UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2023 |
RxSight, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-40690 |
94-3268801 |
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(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
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100 Columbia |
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Aliso Viejo, California |
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92656 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: 949 521-7830 |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Common Stock, par value $0.001 per share |
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RXST |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
Item 1.01 Entry into a Material Definitive Agreement.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ During the quarter ended June 30, 2023, RxSight, Inc. (the “Company”) sold 834,748 common shares pursuant to its “at-the-market” facility (“ATM Facility”) to one large institutional shareholder for approximately $19.4 million in net proceeds, after deducting commissions. The Company used these net proceeds and approximately $1.7 million in cash reserves to reduce its outstanding debt by $20.0 million, pay June 2023 accrued interest of approximately $0.5 million (normally paid on July 3, 2023), and pay approximately $1.2 million in final payment fees. Concurrently, the Company entered into a new loan and security agreement with its current collateral agent, Oxford Finance, LLC (‘Oxford”) for an initial principal amount of $20.0 million in new loans. These actions reflect the ongoing implementation of the Company’s debt management strategy, which is designed to preserve and enhance financial flexibility to support the Company’s growth plans.
We believe the key benefits of the debt paydown and new loan and security agreement include:
Additional information regarding the Retired LSA (defined below) and the New LSA (defined below) with Oxford are as follows:
On October 29, 2020, the Company, Oxford, as collateral agent, and certain lenders (“Lenders”) entered into that certain Loan and Security Agreement, as amended by that certain Consent and First Amendment to Loan and Security Agreement, dated as of July 6, 2021, and that certain Second Amendment to Loan and Security Agreement, dated as of May 3, 2022 (the “Retired LSA”), pursuant to which the Lenders provided to the Company certain loans in accordance with the terms and conditions of the Retired LSA (such loans collectively, the “Retired Term Loan”). On June 30, 2023, the Company prepaid the Retired Term Loan using a combination of cash, primarily comprised of cash raised under the ATM Facility during the quarter ended June 30, 2023, and the Term A Loans (defined below) of $20.0 million.
On June 30, 2023, the Company entered into a new Loan and Security Agreement (“New LSA”) with Oxford as collateral agent and the lenders party thereto, pursuant to which the Company borrowed $20.0 million in aggregate Term A Loans (the “Term A Loans”). Under the New LSA, the Company may borrow additional term loans of up to $40.0 million in aggregate principal, in four tranches and subject to the Company achieving certain revenue milestones and satisfying customary conditions precedent (each a “Term Loan” and together with the Term A Loans, the “Loans”). For each such additional tranche of Term Loans, an unused term loan commitment fee equal to 1.00% of the total earned amount of such additional tranche will be due and payable on the earliest to occur of (a) the expiration of the draw period for such additional tranche, (b) the acceleration of any Term Loan or (c) the voluntary or mandatory prepayment of all of the Term Loans (including in each case, as a result of an event of default as defined in the New LSA during the draw period for such additional tranche).
Each Loan bears interest at a floating per annum rate equal to (a) the greater of (i) the 1-Month Term SOFR on the last business day of the month that immediately precedes the month in which the interest will accrue or (ii) 5.15%, plus (b) 6.35%; provided, in no event will the interest rate for any Loan be less than 11.50% per annum. Upon any event of default as defined in the New LSA, the interest rate will increase to 5% above the applicable interest rate.
The Loans mature on June 1, 2028. Principal repayment will commence on August 1, 2026 in equal monthly installments of the outstanding Loan balance through the maturity date. If the Company is in compliance with its revenue covenant in the New LSA for each quarterly measuring date from June 30, 2023 through July 1, 2026 and if it has not elected to pledge its intellectual property as collateral security for the Loans before August 1, 2026, then principal repayment will begin on August 1, 2027.
The Loans and New LSA are secured by substantially all of the Company’s personal property other than the Company’s intellectual property. The Company also entered into a negative pledge arrangement with the collateral agent and lenders where the Company agreed not to encumber any of its intellectual property.
The Company may elect to prepay the outstanding Loans, in whole but not in part, at any time. After August 31, 2024, the Company may also elect to prepay part of the outstanding Loans. Upon a voluntary or mandatory prepayment of the Loans, the Company is required to pay the lenders’ expenses and all accrued but unpaid interest on the Loans through the prepayment date.
A final payment fee equal to 5.00% of the original principal amount of the Loans advanced will be due at the earlier of the maturity date, acceleration of the Loans, or a voluntary or mandatory prepayment of the Loans (including as a result of an event of default as defined in the New LSA).
The New LSA includes customary representations and covenants that, subject to exceptions and qualifications, restrict the Company’s ability to do the following things: engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; engage in businesses that are not related to the Company’s existing business; add or change business locations; incur additional indebtedness; incur additional liens; make loans and investments; declare dividends or redeem or repurchase equity interests; and make certain amendments or payments in respect of any subordinated debt. In addition, the New LSA contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of the Company’s bank accounts, protection of the Company’s intellectual property, reporting requirements, compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries. The New LSA also contains a performance to plan revenue covenant, unless the Company elects to grant a first priority security interest in its intellectual property to secure the Loans and Company’s obligations under the New LSA.
Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal, interest and other amounts under the New LSA immediately due and payable and may exercise the other rights and remedies provided for under the New LSA and related loan documents. The events of default under the New LSA include, subject to grace periods in certain instances, payment defaults, breaches of covenants or representations and warranties, a material adverse change as defined in the New LSA and with respect to certain governmental approvals, material judgments and attachments, bankruptcy and insolvency events with respect to the Company and its subsidiaries, defaults under other material indebtedness or subordinated debt, and delisting of the Company’s shares from the Nasdaq Global Market or a similar stock exchange.
A copy of New LSA is attached hereto as Exhibit 10.1. The foregoing description of the New LSA does not purport to be complete and is qualified in its entirety by reference to the New LSA.
