(1)

The number of directors of the Corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the by-laws.  Election of directors need not be by ballot unless the by-laws so provide.

(2)

The Board of Directors shall have powers without the assent or vote of the stockholders to make, alter, amend, change, add to or repeal the by-laws of the Corporation; to fix and vary the amount to be reserved for any proper purpose; to authorize and cause to be executed mortgages and liens upon all or any part of the property of the Corporation; to determine the use and disposition of any surplus or net profits; and to fix the times for the declaration and payment of dividends.

(3)

The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors’ interest, or for any other reason.

(4)

In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this certificate, and to any by-laws from time to time made by the stockholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made.

(1)

If a claim under the foregoing paragraph is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

(2)

The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

(3)

The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Exhibit 10.1

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

dated as of March 21, 2023

 

among

 

PHENOMEX INC.,

 

as Borrower,

 

ISOPLEXIS CORPORATION,

 

as a Guarantor,

 

and

 

EAST WEST BANK,

 

as Bank

 

TABLE OF CONTENTS

 

1.	DEFINITIONS AND CONSTRUCTION.		1
	1.1.	Definitions.	1
	1.2.	Accounting Terms.	1
	1.3.	Other Definitional Terms; Rules of Interpretation.	2
	1.4.	Effectuation of Certain Transactions	3
	1.5.	Timing of Payment or Performance	3
	1.6.	Divisions.	3
2.	LOAN AND TERMS OF PAYMENT.		3
	2.1.	Credit Extensions.	3
	2.2.	[Reserved].	4
	2.3.	Interest Rates, Payments, and Calculations.	4
	2.4.	Crediting Payments.	5
	2.5.	Fees.	5
	2.6.	Additional Costs.	6
	2.7.	Taxes.	6
	2.8.	Mandatory Prepayments.	8
	2.9.	Term.	9
3.	CONDITIONS OF LOANS.		10
	3.1.	Conditions Precedent to Initial Credit Extension.	10
4.	CREATION OF SECURITY INTEREST.		10
	4.1.	Grant of Security Interest.	10
	4.2.	Perfection of Security Interest.	11
	4.3.	Right to Inspect.	11
	4.4.	Pledge of Collateral.	12
5.	REPRESENTATIONS AND WARRANTIES.		12
	5.1.	Due Organization and Qualification.	12
	5.2.	Due Authorization; No Conflict.	12
	5.3.	Enforceability.	13
	5.4.	Collateral.	13
	5.5.	Margin Stock and Use of Proceeds.	13
	5.6.	Employee Matters.	13

	5.7.	Intellectual Property.	13
	5.8.	Environmental Matters.	14
	5.9.	Name; Location of Chief Executive Office.	14
	5.10.	Actions, Suits, Litigation, or Proceedings.	14
	5.11.	No Material Adverse Change in Financial Statements.	15
	5.12.	Solvency, Payment of Debts.	15
	5.13.	Compliance with Laws and Regulations.	15
	5.14.	Subsidiaries.	16
	5.15.	Government Consents.	16
	5.16.	Shares.	16
	5.17.	Full Disclosure.	16
	5.18.	[Reserved].	17
	5.19.	Anti-Money-Laundering and Economic Sanctions Laws.	17
	5.20.	[Reserved].	17
	5.21.	ERISA Matters.	17
	5.22.	Taxes.	17
	5.23.	Investor Rights Agreements; Warrant	18
6.	AFFIRMATIVE COVENANTS.		18
	6.1.	Good Standing and Government Compliance.	18
	6.2.	Financial Statements, Reports, Certificates.	18
	6.3.	[Reserved].	20
	6.4.	Taxes.	20
	6.5.	Insurance.	20
	6.6.	Deposit Accounts; Securities Accounts.	21
	6.7.	Financial Covenants.	21
	6.8.	Registration of Intellectual Property Rights.	23
	6.9.	Notice for Inbound Licenses.	23
	6.10.	Creation/Acquisition of Subsidiaries.	24
	6.11.	[Reserved].	24
	6.12.	Further Assurances.	24
	6.13.	Interest Rate Protection.	24
	6.14.	Patriot Act, Bank Secrecy Act and Office of Foreign Assets Control.	24
	6.15.	Bank Meetings.	24

