LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the “Agreement”) dated as of December 22, 2006 by and among MERRILL
LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc. (“Merrill Lynch”), SILICON VALLEY BANK
(“SVB”) (SVB and Merrill Lynch each individually a “Lender”, and collectively the “Lenders”), SVB in its capacity as agent for
the Lenders (in such capacity, “Agent”), SVB and Merrill Lynch in their capacities as joint lead arrangers (in such capacity, the
“Arrangers”), and INSPIRE PHARMACEUTICALS, INC., a corporation organized and in good standing under the laws of the
State of Delaware (“Borrower”), provides the terms on which Lenders shall lend to Borrower and Borrower shall repay Lenders.
The parties agree as follows:
Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations
must be made following GAAP. The term “financial statements” includes the notes and schedules. The terms “including” and
“includes” always mean “including (or includes) without limitation,” in this or any Loan Document. Capitalized terms in this
Agreement shall have the meanings as set forth in Section 13. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such terms are defined therein.
Borrower hereby unconditionally promises to pay Lenders the unpaid principal amount of all Term Loan Advances
hereunder with all interest, fees and finance charges due thereon as and when due in accordance with this Agreement.
(a) Availability . Subject to the terms and conditions of this Agreement, Lenders agree, severally and not
jointly, to lend to Borrower, prior to the expiration of the Draw Period, advances (each a “Term Loan Advance” and collectively,
the “Term Loan Advances”) in an aggregate amount equal to the Term Loan Commitment according to each Lender’s pro rata
share of the Term Loan Commitment (based upon the re