice”), the Borrower, instead of delivering such MNPI Notice to all the Purchasers, shall promptly deliver such MNPI Notice to each Purchaser that is not a Restricted Purchaser and promptly notify each Restricted Purchaser in writing or orally that the Borrower desires to deliver to such Restricted Purchaser a MNPI Notice. Within five Business Days of receipt of such notification, the Restricted Purchaser may either (i) refuse the delivery of such MNPI Notice, in which case the Borrower’s obligations under this Agreement with respect to such MNPI Notice and such Restricted Purchaser shall be deemed satisfied, or (ii) enter into good faith negotiations with the Borrower to agree the time period within which the Borrower will make the material non-public information contained in such MNPI Notice publicly available by including such information in a filing with the SEC. If the Borrower and such Restricted Purchaser agree on such time period, the Borrower shall promptly deliver to such Restricted Purchaser such MNPI Notice and shall include the applicable material non-public information in a public filing with the SEC within such agreed to time period. The failure to agree on such time period will be deemed to satisfy Borrower’s obligations under this Section 5.2(d) with respect to such MNPI Notice and such Restricted Purchaser.

5.3

Existence; Maintenance of Properties. (i) Except as permitted under Section 6.1, maintain and preserve in full force and effect its legal existence, its good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be, and its qualification to do business in every other jurisdiction where the nature of its business or its properties makes such qualification necessary (except where the failure to be so qualified or licensed could not reasonably be expected to have a Material Adverse Effect); and (ii) maintain all material tangible properties in good working order and condition (normal wear and tear and damage by casualty excepted) and from time to time make all necessary repairs to and renewals and replacements of such properties, except to the extent that any of such properties are obsolete or are being replaced or, in the good faith judgment of the Borrower, are no longer useful or desirable in the conduct of the business.

5.4

Compliance with Law. (i) Comply with all material federal, state, local and foreign laws, regulations and orders applicable to any Credit Party or its assets, including all Environmental Laws, (ii) obtain and maintain any and all material licenses, permits, franchises, Governmental Authorizations, Intellectual Property or other rights necessary for the ownership of its properties and the advantageous conduct of its business and as may be required from time to time by applicable law and (iii) maintain each material Regulatory Approval necessary to sell a Material Product within the United States, except in the case of (i) or (ii) where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

5.5

Payment of Obligations. (i) Pay, discharge or otherwise satisfy at or before maturity all liabilities and obligations as and when due (subject to any applicable subordination,

5.6

Maintenance of Books and Records; Inspection. Maintain proper books of accounts and records and enter therein complete and accurate entries and records of all of its transactions in accordance with GAAP and give representatives of the Purchasers access thereto during normal business hours upon not less than five Business Days’ notice (but no more than once annually unless an Event of Default has occurred and is continuing), including permission to (i) examine, copy and make abstracts from any such books and records or other information reasonably requested by any Purchaser from time to time and (ii) communicate directly with any Consolidated Entity’s officers or accountants with respect to the business, financial conditions and other affairs of any Consolidated Entity.

5.7

Maintenance of Insurance.  At its own cost, obtain and maintain insurance against

5.8

ERISA.

(a)

Comply in all material respects with ERISA and the Code and the regulations and requirements of the PBGC with respect to the maintenance and operation of each Plan, except where the necessity of such compliance is being contested in good faith through appropriate proceedings.

(b)

Make timely payment of contributions required to meet the minimum funding standards set forth in ERISA and the Code with respect to any Plan, and not take any action or fail to take action the result of which action or inaction could be a material liability for the

5.9

Creation or Acquisition of Subsidiaries. If the Borrower or any of its Subsidiaries at any time creates or acquires a Subsidiary (other than an Excluded Foreign Subsidiary) or if any Excluded Foreign Subsidiary fails to qualify as such any time after its creation or acquisition:

(a)

As promptly as practicable after (and in any event within 30 days (or 90 days in the event of a Foreign Subsidiary) or in either case such later date as may be agreed upon by the Collateral Agent, after) the creation or direct or indirect acquisition by the Borrower thereof or failure thereof to so qualify, (i) each such Subsidiary will execute and deliver to the Collateral Agent and the Purchasers (A) a joinder to the Guaranty in form and substance satisfactory to the Collateral Agent (B) a joinder to the Security Agreement in form and substance satisfactory to the Collateral Agent and (C) a Mortgage with respect to any owned interests of such Subsidiary in real property having a fair market value in excess of $1,000,000 and (ii) the Borrower will, or will cause the parent Subsidiary that owns the Capital Stock of such Subsidiary to, execute and deliver to the Collateral Agent an amendment or supplement to the Security Agreement pursuant to which all of the Capital Stock of such Subsidiary shall be pledged to the Collateral Agent, together with the certificates, if any, evidencing such Capital Stock, along with undated stock powers duly executed in blank;

(b)

As promptly as practicable after (and in any event within 30 days (or 90 days in the event of a Foreign Subsidiary) or in either case such later date as may be agreed upon by the Collateral Agent, after) the creation or direct or indirect acquisition by the Borrower thereof or failure thereof to so qualify, the Borrower will deliver to the Collateral Agent and the Purchasers:

(i)

a written legal opinion of counsel to such Subsidiary addressed to the Collateral Agent and the Purchasers, in form and substance reasonably satisfactory to the Collateral Agent;

(ii)

(A) a copy of the articles or certificate of incorporation, certificate of formation or other organizational document of such Subsidiary, certified as of a date that is acceptable to the Collateral Agent by the Secretary of State (or comparable Governmental Authority) of its jurisdiction of organization, (B) a copy of the bylaws, operating agreement or similar governing document of such Subsidiary, certified on behalf of such Subsidiary as of a date that is reasonably acceptable to the Collateral Agent by the secretary or an assistant secretary of such Subsidiary, (C) an original certificate of good standing (or equivalent certification if available in the case of a Subsidiary that is organized in a jurisdiction outside the United States) for such Subsidiary issued by the Secretary of State (or comparable Governmental Authority) of its jurisdiction of organization and (D) copies of resolutions adopted by the board of directors (or similar governing body) of such Subsidiary authorizing the execution, delivery and performance of the agreements, documents and instruments executed

(iii)

a report of Uniform Commercial Code financing statement, tax and judgment lien searches (or equivalent searches to the extent available for jurisdictions outside the United States) performed against such Subsidiary in each jurisdiction in which such Subsidiary is incorporated or organized, has a place of business or maintains any assets, which report shall show no Liens on its assets (other than Permitted Liens);

(iv)

a certificate of the secretary or an assistant secretary (or equivalent officer) of such Subsidiary as to the incumbency and signature of the officers executing agreements, documents and instruments executed pursuant to Sections 5.9(a) and 5.9(b);

(v)

a certificate, executed by an authorized officer of the Borrower, in form and substance satisfactory to the Collateral Agent, that no Default or Event of Default shall exist immediately before or after the creation or acquisition of such Subsidiary or be caused thereby; and

(vi)

a certificate executed by the secretary or an assistant secretary of each of the Borrower and such Subsidiary, which shall constitute a representation and warranty by the Borrower and such Subsidiary as of the date of the creation or acquisition of such Subsidiary that all conditions contained in this Agreement and each other Credit Document to such creation or acquisition have been satisfied, in form and substance reasonably satisfactory to the Collateral Agent;

(c)

Notwithstanding the foregoing provisions of this Section 5.9, (i) no Excluded Foreign Subsidiary (and no Subsidiary of any Excluded Foreign Subsidiary) will be required to become a Subsidiary Guarantor, and (ii) no Subsidiary will be required to pledge Capital Stock of an Excluded Foreign Subsidiary to the extent that such pledge would (A) exceed 65% of the total combined voting power of all outstanding classes of Capital Stock of such Excluded Foreign Subsidiary entitled to vote within the meaning of Section 1.956-2(c)(2) of the United States Treasury Regulations (for clarity, such Subsidiary would be required to pledge 100% of the outstanding non-voting Capital Stock of such Excluded Foreign Subsidiary but such Subsidiary would not be required to pledge, or cause to be pledged, any Capital Stock of any Subsidiary of any Excluded Foreign Subsidiary) or (B) result in any breach of the laws or regulations (or analogous restrictions) of any applicable jurisdiction or any similar principles which may limit the pledge of an Excluded Foreign Subsidiary’s Capital Stock.

(d)

Notwithstanding anything in this Agreement or the other Credit Documents, with respect to any real property acquired after the Effective Date and requiring a Mortgage pursuant to Section 5.9(a), the Credit Parties shall have 90 days after the acquisition of the applicable real property (or such later date as may be agreed upon by the Collateral Agent in the exercise of its reasonable discretion with respect thereto) to take the actions required by Section 5.9(a).

5.10

Heplisav-B Launch. Cause the Heplisav-B Launch to occur within 90 days of obtaining the FDA Approval.

5.11

OFAC, PATRIOT Act Compliance. Refrain from doing business in a Sanctioned Country or with a Sanctioned Person in violation of the economic sanctions of the United States administered by OFAC and provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Purchasers in order to assist the Purchasers in maintaining compliance with the PATRIOT Act.

5.12

Legend Removal. With respect to each applicable Purchaser, if the Borrower has paid any of the Approval Fee Amount by delivering shares of Common Stock pursuant to Section 2.4(b)(ii), within five Business Days after either (x) the six-month anniversary of the Purchase Date or (y) if on such six-month anniversary there is not then adequate current public information available with respect to the Borrower as required under Rule 144(c)(1) of the Securities Act, the one-year anniversary of the Purchase Date, deliver to each such Purchaser delegended certificates for all shares of Common Stock issued to such Purchaser under Section 2.4(b)(ii); provided, that no such delegended certificates are required to be delivered to a Purchaser unless such Purchaser has (a) delivered to the Borrower a letter representing that (i) such Purchaser is not, and has not been within the three months prior to six-month anniversary or one-year anniversary, as applicable, of the Purchase Date, an “affiliate” of the Borrower, as that term is defined in Rule 144(a)(1) and (ii) such Purchaser acquired its Notes from the Borrower on the Purchase Date; (b) delivered to the Borrower the original stock certificate(s) to be delegended; and (c) provided an instruction or transfer notice, as applicable, to the Borrower and transfer agent for the Common Stock, setting forth the DTC account information necessary (including the name, account number and contact information of the DTC participant receiving delegended Common Stock) to transfer shares of Common Stock to such Purchaser or its custodian on its behalf, and signed by such Purchaser with a medallion signature guarantee if required by the transfer agent for the Common Stock; provided, further that each Purchaser receiving delegended certificates of Common Stock acknowledges that, notwithstanding the fact that it has received such delegended certificates, it will only sell the related Common Stock pursuant to the registration requirements of the Securities Act or pursuant to a valid exemption therefrom. For the avoidance of doubt, the Consolidated Entities shall not be subject to the provisions of this Section 5.12 if the Borrower has not paid the Approval Fee Amount by delivering shares of Common Stock pursuant to Section 2.4(b)(ii).