	6.16.	Post-Closing Obligations	24
7.	NEGATIVE COVENANTS.		25
	7.1.	Dispositions.	25
	7.2.	Change in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control.	25
	7.3.	Mergers or Acquisitions.	25
	7.4.	Indebtedness.	25
	7.5.	Encumbrances.	26
	7.6.	Distributions.	26
	7.7.	Investments.	26
	7.8.	Transactions with Affiliates.	26
	7.9.	Subordinated Debt.	26
	7.10.	Inventory and Equipment.	27
	7.11.	No Investment Company; Margin Regulation.	27
8.	EVENTS OF DEFAULT.		27
	8.1.	Payment Default.	27
	8.2.	Covenant Default.	27
	8.3.	Material Adverse Change.	27
	8.4.	Attachment.	28
	8.5.	Insolvency.	28
	8.6.	Other Agreements.	28
	8.7.	Subordinated Debt.	28
	8.8.	Judgments.	28
	8.9.	Misrepresentations.	28
	8.10.	Guaranty.	29
9.	BANK'S RIGHTS AND REMEDIES.		29
	9.1.	Rights and Remedies.	29
	9.2.	Power of Attorney.	31
	9.3.	Accounts Collection.	31
	9.4.	Bank Expenses.	31
	9.5.	Bank's Liability for Collateral.	31
	9.6.	No Obligation to Pursue Others.	32
	9.7.	Remedies Cumulative.	32

	9.8.	Demand; Protest.	32
10.	NOTICES.		32
11.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE.		33
	11.1.	Governing Law and Venue.	33
	11.2.	Jury Trial Waiver.	33
	11.3.	Jury Reference.	33
12.	GENERAL PROVISIONS.		34
	12.1.	Successors and Assigns.	34
	12.2.	Indemnification.	34
	12.3.	Time of Essence.	34
	12.4.	Severability of Provisions.	34
	12.5.	Correction of Loan Documents.	35
	12.6.	Amendments in Writing, Integration.	35
	12.7.	Counterparts.	35
	12.8.	Survival.	35
	12.9.	Effect of Amendment and Restatement.	35
	12.10.	Confidentiality.	36
	12.11.	Patriot Act.	36
	12.12.	Reinstatement.	36
	12.13.	Acknowledgment Regarding Any Supported QFCs	37

SCHEDULES

 

6.16

Post-Closing Matters

This SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as amended, restated, supplemented, or otherwise modified from time to time, this "Agreement") is entered into as of March 21, 2023, by and among EAST WEST BANK, a California banking corporation ("Bank"), PHENOMEX INC., a Delaware corporation ("Borrower") and, immediately following the consummation of the Merger (as defined below), ISOPLEXIS CORPORATION, a Delaware corporation ("IsoPlexis").

 

RECITALS

 

Pursuant to the terms of that certain Agreement and Plan of Merger, dated as of December 21, 2022 (the "Merger Agreement"), among IsoPlexis, Borrower, and Iceland Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Borrower ("Merger Sub"), Merger Sub will merge (the "Merger") with and into the IsoPlexis (the "Merger"), with IsoPlexis as the surviving entity of such Merger.

 

Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower.  This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank, and amends and restates, in its entirety, that certain Amended and Restated Loan and Security Agreement (as amended from time to time prior to the date hereof, the "Original Agreement") by and between Bank and Borrower dated as of June 30, 2021 (the "Original Closing Date").

 

AGREEMENT

 

The parties agree as follows:

 

1.           DEFINITIONS AND CONSTRUCTION.

 

 

1.2.         Accounting Terms.

 

(a)          Any accounting term not specifically defined on Exhibit A shall be construed in accordance with GAAP and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP as in effect from time to time, except as otherwise provided herein.  The term "financial statements" shall include the accompanying notes and schedules.

 

(b)          Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (A) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities), or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of Holdings or any Subsidiary at "fair value", as defined therein and (B) any treatment of Indebtedness relating to convertible or equity-linked securities under Accounting Standards Codification 470-20 or 2015-03 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) requiring the valuation of any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

 

(c)          Notwithstanding anything to the contrary contained in the definition of "Capital Leases" or elsewhere in this Agreement, only those leases (assuming for purposes thereof that such leases were then in effect) that would constitute "capital leases" in conformity with GAAP as in effect prior to giving effect to the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02 "Leases (Topic 842)" and ASU No. 2018-11 "Leases (Topic 842)" shall be considered Capital Leases hereunder or under any other Loan Document,  and all calculations and deliverables under this Agreement or any other Loan Document shall be made or prepared, as applicable, in accordance therewith; provided, that all financial statements required to be provided hereunder shall be prepared in accordance with GAAP without giving effect to the foregoing treatment of Capital Leases.