Item 1.02 Termination of a Material Definitive Agreement.
The information required by this Item 1.02 is incorporated by reference from Item 1.01 above.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information required by this Item 2.03 is incorporated by reference from Item 1.01 above.
Item 3.03 Material Modification to Rights of Security Holders.
The information required by this Item 3.03 is incorporated by reference from Item 1.01 above.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the estimated interest expense savings, among others. Statements that are not statements of historical fact are considered forward-looking statements, which are usually identified by the use of words such as “anticipates,” “believes,” “continues,” “goal,” “could,” “estimates,” “scheduled,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “indicate,” “projects,” “seeks,” “should,” “will,” “strategy,” and variations of such words or similar expressions. Forward-looking statements are neither forecasts, promises nor guarantees, and are based on the current beliefs of the Company’s management as well as assumptions made by and information currently available to the Company. Such information may be limited or incomplete, and the Company’s statements should not be read to indicate that it has conducted a thorough inquiry into, or review of, all potentially available relevant information. Such statements reflect the current views of the Company with respect to future events and are subject to known and unknown risks, including business, regulatory, economic and competitive risks, uncertainties, contingencies and assumptions about the Company. More details about these and other risks that may impact the Company’s business are described under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”) on May 9, 2023 and in subsequent filings made by the Company with the SEC, which are available on the SEC’s website at www.sec.gov.
The Company cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The Company does not undertake any duty to update any forward-looking statement or other information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit number |
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Description |
10.1† |
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104 |
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Cover Page Interactive Data File (embedded within the inline XBRL document). |
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Confidential treatment will be requested with respect to certain portions of this exhibit. Omitted portions will be filed separately with the Securities and Exchange Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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RxSight, Inc. |
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Date: |
July 5, 2023 |
By: |
/s/ Shelley Thunen |
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Name: Shelley Thunen |
Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. INFORMATION THAT HAS BEEN OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (as the same may from time to time be amended, modified, supplemented or restated, this “Agreement”) dated as of June 30, 2023 (the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 115 South Union Street, Suite 300, Alexandria, VA 22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its capacity as a Lender, OXFORD FINANCE CREDIT FUND II LP, by its manager Oxford Finance Advisors, LLC, with an office located at 115 South Union Street, Suite 300, Alexandria, VA 22314 (“OFCF II”), OXFORD FINANCE CREDIT FUND III LP, by its manager Oxford Finance Advisors, LLC, with an office located at 115 South Union Street, Suite 300, Alexandria, VA 22314 (“OFCF III”) (each a “Lender” and collectively, the “Lenders”), and RXSIGHT, INC., a Delaware corporation with offices located at 100 Columbia, Aliso Viejo, CA 92656 (“Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
On the date of this Agreement, each Lender shall deliver to Borrower a complete and properly executed IRS Form W-9. If any assignee of a Lender’s rights under Section 12.1 of this Agreement is (a) a “United States Person” as defined in Section 7701(a)(30) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), such assignee shall, upon becoming a party to this Agreement, deliver to Borrower a complete and properly executed IRS Form W-9, or (b) not a “United States Person” as defined in Section 7701(a)(30) of the Code (“Non-U.S.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Lender”), such Non-U.S. Lender shall, upon becoming party to this Agreement, deliver to Borrower a complete and properly executed IRS Form W-8BEN-E (or W-8BEN, as applicable), W-8ECI or W-8IMY, as appropriate, or any successor form prescribed by the IRS, certifying that such Non-U.S. Lender is entitled to an exemption from U.S. withholding tax on interest and other amounts payable under this Agreement. Notwithstanding the foregoing, (i) Borrower shall not be required to pay any additional amount to any Non-U.S. Lender hereunder if such Non-U.S. Lender fails or is unable to deliver the forms, certificates or other evidence described in the preceding sentence, unless such Non-U.S. Lender’s failure or inability to deliver such forms is the result of any change in any applicable law, treaty or governmental rule, or any change in the interpretation thereof after such Non-U.S. Lender became a party to this Agreement and (ii) Borrower shall not be required to pay any additional amount to any Non-U.S. Lender hereunder with respect to taxes imposed under Sections 1471 through 1474 of the U.S. Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Borrower represents and warrants to Collateral Agent and the Lenders as follows:
The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect or are being obtained pursuant to Section 6.1(b)), or (v) constitute an event of default under any material agreement by which Borrower or any of such Subsidiaries, or their respective properties, is bound. Neither Borrower nor any of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound, in each case, in which such default could reasonably be expected to have a Material Adverse Change.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti‑Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti‑Terrorism Law, or (iii) is a Blocked Person. None of Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti‑Terrorism Law.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address or on a secure electronic dataroom site selected by Borrower.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, unless such Event of Default shall have been waived in writing by Collateral Agent and the Required Lenders in their sole discretion, Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent Circumstance. As used in the immediately preceding sentence, “Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile or electronic mail transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand‑delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing address, facsimile number or e-mail address by giving the other party written notice thereof in accordance with the terms of this Section 10.