5.13

Further Assurances. Execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further assurances and other agreements or instruments, and take or cause to be taken all such other action, as shall be reasonably necessary from time to time to give full effect to the Credit Documents and the transactions contemplated thereby. Notwithstanding anything to the contrary herein or in any other Credit Document, no Credit Party shall have any obligation to (A) enter into control agreements with respect to any security interest or lien in any Excluded Deposit Account or Excluded Securities Account (each as defined in the Security Agreement), (B) perfect any security interest or lien in any intellectual property in any jurisdiction other than in the United States, (C) to obtain any landlord waivers, estoppels or collateral access letters (other than with regards to the corporate headquarters of the Borrower or to the extent required pursuant to Section 4.7 of the Security Agreement), provided that no such waiver, estoppel or collateral access letter shall be required if, after using commercially reasonable efforts, the Credit Party are unable to obtain such waiver, estoppel or collateral access letter, (D) perfect a security interest in any letter of credit rights, other than the filing of a UCC financing statement, (E) deliver any leasehold mortgages with regards to leased

5.14

Post-Closing Obligations. The Borrower will use commercially reasonable efforts to deliver to the Collateral Agent (in form and substance reasonably satisfactory to the Collateral Agent), as soon as practicable following the Effective Date, but in any event not later than the dates set forth below (it being understood and agreed that the Collateral Agent, in its sole discretion, may extend the time period allowed for delivery of any such item):

6.1

Liquidate; Merger. Liquidate, or merge or consolidate with any Person, except that (i) any Consolidated Entity that is not a Credit Party may liquidate or dissolve and any Credit Party (other than the Borrower) may liquidate or dissolve into another Credit Party,

6.2

Indebtedness. Directly or indirectly issue, assume, create, incur or suffer to exist any Indebtedness, except for:

(i)

Indebtedness of the Credit Parties in favor of the Collateral Agent and the Purchasers incurred under the Credit Documents;

(ii)

Indebtedness existing as of the date hereof and described in Schedule 6.2

(iii)

Capital Lease Obligations and purchase money Indebtedness of the Borrower or any Subsidiary thereof incurred solely to finance the acquisition, installation, construction or improvement of any equipment, real property or other fixed assets (and any renewals, replacements, refinancings or extensions thereof); provided that all such Indebtedness does not exceed $2,000,000 in aggregate principal amount outstanding at any time;

(iv)

Indebtedness of the Borrower and Subsidiary Guarantors for borrowed money to a Person that is not an Affiliate of a Consolidated Entity under a working capital or revolving credit facility (the “A/R Facility”) that is secured solely by accounts receivables and supporting obligations, and books and records relating to accounts receivables, of the Consolidated Entities (and the products and proceeds thereof); provided, that (A) each provider of such Indebtedness shall have entered into an intercreditor agreement with the Collateral Agent on terms reasonably satisfactory to the Collateral Agent, (B) the maximum aggregate commitment under such A/R Facility does not exceed an amount that, when multiplied by the per annum interest rate applicable thereto measured at the time of entry into the A/R Facility (or any increase in commitment amount), would equal $5,000,000, and (C) the aggregate principal amount outstanding at any time under the A/R Facility does not exceed the lesser of (1) 75% of the account receivables of the Credit Parties (determined on a consolidated basis in accordance with GAAP) and (2) an amount that, when multiplied by the per annum interest rate applicable thereto at such time, would equal $6,000,000;

(v)

unsecured Indebtedness of the Borrower in the form of senior subordinated convertible notes; provided, that (A) such Indebtedness does not have a maturity date, or provide for any scheduled payment of principal (or scheduled redemption date), earlier than 180 calendar days after the Maturity Date, (B) such Indebtedness shall be subject to Customary Subordination Terms, and (C) the aggregate principal amount outstanding at any time under such Indebtedness does not exceed an amount that, when multiplied by the per annum cash interest rate applicable thereto at such time, would equal $10,000,000 (the “Convertible Notes”);

(vi)

Indebtedness of the Borrower or any Subsidiary under Hedge Agreements entered into in the ordinary course of business to manage existing or anticipated interest rate or foreign currency risks and not for speculative purposes;

(vii)

Indebtedness of the Borrower or any Subsidiary thereof incurred in the ordinary course of business in respect of (A) performance, bid and surety bonds and completion guarantees, or (B) surety (or similar) bonds, letters of credit and performance bonds obtained solely in connection with workers’ compensation obligations of the Consolidated Entities;

(viii)

unsecured loans and advances (A) by the Borrower or any Subsidiary to any Subsidiary Guarantor, (B) by any Subsidiary to the Borrower and (C) by any Credit Party to any Subsidiary that is not a Credit Party; provided, that in the case of this clause

(ix)

ACH Indebtedness and Indebtedness owed in respect of business credit card programs and any netting services, overdrafts and related liabilities arising from treasury, depository and cash management services;

(x)

Indebtedness consisting of (i) the financing of insurance premiums with the providers of such insurance or their affiliates or (ii) take-or-pay obligations contained in supply agreements, in each case, in the ordinary course of business;

(xi)

Indebtedness incurred in connection with judgments, decrees, attachments or awards that do not constitute an Event of Default;

(xii)

guarantees of Indebtedness otherwise permitted hereunder;

(xiii)

Indebtedness of Subsidiaries that are not Subsidiary Guarantors not to exceed $1,000,000 in aggregate principal amount (calculated, with respect to each incurrence of Indebtedness under this clause (xiii), using the principal amount of Indebtedness at the time of entry into such Indebtedness and without regard to currency and exchange rate fluctuations) outstanding at any time;

(xiv)

letters of credit, banker’s acceptances and other similar instruments incurred in the ordinary course of business, which may be secured by cash and Cash Equivalents, not to exceed $1,500,000 in aggregate principal amount outstanding at any time (calculated, with respect to each incurrence of Indebtedness under this clause (xiv), using the principal amount of Indebtedness at the time of entry into such Indebtedness and without regard to currency and exchange rate fluctuations); and

(xv)

Any Deferred Acquisition Consideration incurred in connection with a Permitted Acquisition.

6.3

Liens and Encumbrances. Create, assume or suffer to exist any Lien in or on any of its property, real or personal, whether now owned or hereafter acquired, except for (collectively, the “Permitted Liens”):

(i)

Liens in favor of the Collateral Agent or the Purchasers created by or otherwise existing under or in connection with the Credit Documents;

(ii)

Liens in existence as of the date hereof and set forth on Schedule 6.3 of the Disclosure Letter;

(iii)

Liens securing Indebtedness permitted under Section 6.2(iii); provided that (A) the amount of the Indebtedness secured by such Lien shall not exceed 100% of the cost to the Consolidated Entities of acquiring, constructing, installing and/or improving the property and any other assets then being financed solely by the same

(iv)

Liens securing Indebtedness permitted under Section 6.2(iv); provided that any (A) such Lien shall attach only to the accounts receivables and supporting obligations, and books and records relating to accounts receivables of the Credit Parties (and the products and proceeds thereof), and (B) the Collateral Agent shall have a second-priority lien on all such accounts receivables and books and records (and the products and proceeds thereof);

(v)

Liens imposed by mandatory provisions of law of landlords, carriers, warehousemen, bailees, mechanics and materialmen incurred in the ordinary course of business for sums that are (A) not yet more than 30 days past due or (B) being contested in good faith by appropriate proceedings;

(vi)

Liens (other than those imposed by ERISA) incurred in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, insurance, surety bonds, or other obligations of a like nature or to secure the performance of letters of credit, banker’s acceptances, bids, tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business;

(vii)

Liens for current taxes, assessments or other governmental charges that are not delinquent or remain payable without any penalty or that are being contested in good faith and with due diligence by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP;

(viii)

Liens of judgments, execution, attachment or similar process that do not constitute an Event of Default under Section 7.1(j);

(ix)

(A) customary banker’s liens and rights of setoff, revocation, refund or chargeback under deposit agreements with financial institutions where any Credit Party maintains deposits or investments in the ordinary course of business, and (B) customary Liens incurred to secure ACH Indebtedness, business credit card programs, and netting services, overdrafts and related liabilities arising from treasury, depositary and cash management services;

(x)

Liens arising under Article 4 of the UCC on items in collection and documents and proceeds related thereto;

(xi)

with respect to any real property owned or occupied by any Credit Party,

(xii)

Liens on insurance policies, premiums and proceeds thereof, or other deposits, to secure insurance premium financings with respect to unearned premiums and other liabilities to insurance carriers;

(xiii)

Liens on specific items of inventory or other goods (and the proceeds thereof) of the Consolidated Entities securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(xiv)

Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(xv)

Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(xvi)

Liens in the nature of the right of setoff in favor of customers, suppliers and service providers to contractual agreements with the Consolidated Entities in the ordinary course of business;

(xvii)

Liens on processing or manufacturing equipment or inventory of the Consolidated Entities granted in the ordinary course of business to the Consolidated Entities’ supplier at which such equipment or inventory is located;

(xviii)

any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture, minority investment or similar arrangement otherwise permitted hereunder pursuant to any joint venture, shareholders, investor rights or similar agreement;

(xix)

ground leases in respect of real property on which facilities owned or leased by any of the Consolidated Entities are located and other Liens affecting the interest of any landlord (and any underlying landlord) of any real property leased by any Consolidated Entity;

(xx)

any interest or title of a lessor or licensor under any lease, sublease, license or sublicense entered into by any Consolidated Entity (A) existing on the date hereof (but not created in contemplation hereof), (B) entered into in the ordinary course of its business, or (C) entered into in connection with an Investment permitted pursuant to Section 6.6;

(xxi)

Liens on deposits or other amounts held in escrow to secure payments (contingent or otherwise) payable by any Consolidated Entity with respect to (A) the settlement, satisfaction, compromise or resolution or judgments, litigation, arbitration or other disputes, and (B) any commercial contracts for manufacturing, production and other service arrangements entered into in the ordinary course of business;

(xxii)

Liens and other credit support provided in respect of Indebtedness permitted under Section 6.2(vi); provided, that any such Lien shall attach only to cash and Cash Equivalents;

(xxiii)

Liens securing Indebtedness permitted under Section 6.2(xiv); provided that any such Lien shall attach only to the cash and Cash Equivalents of the Consolidated Entities pledged to secure such Indebtedness;

(xxiv)

Liens on assets of Subsidiaries that are not Subsidiary Guarantors securing Indebtedness permitted under Section 6.2(xiii);

(xxv)

leases, subleases, licenses or sublicenses granted to third Persons permitted by Section 6.4 (other than Section 6.4(vi)); and

(xxvi)