 

 

 

 

 

2.            LOAN AND TERMS OF PAYMENT.

 

2.1.        Credit Extensions.

 

(a)         Promise to Pay.  Borrower promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower, together with interest on the unpaid principal amount of such Credit Extensions at the rates set forth herein and all other Obligations owing by Borrower to Bank, in each case, in accordance with the terms hereof.

 

(b)          Term Loan.

 

(i)          Subject to and upon the terms and conditions of the Original Agreement, on the Original Closing Date, Bank made a term loan to Borrower in the original principal amount of Twenty Million Dollars ($20,000,000) (the "Original Term Loan").  On the date hereof, immediately prior to giving effect to this Agreement, the outstanding principal balance of the Original Term Loan is Twenty Million Dollars ($20,000,000) (the "Outstanding Original Term Loan Balance").  On the Closing Date, the Outstanding Original Term Loan Balance shall be continued hereunder for all purposes of this Agreement as a term loan made by Bank pursuant to this Agreement.  Subject to and upon the terms and conditions of this Agreement, Bank hereby agrees to make an additional term loan to Borrower on the Closing Date in the original principal amount of Fifty Million Dollars ($50,000,000) (the "Closing Date Term Loan"; the Outstanding Original Term Loan Balance, taken together and treated as a single loan herein referred to as the "Term Loan"), such that the outstanding Term Loan on the Closing Date after giving effect to this Agreement and the extension of credit hereunder shall equal Seventy Million Dollars ($70,000,000).

 

(ii)

 

a)          Interest shall accrue from the date the Term Loan is made at the rate specified in Section 2.3(a), and shall be payable monthly as provided in Section 2.3(c).

 

b)         The Term Loan shall be repaid in equal monthly installments in the amount of Eight Hundred Seventy-Five Thousand Dollars ($875,000) each, commencing on the Amortization Date and continuing on the first day of each month thereafter through and including March 1, 2028.  On the Term Loan Maturity Date, the outstanding principal amount of the Term Loan and all accrued and unpaid interest thereon shall be immediately due and payable.  The Term Loan, once repaid, may not be reborrowed.

 

(c)         Bank Products.  Borrower may request, and Bank or its affiliates may, in their sole and absolute discretion, provide, Bank Products.  If Borrower requests Bank or its affiliates to procure or provide Bank Products, then Borrower agrees with Bank or such affiliates, as applicable, to pay when due all indebtedness, liabilities and obligations with respect to Bank Products and further agrees to indemnify and hold Bank or such affiliates harmless from any and all indebtedness, liabilities, obligations, losses, costs and expenses (including  reasonable attorneys' fees) now or hereafter owing to or incurred by Bank (including those under agreements of indemnifications or assurances provided by Bank to its affiliates) or its affiliates with respect to Bank Products, all as the same may arise.  Borrower acknowledges and agrees that (a) all indebtedness, liabilities and obligations with respect to Bank Products provided by Bank or its affiliates, and all of its agreements under this Section 2.1(c), are part of the Obligations secured by the Collateral, and (b) the obtaining of Bank Products from Bank or its affiliates, (i) is in the sole and absolute discretion of Bank and its applicable affiliates and (ii) is subject to all rules and regulations of Bank and its applicable affiliates.

 

2.2.         [Reserved].

 

2.3.         Interest Rates, Payments, and Calculations.

 

(a)         Interest Rate.  Except as set forth in Section 2.3(b), the Term Loan shall bear interest, on the outstanding daily balance thereof at a variable rate per annum equal to the Prime Rate plus one-half of one percent (0.50%).