If to Borrower: |
RXSIGHT, INC. 100 Columbia Aliso Viejo, CA 92656 Attn: Shelley Thunen, CFO Email: sthunen@rxsight.com |
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
with a copy (which shall not constitute notice) to: |
Wilson Sonsini Goodrich & Rosati 12235 El Camino Real San Diego, CA 92130 Attn: Marty Waters and Charlotte Kim Fax: (858) 350-2399 Email: mwaters@wsgr.com and ckim@wsgr.com |
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If to Collateral Agent: |
OXFORD FINANCE LLC 115 South Union Street, Suite 300 Alexandria, VA 22314 Attention: Legal Department Fax: (703) 519‑5225 Email: LegalDepartment@oxfordfinance.com
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with a copy to: |
OXFORD FINANCE CREDIT FUND II LP c/o Oxford Finance Advisors, LLC, its manager 115 South Union Street, Suite 300 Alexandria, VA 22314 Attention: Legal Department Fax: (703) 519‑5225 Email: LegalDepartment@oxfordfinance.com |
with a copy to:
with a copy (which shall not constitute notice) to: |
OXFORD FINANCE CREDIT FUND III LP c/o Oxford Finance Advisors, LLC, its manager 115 South Union Street, Suite 300 Alexandria, VA 22314 Attention: Legal Department Fax: (703) 519‑5225 Email: LegalDepartment@oxfordfinance.com
DLA Piper LLP (US) 500 8th Street, NW Washington, DC 20004 Attn: Eric Eisenberg Fax: (202) 799‑5211 Email: eric.eisenberg@us.dlapiper.com |
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California law governs the Loan Documents without regard to principles of conflicts of law. Borrower, Collateral Agent and each Lender each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Collateral Agent or any Lender from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Collateral Agent or any Lender. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, first class, registered or certified mail return receipt requested, proper postage prepaid.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, COLLATERAL AGENT AND EACH LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self‑help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“1-Month CME Term SOFR” is the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website.
“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.
“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.
“Agreement” is defined in the preamble hereof.
“Amortization Date” is, August 1, 2026; provided, however, if Borrower is in compliance with Section 6.10(a) for each Measuring Date from June 30, 2023 through July 1, 2026 and Borrower has not provided the IP Lien Election Notice prior to August 1, 2026, the Amortization Date shall be August 1, 2027.
“Annual Projections” is defined in Section 6.2(a).
“Anti‑Terrorism Laws” are any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.
“Approved Fund” is any (a) Person, investment company, fund, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender, or (b) any Person (other than a natural person) which temporarily warehouses loans, or provides financing or securitizations, in each case, for any Lender or any entity described in the preceding clause (a).
“Approved Lender” is defined in Section 12.1.
“Basic Rate” is with respect to each Term Loan, the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to (a) the greater of (i) the 1-Month CME Term SOFR on the last Business Day of the month that immediately precedes the month in which the interest will accrue and (ii) five and fifteen hundredths of one percent (5.15%), plus (b) six and thirty-five hundredths of one percent (6.35%). Notwithstanding the foregoing, (i) in no event shall the Basic Rate for any Term Loan be less than eleven and fifty hundredths of one percent (11.50%), and (ii) upon the occurrence of a Benchmark Transition Event, Collateral Agent may, in good faith and with reference to the margin above such interest rate in this definition, amend this Agreement to replace the Benchmark with a replacement interest rate and replacement margin above such interest rate that results in a substantially similar interest rate floor, ceiling and total rate in effect immediately prior to the effectiveness of such replacement interest rate and replacement margin, and any such amendment shall become effective at 5:00 p.m. Eastern time on the third Business Day after Collateral Agent has notified Borrower of such amendment. Any determination, decision or election that may be made by Collateral Agent pursuant hereto will be conclusive and binding absent manifest error and may be made in Collateral Agent’s sole but reasonable discretion and without consent from any other party.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Benchmark” is, initially, the 1-Month CME Term SOFR; provided, that if a Benchmark Transition Event has occurred with respect to the 1-Month CME Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable replacement rate that has replaced the immediately preceding benchmark rate pursuant to the defined term “Basic Rate”.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator for such Benchmark announcing that such Person has ceased or will cease to provide such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark;
(b) a public statement or publication of information by the regulatory supervisor for the administrator for such Benchmark, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, which states that the administrator for such Benchmark has ceased or will cease to provide such Benchmark permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark; or
(c) a public statement or publication of information by the regulatory supervisor for the administrator for such Benchmark announcing that such Benchmark is no longer representative or in compliance with the International Organization of Securities Commissions Principles for Financial Benchmarks.
“Blocked Person” is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti‑Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.
“Borrower” is defined in the preamble hereof.
“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.
“Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.
“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of Collateral Agent.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
For the avoidance of doubt, the direct purchase by Borrower or any of its Subsidiaries of any Auction Rate Securities, or purchasing participations in, or entering into any type of swap or other derivative transaction, or otherwise holding or engaging in any ownership interest in any type of Auction Rate Security by Borrower or any of its Subsidiaries shall be conclusively determined by the Lenders as an ineligible Cash Equivalent, and any such transaction shall expressly violate each other provision of this Agreement governing Permitted Investments. Notwithstanding the foregoing, Cash Equivalents does not include and Borrower, and each of its Subsidiaries, are prohibited from purchasing, purchasing participations in, entering into any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in any ownership interest in any type of debt instrument, including, without limitation, any corporate or municipal bonds with a long‑term nominal maturity for which the interest rate is reset through a dutch auction and more commonly referred to as an auction rate security (each, an “Auction Rate Security”).
“Claims” are defined in Section 12.2.
“CME Term SOFR Administrator” is CME Group Benchmark Administration Limited, as administrator of the forward-looking term SOFR, or any successor administrator.
“CME Term SOFR Administrator’s Website” is the website of the CME Group Benchmark Administrator at http://www.cmegroup.com, or any successor source.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.
“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained by Borrower or any Subsidiary at any time.
“Collateral Agent” is, Oxford, not in its individual capacity, but solely in its capacity as agent on behalf of and for the benefit of the Lenders.
“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.
“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.
“Communication” is defined in Section 10.
“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit C.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co‑made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.
“Control Agreement” is any control agreement entered into among the depository institution at which Borrower or any of its Subsidiaries maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent pursuant to which Collateral Agent obtains control (within the meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account.
“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.
“Credit Extension” is any Term Loan or any other extension of credit under the Loan Documents by Collateral Agent or Lenders for Borrower’s benefit.
“Default Rate” is defined in Section 2.3(b).