Liens (i) consisting of deposits or advances made by any Consolidated Entity in connection with any letter of intent or purchase agreement in respect of any Permitted Acquisition or Investment permitted under this Agreement or (ii) consisting of an option or agreement to dispose of any property permitted to be sold pursuant to this Agreement;

6.4

Asset Disposition. Sell, license, assign, lease, convey, transfer or otherwise dispose any of its assets, business or other properties (including Capital Stock of any Subsidiary of the Borrower), except for:

(i)

sales of inventory and the sale or discount of accounts receivables or notes receivables in the ordinary course of business;

(ii)

non-exclusive licenses in the ordinary course of business;

(iii)

(A) licenses (which may be exclusive) in a particular geography outside of the United States to sell or commercialize Heplisav-B, (B) licenses, which may be exclusive, to manufacture any drug or product and (C) licenses, which may be exclusive, to sell, manufacture, co-develop or commercialize pharmaceutical products or programs other than Heplisav-B;

(iv)

licenses or sublicenses granted by any Consolidated Entity to sell or commercialize Heplisav-B in the United States for which a majority of the reasonably expected value of the consideration to be received by the Consolidated Entities is in the form of periodic payments based on per unit sales of Heplisav-B over a period of time; provided, that such license or sublicense does not effect a legal transfer of title to any Intellectual Property rights and such license or sublicense is a true license as opposed to a license or sublicense that is a sales transactions in substance;

(v)

sales, licenses, assignments, leases, conveyances, transfers or other dispositions to a Credit Party and from any Subsidiary that is not a Credit Party to any other Consolidated Entity;

(vi)

Permitted Liens;

(vii)

dispositions of damaged, expired, short-dated, worn-out or obsolete equipment, inventory or assets in the ordinary course of business;

(viii)

leases, subleases, licenses or sublicenses granted to third Persons in the ordinary course of business that do not interfere in any material respect with the business of the Consolidated Entities;

(ix)

dispositions of cash and Cash Equivalents;

(x)

any surrender or waiver of contract rights or the settlement, release or surrender of claims in the ordinary course of business;

(xi)

the abandonment of intellectual property rights in the ordinary course of business;

(xii)

the unwinding, settlement or termination of any obligations or rights under or in respect of any Hedging Agreements;

(xiii)

the issuance or sale of Capital Stock by any Subsidiary to any Credit Party or any Wholly Owned Subsidiary of a Credit Party;

(xiv)

any Investment specifically permitted under Section 6.6 and any Restricted Payment specifically permitted under Section 6.7;

(xv)

foreclosures, condemnation, expropriation or any similar action on assets of Borrower or any of its Subsidiaries;

(xvi)

the sale, assignment, conveyance, transfer or other disposition of any Investment that (A) is a joint venture made pursuant to customary buy/sell arrangements between the joint venture parties set forth in the related joint venture arrangements and

(xvii)

a sale, license, assignment, lease, conveyance, transfer or other disposition of assets with a fair market value of less than or equal to $1,000,000 in any single transaction or series of related transactions; provided, that the aggregate fair market value of all such assets sold, licensed, assigned, leased, conveyed, transferred or otherwise disposed of since the Effective Date is less than $5,000,000.

6.5

Transactions with Foreign Subsidiaries. (i) Other than transactions that are at prices and on terms and conditions not less favorable than could be obtained on an arm’s-length basis from unrelated third parties, with respect to a Credit Party, enter into any transaction with a Foreign Subsidiary pursuant to the terms of which such Credit Party transfers, or is obligated at any time to transfer, cash or assets to such Foreign Subsidiary, except as permitted by

6.6

Investments. Purchase, own, invest in or otherwise acquire, directly or indirectly, any Indebtedness or Capital Stock of any other Person, or purchase or otherwise acquire or license any portion of the assets, business or properties of another Person, or make or permit to exist any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any Person (collectively, “Investments”), except for:

(i)

Investments consisting of cash and Cash Equivalents;

(ii)

Investments consisting of the extension of trade credit, the creation of prepaid expenses, payroll and travel advances, and the purchase of inventory, supplies, equipment and other assets, and licenses not described in clause (z) of Section 6.6(xiii), in each case by the Consolidated Entities in the ordinary course of business;

(iii)

Investments of the Borrower or any Subsidiary under Hedge Agreements entered into in the ordinary course of business to manage existing or anticipated interest rate or foreign currency risks and not for speculative purposes;

(iv)

Investments existing as of the date hereof in Subsidiaries;

(v)

Investments made after the date hereof in Credit Parties and by any Subsidiary that is not a Credit Party to any other Subsidiary that is not a Credit Party;

(vi)

Investments made after the date hereof by Credit Parties in any Subsidiary that is not a Credit Party made after the Effective Date in an aggregate amount not exceeding for all such Investments (A) $5,000,000 in any fiscal year or (B) $20,000,000 at any time after the date hereof;

(vii)

upfront payments made in connection with a Heplisav-B In License;

(viii)

guarantees permitted under Section 6.2(xii);

(ix)

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

(x)

Investments consisting of capped call, call option and other equity derivative transactions entered into at the same time as, and in connection with, the offering of the Convertible Notes;

(xi)

Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

(xii)

Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;

(xiii)

any transaction or series of related transactions by which the Borrower or any of the Credit Parties (x) acquires all or substantially all of the assets of a Person or

(A)

no Default or Event of Default then exists or would result therefrom;

(B)

all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws;

(C)

if such transaction or series of related transactions involves an acquisition of the Capital Stock of a Person, (x) such Person shall not be organized in a jurisdiction outside the United States, and (y) the Borrower shall comply with Section 5.9 within the time periods specified therein;

(D)

any rights to sell or commercialize a pharmaceutical product acquired in such transaction or series of transactions (whether acquired via a license, an acquisition of assets or an acquisition of Capital Stock) shall primarily relate to the sale, research, development or commercialization of a pharmaceutical product in the United States;

(E)

the Consolidated Entities shall be in compliance with the covenants set forth in Section 6.9 and Section 6.10 on a pro forma basis after giving effect to such transactions (with pro forma compliance of Section 6.9 being determined (1) as of the date of the last financial statements filed by the Borrower with the SEC or delivered pursuant to Section 5.1, (2) as if any EBITDA of the target company, division or product line acquired in such transaction was included in EBITDA of the Borrower for the applicable Test Period, and (3) as if Cash Interest Expense for the applicable Test Period included any Cash Interest Expense with respect to any Indebtedness incurred in connection with such transactions as if such Indebtedness was incurred on the first day of such Test Period (and if such Indebtedness is a floating or formula rate, such Indebtedness shall, for purposes of such determination, have an implied rate of interest during the applicable Test Period determined by utilizing the rate of interest that is or would be in effect with respect to such Indebtedness as of the date of determination);

(F)

the aggregate consideration paid or payable in connection with such transaction, including the amount of Deferred Acquisition Consideration required to be shown as a liability on the consolidated balance sheet of the Borrower and a reasonable estimate of any other Deferred Acquisition Consideration, (1) shall not exceed 10% of the Borrower’s Market Capitalization

(G)

an authorized officer of the Borrower has delivered to the Collateral Agent prior to the effectiveness of such transaction or prior to the effectiveness of the first of such series of related transactions, as applicable, a written certificate signed by such officer certifying that the conditions specified in clause (A) through (F) of this Section 6.6(xiii) have been satisfied with respect to such transaction or series of related transactions;

(xiv)

Investments made as a result of the receipt of non-cash consideration from any disposition of assets to third parties permitted under Section 6.4; provided that no more than 25% of the consideration for any sale, license, assignment, lease, conveyance, transfer or other disposition shall consist of non-cash consideration (other than consideration arising from the assumption of liabilities);

(xv)

Investment to the extent the consideration paid therefor consists of Qualified Capital Stock of the Borrower and Investments with the proceeds of a substantially concurrent offering of Qualified Capital Stock of the Borrower;

(xvi)

Investments of any Person in existence at the time such Person becomes a Subsidiary; provided that such Investment was not made in connection with or anticipation of such Person becoming a Subsidiary; and

(xvii)

any other Investments not to exceed $2,000,000 in aggregate principal amount outstanding at any time.

6.7

Restricted Payments.

(a)

Directly or indirectly, declare or make any dividend payment, or make any other distribution of cash, property or assets, in respect of any of its Capital Stock, or purchase, redeem, retire or otherwise acquire for value any shares of its Capital Stock, or set aside funds for any of the foregoing (collectively, “Restricted Payments”), except that:

(i)

any Consolidated Entity may declare and make dividend payments or other distributions payable solely in its Capital Stock;

(ii)

any Subsidiary of the Borrower may declare and make dividend payments or other distributions to the holders of its Capital Stock; provided that in the case of dividend or other distribution by a non-Wholly Owned Subsidiary, such dividend or distribution shall be made ratably with respect to their Capital Stock or shall be payable solely to the Credit Parties and/or Wholly Owned Subsidiaries of the Credit Parties;

(iii)

the Borrower may make cash payments in lieu of the issuance of fractional shares in connection with the exercise or conversion of warrants, options or other rights to acquire Capital Stock;

(iv)

the purchase, redemption, retirement or other acquisition for value of Capital Stock of the Borrower held by current or former officers, directors, employees or consultants of any Consolidated Entity (or their estates or beneficiaries under their estates) upon death, disability, retirement or termination of employment or alteration of employment status or pursuant to the terms of any agreement under which such Capital Stock was issued; provided, however, that the aggregate cash consideration paid for such purchase, redemption, retirement or other acquisition of such Capital Stock does not exceed $1,000,000 in any fiscal year;

(v)

(A) repurchases of Capital Stock deemed to occur upon the cash-less or net exercise of stock options, warrants or other convertible or exchangeable securities and

(vi)

purchases of Capital Stock of any Subsidiary to the extent permitted as an Investment under Section 6.4;

(vii)

the issuance of rights in connection with the adoption of a stockholders’ rights plan approved by the Borrower’s board of directors; and

(viii)

purchases of Capital Stock of the Borrower in connection with any capped call, call option or other equity derivative transactions entered into at the same time as, and in connection with, the offering of the Convertible Notes and the settlement or termination thereof.