 

(b)         Late Fee; Default Rate.  If any payment is not made within ten (10) days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) three percent (3%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law.  At Bank's election, all Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

 

(c)          Payments.  Interest hereunder shall be due and payable on the first (1st) calendar day of each month during the term hereof (commencing as of May 1, 2023).  Bank shall, at its option, charge such interest and all Periodic Payments, in each case if and when due, against, first, a deposit account designated by Borrower in writing, and second, if insufficient funds remain in such account, any of Borrower's other Deposit Accounts, in which case those amounts shall, to the extent not satisfied in full after charging such remaining amounts to such other Deposit Accounts, thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.  Notwithstanding anything to the contrary herein, the parties hereto hereby agree that any and all interest on the "Credit Extensions" under, and as defined in, the Original Agreement that is accrued and unpaid as of the Closing Date, shall be Obligations of Borrower hereunder, shall constitute accrued and unpaid interest hereunder as of the Closing Date, and shall be due and payable on the Closing Date.

 

(d)         Application of Payments.  Unless otherwise agreed or required by applicable law, payments made hereunder will be applied first to any accrued unpaid interest as shown on the most recent statement or bill provided to Borrower (if no statement or bill has been provided for any reason, it shall be applied to the unpaid interest accrued since the last payment); then to principal; then to any late charges; then to any unpaid collection costs, then to any other Obligations until Paid in Full and Bank has no further obligation to make Credit Extensions under this Agreement and then to Borrower or such other Person entitled thereto under applicable law.  Borrower will pay Bank at Bank's address set forth in Section 10 or at such other place as Bank may designate in writing.

 

(e)         Computation.  In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate.  All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.

 

 

 

(a)          Term Loan Facility Fee.  On the Closing Date, a term loan facility fee equal to Seven Hundred Thousand Dollars ($700,000), which shall be nonrefundable when paid.

 

(b)          Bank Expenses.  All Bank Expenses incurred through the Closing Date, less any amounts paid specifically for Bank Expenses prior to such invoicing, shall be paid on the Closing Date and, after the Closing Date, promptly after receiving an invoice from Bank, all Bank Expenses shall be paid as and when requested by Bank.

 

(c)          Early Termination Fee.  A fee in an amount equal to one percent (1%) of the amount of any prepayment of the outstanding principal balance of the Term Loan with respect to any prepayment made prior to the first anniversary of the Closing Date; provided, that no such fee shall be required in respect of any prepayment that occurs on or after the date that is the first anniversary of the Closing Date.

 

 

2.7.         Taxes.

 

(a)         Withholding.  Any and all payments by any Loan Party to or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Taxes, except as required by applicable law.  If any Loan Party shall be required by any applicable law to deduct any Taxes from such payments, then:  (i) the applicable Loan Party shall make such deductions, (ii) the Loan Party shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law and promptly furnish to Bank a certified receipt or other evidence of such payment, and (iii) if the Tax required to be withheld is an Indemnified Tax, the sum payable by such Loan Party shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.7(a)), Bank receives an amount equal to the sum it would have received had no such deductions been made.

 

(b)        Obligation to Pay.  Without limiting the provisions of Section 2.7(a), each Loan Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)          Indemnity.  The Loan Parties shall jointly and severally indemnify Bank, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes (including Taxes imposed or asserted on or attributable to amounts payable under this this Section 2.7) paid by, or imposed on, Bank (or its Affiliates) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto (including reasonable attorneys' and tax advisors' fees and expenses), whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Borrower by Bank shall be conclusive absent manifest error.

 

(d)          Receipts.  If requested in writing by Bank, Borrower shall deliver to Bank, as soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Bank.

 

(e)          Refunds.  If Bank receives a refund of any Taxes as to which it has been indemnified by Borrower or another Loan Party or with respect to which Borrower or another Loan Party has paid additional amounts pursuant to this Section 2.7, it shall, so long as no Event of Default has occurred and is continuing, pay to such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section 2.7 with respect to the Taxes giving rise to such refund), net of all out of pocket expenses of Bank and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that such Loan Party, upon the request of Bank, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to Bank in the event Bank is required to repay such refund to such Governmental Authority.  This Section 2.7(e) shall not be construed to require Bank to (i) make available its tax returns (or any other information relating to its taxes that it deems confidential) to such Loan Party or any other Person or (ii) pay any amount pursuant to this Section 2.7(e) the payment of which would place Bank (or its Affiliates) in a less favorable net after-Tax position than Bank (or its Affiliates) would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.

 

(f)          Bank and any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, shall provide a duly executed IRS Form W-9 to Borrower on the Closing Date, and other appropriate documentation (upon Borrower's written request) certifying to Bank's exemption from, or reduction in rate of, United States federal withholding taxes.  Bank and any other such recipient agree that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Loan Party in writing of its legal inability to do so.