“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.
“Designated Deposit Account” is Borrower’s deposit account, account number xxxxxxxx4653, maintained with Bank of America, N.A.
“Disbursement Letter” is that certain form attached hereto as Exhibit B.
“Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, or any analogous action taken pursuant to any other applicable law with respect to any corporation, limited liability company, partnership or other entity.
“Dollars,” “dollars” and “$” each mean lawful money of the United States.
“Effective Date” is defined in the preamble of this Agreement.
“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has total assets in excess of Five Billion Dollars ($5,000,000,000.00), and in each case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, unless an Event of Default has occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Notwithstanding the foregoing, (x) in connection with assignments by a Lender due to a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party providing such financing or formed to undertake such securitization transaction and any transferee of such Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall release such Lender from any of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral Agent reasonably shall require.
“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.
“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.
“Event of Default” is defined in Section 8.
“Excluded Taxes” means, with respect to a Lender, any Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes imposed as a result of such Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or that are imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising solely from such Lender becoming a party to this Agreement and performing its obligations and receiving payments under such Agreement).
“Existing Indebtedness” is the Indebtedness of Borrower to Oxford Finance LLC and certain other lenders in the aggregate principal amount outstanding as of the Effective Date of Forty Million Dollars ($40,000,000.00) pursuant to that certain Loan and Security Agreement, dated as of October 29, 2020, by and among Borrower, Oxford Finance LLC, as collateral agent and the lenders party thereto from time to time, as amended.
“Existing Subsidiary” means each Subsidiary of Borrower existing on the Effective Date.
“Fifth Draw Period” is, if the Fifth Draw Period Milestone has occurred, the period commencing on April 1, 2025 and ending on the earlier of (i) June 28, 2025 and (ii) the occurrence of an Event of Default (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion); provided, however, that the Fifth Draw Period shall not commence if on the date of the occurrence of the Fifth Draw Period Milestone an Event of Default has occurred and is continuing (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion). The Fifth Draw Period shall not commence if the Fifth Draw Period Milestone has not been achieved.
“Fifth Draw Period Milestone” is Borrower’s delivery to Collateral Agent and the Lenders of evidence, reasonably satisfactory to Collateral Agent and the Required Lenders in their sole but reasonable discretion that Borrower has achieved trailing twelve (12) month sales revenues (measured in accordance with GAAP) for the trailing twelve (12) month period ending March 31, 2025 of not less than the amount set forth on Annex A attached hereto.
“Fifth Draw Period Unused Term Loan Commitment Fee” means a nonrefundable fee (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) in an amount equal to One Hundred Thousand Dollars ($100,000.00), such fee to be fully-earned if Borrower does not request a Credit Extension in respect of the Term E Loans during the Fifth Draw Period, and due on the earliest to occur of (a) the expiration of the Fifth Draw Period, (b) the acceleration of any Term Loan, or (c) the prepayment of all of the Term Loans pursuant to Section 2.2(c) or (d), payable to Lenders in accordance with their respective Pro Rata Shares.
“Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of all or part of the Term Loans pursuant to Section 2.2(c) or (d), equal to the original principal amount (or, in the case of a partial prepayment, the principal amount to be prepaid as permitted in accordance with Section 2.2(d)(ii)) of such Term Loan prepaid multiplied by the Final Payment Percentage, payable to Lenders in accordance with their respective Pro Rata Shares.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
For the avoidance of doubt, the calculation of any Final Payment shall not include the principal amount prepaid in accordance with Section 2.2(d)(ii) if a Final Payment based on such principal amount was made at the time of such prepayment.
“Final Payment Percentage” is five percent (5.00%).
“Foreign Subsidiary” is (a) a Subsidiary that is not an entity organized under the laws of the United States or any territory thereof or (b) a Foreign Subsidiary Holding Company.
“Foreign Subsidiary Holding Company” is a Subsidiary all of the assets of which consist of the equity of one or more Foreign Subsidiaries and/or other Foreign Subsidiary Holding Companies.
“Fourth Draw Period” is, if the Fourth Draw Period Milestone has occurred, the period commencing on January 1, 2025 and ending on the earlier of (i) March 29, 2025 and (ii) the occurrence of an Event of Default (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion); provided, however, that the Fourth Draw Period shall not commence if on the date of the occurrence of the Fourth Draw Period Milestone an Event of Default has occurred and is continuing (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion). The Fourth Draw Period shall not commence if the Fourth Draw Period Milestone has not been achieved.
“Fourth Draw Period Milestone” is Borrower’s delivery to Collateral Agent and the Lenders of evidence, reasonably satisfactory to Collateral Agent and the Required Lenders in their sole but reasonable discretion that Borrower has achieved trailing twelve (12) month sales revenues (measured in accordance with GAAP) for the trailing twelve (12) month period ending December 31, 2024 of not less than the amount set forth on Annex A attached hereto.
“Fourth Draw Period Unused Term Loan Commitment Fee” means a nonrefundable fee (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) in an amount equal to One Hundred Thousand Dollars ($100,000.00), such fee to be fully-earned if Borrower does not request a Credit Extension in respect of the Term D Loans during the Fourth Draw Period, and due on the earliest to occur of (a) the expiration of the Fourth Draw Period, (b) the acceleration of any Term Loan, or (c) the prepayment of all of the Term Loans pursuant to Section 2.2(c) or (d), payable to Lenders in accordance with their respective Pro Rata Shares.
“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.
“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.
“General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self‑regulatory organization.
“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent.
“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.
“Indemnified Person” is defined in Section 12.2.
“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Insolvent” means not Solvent.
“Intellectual Property” means all of Borrower’s or any Subsidiary’s right, title and interest in and to the following:
“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.
“IP Lien Election Notice” is defined in Section 6.10(b) hereof.
“IP Lien Event” is defined in Section 6.10(b) hereof.
“Key Person” is each of Borrower’s (i) President and Chief Executive Officer, who is Ron Kurtz as of the Effective Date, (ii) Chief Financial Officer, who is Shelley Thunen as of the Effective Date, (iii) Chief Commercial Officer, who is Eric Weinberg as of the Effective Date and (iii) Chief Operating Officer, who is Ilya Goldshleger as of the Effective Date.
“Lender” is any one of the Lenders.
“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section 12.1.
“Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents.
“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.
“Loan Documents” are, collectively, this Agreement, the Perfection Certificates, each Compliance Certificate, each Disbursement Letter, the Post Closing Letter, any subordination agreements, any intellectual property security agreement, any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement; all as amended, restated, or otherwise modified.
“Material Adverse Change” is (a) a material impairment in the perfection or priority of Collateral Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations or condition (financial or otherwise) of Borrower or of Borrower and its Subsidiaries, taken as a whole; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.
“Maturity Date” is, for each Term Loan, June 1, 2028.
“Measuring Date” means, for each fiscal year of Borrower, commencing with Borrower’s 2023 fiscal year until the occurrence of the IP Lien Event, each of March 31, June 30, September 30 and December 31 of such fiscal year.
“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Final Payment, any Unused Term Loan Commitment Fees and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or the other Loan Documents, or otherwise, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Obligor” means Borrower or any Guarantor.
“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“OFCF II” is defined in the preamble hereof.
“OFCF III” is defined in the preamble hereof.
“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
“Payment Date” is the first (1st) calendar day of each calendar month, commencing on August 1, 2023.
“Perfection Certificate” and “Perfection Certificates” is defined in Section 5.1.
“Performance to Plan Revenue” is defined in Section 6.10(a) hereof.
“Permitted Indebtedness” is:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Permitted Investments” are:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Permitted Licenses” are (A) licenses of over-the-counter software that is commercially available to the public, (B) licenses disclosed in the Perfection Certificate(s), and (C) non‑exclusive and exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of business, provided, that, with respect to each such license described in clause (C), (i) no Event of Default has occurred and is continuing on the date of such license; (ii) such license constitutes an arms‑length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property; (iii) in the case of any exclusive license, (x) Borrower delivers ten (10) days’ prior written notice and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and delivers to Collateral Agent and the Lenders copies of the final executed licensing documents in connection with the exclusive license promptly upon consummation thereof, and (y) any such license could not result in a legal transfer of title of the licensed property but may be exclusive in respects other than territory and may be exclusive as to territory only as to discrete geographical areas outside of the United States; and (iv) all upfront payments, royalties, milestone payments or other proceeds arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement.
“Permitted Liens” are:
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“Post Closing Letter” means that certain Post Closing Letter dated as of the Effective Date by and between Collateral Agent and Borrower.
“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term Loans.
“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.
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[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their Term Loan, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least sixty-six percent (66%) of the aggregate outstanding principal balance of the Term Loan and, in respect of this clause (ii), (A) each Original Lender that has not assigned or transferred any portion of its Term Loan, (B) each assignee or transferee of an Original Lender’s interest in the Term Loan, but only to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any Person providing financing to any Person described in clauses (A) and (B) above; provided, however, that this clause (C) shall only apply upon the occurrence of a default, event of default or similar occurrence with respect to such financing.
“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.
“Second Draw Period” is, if the Second Draw Period Milestone has occurred, the period commencing on July 3, 2024 and ending on the earlier of (i) September 29, 2024 and (ii) the occurrence of an Event of Default (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion); provided, however, that the Second Draw Period shall not commence if on the date of the occurrence of the Second Draw Period Milestone an Event of Default has occurred and is continuing (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion). The Second Draw Period shall not commence if the Second Draw Period Milestone has not been achieved.
“Second Draw Period Milestone” is Borrower’s delivery to Collateral Agent and the Lenders of evidence, reasonably satisfactory to Collateral Agent and the Required Lenders in their sole but reasonable discretion that Borrower has achieved trailing twelve (12) month sales revenues (measured in accordance with GAAP) for the trailing twelve (12) month period ending June 30, 2024 of not less than the amount set forth on Annex A attached hereto.
“Second Draw Period Unused Term Loan Commitment Fee” means a nonrefundable fee (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) in an amount equal to One Hundred Thousand Dollars ($100,000.00), such fee to be fully-earned if Borrower does not request a Credit Extension in respect of the Term B Loans during the Second Draw Period, and due on the earliest to occur of (a) the expiration of the Second Draw Period, (b) the acceleration of any Term Loan, or (c) the prepayment of all of the Term Loans pursuant to Section 2.2(c) or (d), payable to Lenders in accordance with their respective Pro Rata Shares.
“Secured Promissory Note” is defined in Section 2.4.
“Secured Promissory Note Record” is a record maintained by each Lender with respect to the outstanding Obligations owed by Borrower to Lender and credits made thereto.
“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.
“Shares” is one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower or Borrower’s Subsidiary, in any Subsidiary; provided that, in the event Borrower, demonstrates to Collateral Agent’s reasonable satisfaction, that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary which is a Foreign Subsidiary, creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code, “Shares” shall mean sixty‑five percent (65%) of the issued and outstanding capital stock, membership units or other securities, owned or held of record by Borrower or its Subsidiary in such Foreign Subsidiary, which entitle the holder thereof to vote for directors or any other matter.
-41-
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Solvent” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature.
“Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Required Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders.
“Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.
“Term Loan” is defined in Section 2.2(a)(v) hereof.
“Term A Loan” is defined in Section 2.2(a)(i) hereof.
“Term B Loan” is defined in Section 2.2(a)(ii) hereof.
“Term C Loan” is defined in Section 2.2(a)(iii) hereof.
“Term D Loan” is defined in Section 2.2(a)(iv) hereof.
“Term E Loan” is defined in Section 2.2(a)(v) hereof.
“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on Schedule 1.1. “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.
“Third Draw Period” is, if the Third Draw Period Milestone has occurred, the period commencing on October 2, 2024 and ending on the earlier of (i) December 29, 2024 and (ii) the occurrence of an Event of Default (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion); provided, however, that the Third Draw Period shall not commence if on the date of the occurrence of the Third Draw Period Milestone an Event of Default has occurred and is continuing (unless such Event of Default has been waived in writing by Collateral Agent and the Required Lenders in their sole discretion). The Third Draw Period shall not commence if the Third Draw Period Milestone has not been achieved.
“Third Draw Period Milestone” is Borrower’s delivery to Collateral Agent and the Lenders of evidence, reasonably satisfactory to Collateral Agent and the Required Lenders in their sole but reasonable discretion that Borrower has achieved trailing twelve (12) month sales revenues (measured in accordance with GAAP) for the trailing twelve (12) month period ending September 30, 2024 of not less than the amount set forth on Annex A attached hereto.
“Third Draw Period Unused Term Loan Commitment Fee” means a nonrefundable fee (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) in an amount equal to One Hundred Thousand Dollars ($100,000.00), such fee to be fully-earned if Borrower does not request a Credit Extension in respect of the Term C Loans during the Third Draw Period, and due on the earliest to occur of (a) the expiration of the Third Draw Period, (b) the acceleration of any Term Loan, or (c) the prepayment of all of the Term Loans pursuant to Section 2.2(c) or (d), payable to Lenders in accordance with their respective Pro Rata Shares.
-42-
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.
“Transfer” is defined in Section 7.1.
“Unused Term Loan Commitment Fee(s)” means, individually and collectively, the Second Draw Period Unused Term Loan Commitment Fee, the Third Draw Period Unused Term Loan Commitment Fee, the Fourth Draw Period Unused Term Loan Commitment Fee and the Fifth Draw Period Unused Term Loan Commitment Fee.
[Balance of Page Intentionally Left Blank]
-43-
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.
BORROWER: |
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RXSIGHT, INC. |
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By |
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Name: |
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Title: |
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COLLATERAL AGENT AND LENDER: |
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OXFORD FINANCE LLC |
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By |
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Name: |
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Title:
LENDER:
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OXFORD FINANCE CREDIT FUND II LP
By: Oxford Finance Advisors, its manager |
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By |
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Name: |
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Title:
LENDER:
OXFORD FINANCE CREDIT FUND III LP
By: Oxford Finance Advisors, its manager
By Name: Title:
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SCHEDULE 1.1
Lenders and Commitments
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Term A Loans |
|
Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$15,500,000.00 |
77.50% |
OXFORD FINANCE CREDIT FUND II LP |
$1,500,000.00 |
7.50% |
OXFORD FINANCE CREDIT FUND III LP |
$3,000,000.00 |
15.00% |
TOTAL |
$20,000,000.00 |
100.00% |
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Term B Loans |
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Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$10,000,000.00 |
100.00% |
TOTAL |
$10,000,000.00 |
100.00% |
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Term C Loans |
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Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$10,000,000.00 |
100.00% |
TOTAL |
$10,000,000.00 |
100.00% |
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Term D Loans |
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Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$10,000,000.00 |
100.00% |
TOTAL |
$10,000,000.00 |
100.00% |
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Term E Loans |
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Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$10,000,000.00 |
100.00% |
TOTAL |
$10,000,000.00 |
100.00% |
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Aggregate (all Term Loans) |
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Lender |
Term Loan Commitment |
Commitment Percentage |
OXFORD FINANCE LLC |
$55,500,000.00 |
92.50% |
OXFORD FINANCE CREDIT FUND II LP |
$1,500,000.00 |
2.50% |
OXFORD FINANCE CREDIT FUND III LP |
$3,000,000.00 |
5.00% |
TOTAL |
$60,000,000.00 |
100.00% |
SCHEDULE 6.10(a)
Performance to Plan Revenue
Quarter |
Performance to Plan Revenue |
March 31, 2023 |
$[***] |
June 30, 2023 |
$[***] |
September 30, 2023 |
$[***] |
December 31, 2023 |
$[***] |
March 31, 2024 |
$[***] |
June 30, 2024 |
$[***] |
September 30, 2024 |
$[***] |
December 31, 2024 |
$[***] |
March 31, 2025 |
$[***] |
June 30, 2025 |
$[***] |
September 30, 2025 |
$[***] |
December 31, 2025 |
$[***] |
March 31, 2026 |
$[***] |
June 30, 2026 |
$[***] |
September 30, 2026 |
$[***] |
December 31, 2026 |
$[***] |
March 31, 2027 |
$[***] |
June 30, 2027 |
$[***] |
September 30, 2027 |
$[***] |
December 31, 2027 |
$[***] |
March 31, 2028 |
$[***] |
June 30, 2028 |
$[***] |
ANNEX A
Fourth Draw Period Milestone and Fifth Draw Period Milestone
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Amount |
Second Draw Period Milestone |
$[***] |
Third Draw Period Milestone |
$[***] |
Fourth Draw Period Milestone |
$[***] |
Fifth Draw Period Milestone |
$[***] |
EXHIBIT A
Description of Collateral
The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:
All goods, Accounts (including health‑care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and
All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include (a) any Intellectual Property (provided, however, that (1) the Collateral shall include all Accounts and all proceeds of Intellectual Property and (2) if a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property); (b) any intent-to-use trademarks at all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording of a statement of use with the United States Patent and Trademark Office or otherwise; (c) the Excluded Accounts; (d) more than 65% of the total combined voting power of all classes of stock entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Borrower demonstrates to Collateral Agent’s reasonable satisfaction that a pledge of more than 65% of the Shares of such Subsidiary creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code; (e) more than 65% of the total combined voting power of all Shares of each Existing Subsidiary; and (f) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be deemed ineffective under Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the “Collateral.”.
Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Borrower has agreed not to encumber any of its Intellectual Property.
[see attached]
DISBURSEMENT LETTER
[DATE]
EXHIBIT B Form of Disbursement Letter The undersigned, being the duly elected and acting President and CEO of RXSIGHT, INC., a Delaware corporation with offices located at 100 Columbia, Aliso Viejo, CA 92656 (“Borrower”), does hereby certify to OXFORD FINANCE LLC (“Oxford”), as collateral agent and acting on behalf of the Lenders from time to time party to the Loan Agreement (as defined below) (the “Collateral Agent”) in connection with that certain Loan and Security Agreement dated as of June 30, 2023, by and among Borrower, Collateral Agent and the Lenders from time to time party thereto (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that:
1. The representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct in all material respects as of the date hereof.
2. No event or condition has occurred that would constitute an Event of Default under the Loan Agreement or any other Loan Document.
3. Borrower is in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement.
4. All conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof have been satisfied or waived by Collateral Agent.
5. No Material Adverse Change has occurred.
6. The undersigned is a Responsible Officer.
[Balance of Page Intentionally Left Blank]
7. The proceeds of the Term [A][B][C][D][E] Loan shall be disbursed as follows:
Disbursement from Collateral Agent: |
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Loan Amount |
$_______________ |
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Less: |
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‑‑Facility Fee |
($_________) |
--Payoff of Existing Indebtedness |
($_________) |
[‑‑Interim Interest |
($_________)] |
‑‑Collateral Agent’s Legal Fees |
($_________) |
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TOTAL TERM [A][B][C][D][E] LOAN NET PROCEEDS FROM COLLATERAL AGENT: |
$_______________ |
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8. The Term [A][B][C][D][E] Loan shall amortize in accordance with the Amortization Table attached hereto.
9. The aggregate net proceeds of the Term [A][B][C][D][E] Loan shall be transferred to the Designated Deposit Account as follows:
Account Name: |
RXSIGHT, INC. |
Bank Name: |
[_________] |
Bank Address: |
[_________] |
Account Number: |
[_________] |
ABA Number: |
[_________] |
[Balance of Page Intentionally Left Blank]
Dated as of the date first set forth above.
BORROWER: |
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RXSIGHT, INC. |
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By |
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Name: |
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Title: |
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COLLATERAL AGENT on behalf of Lenders: |
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OXFORD FINANCE LLC |
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By |
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Name: |
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Title: |
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AMORTIZATION TABLE(Term [A][B][C][D][E] Loan)
[see attached]
EXHIBIT C
Compliance Certificate
TO: |
OXFORD FINANCE LLC, as Collateral Agent and Lender |
FROM: |
RXSIGHT, INC. |
The undersigned authorized officer (“Officer”) of RXSIGHT, INC., a Delaware corporation (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),
(a) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;
(b) There are no Events of Default, except as noted below;
(c) Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.
(d) Borrower, and each of Borrower’s Subsidiaries, has timely filed all required foreign, federal and material state and local tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, and material state and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;
(e) No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.
Attached are the required documents, if any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year‑end audit adjustments as to the interim financial statements.
Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.
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Reporting Covenant |
Requirement |
Actual |
Complies |
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1) |
Financial statements |
Quarterly within 45 days |
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Yes |
No |
N/A |
2) |
Annual (CPA Audited) statements |
Within 90 days after FYE |
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Yes |
No |
N/A |
3) |
Annual Financial Projections/Budget (prepared on a monthly basis) |
Annually (within 30 days after FYE), and when revised |
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Yes |
No |
N/A |
4) |
A/R & A/P agings |
If applicable |
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Yes |
No |
N/A |
5) |
8‑K, 10‑K and 10‑Q Filings |
If applicable, within 5 days of filing |
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Yes |
No |
N/A |
6) |
Compliance Certificate |
Monthly within 30 days |
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Yes |
No |
N/A |
7) |
IP Report |
When required |
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Yes |
No |
N/A |
8) |
Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period |
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$________ |
Yes |
No |
N/A |
9) |
Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period |
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$________ |
Yes |
No |
N/A |
10) |
Total aggregate assets held at Borrower’s Foreign Subsidiaries |
$___________________ |
$________ |
Yes |
No |
N/A |
Deposit and Securities Accounts
(Please list all accounts; attach separate sheet if additional space needed)
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Institution Name |
Account Number |
New Account? |
Account Control Agreement in place? |
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1) |
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Yes |
No |
Yes |
No |
2) |
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Yes |
No |
Yes |
No |
3) |
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Yes |
No |
Yes |
No |
4) |
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Yes |
No |
Yes |
No |
Financial Covenants
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Covenant |
Requirement |
Actual |
Compliance |
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1) |
Section 6.10(a) Minimum sales (trailing twelve (12) months) |
$___________ |
$_________ |
Yes |
No |
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Other Matters
1) |
Has any Key Person ceased to be actively engaged in management since the last Compliance Certificate? |
Yes |
No |
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2) |
Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement? |
Yes |
No |
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3) |
Have there been any new or pending claims or causes of action against Borrower that could reasonably be expected to result in aggregate damages of more than Two Hundred Fifty Thousand Dollars ($250,000.00)? |
Yes |
No |
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4) |
Have there been any amendments of or other changes to the capitalization table of Borrower (which are material) and to the Operating Documents of Borrower or |
Yes |
No |
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any of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Certificate. |
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Exceptions
Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if additional space needed.)
RXSIGHT, INC.
By
Name:
Title:
Date:
LENDER USE ONLY |
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Received by: |
Date: |
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Verified by: |
Date: |
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Compliance Status: Yes No |
[see attached]
SECURED PROMISSORY NOTE
(Term[A][B][C][D][E]Loan)
$____________________ Dated: [DATE]
EXHIBIT D Form of Secured Promissory Note FOR VALUE RECEIVED, the undersigned, RXSIGHT, INC., a Delaware corporation with offices located at 100 Columbia, Aliso Viejo, CA 92656 (“Borrower”) HEREBY PROMISES TO PAY to the order of [OXFORD FINANCE LLC] [OXFORD FINANCE CREDIT FUND II LP] [OXFORD FINANCE CREDIT FUND III LP] (“Lender”) the principal amount of [___________] MILLION DOLLARS ($______________) or such lesser amount as shall equal the outstanding principal balance of the Term [A][B][C][D][E] Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term [A][B][C][D][E] Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated June 30, 2023 by and among Borrower, Lender, Oxford Finance LLC, as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.
Principal, interest and all other amounts due with respect to the Term [A][B][C][D][E] Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.
The Loan Agreement, among other things, (a) provides for the making of a secured Term [A][B][C][D][E] Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.
This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.
This Note and the obligation of Borrower to repay the unpaid principal amount of the Term [A][B][C][D][E] Loan, interest on the Term [A][B][C][D][E] Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.
Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.
Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due.
This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California.
The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation. Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.
[Balance of Page Intentionally Left Blank]
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.
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BORROWER: |
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RXSIGHT, INC. |
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By |
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Name: |
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Title: |
LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL
Date |
Principal Amount |
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Corporate Borrowing Certificate
RXSIGHT, INC.
SECRETARY’S CERTIFICATE
June 30, 2023
The undersigned, being the duly elected, qualified and acting Assistant Secretary of RxSight, Inc., a Delaware corporation (the “Company”), does hereby certify, as of the date hereof, in her capacity as an officer of the Company and not in any individual capacity, pursuant to the Loan and Security Agreement, dated as of the date hereof (the “Loan Agreement”), by and among the Company, the lenders party thereto, and Oxford Finance LLC, as collateral agent thereunder, that:
1. Attached hereto as Exhibit A is a true and complete copy of the Amended and Restated Certificate of Incorporation of the Company, including all amendments thereto, certified by the Secretary of State of the State of Delaware and as presently in full force and effect on and as of the date hereof (the “Certificate”), there having been no other amendments, restatements or modifications to, or other documents effecting any amendment, modification, restatement or repeal of, the Certificate;
2. Attached hereto as Exhibit B is a true and complete copy of the Second Amended and Restated Bylaws, including all amendments and restatements thereto, of the Company, as in full force and effect on and as of the date hereof (the “Bylaws”), there having been no other amendments, restatements or modifications to, or other documents effecting any amendment, modification, restatement or repeal of, the Bylaws;
3. Attached hereto as Exhibit C is a true and complete copy of the resolutions adopted by the Company’s Board of Directors relating to the authorization, execution, delivery and performance of the Loan Agreement and other Loan Documents, and such resolutions have not been amended, annulled, rescinded or revoked and remain in full force and effect on and as of the date hereof; and
4. Attached hereto as Exhibit D is a list of certain persons who are, on and as of the date hereof, the duly elected, qualified and acting officers of the Company authorized to execute and deliver the Loan Agreement, the other Loan Documents and the other documents related thereto to which the Company is a party, holding the office(s) set forth opposite their respective names, and the signatures appearing opposite their respective names are the true signatures of said officers.
5. Attached hereto as Exhibit E is a copy of the certificate of good standing of the Company certified by the Secretary of State of the State of Delaware.
All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.
[Signature Page Follows]
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
By:
Name: Shelley Thunen
Title: Assistant Secretary
The undersigned, being the Chief Executive Officer of the Company, hereby certifies that Shelley Thunen is the duly elected, qualified and acting Assistant Secretary of the Company and that the above signature is her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
By:
Name: Ron Kurtz
Title: Chief Executive Officer
[***] Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Exhibit A
Amended and Restated Certificate of Incorporation
See attached.
Exhibit B
Second Amended and Restated Bylaws
See attached.
Exhibit C
Resolutions Adopted By the Board of Directors
See attached.
Exhibit D
Incumbency
Name Office Signature
Ron Kurtz Chief Executive Officer
Shelley Thunen Assistant Secretary
Shelley Thunen Chief Financial Officer DEBTOR: RXSIGHT, INC. SECURED PARTY: OXFORD FINANCE LLC, as Collateral Agent
Exhibit E
Certificate of Good Standing
See attached.
EXHIBIT A TO UCC FINANCING STATEMENT
Description of Collateral
The Collateral consists of all of Debtor’s right, title and interest in and to the following personal property:
All goods, Accounts (including health‑care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and
All Debtor’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include (a) any Intellectual Property (provided, however, that (1) the Collateral shall include all Accounts and all proceeds of Intellectual Property and (2) if a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Debtor that are proceeds of the Intellectual Property); (b) any intent-to-use trademarks at all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording of a statement of use with the United States Patent and Trademark Office or otherwise; (c) the Excluded Accounts; (d) more than 65% of the total combined voting power of all classes of stock entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Debtor demonstrates to Collateral Agent’s reasonable satisfaction that a pledge of more than 65% of the Shares of such Subsidiary creates a present and existing adverse tax consequence to Debtor under the U.S. Internal Revenue Code; (e) more than 65% of the total combined voting power of all Shares of each Existing Subsidiary; and (f) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be deemed ineffective under Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the “Collateral”.
Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Debtor has agreed not to encumber any of its Intellectual Property.
Capitalized terms used but not defined herein have the meanings ascribed in the Uniform Commercial Code in effect in the State of California as in effect from time to time (the “Code”) or, if not defined in the Code, then in the Loan and Security Agreement by and between Debtor, Secured Party and the other Lenders party thereto (as modified, amended and/or restated from time to time).