(b)

Directly or indirectly, make any voluntary prepayment of principal on, or interest, fees or premium (if any) with respect to, the Convertible Notes, or directly or indirectly make any redemption (including pursuant to any change of control or asset disposition provision), retirement, defeasance or other acquisition for value of the Convertible Notes, or make any deposit or otherwise set aside funds for any of the foregoing purposes; except that:

(i)

the Borrower may make scheduled payments of cash interest with respect to the Convertible Notes at the non-default rate of interest (plus any additional interest payable with respect to any Convertible Notes or (x) as a remedy relating to the Borrower’s failure to comply with its reporting obligations thereunder, (y) for any such Convertible Notes failing to be freely tradable as required by the terms thereof and (z) for the restrictive legend on any such Convertible Notes failing to have been removed as required by the terms thereof, but not cash payments of interest previously accrued in- kind); provided that the amount of cash interest paid by the Borrower thereunder in any period of four consecutive fiscal quarters does not exceed $10,000,000;

(ii)

the Borrower may accrue (but may not pay in cash) other interest (including interest at the default rate);

(iii)

upon any conversion of any Indebtedness under the Convertible Notes by the holders thereof pursuant to its terms, the Borrower may pay or prepay the principal on such Indebtedness subject to such conversion, and interest with respect thereto, but only in Capital Stock of the Borrower (provided, that any fractional shares of Capital Stock of the Borrower required to be issued in connection with such conversion may be paid in cash);

(iv)

the Borrower may settle, repay, redeem or otherwise retire or acquire for value any such Indebtedness in exchange for shares of Qualified Capital Stock; provided, that on the trade date for any such exchange the Common Stock is trading at a price per share equal to or greater than the conversion price per share for such Indebtedness;

(v)

the Borrower may repurchase, redeem or otherwise retire or acquire for value any such Indebtedness with the proceeds of, in exchange for, new Indebtedness incurred pursuant to Section 6.2(v); and

(vi)

the Borrower may repurchase any such Indebtedness upon the occurrence of a Major Transaction so long as the Required Purchasers have received notice of such Major Transaction in accordance with Section 5.2(b) and the Required Purchasers shall not have required that the Borrower have prepaid the Notes in whole pursuant to Section 2.7.

6.8

Transactions with Related Persons.  Except as expressly permitted by Section 6.7(a) or Section 6.5 and Investments permitted by Section 6.6, enter into any transaction with any Affiliate, except in the ordinary course of business pursuant to the reasonable requirements of the business of the Borrower and on terms substantially no more favorable to such Affiliate than those that such Affiliate would obtain in a comparable arms-

6.9

Cash Interest Expense. Permit Cash Interest Expense for any Test Period in which the Interest Coverage Ratio is less than 1.0: 1.0 to be greater than $25,000,000.

6.10

Minimum Unrestricted Cash Balance. Permit the Unrestricted Cash, at any time during any period below, to be less than the amount set opposite such period (provided, that if Net Sales for each of the two most recent fiscal quarters for which financial statements have been filed with the SEC are at least $25,000,000, the Borrower shall have no obligation to comply with this Section 6.10):

Period (Reduction Milestones requirements below)

Minimum Unrestricted Cash

From the Purchase Date (after giving effect to the Purchase of the Notes) until the First Reduction Milestone

$70,000,000

After the First Reduction Milestone until the Second Reduction Milestone

$50,000,000

After the Second Reduction Milestone until the Third Reduction Milestone

$40,000,000

After the Third Reduction Milestone until the Fourth Reduction Milestone

$30,000,000

After the Fourth Reduction Milestone

$25,000,000

Reduction Milestone

Requirements

(with “Heplisav-B Units sold” being measured based upon Heplisav-B Units sold to end customers in the United States, as set forth on the 867 Product Transfer and Resale Reports received by the Consolidated Entities form wholesalers and distributors)

First Reduction Milestone

At least 63,000 Heplisav-B Units sold in each of two consecutive fiscal quarters, and at least 100,000 Heplisav-B Units sold in one of those two fiscal quarters, prior to the fifth fiscal quarter after the Heplisav-B Launch

Second Reduction Milestone

At least 100,000 Heplisav-B Units sold in each of two consecutive fiscal quarters, and at least 150,000 Heplisav-B Units sold in one of those two fiscal quarters, prior to the sixth fiscal quarter after the Heplisav-B Launch

Third Reduction Milestone

At least 150,000 Heplisav-B Units sold in each of two consecutive fiscal quarters, and at least 190,000 Heplisav-B Units sold in one of those two fiscal quarters, prior to the sixth fiscal quarter after the Heplisav-B Launch

Fourth Reduction Milestone

At least 190,000 Heplisav-B Units sold in each of two consecutive fiscal quarters, and at least 250,000 Heplisav-B Units sold in one of those two fiscal quarters, prior to the sixth fiscal quarter after the Heplisav-B Launch

6.11

[Reserved].

6.12

Lines of Business. Engage in any business other than the research, development, sale, distribution, manufacture and other commercialization of pharmaceutical products or compounds  and any business reasonably related, ancillary or incidental thereto.

6.13

Certain Amendments.  Amend, modify or change any provision of (i) its articles or certificate of incorporation or formation, bylaws, operating agreement or other applicable formation or organizational documents, as applicable, the terms of any class or series of its Capital Stock, or any agreement among the holders of its Capital Stock or any of them; (ii) the terms of the Convertible Notes after the date such Indebtedness is incurred; in each case other than in a manner that could not reasonably be expected to adversely affect the Purchasers in any material respect; or (iii) any Heplisav-B In License in a manner that would cause such Heplisav- B In License or any other Heplisav-B In License to fail to comply with the requirements for such licenses set forth in the proviso to the definition of “Heplisav-B Draw Condition.”

6.14

Limitation on Certain Restrictions.  Directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction, encumbrance or condition on (i) the ability of any Subsidiary of the Borrower to make any cash dividend payment or other cash distribution in respect of its Capital Stock, to repay Indebtedness owed to the Borrower or any other Subsidiary, to make loans or advances to the Borrower or any other Subsidiary, (ii) the ability of any Subsidiary of the Borrower to transfer any of its assets or properties to the Borrower or any other Subsidiary (including by way of dividend or distribution) or (iii) the creation, incurrence or assumption of any Lien upon or with respect to any part of the  Borrower’s or any of its Subsidiary’s property or assets, whether now owned or hereafter acquired, except (A) in the case of clauses (i), (ii) and (iii), for such restrictions or encumbrances existing under or by reason of (1) the Credit Documents, (2) applicable law, (3) restrictions and conditions set forth in any Indebtedness permitted under Section 6.2(xiii) (provided, in each case, that the Liens created under the Security Documents are permitted), or (4) restrictions on cash, other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business, or (B) in the case of clauses (ii) and (iii) only, for such restrictions or encumbrances existing under or by reason of (1) customary restrictions on the transfer or the creation, incurrence or assumption of any Lien contained in any agreement or instrument creating a Lien permitted under Section 6.3 (provided that such restrictions apply only to the assets subject to such Lien), (2) customary non-assignment provisions in contracts or leases and licenses of real or personal property entered into by the Borrower or any Subsidiary as lessee or licensee in the ordinary course of business, restricting the assignment or transfer of such agreement and/or property that is the subject thereof, (3) customary restrictions and conditions contained in any agreement relating to the sale of assets (including Capital Stock of a Subsidiary) pending such sale (provided that such restrictions and conditions apply only to the assets being sold and such sale is permitted under this Agreement), (4) any restriction arising under or in connection with any agreement or instrument governing Capital Stock of any joint venture or any minority investment permitted hereunder; (5) with respect to any applicable Credit Party, restrictions and conditions set forth in the A/R Facility (provided that the Liens created under the Security Documents are permitted), and (6) restrictions and conditions imposed by agreements of any Person in existence at the time such Person became a Subsidiary and any amendments or modifications thereof that do not materially expand the scope of any such restriction or condition taken as a whole, provided that such restrictions and conditions apply only to such Person.

6.15

Fiscal Year. Change its fiscal year or its method of determining fiscal quarters (other than to conform to the fiscal year of the Borrower).

6.16

Accounting Changes. Other than as permitted pursuant to Section 1.2, make or permit any material change in its accounting policies or reporting practices, except as may be required by GAAP.

7.1

Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

(a)

(i) The Borrower shall fail to pay any principal amount when due, or (ii) the Borrower fails to pay any interest, fees or other charges or amounts payable within three Business Days of when due, under this Agreement, the Notes or under any other Credit Document;

(b)

Any Credit Party shall fail to observe or perform any covenant, restriction or agreement contained in Section 5.1(a), 5.1(b), 5.2(a)(i), 5.3 (solely with respect to the Borrower), 5.9, 5.10 or ARTICLE VI;

(c)

Any Credit Party shall fail to observe or perform any covenant, restriction or agreement contained in any Credit Document (other than those described in Sections 7.1(a) and 7.1(b)) for 30 days after the earlier of (i) the chief executive officer, chief financial officer, general counsel or any vice president obtaining actual knowledge of such failure or (ii) the Borrower receiving written notice of such failure from the Collateral Agent or the Required Purchasers;

(d)

Any representation or warranty made or deemed made by any Credit Party in any Credit Document delivered pursuant to any Credit Document shall prove to have been incorrect in any material respect when made or deemed made; provided, that the words “in any material respect” shall not apply to any representation, warranty, certification or statement that contains any qualification with respect to materiality, including a reference to the defined term “Material Adverse Effect;”

(e)

The occurrence and continuance of any event of default (after expiration of any applicable grace period) under the credit agreement or similar agreement governing the A/R Facility;

(f)

The occurrence and continuance of any default or event of default on the part of any Credit Party (including events of default due to non-payment) under the terms of any agreement, document or instrument pursuant to which the Credit Parties have incurred any Indebtedness in excess of $10,000,000 or the occurrence of any other event or condition, the effect of which default, event or condition is to cause, or permit the holder or holders of such Indebtedness (or a trustee or agent on its or their behalf) to cause (with or without the giving of notice, lapse of time, or both), without regard to subordinated terms with respect thereto, such Indebtedness to become due or to be repurchased or redeemed (or an offer to repurchase or redeem such Indebtedness to be made) prior to its stated maturity (any applicable grace period having expired); provided, that this clause (e) shall not apply to (i) secured Indebtedness that

(g)

Any provision of the Security Documents shall for any reason cease to be in full force and effect or cease to be effective to give the Collateral Agent a valid and perfected security interest in and Lien upon (i) any Collateral related to Heplisav-B or (ii) any other Collateral in excess of, individually or in the aggregate, $500,000, in each case, purported to be covered thereby, subject to no Liens other than Permitted Liens, in each case unless any such cessation occurs in accordance with the terms thereof or is due to any act or failure to act on the part of the Collateral Agent or the Purchasers, or any Consolidated Entity or any Person acting on behalf thereof shall assert of the foregoing or deny or disaffirm any Credit Party’s obligations under the Guaranty;

(h)

Any Consolidated Entity (i) files a petition for relief under the Bankruptcy Code or any other insolvency law or seeking to adjudicate it bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (ii) takes any corporate action to authorize or effect any of the foregoing actions, (iii)  admits in writing its inability to pay its debts as such debts become due;

(i)