 

(g)        If a payment made to Bank or any other recipient of any payment on account of any obligation of any Loan Party hereunder or under any other Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in IRC Section 1471(b) or 1472(b), as applicable), such recipient shall deliver to Borrower at the time or times prescribed by law and at such time or times reasonably requested by Borrower such documentation prescribed by applicable law (including as prescribed by IRC Section 1471(b)(3)(C)(i)) and such additional documentation reasonably requested by Borrower as may be necessary for Borrower to comply with its obligations under FATCA and to determine that such recipient has complied with such recipient's obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.7(g), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

 

(h)          The Loan Parties' obligations under this Section 2.7 shall survive the repayment of the Loans, the assignment of the Loans, and the termination of the other provisions of this Agreement.

 

2.8.         Mandatory Prepayments.

 

(a)          Sales of Assets.  No later than the fifth Business Day following any Loan Party's receipt of net cash proceeds from any Prepayment Asset Sale of any Loan Party, Borrower shall pay (or cause to be paid) such net cash proceeds to Bank as a mandatory prepayment of the Obligations, such payment to be applied (i) if no Event of Default has occurred and is continuing, to the outstanding principal balance of the Term Loan, applied to the installments in the inverse order of maturity (for the avoidance of doubt, any amount that is due and payable on the Term Loan Maturity Date shall constitute an installment), and (ii) if an Event of Default has occurred and is continuing, in such manner as Bank may elect; provided, that, so long as (1) no Event of Default has occurred and is continuing and (2) prior to the date any such prepayment is required to be made, Borrower has notified Bank in writing of its intention to reinvest the applicable proceeds in the business of one or more Loan Parties, then Borrower shall not be required to make a mandatory prepayment under this clause (a) in respect of the applicable net cash proceeds to the extent that (x) such net cash proceeds are so reinvested within 6 months following receipt thereof, or (y) one or more Loan Parties has committed to so reinvest such net cash proceeds during such 6-month period and the applicable net cash proceeds are so reinvested within 6 months after the expiration of such 6-month period; it being understood that if the applicable net cash proceeds have not been so reinvested prior to the expiration of the applicable period, Borrower shall promptly prepay the Obligations with the amount of applicable net cash proceeds (without regard to the immediately preceding proviso).

 

(b)         Insured Losses/Condemnation.  If any Equipment or real property of any Loan Party is damaged, destroyed or taken by condemnation in whole or in part or any Loan Party receives proceeds of casualty insurance, upon receipt by any Loan Party of net cash proceeds in respect of the foregoing, no later than the fifth Business Day following any Loan Party's receipt of such net cash proceeds, Borrower shall pay (or cause to be paid) such net cash proceeds to Bank as a mandatory prepayment of the Obligations, such payment to be applied (i) if no Event of Default has occurred and is continuing, to the outstanding principal balance of the Term Loan, applied to the installments in the inverse order of maturity (for the avoidance of doubt, any amount that is due and payable on the Term Loan Maturity Date shall constitute an installment), and (ii) if an Event of Default has occurred and is continuing, in such manner as Bank may elect; provided, that, so long as (1) no Event of Default has occurred and is continuing and (2) prior to the date any such prepayment is required to be made, Borrower has notified Bank in writing of its intention to reinvest the applicable proceeds in the business of one or more Loan Parties, then Borrower shall not be required to make a mandatory prepayment under this clause (b) in respect of the applicable net cash proceeds to the extent that (x) such net cash proceeds are so reinvested within 6 months following receipt thereof, or (y) one or more Loan Parties has committed to so reinvest such net cash proceeds during such 6-month period and the applicable net cash proceeds are so reinvested within 6 months after the expiration of such 6-month period; it being understood that if the applicable net cash proceeds have not been so reinvested prior to the expiration of the applicable period, Borrower shall promptly prepay the Obligations with the amount of applicable net cash proceeds (without regard to the immediately preceding proviso).

 

(c)        Indebtedness.  Promptly (and in any event within three Business Days) following any Loan Party's receipt of the net cash proceeds from the issuance or incurrence of Indebtedness (other than Permitted Indebtedness), Borrower shall pay (or cause to be paid) such net cash proceeds to Bank as a mandatory prepayment of the Obligations, such payment to be applied in such manner as Bank may elect.  The provisions of this clause (c) shall not be deemed to be implied consent to any such issuance or incurrence otherwise prohibited by the terms of this Agreement.