Failure of any Consolidated Entity within 60 days after the commencement of any proceeding against it seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, to have such proceeding dismissed, or to have all orders or proceedings thereunder affecting the operations or the business of any Consolidated Entity stayed, or failure of any Consolidated Entity within 30 days after the appointment, without its consent or acquiescence, of any custodian, receiver trustee, examiner, liquidator or similar official for it or for any material portion of its assets, to have such appointment vacated;

(j)

The entry of one or more judgments or orders for the payment of money in excess of $10,000,000 in the aggregate (excluding any amounts covered by insurance within available limits which the applicable insurer does not deny are covered thereby) against the Consolidated Entities and such judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of 60 days or the issuance of a writ of execution, attachment or similar process against any Consolidated Entity that is not dismissed, stayed, discharged or bonded within 60 days after any Consolidated Entity acquires knowledge thereof; or

(k)

The occurrence of any of the following: (i) any event or series of events that causes the Consolidated Entities to discontinue marketing or withdraw Heplisav-B in the United States, which discontinuance or withdrawal lasts for more than three months; (ii) any recall of the Heplisav-B Units that would reasonably be expected to result in liability in excess of

7.2

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

(a)

Acceleration of Indebtedness. The Required Purchasers may declare all or any part of the Notes immediately due and payable, (provided, however, that all Notes shall automatically become due and payable upon the occurrence of an Event of Default under Section 7.1(h) or 7.1(i) with respect to the Borrower). Upon the Notes becoming due and payable under this Section 7.2(a), whether by declaration or automatically, the Notes shall mature and the entire unpaid principal amount of the Notes, plus (i) all accrued and unpaid interest therein (including interest thereon at the Default Rate), (ii) the applicable Prepayment Premium determined with respect to the principal amount of the Notes as of the date of acceleration and (iii) an additional amount equal to the amount of interest that would have accrued from, and including, the date of acceleration to, but excluding, the third anniversary of the Purchase Date on the principal amount of the Notes outstanding immediately prior to such acceleration shall become immediately due and payable without presentment, demand, protest, notice or legal process of any kind, all of which are hereby expressly waived by the Borrower.

(b)

Other Remedies. The Collateral Agent may with the approval of the Required Purchasers and shall at the direction of the Required Purchasers pursue all other remedies available to it by contract, at law or in equity, including its rights under the Security Documents.

(c)

Right of Setoff. Each Purchaser may, and is hereby authorized by the Borrower to, at any time and from time to time, to the fullest extent permitted by applicable laws, without advance notice to the Borrower (any such notice being expressly waived by the Borrower), set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and any other indebtedness at any time owing by such Purchaser or any of its Affiliates to or for the credit or the account of the Borrower against any or all of the Obligations now or hereafter existing, whether or not such obligations have matured. Each Purchaser agrees promptly to notify the Borrower, each other Purchaser and the Collateral Agent after any such setoff or application; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.

(d)

Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of the Collateral Agent’s and the Purchasers’ rights and remedies set forth in this Agreement is not intended to be exhaustive and the exercise by the Collateral Agent or the Purchasers of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder, under the

8.1

Appointment and Authority. Each of the Purchasers hereby irrevocably appoints Deerfield to act on its behalf as the Collateral Agent hereunder and under the other Credit Documents and authorizes the Collateral Agent to take such actions on its behalf, including the execution of the other Credit Documents, and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Each of the Purchasers hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of such Purchaser for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Credit Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. Except for the last paragraph of Section 8.8, the provisions of this ARTICLE VIII are solely for the benefit of the Collateral Agent and the Purchasers, and neither the Borrower nor any other Credit Party shall have rights as a third party beneficiary of any of such provisions. Subject to Section 8.8 and Section 9.10, any action required or permitted to be taken by the Collateral Agent hereunder shall be taken with the prior approval of the Required Purchasers.

8.2

Rights as a Purchaser. The Person serving as the Collateral Agent hereunder shall have the same rights (including under Section 2.11) and powers, and shall be subject to the same obligations under Section 2.11, as any other Purchaser and may exercise the same as though it were not the Collateral Agent and the term “Purchaser” or “Purchasers” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Collateral Agent hereunder.  Such Person and its Affiliates may lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Collateral Agent hereunder and without any duty to account therefor to the Purchasers.

8.3

Exculpatory Provisions.

(a)

The Collateral Agent shall not have any duties or obligations except those expressly set forth herein and in the other Credit Documents to which it is a party. Without limiting the generality of the foregoing, the Collateral Agent:

(i)

shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

(ii)

shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Credit Documents to which it is a party that the Collateral Agent is required to exercise as directed in writing by the Required Purchasers (or such other number or percentage of the Purchasers as shall be expressly provided for herein or in such other Credit Documents), provided that the Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Collateral Agent to liability or that is contrary to any Credit Document or applicable law; and

(iii)

shall not, except as expressly set forth herein and in the other Credit Documents to which it is a party, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Collateral Agent or any of its Affiliates in any capacity.

(b)

The Collateral Agent shall not be liable for any action taken or not taken by it

(c)

The Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in ARTICLE III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent.

8.4

Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. The Collateral Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and

8.5

Delegation of Duties. The Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by the Collateral Agent. The Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Collateral Agent and any such sub-agent. The Collateral Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Collateral Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

8.6

Resignation of Collateral Agent.  The Collateral Agent may at any time give notice of its resignation to the Purchasers and the Borrower. Upon the receipt of any such notice of resignation, the Required Purchasers shall have the right, in consultation with the Borrower so long as no Default has occurred and is continuing, to appoint a successor. If no successor shall have been so appointed by the Required Purchasers and shall have accepted such appointment within 30 days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may, on behalf of the Purchasers, appoint a successor Collateral Agent; provided that, whether or not a successor has been appointed or has accepted such appointment, such resignation shall become effective upon delivery of the notice thereof. Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral Agent shall be discharged from all of its duties and obligations under the Credit Documents (if not already discharged therefrom as provided above in this Section 8.6). After the retiring Collateral Agent’s resignation, the provisions of this ARTICLE VIII and Section 9.2 shall continue in effect for the benefit of such retiring Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent. Upon any resignation by the Collateral Agent, all payments, communications and determinations provided to be made by, to or through the Collateral Agent shall instead be made by, to or through each Purchaser directly, until such time as a Person accepts an appointment as Collateral Agent in accordance with this Section 8.6.

8.7

Non-Reliance on Collateral Agent and Other Purchasers. Each Purchaser acknowledges that it has, independently and without reliance upon the Collateral Agent or any other Purchaser or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and purchase the Notes hereunder. Each Purchaser also acknowledges that it will, independently and without reliance upon the Collateral Agent or any other Purchaser or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder.

8.8

Collateral and Guaranty Matters. Each Purchaser agrees that any action taken by the Collateral Agent or the Required Purchasers in accordance with the provisions of this Agreement or of the other Credit Documents, and the exercise by the Collateral Agent or Required Purchasers of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Purchasers. Without limiting the generality of the foregoing, the Purchasers irrevocably authorize the Collateral Agent, at its option and in its discretion:

(a)

to release any Lien on any property granted to or held by the Collateral Agent under any Security Document (A) upon discharge of the Obligations, (B) that is sold, transferred, disposed or to be sold, transferred, disposed as part of or in connection with any sale, transfer o or other disposition (other than any sale to a Credit Party; provided, however that the Collateral Agent may make any filings necessary to reflect the transfer of Collateral from one Credit Party to another) permitted hereunder or otherwise becomes an Excluded Property (as defined in the Security Agreement), (C) subject to Section 9.10, if approved, authorized or ratified in writing by the Required Purchasers or (D) to the extent such property is owned by a Subsidiary Guarantor upon the release of such Subsidiary Guarantor from its obligations under its Guaranty pursuant to clause (c) below;

(b)

to subordinate any Lien on any property granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by clause (iii), (iv), (xxii), (xxiii) and (xxv) of Section 6.3;

(c)

to release any Subsidiary Guarantor from its obligations under the Guaranty Agreement if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder;

(d)

to enter into non-disturbance and similar agreements in connection with the licensing of Intellectual Property permitted pursuant to the terms of this Agreement in form and substance reasonably satisfactory to the Collateral Agent and the applicable licensor; and

(e)

to enter into an intercreditor agreement as contemplated by Section 6.2(iv).

8.9

Reimbursement by Purchasers.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 9.1 or 9.2 to be paid by it to the Collateral Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Purchaser severally agrees to pay to the Collateral Agent (or any such sub-agent) or such Related Party, as the case may be, such Purchaser’s pro rata share (based upon the percentages as used in determining the Required Purchasers as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, damage, liability or related expense, as the case may be, was incurred by or asserted against the Collateral Agent (or any such sub-agent) in its capacity as such or against any Related Party of any of the foregoing acting for the Collateral Agent (or any sub-agent) in connection with such capacity.

9.1

Costs and Expenses. The Borrower agrees to pay on demand all reasonable and documented out-of-pocket expenses of the Collateral Agent and the Purchasers, including reasonable fees and disbursements of counsel, in connection with: (i) the preparation, execution, delivery, and filing, if required of this Agreement and the other Credit Documents (provided that the obligation to reimburse under clause (i) shall not exceed $225,000), (ii) any amendments, supplements, consents or waivers hereto or to the other Credit Documents and (iii) the administration or enforcement of this Agreement and the other Credit Documents.  In addition, the Borrower shall pay, or reimburse the relevant Purchaser for, all Other Taxes in accordance with Section 2.11(b). It is the intention of the parties hereto that the Borrower shall pay amounts referred to in this Section 9.1 directly. In the event the Collateral Agent or any Purchaser pays any of the amounts referred to in this Section 9.1 directly, the Borrower will reimburse the Collateral Agent or such Purchaser for such advances and interest on such advance shall accrue until reimbursed at the Default Rate.  Notwithstanding anything in this Section 9.1 to the contrary, the Purchasers and the Borrower agree that the costs (including reasonable fees and disbursements of counsel and any Other Taxes incurred upon the execution, recording or registration) with respect to the condition that 65% of the outstanding voting Capital Stock and 100% of the outstanding non-voting Capital Stock of Dynavax GmbH be pledged to the Collateral Agent, as more fully described in Section 3.2(a)(iii), shall be borne by the Borrower, provided that the Purchasers will contribute to such costs an aggregate amount equal to the lesser of (x) one-half of the costs and expenses incurred by the Borrower, the Collateral Agent and the Purchasers and (y) $75,000.

9.2

Indemnification. From and at all times after the date of this Agreement, and in addition to all of the Collateral Agent’s and the Purchasers’ other rights and remedies against the Borrower, the Borrower agrees to indemnify, defend and hold harmless the Collateral Agent and the Purchasers and their respective Related Parties from and against all damages, losses and other out-of-pocket costs and expenses of any kind or nature whatsoever (including reasonable attorneys’ fees and expenses, court costs and fees, and consultant and expert witness fees and expenses, but limited in the case of attorney’s fees and expenses to the reasonable and documented out of pocket fees, disbursements and other charges of one counsel to the indemnified parties, taken as a whole and if reasonably necessary, one local counsel in each appropriate jurisdiction (and, in the case of a conflict of interest, where the indemnitee affected by such conflict notifies the Borrower of the existence of such conflict and thereafter retains its own counsel, one additional separate counsel for all similarly affected indemnitees) (collectively “Costs”) arising in any manner, directly or indirectly, out of or by reason of any and all claims (whether valid or not), actions, suits, inquiries, investigations and administrative proceedings, and including those brought by the Borrower or another Consolidated Entity (collectively, “Proceedings”) relating to (i) the negotiation, preparation, execution or performance of this Agreement or the other Credit Documents, or any transaction contemplated herein or therein, whether or not any party protected under this Section 9.2 is a party to, or target of, any Proceeding in question (provided, however, that no indemnified party shall have the right to be indemnified hereunder for any liability resulting from the willful misconduct or gross negligence of such indemnified party (as finally determined by a court of competent jurisdiction), material breach by any Purchaser of its obligations under this Agreement (including any failure by a Purchaser to purchase the Notes as required hereunder), or disputes that are solely among Purchasers or among the Collateral Agent and the Purchasers), (ii) any breach of any of the covenants, warranties or representations of any Credit Party hereunder or under any other Credit Document, (iii) any Lien or charge upon amounts payable hereunder by any Credit Party to the Purchasers or any taxes, assessments, impositions and other charges in respect of the collateral described in the Security Documents, (iv) any violation or alleged violation of any Environmental Law, federal or state securities law, common law, equitable requirement or other legal requirement by any Credit Party or with respect to any property owned, leased or operated by any Credit Party (in the past, currently or in the future), or (v) any presence, generation, treatment, storage, disposal, transport, movement, release, suspected release or threatened release of any Hazardous Material on, in, to or from any property (or any part thereof including the soil and groundwater thereon and thereunder) owned, leased or operated by any Credit Party (in the past, currently or in the future). All Costs shall be additional Obligations under this Agreement, shall be payable on demand to the party to be indemnified and shall be secured by the Lien of the Security Documents. Without limiting the foregoing, the Borrower shall be obligated to pay, on demand, the costs of any investigation, monitoring, assessment, enforcement, removal, remediation, restoration or other response or corrective action undertaken by the Collateral Agent or the Purchasers or any other indemnified party, or their respective agents, with respect to any property owned, leased or operated by any Credit Party. The obligations of the Borrower under this Section 9.2 shall not be limited to any extent by payment of the Obligations and termination of this Agreement and shall remain in full force and effect until expressly terminated by the Purchasers in writing.  This Section 9.2 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

9.3

Governing Law.  This Agreement and the other Credit Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Credit Document (except as may be expressly otherwise provided in any Credit Document) shall be governed by, and construed in accordance with, the law of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules).

9.4

Consent to Jurisdiction; Waiver of Jury Trial. The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against any Purchaser, the Collateral Agent or any Affiliate of any of the foregoing in any way relating to this Agreement or any other Credit Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in the City and County of New York and of the United States District Court of the Southern District of New York and any appellate court thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such state court or, to the fullest extent permitted by applicable law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Credit Document shall affect any right that any Purchaser or the Collateral Agent may otherwise have to bring any action or proceeding relating to this Agreement or any other Credit Document against the Borrower or any other Credit Party or its properties in the courts of any jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

9.5

Notices. All demands, notices, approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given when the writing is delivered, if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed receipt), or five days after being mailed, if mailed, by first class, registered or certified mail, postage prepaid, to the address set forth below:

Any Purchaser

To the address set forth on Exhibit A for such Purchaser.

9.6

Continuing Obligations.  All agreements, representations and warranties contained herein or made in writing by or on behalf of any Credit Party in connection with the transactions contemplated hereby shall survive the execution and delivery of the Credit Documents. The Borrower further agrees that to the extent any Credit Party makes a payment to the Collateral Agent or the Purchasers, which payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy, insolvency or other similar state or federal statute, or principle of equity, then, to the extent of such repayment by the Collateral Agent or the Purchasers, the Obligation or part thereof intended to be satisfied by such payment shall be revived and continued in full force and effect as if such payment had not been received by the Collateral Agent or the Purchasers.

9.7

Successors and Assigns. This Agreement shall be binding upon the Borrower and its respective successors and assigns and all rights against the Borrower arising under this Agreement shall be for the sole benefit of the Collateral Agent and the Purchasers.

9.8

Assignment and Sale. The Borrower may not sell, assign or transfer this Agreement or any of the other Credit Documents or any portion hereof or thereof, including their respective rights, title, interests, remedies, powers, and duties hereunder or thereunder.  Nothing in any Credit Document shall prohibit the Purchasers from pledging or assigning this Agreement, the Notes and the Purchasers’ rights under any of the Credit Documents, including collateral therefor, or any portion hereof or thereof to any Person other than a Restricted Transferee; provided that, in the case of an assignment of the Notes or any rights or participations therein, such Person shall agree in writing to the provisions hereof applicable to Purchasers (including the provisions of ARTICLE VIII and Sections 9.10 and 9.11). Any assignee or successor to a Purchaser shall become a “Purchaser” under this Agreement at the time such Person’s ownership interest in a Note is recorded in the Register and such Person shall be subject to the obligations set forth in this Agreement.

9.10

Amendment.  No amendment, modification, waiver or discharge or termination of, or consent to any departure by any Credit Party from, any provision of this Agreement or any other Credit Document shall be effective unless in a writing signed by the Required Purchasers, and then the same shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, modification, waiver, discharge, termination or consent shall:

(a)

unless agreed to by each Purchaser directly affected thereby, (i) reduce or forgive the principal amount of any Note, reduce the rate of or forgive any interest thereon, or reduce or forgive any premium or fees hereunder, (ii) extend the final scheduled maturity date or any other scheduled date for the payment of any principal of or interest on any Note, or extend the time of payment of any premium or fees hereunder, (iii) increase any Commitment of any such Purchaser over the amount thereof in effect or extend the maturity thereof (it being understood that a waiver of any condition precedent set forth in Section 3.2 or of any Default or Event of Default or mandatory reduction in the Commitments, if agreed to by the Required Purchasers or all Purchasers (as may be required hereunder with respect to such waiver), shall not constitute such an increase), (iv) reduce the percentage of the aggregate Commitments or of the aggregate outstanding principal amount of the Notes, or the number or percentage of Purchasers, that shall

(b)

unless agreed to by the Collateral Agent in addition to the Purchasers required as provided hereinabove to take such action, affect the respective rights or obligations of the Collateral Agent, as applicable, hereunder or under any of the other Credit Documents.

9.11

Treatment of Certain Information; Confidentiality. Each of the Collateral Agents and the Purchasers agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors, managing members or managers, counsel, accountants and other representatives (collectively, “Representatives”) (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and the person making such disclosure shall remain liable and be responsible for any breach by such Representative of the provisions of this Section 9.11), (b) to the extent requested by any Governmental Authority or regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) (in which case, the Collateral Agent or such Purchaser, as applicable, shall use reasonable efforts to notify the Borrower prior to such disclosure to the extent practicable and legally permitted to do so), (c) to the extent required by applicable Requirements of Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (f) to any state, federal or foreign authority or examiner regulating any Purchaser, (g) subject to an agreement containing provisions substantially the same as those of this Section 9.11, to any actual or prospective permitted assignee of the Purchaser (or their Representatives, it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (h) with the consent of the Borrower, or (i) to the extent such Information becomes available to the Collateral Agent, any Purchaser or any of their respective Affiliates on a non-confidential basis from a source other than a Consolidated Entity; provided that, to the knowledge of the recipient of such Information, the source of such Information was not and is not bound by any contractual or other obligation of confidentiality to the Borrower or any other Person with respect to any of such information. For purposes of this Section, “Information” means all information received from any Consolidated Entity relating to any Consolidated Entity or any of their respective businesses excluding any such information that is generally available to the public, other than as a direct or indirect result of the disclosure of any of such information by the Collateral Agent, any Purchaser or any of their Representatives.

9.12

Representations and Warranties of the Purchasers. Each Purchaser, severally and not jointly, represents and warrants to the Borrower as of the date hereof and as of each date that any Notes are issued to such Purchaser, that:

(a)

Such Purchaser is duly organized and validly existing under the laws of the jurisdiction of its formation. Each Credit Document to which it is a party has been duly authorized, executed and delivered by such Purchaser and constitutes the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws, statutes or rules of general application affecting the enforcement of creditor’s rights or general principles of equity.

(b)

Each of the Notes to be received by such Purchaser hereunder will be acquired for such Purchaser’s own account, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, except pursuant to sales registered or exempted under the Securities Act, and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of such Notes in compliance with applicable federal and state securities laws.

(c)

Such Purchaser can bear the economic risk and complete loss of its investment in the Notes and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

(d)

Such Purchaser has had an opportunity to receive, review and understand all information related to the Borrower requested by it and to ask questions of and receive answers from the Borrower regarding the Borrower, its business and the terms and conditions of the offering of the Notes, and has conducted and completed its own independent due diligence. Such Purchaser acknowledges receipt of copies of the Borrower’s filings with the SEC. Based on the information such Purchaser has deemed appropriate, it has independently made its own analysis and decision to enter into the Credit Documents.

(e)

Such Purchaser understands that the Notes are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Borrower in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. Such Purchaser understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Borrower or the purchase of the Notes.

(f)

Such Purchaser is an “accredited investor” in Regulation D promulgated under the 1933 Act.

(g)

Such Purchaser did not learn of the investment in the Loan Securities as a result of any general solicitation or general advertising.

9.13

Termination. This Agreement shall terminate and shall cease to be further force and effect if the Purchasers shall not have purchased the Notes on or prior to the Termination

9.14

Severability. In the event that any provision of this Agreement shall be determined to be invalid or unenforceable by any court of competent jurisdiction, such determination shall not invalidate or render unenforceable any other provision hereof.

9.15

Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which, together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic format (e.g., “pdf,” “tif” or similar file formats) shall be effective as delivery of a manually executed counterpart of this Agreement.

9.16

Captions. The captions to the various sections and subsections of this Agreement have been inserted for convenience only and shall not limit or affect any of the terms hereof.

By:

/s/ MICHAEL OSTRACH

Name:

Michael Ostrach

Title:

Senior Vice President and Chief Financial Officer

By:

Deerfield Mgmt, L.P. General Partner

By:

Deerfield Mgmt, L.P. General Partner

Purchaser

Commitment

Notice Address

Deerfield Partners, L.P.

$43,800,000

c/o Deerfield Management Company, L.P. 780 Third Avenue, 37th Floor

New York, NY 10017 Fax: (212) 599-3075

Attention:  Jon Isler

Deerfield International Master Fund, L.P.

$56,200,000

c/o Deerfield Management Company, L.P. 780 Third Avenue, 37th Floor

New York, NY 10017 Fax: (212) 599-3075

Attention:  Jon Isler

TOTAL

$100,000,000

(i)

The date of sale and purchase of the Notes is requested to be [●], 20[●]

(ii)

The Borrower directs each Purchaser to wire the Note purchase proceeds to and on behalf of the Borrower in accordance with the payment and wiring instructions attached hereto as Schedule A.

A.

The Borrower, the Purchasers party thereto, and Deerfield Partners, L.P., as a Purchaser and as Collateral Agent for the Purchasers (in such capacity, the “Collateral Agent”), are parties to a Note Purchase Agreement, dated as of October 26, 2016 (as amended, modified, restated or supplemented from time to time, the “Note Purchase Agreement”), pursuant to which the Purchasers will purchase the Notes upon the terms and subject to the conditions set forth therein.

B.

It is a condition to the purchase of the Notes by the Purchasers under the Note Purchase Agreement that each Guarantor shall have agreed, by executing and delivering this Guaranty, to guarantee to the Guaranteed Parties the payment in full of the Guaranteed Obligations (as hereinafter defined). The Guaranteed Parties are relying on this Guaranty in their decision to purchase the Notes from the Borrower under the Note Purchase Agreement, and would not purchase the Notes thereunder without this Guaranty.

C.

The Borrower and the Guarantors are engaged in related businesses and undertake certain activities and operations on an integrated basis. As part of such integrated operations, the Borrower, among other things, will advance to the Guarantors from time to time certain proceeds from the sale of the Notes by the Borrower to the Purchasers pursuant to the Note Purchase Agreement. Each Guarantor will therefore obtain benefits as a result of the sale of the Notes by the Borrower under the Note Purchase Agreement, which benefits are hereby acknowledged, and, accordingly, desires to execute and deliver this Guaranty.

1.

Guaranty.

(a)

Each Guarantor hereby irrevocably, absolutely and unconditionally, and jointly and severally:

(i)

guarantees to the Purchasers and the Collateral Agent (collectively, the “Guaranteed Parties”) the full and prompt payment, at any time and from time to time as and when due (whether at the stated maturity, by acceleration or otherwise), of all of the Obligations of the Borrower under the Note Purchase Agreement and the other Credit Documents, including all principal of and interest on the Notes, all fees, expenses, indemnities and other amounts payable by the Borrower under the Note Purchase Agreement or any other Credit Document (including interest accruing after the filing of a petition or commencement of a case by or with respect to the Borrower seeking relief under any Insolvency Laws (as hereinafter defined), whether or not the claim for such interest is allowed in such proceeding), and all Obligations that, but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, would become due, whether now existing or hereafter created or arising and whether direct or indirect, absolute or contingent, due or to become due (all liabilities and obligations described in this Section 1(a)(i), collectively, the “Guaranteed Obligations”);

(ii)

agrees to pay on demand all reasonable and documented out-of-pocket expenses of the Guaranteed Parties hereunder, including reasonable fees and disbursements of counsel in connection with (A) any amendments, supplements, consents or waivers hereto and (B) the administration or enforcement of this Guaranty; and

(iii)

agrees to indemnify, defend and hold harmless each Guaranteed Party and their respective Related Parties from and against all damages, losses and other out-of- pocket costs and expenses of any kind or nature whatsoever pursuant to the terms of Section 9.2 of the Note Purchase Agreement.

(b)

Notwithstanding the provisions of Section 1(a) and notwithstanding any other provisions contained herein or in any other Credit Document:

(i)

no provision of this Guaranty shall require or permit the collection from any Guarantor of interest in excess of the maximum rate or amount that such Guarantor may be required or permitted to pay pursuant to applicable law; and

(ii)

the liability of each Guarantor under this Guaranty as of any date shall be limited to a maximum aggregate amount (the “Maximum Guaranteed Amount”) equal to the greatest amount that would not render such Guarantor’s obligations under this Guaranty subject to avoidance, discharge or reduction as of such date as a fraudulent

(c)

The Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made hereunder on any date by a Guarantor (a “Funding Guarantor”) that exceeds its Fair Share (as hereinafter defined) as of such date, that Funding Guarantor shall be entitled to a contribution from each of the other Guarantors in the amount of such other Guarantor’s Fair Share Shortfall (as hereinafter defined) as of such date, with the result that all such contributions will cause each Guarantor’s Aggregate Payments (as hereinafter defined) to equal its Fair Share as of such date.

(d)

The guaranty of each Guarantor set forth in this Section 1 is a guaranty of payment as a primary obligor, and not a guaranty of collection. Each Guarantor hereby acknowledges and agrees that the Guaranteed Obligations, at any time and from time to time, may exceed the Maximum Guaranteed Amount of such Guarantor and may exceed the aggregate of the Maximum Guaranteed Amounts of all Guarantors, in each case without discharging, limiting or otherwise affecting the obligations of any Guarantor hereunder or the rights, powers and remedies of any Guaranteed Party hereunder or under any other Credit Document.

2.

Guaranty Absolute. Each Guarantor agrees that its obligations hereunder and under the other Credit Documents to which it is a party are irrevocable, absolute and unconditional, are independent of the Guaranteed Obligations and any Collateral (as defined in the Security Agreement) or other security therefor or other guaranty or liability in respect thereof, whether given by such Guarantor or any other Person, and shall not be discharged, limited or otherwise affected by reason of any of the following, whether or not such Guarantor has notice or knowledge thereof:

(i)

any change in the time, manner or place of payment of, or in any other term of, any Guaranteed Obligations or any guaranty or other liability in respect thereof, or any amendment, modification or supplement to, restatement of, or consent to any rescission or waiver of or departure from, any provisions of the Note Purchase Agreement, any other Credit Document or any agreement or instrument delivered pursuant to any of the foregoing;

(ii)

the invalidity or unenforceability of any Guaranteed Obligations, any guaranty or other liability in respect thereof or any provisions of the Note Purchase Agreement, any other Credit Document or any agreement or instrument delivered pursuant to any of the foregoing;

(iii)

the addition or release of Guarantors hereunder or the taking, acceptance or release of other guarantees of any Guaranteed Obligations or additional Collateral or other security for any Guaranteed Obligations or for any guaranty or other liability in respect thereof;

(iv)

any discharge, modification, settlement, compromise or other action in respect of any Guaranteed Obligations or any guaranty or other liability in respect thereof, including any acceptance or refusal of any offer or performance with respect to the same or the subordination of the same to the payment of any other obligations;

(v)

any agreement not to pursue or enforce or any failure to pursue or enforce (whether voluntarily or involuntarily, as a result of operation of law, court order or otherwise) any right or remedy in respect of any Guaranteed Obligations, any guaranty or other liability in respect thereof or any Collateral or other security for any of the foregoing; any sale, exchange, release, substitution, compromise or other action in

(vi)

the exercise of any right or remedy available under the Credit Documents, at law, in equity or otherwise in respect of any Collateral or other security for any Guaranteed Obligations or for any guaranty or other liability in respect thereof, in any order and by any manner thereby permitted, including foreclosure on any such Collateral or other security by any manner of sale thereby permitted, whether or not every aspect of such sale is commercially reasonable;

(vii)

any bankruptcy, reorganization, arrangement, liquidation, insolvency, dissolution, termination, reorganization or like change in the corporate structure or existence of the Borrower or any other Person directly or indirectly liable for any Guaranteed Obligations;

(viii)

any manner of application of any payments by or amounts received or collected from any Person, by whomsoever paid and howsoever realized, whether in reduction of any Guaranteed Obligations or any other obligations of the Borrower or any other Person directly or indirectly liable for any Guaranteed Obligations, regardless of what Guaranteed Obligations may remain unpaid after any such application; or

(ix)

any other circumstance that might otherwise constitute a legal or equitable discharge of, or a defense, setoff or counterclaim available to, the Borrower, any Guarantor or a surety or guarantor generally, other than the occurrence of all of the following: (x) the payment in full in cash of the Guaranteed Obligations (other than contingent and indemnification obligations not then due and payable) and (y) the termination of the Commitments under the Note Purchase Agreement (the events in clauses (x) and (y) above, collectively, the “Termination Requirements”).

3.

Certain Waivers. Each Guarantor hereby knowingly, voluntarily and expressly waives:

(i)

presentment, demand for payment, demand for performance, protest and notice of any other kind, including notice of nonpayment or other nonperformance (including notice of default under any Credit Document with respect to any Guaranteed Obligations), protest, dishonor, acceptance hereof, extension of additional credit to the Borrower and of any of the matters referred to in Section 2 and of any rights to consent thereto;

(ii)

any right to require the Guaranteed Parties or any of them, as a condition of payment or performance by such Guarantor hereunder, to proceed against, or to exhaust or have resort to any Collateral or other security from or any deposit balance or other credit in favor of, the Borrower, any other Guarantor or any other Person directly or indirectly liable for any Guaranteed Obligations, or to pursue any other remedy or enforce any other right; and any other defense based on an election of remedies with respect to any Collateral or other security for any Guaranteed Obligations or for any guaranty or other liability in respect thereof, notwithstanding that any such election (including any failure to pursue or enforce any rights or remedies) may impair or

(iii)

any right or defense based on or arising by reason of any right or defense of the Borrower or any other Person, including any defense based on or arising from a lack of authority or other disability of the Borrower or any other Person, the invalidity or unenforceability of any Guaranteed Obligations, any Collateral or other security therefor or any Credit Document or other agreement or instrument delivered pursuant thereto, or the cessation of the liability of the Borrower for any reason other than the satisfaction of the Termination Requirements;

(iv)

any defense based on any Guaranteed Party’s acts or omissions in the administration of the Guaranteed Obligations, any guaranty or other liability in respect thereof or any Collateral or other security for any of the foregoing, and promptness, diligence or any requirement that any Guaranteed Party create, protect, perfect, secure, insure, continue or maintain any Liens in any such Collateral or other security;

(v)

any right to assert against any Guaranteed Party, as a defense, counterclaim, crossclaim or setoff, any defense, counterclaim, claim, right of recoupment or setoff that it may at any time have against any Guaranteed Party (including failure of consideration, fraud, fraudulent inducement, statute of limitations, payment, accord and satisfaction and usury), other than compulsory counterclaims and other than the payment in full in cash of the Guaranteed Obligations; and

(vi)

any defense based on or afforded by any applicable law that limits the liability of or exonerates guarantors or sureties or that may in any other way conflict with the terms of this Guaranty.

4.

No Subrogation; Subordination. Each Guarantor hereby waives, and agrees that it will not exercise or seek to exercise, any claim or right that it may have against the Borrower or any other Guarantor at any time as a result of any payment made under or in connection with this Guaranty or the performance or enforcement hereof, including any right of subrogation to the rights of any of the Guaranteed Parties against the Borrower or any other Guarantor, any right of indemnity, contribution or reimbursement against the Borrower or any other Guarantor (including rights of contribution as set forth in Section 1(c)), any right to enforce any remedies of any Guaranteed Party against the Borrower or any other Guarantor, or any benefit of, or any right to participate in, any Collateral or other security held by any Guaranteed Party to secure payment of the Guaranteed Obligations, in each case whether such claims or rights arise by contract, statute (including the Bankruptcy Code), common law or otherwise; provided, however, that a Guarantor may enforce the rights of contribution set forth in Section 1(c) after satisfaction of the Termination Requirements. Each Guarantor further agrees that all indebtedness and other obligations, whether now or hereafter existing, of the Borrower or any other Subsidiary of the Borrower to such Guarantor, including any such indebtedness in any proceeding under the Bankruptcy Code and any intercompany debt or receivables, together with any interest thereon, shall be, and hereby are, subordinated and made junior in right of payment to the Guaranteed

5.

Representations and Warranties. Each Guarantor hereby represents and warrants to the Guaranteed Parties that, as to itself, all of the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.7 relating to it contained in the Note Purchase Agreement are true and correct.

6.

Financial Condition of Borrower.  Each Guarantor represents that it has knowledge of the Borrower’s financial condition and affairs and that it has adequate means to obtain from the Borrower on an ongoing basis information relating thereto and to the Borrower’s ability to pay and perform the Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect with respect to such Guarantor. Each Guarantor agrees that the Guaranteed Parties shall have no obligation to investigate the financial condition or affairs of the Borrower for the benefit of any Guarantor nor to advise any Guarantor of any fact respecting, or any change in, the financial condition or affairs of the Borrower that might become known to any Guaranteed Party at any time, whether or not such Guaranteed Party knows or believes or has reason to know or believe that any such fact or change is unknown to any Guarantor, or might (or does) materially increase the risk of any Guarantor as guarantor, or might (or would) affect the willingness of any Guarantor to continue as a guarantor of the Guaranteed Obligations.

7.

Payments; Application; Setoff.

(a)

Each Guarantor agrees that, upon the failure of the Borrower to pay any Guaranteed Obligations when and as the same shall become due (whether at the stated maturity, by acceleration or otherwise), and without limitation of any other right or remedy that any Guaranteed Party may have at law, in equity or otherwise against such Guarantor, such Guarantor will, subject to the provisions of Section 1(b), forthwith pay or cause to be paid to the

(b)

All payments made by each Guarantor hereunder will be made in Dollars to the Collateral Agent, without setoff, counterclaim or other defense and, in accordance with the Note Purchase Agreement, free and clear of and without deduction for any taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto, each Guarantor hereby agreeing to comply with and be bound by the provisions of the Note Purchase Agreement in respect of all payments made by it hereunder.

(c)

All payments made hereunder shall be applied in accordance with the provisions of Section 2.8(a) of the Note Purchase Agreement.

(d)

In the event that the proceeds of any sale, disposition or realization of the Collateral or otherwise are insufficient to pay all amounts to which the Guaranteed Parties are legally entitled, the Guarantors shall be jointly and severally liable for the deficiency, together with interest thereon at the highest rate specified in any applicable Credit Document for interest on overdue principal or such other rate as shall be fixed by applicable law, together with the costs of collection and all other fees, costs and expenses payable hereunder.

(e)

Upon and at any time after the occurrence and during the continuance of any Event of Default, each Guaranteed Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Guaranteed Party or any such Affiliate to or for the credit or the account of any Guarantor against any and all of the obligations of such Guarantor now or hereafter existing under this Guaranty or any other Credit Document to such Guaranteed Party, irrespective of whether or not such Guaranteed Party shall have made any demand under this Guaranty or any other Credit Document and although such obligations of such Guarantor may be contingent or unmatured or are owed to a branch or office of such Guaranteed Party different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Guaranteed Party and their respective Affiliates under this Section 7(e) are in addition to other rights and remedies (including other rights of setoff) that such Guaranteed Parties or their respective Affiliates may have. Each Guaranteed Party agrees to notify the Borrower and the Collateral Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

8.

No Waiver. The rights and remedies of the Guaranteed Parties expressly set forth in this Guaranty and the other Credit Documents are cumulative and in addition to, and not exclusive of, all other rights and remedies available at law, in equity or otherwise. No failure or delay on the part of any Guaranteed Party in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be a waiver of any Default or Event of Default. No course of dealing between any of the Guarantors and the Guaranteed Parties or their agents or employees

9.

Enforcement.  The Guaranteed Parties agree that, except as provided in

10.

Amendments, Waivers, etc. No amendment, modification, waiver, discharge or termination of, or consent to any departure by any Guarantor from, any provision of this Guaranty, shall be effective unless in a writing signed by the Guarantors, the Collateral Agent and such of the Purchasers as may be required under Section 9.10 of the Note Purchase Agreement to concur in the action then being taken, and then the same shall be effective only in the specific instance and for the specific purpose for which given.

11.

Addition, Release of Guarantors. Subject to Section 8.8 of the Note Purchase Agreement, each Guarantor recognizes that the provisions of the Note Purchase Agreement require certain Persons that become Subsidiaries of the Borrower and that are not already parties hereto to become Guarantors hereunder by executing a Guarantor Accession, and agrees that its obligations hereunder shall not be discharged, limited or otherwise affected by reason of the same, or by reason of the Collateral Agent’s actions in effecting the same or in releasing any Guarantor hereunder, in each case without the necessity of giving notice to or obtaining the consent of any other Guarantor.

12.

Continuing Guaranty; Term; Successors and Assigns; Assignment; Survival. This Guaranty is a continuing guaranty and covers all of the Guaranteed Obligations as the same may arise and be outstanding at any time and from time to time from and after the date hereof, and shall (i) remain in full force and effect until satisfaction of all of the Termination Requirements (provided that the provisions of Sections 1(a)(ii) and 4 shall survive any termination of this

13.

Governing Law; Consent to Jurisdiction; Appointment of Borrower as Representative, Process Agent, Attorney-in-Fact.

(a)

This Guaranty and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules).

(b)

Each Guarantor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in the City and County of New York and of the United States District Court of the Southern District of New York and any appellate court therefrom in any action or proceeding arising out of or relating to this Guaranty or any other Credit Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such state court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty or in any other Credit Document shall affect any right that any Guaranteed Party may otherwise have to bring any action or proceeding relating to this Guaranty or any other Credit Document against any Guarantor or its properties in the courts of any jurisdiction.

(c)

Each Guarantor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Guaranty or any other Credit Document in any court referred to in Section 13(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)

Each Guarantor hereby irrevocably designates and appoints the Borrower as its designee, appointee and agent to receive on its behalf all service of process in any such action or proceeding and any other notice or communication hereunder, irrevocably consents to service of process in any such action or proceeding by registered or certified mail directed to the Borrower at its address set forth in the Note Purchase Agreement (and service so made shall be deemed to be completed upon the earlier of actual receipt thereof or three business days after deposit in the United States mails, proper postage prepaid and properly addressed), and irrevocably agrees that service so made shall be effective and binding upon such Guarantor in every respect and that any other notice or communication given to the Borrower at the address and in the manner specified herein shall be effective notice to such Guarantor.  Nothing in this Section 13 shall affect the right of any party to serve legal process in any other manner permitted by law or affect the right of any Guaranteed Party to bring any action or proceeding against any Guarantor in the courts of any other jurisdiction.

(e)

Further, each Guarantor does hereby irrevocably make, constitute and appoint the Borrower as its true and lawful attorney-in-fact, with full authority in its place and stead and in its name, the Borrower’s name or otherwise, and with full power of substitution in the premises, from time to time in the Borrower’s discretion to agree on behalf of, and sign the name of, such Guarantor to any amendment, modification or supplement to, restatement of, or waiver or consent in connection with, this Guaranty, any other Credit Document or any document or instrument related hereto or thereto, and to take any other action and do all other things on behalf of such Guarantor that the Borrower may deem necessary or advisable to carry out and accomplish the purposes of this Guaranty and the other Credit Documents.  The Borrower will not be liable for any act or omission nor for any error of judgment or mistake of fact unless the same shall occur as a result of the gross negligence or willful misconduct of the Borrower. This power, being coupled with an interest, is irrevocable by any Guarantor for so long as this Guaranty shall be in effect with respect to such Guarantor.

14.

Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND

15.

Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows: (i) if to any Guarantor, in care of the Borrower and at the Borrower’s address for notices set forth in the Note Purchase Agreement, and (ii) if to

16.

Severability. To the extent any provision of this Guaranty is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Guaranty in any jurisdiction.

17.

Construction. The headings of the various sections and subsections of this Guaranty have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof. Unless the context otherwise requires, words in the singular include the plural and words in the plural include the singular.  The provisions of Section 1.3 of the Note Purchase Agreement are hereby incorporated by reference as if fully set forth herein.

18.

Counterparts; Effectiveness. This Guaranty may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Guaranty shall become effective, as to any Guarantor, upon the execution and delivery by such Guarantor of a counterpart hereof or a Guarantor Accession. Delivery of an executed counterpart of a signature page of this Guaranty or a Guarantor Accession by facsimile or in electronic format (e.g., “pdf,” “tif” or similar file formats) shall be effective as delivery of a manually executed counterpart of this Guaranty or such Guarantor Accession.

By:

J.E. Flynn Capital, LLC General Partner

1.

The New Guarantor hereby joins in and agrees to be bound by each and all of the provisions of the Guaranty Agreement as a Guarantor thereunder. In furtherance (and without limitation) of the foregoing, pursuant to Section 1 of the Guaranty Agreement, the New Guarantor hereby irrevocably, absolutely and unconditionally, and jointly and severally with each other Guarantor, guarantees to the Guaranteed Parties the full and prompt payment, at any time and from time to time as and when due (whether at the stated maturity, by acceleration or otherwise), of all of the Guaranteed Obligations, and agrees to pay or reimburse upon demand all other obligations of the Guarantors under the Guaranty Agreement, all on the terms and subject to the conditions set forth in the Guaranty Agreement.

2.

The New Guarantor hereby represents and warrants that after giving effect to this Accession, each representation and warranty related to it contained in Sections 4.1, 4.2, 4.3, 4.4,

3.

This Accession shall be a Credit Document (within the meaning of such term under the Note Purchase Agreement), shall be binding upon and enforceable against the New Guarantor and its successors and assigns, and shall inure to the benefit of and be enforceable by each Guaranteed Party and its successors and assigns. This Accession and its attachments are hereby incorporated into the Guaranty Agreement and made a part thereof.