 

(d)        Extraordinary Receipts.  No later than the fifth Business Day following any Loan Party's receipt of the net cash proceeds of any Extraordinary Receipt, Borrower shall pay such net cash proceeds to Bank as a mandatory prepayment of the Obligations, such payment to be applied (i) if no Event of Default has occurred and is continuing, to the outstanding principal balance of the Term Loan, applied to the installments in the inverse order or maturity (for the avoidance of doubt, any amount that is due and payable on the Term Loan Maturity Date shall constitute an installment), and (ii) if an Event of Default has occurred and is continuing, in such manner as Bank may elect; provided that no prepayment under this Section 2.8(d) shall be required unless and solely to the extent that the amount of the net cash proceeds received from Extraordinary Receipts in any fiscal year exceeds Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate for all such Extraordinary Receipts in such fiscal year.

 

 

3.            CONDITIONS OF LOANS.

 

 

(a)          Bank shall have received executed counterparts of this Agreement and each of the other agreements, documents, instruments, opinions, certificates and other items as set forth on Schedule 3.1(a) hereto, in each case, where applicable, duly executed by the applicable parties thereto;

 

(b)          Since January 1, 2023, no event shall have occurred which has had or would reasonably be expected have a Material Adverse Effect;

 

(c)          Bank shall have received payment of the fees and Bank Expenses then due pursuant to Section 2.5;

 

(d)          Bank shall have received an Automatic Debit Authorization;

 

(e)          the representations and warranties contained in this Agreement and each other Loan Document shall be true and correct in all material respects on and as of the Closing Date (provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date); and

 

(f)          no Event of Default shall have occurred and be continuing, or would result from the making of the Credit Extension on the Closing Date after giving effect to such Credit Extension.

 

The making of the Credit Extension on the Closing Date shall be deemed to be a representation and warranty by Borrower on the Closing Date that the foregoing conditions are satisfied on such date.

 

4.           CREATION OF SECURITY INTEREST.

 

 

 

 

 

5.            REPRESENTATIONS AND WARRANTIES.

 

Each Loan Party represents and warrants as follows:

 

 

 

 

 

 

 

5.7.        Intellectual Property.

 

(a)          The Loan Parties are the sole owners or licensees of the Intellectual Property, except for (a) licenses permitted hereunder or granted by the Loan Parties to their customers in the ordinary course of business, (b) over the counter software that is commercially available to the public and (c) those agreements into which the Loan Parties have entered that provide for joint ownership of certain intellectual property rights created during the course of the engagement.  To the best of each Loan Party's knowledge, each of the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and, except as set forth in Section 5.7 of the Disclosure Schedules, no claim has been made to any Loan Party that it has infringed or misappropriated or is currently infringing or misappropriating the rights of any third party except to the extent such claim could not reasonably be expected to cause a Material Adverse Effect.  The applicable Loan Parties have taken commercially reasonable actions necessary to maintain and protect the Intellectual Property that is necessary in or material to the conduct of the business of any Loan Party, including taking reasonable measures to maintain the confidentiality of all such Intellectual Property that constitutes a trade secret under applicable law.

 

(b)         Except as specifically disclosed in Section 5.7 of the Disclosure Schedules, to the knowledge of each Loan Party, no Person has infringed or misappropriated or is currently infringing or misappropriating any Intellectual Property rights owned or exclusively licensed by such Loan Party, except to the extent such claim could not reasonably be expected to cause a Material Adverse Effect.

 

(c)         Section 5.7 of the Disclosure Schedules sets forth a complete and accurate list of all Open Source Software in use by any Loan Party as of the Closing Date.  Each Loan Party's use of Open Source Software (i) is in full compliance with the terms of each applicable open source license and (ii) is in a manner that does not require or condition the use or distribution of any Loan Party's proprietary software on the disclosure, licensing, or distribution of any source code for any portion of the proprietary software, or otherwise impose an obligation to disclose or distribute any proprietary software on a royalty-free basis.

 

(d)         All employees and contractors of each Loan Party who were involved in the creation or development of any Intellectual Property for the benefit of or under the supervision of such Loan Party that is necessary in or material to the business of such Loan Party have signed agreements containing assignment of Intellectual Property rights to such Credit Party and obligations of confidentiality.

 

 

 

 

 

 

 

 

 

 

 

5.18.      [Reserved].

 

5.19.      Anti-Money-Laundering and Economic Sanctions Laws.

 

(a)          To the extent applicable, each Loan Party and each of its Subsidiaries is in compliance with (i) the Patriot Act in all material respects and (ii) any applicable anti-money laundering laws or any applicable Sanctions or Requirements of Law that in each case are binding on them, except in the case of this clause (ii) where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of each Loan Party, none of the Loan Parties, their respective Subsidiaries or their respective officers or directors is an Embargoed Person.

 

(b)          No part of the proceeds of the Loans will be used, directly or, to the knowledge of management of any Loan Party, indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

(c)          None of the Loan Parties or their respective Subsidiaries or, to the knowledge of any of their respective officers and directors, will directly or indirectly use any proceeds of the Loans or lend, contribute or otherwise make available such proceeds to any Person for the purpose of financing the activities of or with any Person or in any country or territory that, at the time of funding, is an Embargoed Person.

 

5.20.      [Reserved].

 

 

 

 

6.           AFFIRMATIVE COVENANTS.

 

Each Loan Party covenants that, until the Obligations have been Paid in Full and for so long as Bank may have any commitment to make a Credit Extension hereunder, each Loan Party shall, and shall cause each of its Subsidiaries to, do all of the following:

 

 

 

(a)          Quarterly Financial Statements.  As soon as available, but in any event within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year, a company prepared consolidated balance sheet, statement of cash flows, and profit and loss statement covering Borrower's operations during such period, in a form reasonably acceptable to Bank and accompanied by a Responsible Officer Certification (which may be included in the applicable Compliance Certificate);

 

(b)       Annual Audited Financial Statements.  As soon as available, but in any event within ninety (90) days after the end of Borrower's fiscal year, audited consolidated financial statements of the Loan Parties and their Subsidiaries prepared in accordance with GAAP, consistently applied, together with an unqualified opinion (including no going-concern qualification) of KPMG LLP or such other independent certified public accounting firm or other accounting firm as may be reasonably acceptable to Bank and without any qualification or exception as to the scope of such audit;

 

(c)          Compliance Certificate.  Together with the financial statements delivered pursuant to clauses (a) and (b) above, commencing with the fiscal quarter ending March 31, 2023, Borrower shall deliver to Bank a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto;

 

(d)          [Reserved].

 

(e)          Annual Operating Budget and Financial Projections.  As soon as available, but in any event not later than ninety (90) days after the beginning of each fiscal year, commencing with the fiscal year ending December 31, 2024, Borrower's consolidated budget for such fiscal year (broken down by fiscal quarter), which budget has been approved by Borrower's board of directors;

 

(f)         Security Holder and Subordinated Debt Holder Reports.  If applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt (excluding any materials provided to such security holders, stockholders, or holders of Subordinated Debt solely in their capacity as members of Borrower's board of directors) and all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission.

 

(g)          Legal Action Notice.  Promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against any Loan Party or any Subsidiary of any Loan Party that could result in damages or costs to any Loan Party or any Subsidiary of any Loan Party of Five Hundred Thousand Dollars ($500,000.00) or more.

 

(h)          Default.  As soon as possible and in any event within three (3) Business Days after becoming aware of the occurrence or existence of an Event of Default hereunder, a written statement of a Responsible Officer setting forth details of the Event of Default, and the action which the Loan Parties have taken or propose to take with respect thereto; provided, that Borrower shall immediately notify Bank of the commencement of any Insolvency Proceeding.

 

(i)          Audit.  Bank shall have a right, upon reasonable prior notice, from time to time hereafter to audit each Loan Parties' Accounts and appraise Collateral at Borrower's expense, provided that such audits will be conducted during normal business hours and no more often than once every twelve (12) months unless an Event of Default has occurred and is continuing and with no less than fifteen (15) days' notice of such audit request; provided that the audit carried out pursuant to this Section 6.2(i) shall be carried out without duplication of the inspection provided for pursuant to Section 4.3.

 

(j)          [Reserved].

 

(k)          Promptly following any request therefor by Bank, each Loan Party shall provide information and documentation reasonably requested by Bank for purposes of compliance with applicable "know your customer" requirements under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws, including but not limited to a Beneficial Ownership Certification form acceptable to Bank.

 

(l)           Promptly following request therefor by Bank, such other business or financial information as Bank may reasonably request.

 

The Loan Parties may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer.  To the extent any such documents are included in materials otherwise filed with the SEC, such documents shall be deemed to have been delivered on the date on which Borrower or any of its Subsidiaries posts such documents, or provides a link thereto, on Borrower's or any of its Subsidiaries' website on the internet at Borrower's or any of its Subsidiaries' website address; provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents.

 

6.3.        [Reserved].

 

 

6.5.        Insurance.

 

(a)          Each Loan Party shall, and shall cause each of its Subsidiaries to, at its expense, keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as is customarily insured against by other owners in similar businesses conducted in the locations where such Loan Party's or such Subsidiary's business is conducted on the date hereof.  Each Loan Party shall, and shall cause each of its Subsidiaries to, also maintain liability and other insurance in amounts and of a type that are customary to businesses similar to such Loan Party's or such Subsidiary's business.

 

DEBTOR	PHENOMEX INC./ISOPLEXIS CORPORATION
SECURED PARTY:	EAST WEST BANK

Please send all Required Reporting to:	East West Bank
	135 North Robles Avenue, 2nd Floor
	Pasadena, California 91101 Attn: Eric Watson, Senior Vice President Email: Eric.Watson@eastwestbank.com

REPORTING COVENANTS		REQUIRED		COMPLIES
Quarterly Financial Statements (Section 6.2(a))		Within 45 days after the end of each fiscal quarter1		YES	NO
Annual Audited Financial Statements (Section 6.2(b))		Within 90 days after the end of each fiscal year		YES	NO
Compliance Certificate (Section 6.2(c))		Together with the quarterly financial statements and the annual audited financial statements2		YES	NO
Annual Operating Budget and Financial Projections (Section 6.2(e))		Within 90 days after the beginning of each fiscal year3		YES	NO
If Public:
10-Q		Quarterly, within 5 days of SEC filing (50 days)		YES	NO
10-K		Annually, within 5 days of SEC filing (95 days)		YES	NO

COVENANTS	REQUIRED4		COMPLIES
Remaining Months Liquidity measured as of the last day of each fiscal quarter	4.00 to 1.00 or each Loan Party must execute an Amendment to Agreement and Intellectual Property Security Agreement to provide Bank with a perfected first priority security interest on each Loan Party's Intellectual Property		YES	NO	N/A
Minimum Unrestricted Cash	Maintain unrestricted cash or cash equivalents of the Loan Parties of not less than Seventy Million Dollars ($70,000,000) at all times, all of which shall be held in a Deposit Account of one or more Loan Parties maintained with Bank that are not Excluded Accounts and are subject to an assignment of deposit in form and substance satisfactory to Bank (it being acknowledged and agreed by Bank that the form of Assignment of Deposit executed and delivered on the Closing Date is satisfactory).		YES	NO	N/A
Minimum EBITDA	During any Covenant Testing Period, maintain EBITDA measured on the last day of each quarter for the one-quarter period ending on such date, of at least the amount for the one-quarter period ending on the date set forth opposite of the column “Quarter Ending” in the table in Section 6.7(c) of the Agreement for that period.		YES	NO	N/A
Applications or Registrations of Intellectual Property Rights Filed with the United States Patent and Trademark Office			YES	NO
Inbound Licenses or Agreements			YES	NO
Creation/Acquisition of Subsidiaries			YES	NO

Very truly yours,

PHENOMEX INC.

Authorized Signer

Name:
Title:

EAST WEST BANK
	AUTOMATIC DEBIT AUTHORIZATION
Member FDIC
To:  East West Bank
Re:  Loan #                769631502
You are hereby authorized and instructed to charge account No. _____8003098608______________ in the name of
for principal, interest and other payments due on above referenced loan as set forth below and credit the loan referenced above.
☒          Debit each interest payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.
☒          Debit each principal payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.
This Authorization is to remain in full force and effect until revoked in writing by Borrower.

Borrower Signature:	Date:

Agreement to Furnish Insurance to Loan and Security Agreement

Date:  March 21, 2023	OWNERS OF COLLATERAL
	PHENOMEX INC.
	ISOPLEXIS CORPORATION
	By:

	Name:
	Title: