LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of September 30, 2010 (the "Effective Date") among (i) TRANZYME, INC., a Delaware corporation ("Tranzyme"), (ii) TRANZYME PHARMA INC., a Canadian corporation ("Tranzyme-Canada") (Tranzyme and Tranzyme-Canada are referred to herein individually and collectively, jointly and severally, solidarily, as "Borrower"), (iii) COMPASS HORIZON FUNDING COMPANY LLC, a Delaware limited liability company, as a Lender ("Horizon"), (iv) OXFORD FINANCE CORPORATION, a Delaware corporation , as a Lender ("Oxford") (Horizon, Oxford and each of the other "Lenders" from time to time a party hereto are referred to herein collectively as the "Lenders" and each individually as a "Lender"); and (v) OXFORD FINANCE CORPORATION, a Delaware corporation, as agent for the Lenders (in such capacity, "Collateral Agent"), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
1.1 Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.
1.2 Designation of Agent. Each Borrower hereby designates Tranzyme as the agent of that Borrower to discharge the duties and responsibilities as provided herein.
1.3 Operation of Borrowing. Except as otherwise provided in this Section, loans and advances hereunder shall be requested solely by Tranzyme as agent for each Borrower. Each Borrower shall be directly indebted to the Lenders for each advance distributed to Tranzyme, together with all accrued interest thereon, as if that amount had been advanced directly by the Lenders to such Borrower. Collateral Agent and the Lenders shall have no responsibility to inquire as to the distribution of loans and advances made by the Lenders through Tranzyme as described herein.
1.4 Continuation of Authority of Agent. The authority of Tranzyme to request loans on behalf of, and to bind, Borrower, shall continue unless and until Collateral Agent and the Lenders actually receive written notice of the termination of such authority.
2 LOANS AND TERMS OF PAYMENT
2.1 Promise to Pay. Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.
2.2 Term Loans.
(a) Availability. Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term loans to Borrower on the Effective Date in an aggregate amount up to Thirteen Million Dollars ($13,000,000.00) according to each Lender's Term Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a "Term Loan", and collectively as the "Term Loans"). After repayment, no Term Loan may be re-borrowed.
(b) Repayment. Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of the Term Loans, and continuing on the Payment Date of each successive month thereafter through and including July 1, 2011.
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Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal and interest, in arrears, to each Lender, as calculated by the Collateral Agent based upon: (i) the amount of such Lender's Term Loan, (ii) the effective rate of interest, as determined in Section 2.3(a), and (iii) a repayment schedule equal to thirty (30) months. All unpaid principal and accrued interest with respect to the Term Loans is due and payable in full on the Maturity Date. The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).
(c) Mandatory Prepayments. If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued interest thereon, (ii) the Prepayment Fee, (iii) the Final Payment, plus (iv) all other sums, that shall have become due and payable, including interest at the Default Rate with respect to any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the Maturity Date Borrower shall pay to each Lender its respective Pro Rata Share of the Final Payment in respect of the Term Loans.
(d) Permitted Prepayment of Loans. Borrower shall have the option to prepay all, but not less than all, of the Term Loans advanced by Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least fifteen (15) days prior to such prepayment, and (ii) pays to Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued interest thereon, (B) the Prepayment Fee, (C) the Final Payment, plus (D) all other sums, that shall have become due and payable, including Lenders' Expenses, if any, and interest at the Default Rate with respect to any past due amounts.
2.3 Payment of Interest on the Credit Extensions.
(a) Interest Rate. Subject to Section 2.2(b), the principal amount outstanding under the Term Loans shall accrue interest at a fixed per annum rate equal to the Basic Rate, determined by Collateral Agent on the Funding Date of the Term Loans, which interest shall be payable monthly in accordance with Section 2.2(b). Interest shall accrue on each Term Loan commencing on, and including, the date on which the Term Loan is made.
(b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percentage points above the rate that is otherwise applicable thereto (the "Default Rate"). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.
(c) 360-Day Year. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed. For purposes of disclosure pursuant to the Interest Act (Canada), the annual rates of interest or fees to which the rates of interest or fees provided in this Agreement and the other Loan Documents (and stated herein or therein, as applicable, to be computed on the basis of a 360 day year or any other period of time less than a calendar year) are equivalent are the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by 360 or such other period of time, respectively.
(d) Debit of Accounts. Collateral Agent may debit any of Borrower's deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Lenders under the Loan Documents when due. These debits shall not constitute a set-off.
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(e) Payments. Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue.
2.4 Secured Promissory Notes. Each Term Loan shall be evidenced by a Secured Promissory Note in the form attached as Exhibit D hereto (each a "Secured Promissory Note"), and shall be repayable as set forth herein. The Borrower irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on such Lender's Secured Promissory Note, an appropriate notation on such Lender's Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment. The outstanding amount of each Term Loan set forth on such Lender's Secured Promissory Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender's Secured Promissory Note Record shall not limit or otherwise affect the obligations of the Borrower hereunder or under any Secured Promissory Note to make payments of principal of or interest on any Secured Promissory Note when due. Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, the Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.
2.5 Fees. Borrower shall pay to Collateral Agent:
(a) Facility Fee. A fully earned, non-refundable facility fee of Ninety Seven Thousand Five Hundred Dollars ($97,500.00) to be shared between the Lenders pursuant to their respective Commitment Percentages;
(b) Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares;
(c) Final Payment. The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares;
(d) Late Payment Fee. A late payment fee equal to five percent (5.00%) of any payment not paid when due, to be shared between the Lenders in accordance with their respective Pro Rata Shares; and
(e) Lenders' Expenses. All Lenders' Expenses (including reasonable attorneys' fees and expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.
2.6 Withholding. Payments received by Lenders from Borrower hereunder will be made free and clear of any withholding taxes. Specifically, however, if at any time any governmental authority, applicable law, regulation or international agreement requires Borrower to make any such withholding or deduction from any such payment or other sum payable hereunder to Lenders, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant governmental authority. Borrower will, upon request, furnish Lenders with proof reasonably satisfactory to Lenders indicating that Borrower has made such withholding payment provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section shall survive the termination of this Agreement.
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3 CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension. Each Lender's obligation to make the Term Loan is subject to the condition precedent that Collateral Agent shall consent to or shall have received, in form and substance satisfactory to Lenders, such documents, and completion of such other matters, as Lenders may reasonably deem necessary or appropriate, including, without limitation:
(a) duly executed original signatures to the Loan Documents to which Borrower is a party;
(b) duly executed original signatures to a Control Agreement with SVB with respect to the Designated Deposit Account and any other account(s) maintained by Borrower at SVB;
(c) duly executed original signatures to a Control Agreement with Royal Bank of Canada with respect to any account(s) maintained by Borrower at Royal Bank of Canada;
(d) duly executed original Secured Promissory Notes in favor of each Lender according to its Commitment Percentage in an aggregate amount not to exceed the Term Loan Commitments;
(e) Operating Documents of Tranzyme certified by the Secretary of State of the State of Delaware and (i) a good standing certificate certified by the Secretary of State of the State of Delaware and (ii) a certificate of authorization issued by the Secretary of State of the State of North Carolina, each as of a date no earlier than thirty (30) days prior to the Effective Date;
(f) Operating Documents of Tranzyme-Canada and (i) a certificate of compliance of in respect of Tranzyme-Canada certified by Industry Canada as of a date no earlier than thirty (30) days prior to the Effective Date and (ii) a certificate of attestation issued by the Registraire des Entreprises for the Province of Quebec in respect of Tranzyme-Canada;
(g) duly executed original signatures to the completed Borrowing Resolutions for Borrower;
(h) Collateral Agent shall have received certified copies, dated as of a recent date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any Code or PPSA termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;
(i) landlord's consent executed in favor of Collateral Agent, for the ratable benefit of the Lenders, in respect of Borrower's facilities located in Durham, North Carolina and Sherbrooke, Quebec;
(j) a payoff letter from Oxford and SVB in respect of the Existing Oxford and SVB Indebtedness;
(k) Evidence of receipt by Borrower from 100% of the holders of Borrower's Subordinated Convertible Promissory Notes of legally binding elections to convert 100% of such Subordinated Convertible Promissory Notes to equity securities of Borrower effective September 30, 2010;
(l) evidence satisfactory to Collateral Agent that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Lenders; and
(m) payment of the fees and Lenders' Expenses then due as specified in Section 2.5 hereof.
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3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender to make each Credit Extension, including the initial Credit Extension, is subject to the following:
(a) timely receipt of an executed Payment/Advance Form in the form of Exhibit B attached hereto;
(b) the representations and warranties in Section 5 shall be true, in all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; 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, and no Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower's representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; 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; and
(c) in such Lender's reasonable discretion, there has not been any material impairment in the general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations, nor has there been any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Lenders.
3.3 Covenant to Deliver. Borrower agrees to deliver to Collateral Agent each item required to be delivered to Collateral Agent under this Agreement as a condition to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Collateral Agent of any such item shall not constitute a waiver by Lenders of Borrower's obligation to deliver such item, and any such Credit Extension in the absence of a required item shall be made in Lenders' sole discretion.
3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan, Borrower shall notify Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time five (5) Business Days prior to the date the Term Loan is to be made. Together with any such electronic or facsimile notification, Borrower shall deliver to Lenders by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible Officer or his or her designee. Lenders may rely on any telephone notice given by a person whom Lenders believe is a Responsible Officer or designee. On the Funding Date, each Lender shall credit and/or transfer (as applicable) to Borrower's Designated Deposit Account, an amount equal to its Term Loan Commitment.
4 CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest. Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, and to each Lender, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the Lenders, and to each Lender, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral. If Borrower shall acquire a commercial tort claim (as defined in the Code), Borrower shall promptly notify Collateral Agent in a writing signed by Borrower of the general details thereof (and further details as may be required by Collateral Agent) and grant to Collateral Agent, for the ratable benefit of the Lenders, and to each Lender in such writing a security
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interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.
If this Agreement is terminated, Collateral Agent's and each Lender'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 and at such time as the Lenders' obligation to make Credit Extensions has terminated, Collateral Agent, and if appropriate, each Lender shall, at Borrower's sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.
4.2 Authorization to File Financing Statements. Borrower hereby authorizes Collateral Agent and Lenders to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent's and each Lender's interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Collateral Agent and Lenders under the Code. Such financing statements may indicate the Collateral as "all assets of Debtor other than Debtor's intellectual property" or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Collateral Agent's and Lenders' discretion.
5 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Collateral Agent and the Lenders as follows:
5.1 Due Organization, Authorization: Power and Authority. Borrower and each of its Subsidiaries, if any, are duly existing and in good standing, as Registered Organizations in their respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of their business or their ownership of property requires that they be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower's business. In connection with this Agreement, Borrower has delivered to Collateral Agent a completed perfection certificate signed by Borrower (the "Perfection Certificate"). Borrower represents and warrants that (a) Borrower's exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower's organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower's place of business, or, if more than one, its chief executive office as well as Borrower's mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction of formation; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Collateral Agent of such occurrence and provide Collateral Agent with Borrower's organizational identification number.
The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower's organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries 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
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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 is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower's business.
5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to xxxxx x Xxxx hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts with SVB and Royal Bank of Canada or the other investment accounts, if any, described in the Perfection Certificate delivered to Collateral Agent in connection herewith in respect of which Borrower has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security interest therein.
The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will first receive the written consent of Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Collateral Agent.
All Inventory is in all material respects of good and marketable quality, free from material defects.
Borrower is the sole owner of its intellectual property, except for licenses granted by Borrower in connection with joint ventures and corporate collaborations in the ordinary course of business. Each issued patent is valid and enforceable, and no part of the intellectual property has been judged invalid or unenforceable, in whole or in part, and to Borrower's knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on Borrower's business. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any material license or other agreement with respect to which Borrower is a licensee that (a) prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Collateral Agent's and Lenders' right to sell any Collateral. Borrower shall provide written notice to Collateral Agent and Lenders within ten (10) days of entering into or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Collateral Agent requests to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed "Collateral" and for Collateral Agent and each Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or, whether now existing or entered into in the future, and (y) Collateral Agent shall have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent's rights and remedies under this Agreement and the other Loan Documents.
5.3 Litigation. There are no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than One Hundred Thousand Dollars ($100,000.00).
5.4 No Material Deterioration in Financial Condition; Financial Statements. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Lenders fairly present, in all material respects Borrower's consolidated financial condition and Borrower's consolidated results of
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operations. There has not been any material deterioration in Borrower's consolidated financial condition since the date of the most recent financial statements submitted to Lenders.
5.5 Solvency. Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.
5.6 Regulatory Compliance. Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a "holding company" or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" as each term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower's or any of its Subsidiaries' properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.
5.7 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.
5.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns and reports, and Borrower and its Subsidiaries have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower. To Borrower's knowledge there are not any claims or adjustments proposed for any of Borrower's prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes; provided, however, that a portion of the proceeds of the Term Loans shall be used to repay the Existing Oxford and SVB Indebtedness in full.
5.10 Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).
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5.11 Subordinated Convertible Promissory Notes. Borrower has received from 100% of the holders of Borrower's Subordinated Convertible Promissory Notes legally binding elections to convert 100% of such Subordinated Convertible Promissory Notes to equity securities of Borrower effective September 30, 2010; effective as of September 30, 2010, 100% of Borrower's Subordinated Convertible Promissory Notes have been converted to equity securities of Borrower and upon such conversion 100% of the Subordinated Convertible Promissory Notes have been retired and are no longer outstanding.
Lenders hereby represent and warrant to Borrower as follows:
5.12 Inter-creditor Agreement. That certain Inter-creditor Agreement by and between the Lenders dated as of September 30, 2010 is in full force and effect as of the date hereof and the execution, delivery, and performance by Lenders of the Loan Documents do not conflict with such Inter-creditor Agreement.
6 AFFIRMATIVE COVENANTS
Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:
6.1 Government Compliance.
(a) Maintain its and all its Subsidiaries' legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a material adverse effect on Borrower's business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could reasonably be expected to have a material adverse effect on Borrower's business.
(b) Obtain and keep in full force and effect, all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Collateral Agent for the ratable benefit of the Lenders, in all of the Collateral. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Collateral Agent.
6.2 Financial Statements, Reports, Certificates.
(a) Deliver to Lenders: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet and income statement covering Borrower's consolidated operations for such month certified by a Responsible Officer and in a form acceptable to Collateral Agent; (ii) as soon as available, but no later than one hundred eighty (180) days after the last day of Borrower's fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (other than with a "going concern" qualification relating to the need for future additional equity or debt financing) on the financial statements from an independent certified public accounting firm acceptable to Collateral Agent in its reasonable discretion (it being understood that Ernst & Young LLP, Borrower's certified public accounting firm on and as of the Effective Date is acceptable to Collateral Agent); (iii) as soon as available, but no later than ten (10) days after the last day of Borrower's fiscal year, Borrower's financial projections for current fiscal year as approved by Borrower's Boards of Directors; (iv) within five (5) days of delivery, copies of all statements, reports and notices made available to all of Borrower's security holders or to any holders of Subordinated Debt; (v) in the event that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on Borrower's or another website on the Internet; (vi) a prompt report of any legal actions pending or threatened against Borrower or any of its Subsidiaries that
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could result in damages or costs to Borrower or any of its Subsidiaries of Two Hundred Thousand Dollars ($200,000) or more; and (vii) such other budgets, sales projections, operating plans and other financial information reasonably requested by Lenders. Without limiting the foregoing, Borrower shall deliver to Lenders, concurrently with the delivery of any financial statements pursuant to clause (a) above, a copy of the bank and/or investment account statements issued by or otherwise available from each institution at which Borrower or any Subsidiary maintains any Collateral Account.
(b) Within thirty (30) days after the last day of each month, deliver to Collateral Agent with the monthly financial statements, a duly completed Compliance Certificate signed by a Responsible Officer.
6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower's customary practices as they exist at the Effective Date. Borrower must promptly notify Collateral Agent of all returns, recoveries, disputes and claims that involve more than One Hundred Thousand Dollars ($100,000).
6.4 Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely file, all foreign, federal, state, and local taxes, assessments, deposits and contributions owned by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.8 hereof, and shall deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Lenders in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a "Permitted Lien".
6.5 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower's industry and location and as Collateral Agent and Lenders may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Collateral Agent and Lenders. All property policies shall have a lender's loss payable endorsement showing Collateral Agent and Horizon Technology Finance Management LLC, as agent for Horizon ("HTFM") as lender loss payees and waive subrogation against Collateral Agent and HTFM, and all liability policies shall show, or have endorsements showing, Collateral Agent and HTFM, as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Collateral Agent and HTFM at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Collateral Agent's or HTFM's request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Collateral Agent's or HTFM's option, be payable to Collateral Agent and HTFM on behalf of the Lenders on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to $100,000 with respect to any loss, but not exceeding $250,000, in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent and Lenders have been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent and HTFM, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations. If Borrower
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fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Collateral Agent and HTFM, Collateral Agent or HTFM may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or HTFM deems prudent.
6.6 Operating Accounts.
(a) Maintain all of Borrower's and each Subsidiary's operating and investment accounts with SVB, other than (i) Borrower's operating accounts in Canada at Royal Bank of Canada which are subject to a Control Agreement or other appropriate instrument with respect to such accounts to perfect Collateral Agent's Lien in such accounts in accordance with the terms hereunder and (ii) Tranzyme NSULC's operating accounts in Canada at Royal Bank of Canada (which accounts shall be subject to a Control Agreement or other appropriate instrument with respect to such accounts to perfect Collateral Agent's Lien in such accounts to the extent required by Section 7.7 hereof).
(b) Provide Collateral Agent and Lenders five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Royal Bank of Canada or SVB. In addition, for each Collateral Account that Borrower or any Subsidiary at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or financial institution (other than Collateral Agent) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent's and Lenders' Lien in such Collateral Account in accordance with the terms hereunder, which Control Agreement may not be terminated without prior written consent of Collateral Agent and Lenders. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower's or such Subsidiary's employees and identified to Collateral Agent and Lenders by Borrower or such Subsidiary as such.
6.7 Protection of Intellectual Property Rights. Borrower shall: (a) protect, defend and maintain the validity and enforceability of the intellectual property material to the conduct of its business; (b) promptly advise Collateral Agent in writing of material infringements of its intellectual property of which Borrower is or becomes, or upon the exercise of reasonable diligence should have become, aware; and (c) not allow any intellectual property material to Borrower's business to be abandoned, forfeited or dedicated to the public without Lenders' written consent.
6.8 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Lenders, without expense to Lenders, Borrower and its officers, employees and agents and Borrower's books and records, to the extent that Lenders may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Collateral Agent or Lenders with respect to any Collateral or relating to Borrower.
6.9 Notices of Litigation and Default. Borrower will give prompt written notice to Lenders of any litigation or governmental proceedings pending or threatened (in writing) against Borrower which would reasonably be expected to have a material adverse effect with respect to Borrower. Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, Borrower shall give written notice to Lenders of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default.
6.10 Creation/Acquisition of Subsidiaries. In the event Borrower or any Subsidiary creates or acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Lenders of the creation or
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acquisition of such new Subsidiary and take all such action as may be reasonably required by Lenders to cause each such domestic Subsidiary to guarantee the Obligations of Borrower under the Loan Documents and grant a continuing pledge and security interest in and to the assets of such Subsidiary (substantially as described on Exhibit A hereto); and Borrower shall grant and pledge to Collateral Agent, for the ratable benefit of Lenders, and Lenders a perfected security interest in the stock, units or other evidence of ownership of each.
6.11 Further Assurances. Execute any further instruments and take further action as Lenders or Collateral Agent reasonably request to perfect or continue Collateral Agent's and Lenders' Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Collateral Agent, within five (5) days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material effect on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries; provided, however, that Borrower shall not be required to deliver any correspondence, reports, documents or other filings made by Borrower with the United States Food and Drug Administration or corresponding foreign governmental regulatory organizations in the ordinary course of business.
7 NEGATIVE COVENANTS
Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without Lenders' prior written consent:
7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, "Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; (d) of non-exclusive licenses for the use of the property, including, without limitation, intellectual property, of Borrower or its Subsidiaries in the ordinary course of business; and (e) the entering into of exclusive licenses for the use of the intellectual property of Borrower or its Subsidiaries in the ordinary course of business in connection with joint ventures and corporate collaborations, provided that any exclusive license of any of Borrower's material intellectual property shall be approved by Borrower's Boards of Directors and subject to a license agreement entered into in an arm's-length transaction. Notwithstanding the foregoing, Borrower shall be entitled to transfer assets from its Sherbrooke, Quebec facility to its Durham, North Carolina facility.
7.2 Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) have a change in management such that if a Key Person resigns, is terminated, or is no longer actively involved in the management of Borrower in his current position unless either (A) a replacement officer approved by Borrower's Boards of Directors has been engaged within ninety (90) days after such Key Person's departure from Borrower (with notice of such engagement provided to Lenders) or (B) within ninety (90) days after such Key Person's departure from Borrower, Borrower has delivered to Lenders a copy of a plan approved by Borrower's Boards of Directors outlining a course of action with respect to the replacement of such Key Person; (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than 50% of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower's equity securities in a public offering or to institutional investors so long as Borrower identifies to Lenders the institutional investors prior to the closing of the transaction), unless all Obligations (including any applicable Prepayment Fee and the Final Payment) are repaid in full by
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Borrower in accordance with Section 2.2(d) hereof prior to or substantially contemporaneously with closing of such transaction and this Agreement is terminated (other than those provisions which by their terms survive the termination of this Agreement). Borrower shall not, without at least thirty (30) days prior written notice to Lenders: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Ten Thousand Dollars ($10,000) in Borrower's assets or property), (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, unless all Obligations are repaid in full (including any applicable Prepayment Fee and the Final Payment) by Borrower in accordance with Section 2.2(d) hereof prior to or substantially contemporaneously with closing of such transaction and this Agreement is terminated (other than those provisions which by their terms survive the termination of this Agreement). A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a "Borrower" or has provided a secured guaranty hereunder) or into Borrower provided Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom.
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent and Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower's or any Subsidiary's intellectual property, except as is otherwise permitted in Section 7.1 hereof and the definition of "Permitted Liens" herein.
7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6(b) hereof.
7.7 Distributions; Investments.
(a) Pay any dividends (other than dividends payable solely in common stock) or make any distribution or payment or redeem, retire or purchase any capital stock (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar plans or repurchases of capital stock for consideration paid in the form of capital stock pursuant to that certain Amended and Restated Put and Support Agreement dated May 12, 2005, among Borrower and the individuals and entities party thereto), or
(b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so; provided, that
(i) Tranzyme may make direct Investments in Tranzyme-Canada to fund the operating expenses of Tranzyme-Canada;
(ii) Tranzyme-Canada may make distributions to Tranzyme to fund the operating expenses of Tranzyme;
(iii) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or in exchange thereof;
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(iv) Tranzyme may make Investments in the capital stock of Tranzyme NSULC for the purpose of indirectly funding the operating expenses of Tranzyme-Canada provided, that (1) such Investments shall not exceed $2,000,000 in the aggregate in any three-month period, (2) Tranzyme NSULC shall use 100% of the proceeds of such Investments as a contribution of capital to Tranzyme-Canada, which contributions to Tranzyme-Canada shall occur as soon as practicable (and in any event within two (2) Business Days) after receipt by Tranzyme NSULC of the Investment proceeds from Tranzyme and (3) no such Investments shall occur on or after the date which is one hundred twenty (120) days after the Effective Date unless (A) Borrower notifies the Collateral Agent and the Lenders on or before the date which is one hundred twenty (120) days after the Effective Date that Borrower has determined, in its sole discretion, that it remains necessary for Tranzyme to utilize Tranzyme NSULC to indirectly fund the operating expenses of Tranzyme-Canada and (B) on or before the date which is one hundred fifty (150) days after the Effective Date, Borrower shall have caused Tranzyme NSULC to have (x) delivered to the Collateral Agent and the Lenders a Guaranty of the Obligations substantially in the form of Exhibit E hereto (subject to the review of such Guaranty by Canadian counsel to Tranzyme NSULC) and (y) taken all steps required by applicable law in order to create and perfect a first priority Lien in favor of the Collateral Agent and the Lenders in and to each Collateral Account maintained by Tranzyme NSULC, including, without limitation, execution and delivery of a Deed of Hypothec in respect of such Collateral Accounts and Control Agreement(s) executed by the applicable institution at which such Collateral Accounts are maintained with respect each such Collateral Account; and
(v) Tranzyme NSULC may make Investments in the capital stock of Tranzyme-Canada for purposes of (1) acquiring common shares of Tranzyme-Canada equal to the number of shares that may be issued from time to time by Tranzyme and (2) funding the operating expenses of Tranzyme-Canada provided that (A) any such Investment made by means of cash (whether by capital contribution, acquisition of capital stock, loan, or otherwise) is made in accordance with the terms set forth in the preceding clause (iv); or
(c) make any dividends or other distributions from Tranzyme-Canada to Tranzyme NSULC, or permit Tranzyme-Canada to redeem any of the capital stock of Tranzyme-Canada held by Tranzyme NSULC, unless as soon as practicable (and in any event within two (2) Business Days) after receipt by Tranzyme NSULC of any such dividends, redemption proceeds, or other distributions in respect of such capital stock of Tranzyme-Canada, Tranzyme NSULC shall declare and pay to Tranzyme a dividend or distribution in an amount equal to 100% of the dividend, redemption proceeds, or other distribution received by Tranzyme NSULC from Tranzyme-Canada.
7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower's business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm's length transaction with a non-affiliated Person.
7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to the Lenders.
7.10 Compliance. Become an "investment company" or a company controlled by an "investment company", under the Investment Company Act of 1940, as amended or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable
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Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower's business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
8 EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an "Event of Default") under this Agreement:
8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date). During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period);
8.2 Covenant Default.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6, 6.7, 6.10, or 6.11 or violates any covenant in Section 7; or
(b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Grace periods provided under this Section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above;
8.3 Material Adverse Change. A Material Adverse Change occurs;
8.4 Attachment; Levy; Restraint on Business.
(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under control of Borrower (including a Subsidiary) on deposit with Lenders or any Lender Affiliate, or (ii) a notice of lien, levy, or assessment is filed against any of Borrower's assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; and
(b) (i) any material portion of Borrower's assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting any part of its business;
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8.5 Insolvency (a) Borrower is unable to pay its debts (including trade debts) as they become due; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while of any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);
8.6 Other Agreements. There is a default in any agreement to which Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or that could have a material adverse effect on Borrower's business.
8.7 Judgments. One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower and shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction, vacation, or stay of such judgment, order or decree);
8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders or to induce Collateral Agent and/or Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;
8.9 Subordinated Debt. A default or breach occurs (and applicable notice and grace periods have expired, if any) under any agreement between Borrower and any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Collateral Agent or Lenders, or any creditor that has signed such an agreement with Collateral Agent or Lenders breaches any terms of such agreement in any material respect; or
8.10 Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) has, or could reasonably be expected to have, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction.
9 RIGHTS AND REMEDIES
9.1 Rights and Remedies. While an Event of Default occurs and continues Collateral Agent and/or Lenders may, without notice or demand, do any or all of the following:
(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Collateral Agent or Lenders);
(b) stop advancing money or extending credit for Borrower's benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or Lenders;
(c) settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent and/or Lenders consider advisable, notify any Person owing
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Borrower money of Collateral Agent's and Lenders' security interest in such funds, and verify the amount of such account;
(d) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral if Collateral Agent requests and make it available as Collateral Agent designates. Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Collateral Agent and/or Lenders a license to enter and occupy any of its premises, without charge, to exercise any of Collateral Agent's and/or Lenders' rights or remedies;
(e) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Collateral Agent or Lenders owing to or for the credit or the account of Borrower;
(f) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Collateral Agent and Lenders are hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower's labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent's or Lenders' exercise of their rights under this Section, Borrower's rights under all licenses and all franchise agreements inure to Collateral Agent for the benefit of the Lenders;
(g) place a "hold" on any account maintained with Collateral Agent or Lenders and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;
(h) demand and receive possession of Borrower's Books; and
(i) exercise all rights and remedies available to Collateral Agent and Lenders under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).
9.2 Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable only upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower's name on any checks or other forms of payment or security; (b) sign Borrower's name on any invoice or xxxx of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower's insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower's name on any documents necessary to perfect or continue the perfection of Collateral Agent's and Lenders' security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Collateral Agent and Lenders are under no further obligation to make Credit Extensions hereunder. Collateral Agent's foregoing appointment as Borrower's attorney in fact, and all of Collateral Agent's rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid.
9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or
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make such payment, and all amounts so paid by Collateral Agent are Lenders' Expenses and immediately due and payable, bearing interest at the then highest applicable rate, and secured by the Collateral. Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent's waiver of any Event of Default.
9.4 Application of Payments and Proceeds. Borrower shall have no right to specify the order or the accounts to which Collateral Agent or Lenders shall allocate or apply any payments required to be made by Borrower to Collateral Agent or Lenders or otherwise received by Collateral Agent or Lenders under this Agreement when any such allocation or application is not specified elsewhere in this Agreement. If an Event of Default has occurred and is continuing, Collateral Agent and/or each Lender may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as the Lenders shall determine in their sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Lenders for any deficiency. If Collateral Agent, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Collateral Agent shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Collateral Agent of cash therefor.
9.5 Liability for Collateral. So long as Collateral Agent and Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and Lenders, Collateral Agent and Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.
9.6 No Waiver; Remedies Cumulative. Collateral Agent's or Lenders' failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or Lenders thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Collateral Agent and Lenders and then is only effective for the specific instance and purpose for which it is given. Collateral Agent's and Lenders' rights and remedies under this Agreement and the other Loan Documents are cumulative. Collateral Agent and Lenders have all rights and remedies provided under the Code, by law, or in equity. Collateral Agent's or any Lender's exercise of one right or remedy is not an election, and Collateral Agent's waiver of any Event of Default is not a continuing waiver. Collateral Agent's or any Lender's delay in exercising any remedy is not a waiver, election, or acquiescence.
9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or Lenders on which Borrower is liable.
10 NOTICES
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 electronic mail (if an email address is specified herein) or facsimile transmission; (c) one (1) Business
18
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. Either Collateral Agent, Lender or Borrower may change its address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.
If to Borrower: | Tranzyme, Inc. 0000 Xxxxxxx Xxxx., Xxxxx 000 Xxxxxx, Xxxxx Xxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxxxxx Fax: (000) 000-0000 Email: xxxxxxxxxxx@xxxxxxxx.xxx |
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with a copy to: |
Xxxxxxxxx Law Group PLLC 0000 Xxxxxxx Xxxx, Xxxxx 000 Xxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxxx Fax: (000) 000-0000 Email: xxxxxxxxxx@xxxxxxxx.xxx |
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and to: |
Xxxxxx Xxxxxxx LLP 0 Xxxxx Xxxxx Xxxxx, Xxxxx 0000 Xxxxxxxx, Xxxxxx Xxxxxx X0X 0X0 Attention: Xxxxxx Xxxxxxx Fax: (000) 000-0000 Email: xxxxxxxx@xxxxxxxxxxxxx.xxx |
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If to Collateral Agent: |
Oxford Finance Corporation 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx, Xxxxxxxx 00000 Attention: General Counsel Fax: (000) 000-0000 |
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if to Horizon: |
Compass Horizon Funding Company LLC 00 Xxxxxxxxx Xxxx Xxxx Xxxxxxxxxx, Xxxxxxxxxxx 00000 Attention: Legal Department Fax: (000) 000-0000 Email: xxx@xxxxxxxxxxxxxxxxxx.xxx |
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with a copy to: |
Xxxxxx & Xxxxxxxxxx LLP Xxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 Attn: Xxxxx X. Xxxxxxx, Esquire Fax: (000) 000-0000 Email: XXxxxxxx@xxxxxxxxx.xxx |
11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
New York law governs the Loan Documents without regard to principles of conflicts of law. Borrower, Lenders and Collateral Agent each submit to the exclusive jurisdiction of the State and Federal courts in New York. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to operate to preclude Collateral Agent or any Lender from bringing suit or taking other legal action
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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 and Lenders. 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 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, proper postage prepaid.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, LENDERS AND COLLATERAL AGENT 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 THE PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12 GENERAL PROVISIONS
12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Collateral Agent's and Lenders' prior written consent (which may be granted or withheld in Collateral Agent's and Lenders' discretion). Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Lenders' obligations, rights, and benefits under this Agreement and the other Loan Documents. Borrower hereby authorizes and directs Lender, for and on behalf of the Borrower, to maintain a record of ownership of the Notes and any interest therein, which record, or "book-entry system", shall identify the owner or owners of the Notes and any interests therein. Notwithstanding any other provision of this Agreement or the Loan Documents, the right to the principal of, and stated interest on, the Notes may be transferred only through such book-entry system.
12.2 Indemnification. Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an "Indemnified Person") harmless against: (a) all obligations, demands, claims, and liabilities (collectively, "Claims") asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Lenders' Expenses incurred, or paid by Indemnified Person from, following, or arising from transactions between Collateral Agent, and/or Lenders and Borrower (including reasonable attorneys' fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person's gross negligence or willful misconduct.
12.3 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.
12.4 Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.
12.5 [Reserved].
12.6 Amendments in Writing; Integration. All amendments to this Agreement must be in writing signed by Collateral Agent, Lenders and Borrower. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or
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agreements. All prior agreements, term sheets, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.
12.7 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Agreement.
12.8 Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent shall survive until the statute of limitations with respect to such claim or cause of action shall have run.
12.9 Confidentiality. In handling any confidential information of Borrower, Lenders and Collateral Agent shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Lenders' and Collateral Agent's Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Lenders and Collateral Agent shall use commercially reasonable efforts to obtain such prospective transferee's or purchaser's agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent considers appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement with Lenders and Collateral Agent with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in Lenders' and/or Collateral Agent's possession when disclosed to Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to Lenders and/or Collateral Agent; or (ii) is disclosed to Lenders and/or Collateral Agent by a third party, if Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information.
Collateral Agent may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and market analysis, so long as Collateral Agent does not disclose Borrower's identity or the identity of any person associated with Borrower unless otherwise expressly permitted by this Agreement. The provisions of the immediately preceding sentence shall survive the termination of this Agreement.
12.10 Right of Set Off. Borrower hereby grants to Collateral Agent and to each Lender, a Lien, security interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Collateral Agent or Lenders or any entity under the control of Collateral Agent or Lenders (including an Collateral Agent affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or Lenders may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
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12.11 Borrower Liability. Each Borrower hereunder shall be obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives the proceeds of such Credit Extension, as if each Borrower hereunder directly received all Credit Extensions. Each Borrower waives any suretyship defenses available to it under the Code or any other applicable law. Each Borrower waives any right to require Collateral Agent or the Lenders to: (i) proceed against any Borrower or any other Person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Collateral Agent or the Lenders may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower's liability. Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and the Lenders under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Collateral Agent and such payment shall be promptly delivered to Collateral Agent for application to the Obligations, whether matured or unmatured.
13 DEFINITIONS
13.1 Definitions. As used in this Agreement, the following terms have the following meanings:
"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, 2011.
"Basic Rate" is the per annum rate of interest (based on a year of 360 days) equal to the greater of (i) 10.75% and (ii) the sum of (a) the three-month U.S. LIBOR rate reported in the Financial Times three (3) Business Days prior to the applicable Funding Date, plus (b) 9.50%.
"Borrower" is defined in the preamble hereof.
"Borrower's Books" are all Borrower's books and records including ledgers, federal and state tax returns, records regarding Borrower's assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.
"Borrowing Resolutions" are, with respect to any Person, those resolutions adopted by such Person's Board of Directors and delivered by such Person to Collateral Agent approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together
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with a certificate executed by its secretary on behalf of such Person certifying that (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Collateral Agent and Lenders may conclusively rely on such certificate unless and until such Person shall have delivered to Collateral Agent a further certificate canceling or amending such prior certificate.
"Business Day" is any day that is not a Saturday, Sunday or any days that are recognized bank holidays in the United States, North Carolina and Virginia, and any other days 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 Xxxxx'x Investors Service, Inc., and (c) certificates of deposit issued maturing no more than one (1) year after issue. For the avoidance of doubt, the direct purchase by Borrower, co-borrower, or any subsidiary of Borrower of any Auction Rate Securities, or purchasing participations in, or entering into any type of swap or other derivative transaction (other than currency option agreements relating to British Pounds Sterling, Euros or Canadian Dollars entered into by Borrower in the ordinary course of business and not for speculation, provided that the aggregate outstanding notional amount of such currency options shall not exceed $2,000,000 at any time), or otherwise holding or engaging in any ownership interest in any type of Auction Rate Security by Borrower, co-borrower, or any subsidiary of Borrower 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 each Borrower and Subsidiary is 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.
"Claims" are defined in Section 12.2.
"Code" is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York 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 1 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 and Lenders' Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the New York, 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.
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"Collateral Agent" means, 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. 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 maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, 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.
"Credit Extension" is any Term Loan or any other extension of credit by Collateral Agent or Lenders for Borrower's benefit.
"Deed of Hypothec" means the Deed of Hypothec on a Universality of Movable Property made by Tranzyme-Canada in favor of Lenders.
"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 3300633969, maintained with SVB.
"Dollars," "dollars" and "$" each mean lawful money of the United States.
"Effective Date" is defined in the preamble of this Agreement.
"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, and its regulations.
"Event of Default" is defined in Section 8.
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"Existing Oxford and SVB Indebtedness" means the indebtedness of Borrower to Oxford and SVB in the aggregate principal and interest outstanding amount as of the Effective Date of $3,591,674.57 outstanding pursuant to the terms of a Loan and Security Agreement dated December 3, 2008 among Borrower, Oxford and SVB .
"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 earlier to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of a Term Loan pursuant to Section 2.2(c) or (d), equal to four percent (4.00%) of the original principal amount of the Term Loans, 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, which are applicable to the circumstances as of the date of determination.
"General Intangibles" is 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, data, 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.
"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.
"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.
"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,
25
raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower's custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
"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.
"Key Person" is Borrower's Chief Executive Officer and Borrower's Chief Financial Officer.
"Lender" is any one of the Lenders.
"Lenders" shall mean 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 Collateral Agent's and Lenders' 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, recording, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.
"Lien" is a claim, mortgage, deed of trust, levy, charge, pledge, hypothec, 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 Warrants, the Perfection Certificate, any note, or notes or guaranties executed by Borrower, any note, or notes or guaranties or hypothecs or securities executed by Borrower or any Guarantor, and any other present or future agreement between Borrower and/or for the benefit of 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 and/or Lenders' 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) or prospects of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.
"Maturity Date" is, for each Term Loan, the date which is twenty-nine (29) months after the Amortization Date with respect to such Term Loan.
"Obligations" are Borrower's obligation to pay when due any debts, principal, interest, Lenders' Expenses, Final Payment, Prepayment Fee, and other amounts Borrower owes Lenders now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to Lenders and/or Collateral Agent, and the performance of Borrower's duties under the Loan Documents.
"Operating Documents" are, for any Person, such Person's formation documents, as certified with the Secretary of State of such Person's state of formation on a date that is no earlier than 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.
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"Payment/Advance Form" is that certain form attached hereto as Exhibit B.
"Payment Date" is the first day of each calendar month.
"Perfection Certificate" is defined in Section 5.1.
"Permitted Indebtedness" is:
(a) Borrower's Indebtedness to Lenders and Collateral Agent under this Agreement and the other Loan Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;
(e) Indebtedness secured by Permitted Liens described in clause (c) of the definition thereof, provided that such Indebtedness does not exceed $250,000 in the aggregate in any fiscal year of Borrower and provided such Indebtedness does not exceed the lesser of cost or fair market value of the Equipment financed with such Indebtedness;
(f) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(g) other unsecured Indebtedness in an aggregate outstanding principal amount at any time not to exceed One Hundred Thousand Dollars ($100,000); and
(h) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (g) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.
"Permitted Investments" are:
(a) Investments shown on the Perfection Certificate and existing on the Effective Date; and
(b) Cash Equivalents.
"Permitted Liens" are:
(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended , and the Treasury Regulations adopted thereunder;
(c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;
(d) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) and which are not delinquent or remain payable without penalty
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- (i)
- for
a prepayment made on or prior to September 30, 2011, six percent (6.0%) of the principal amount of the outstanding Term Loans as of the date of
such prepayment; or
- (ii)
- for
a prepayment made after September 30, 2011, and on or prior to September 30, 2012, three percent (3.0%) of the principal amount of the
outstanding Term Loans as of the date of such prepayment; and
- (iii)
- for
a prepayment made after September 30, 2012, and on or prior to September 30, 2013, two percent (2.0%) of the principal amount of the
outstanding Term Loans as of the date of such prepayment; and
- (iii)
- for a prepayment made after September 30, 2013, and prior to the Maturity Date, one percent (1.0%) of the principal amount of the outstanding Term Loans as of the date of such prepayment.
or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(e) bankers' liens, rights of setoff and Liens in favor of financial institutions incurred made in the ordinary course of business arising in connection with Borrower's deposit accounts or securities accounts held at such institutions to secure payment of fees and similar costs and expenses subject to Borrower's compliance with Section 6.6(b) hereof;
(f) Liens to secure payment of workers' compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);
(g) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;
(h) leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or intellectual property) granted in the ordinary course of Borrower's business, if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent a security interest;
(i) non-exclusive licenses of intellectual property granted to third parties in the ordinary course of business; and
(j) exclusive licenses of intellectual property granted to third parties in the ordinary course of business in connection with joint ventures and corporate collaborations provided that any exclusive license of any of Borrower's material intellectual property shall be approved by Borrower's Board of Directors and subject to a license agreement entered into in an arm's-length transaction.
"Person" is any individual, sole proprietorship, partnership, limited liability company, unlimited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
"Prepayment Fee" shall be an additional fee payable to Collateral Agent, to be shared between the Lenders pursuant to their respective Pro Rata Shares, in amount equal to:
28
"Pro Rata Share" means, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the amount of Term Loans made by such Lender by the aggregate amount of all outstanding Term Loans.
"Registered Organization" is any "registered organization" as defined in the Code with such additions to such term as may hereafter be made
"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 Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower.
"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 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.
"Subordinated Debt" is indebtedness incurred by Borrower subordinated to all of Borrower's now or hereafter indebtedness to Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and Lenders entered into between Collateral Agent, the Borrower and the other creditor), on terms acceptable to Collateral Agent and Lenders.
"Subsidiary" means, with respect to any Person, any Person of which more than 50.0% 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 one or more of Affiliates of such Person.
"SVB" means Silicon Valley Bank, a California corporation.
"Term Loan" is defined in Section 2.2(a) hereof.
"Term Loan Commitment" means, 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.
"Transfer" is defined in Section 7.1.
"Tranzyme NSULC" means Tranzyme Holdings ULC, an unlimited liability company organized under the laws of Nova Scotia, Canada.
"Warrants" are those certain Warrants to Purchase Stock dated as of the Effective Date executed and issued by Tranzyme in favor of each Lender.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.
BORROWER: | ||||
TRANZYME, INC. |
||||
By |
/s/ Xxxxxxx X. Xxxxxxxxxx |
|||
Name: | Xxxxxxx X. Xxxxxxxxxx |
|||
Title | VP, Finance & CFO |
|||
TRANZYME PHARMA INC. |
||||
By |
/s/ Xxxxxxx X. Xxxxxxxxxx |
|||
Name: | Xxxxxxx X. Xxxxxxxxxx |
|||
Title | VP, Finance & CFO |
|||
LENDERS AND COLLATERAL AGENT: |
||||
OXFORD FINANCE CORPORATION, as Collateral Agent and as a Lender |
||||
By |
/s/ TA Lex |
|||
Name: | TA Lex |
|||
Title: | COO |
|||
COMPASS HORIZON FUNDING COMPANY LLC, as a Lender |
||||
By |
/s/ Xxxxxx X. Xxxxxxx, Xx. |
|||
Name: | Xxxxxx X. Xxxxxxx, Xx. |
|||
Title: | Chief Executive Officer |
30
SCHEDULE 1.1
LENDERS AND COMMITMENTS
Lender
|
Commitment | Commitment Percentage |
|||||
---|---|---|---|---|---|---|---|
Oxford Finance Corporation |
$ | 8,000,000 | 61.54 | % | |||
Compass Horizon Funding Company LLC |
$ | 5,000,000 | 38.46 | % | |||
TOTAL |
$ | 13,000,000 | 100.00 | % | |||
1
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 provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit 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 any of the following, whether now owned or hereafter acquired: any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished; any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same; trademarks, trade names, service marks, mask works, rights of use of any name or domain names and, to the extent permitted under applicable law, any applications therefor, whether registered or not; and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating manuals, trade secret rights, clinical and non-clinical data, rights to unpatented inventions; provided, however, the Collateral shall include all Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or relating to any of the foregoing and any claims for damage by way of any past, present, or future infringement of any of the foregoing.
2
EXHIBIT B
Loan Payment/Advance Request Form
DISBURSEMENT LETTER
The undersigned, being the duly elected and acting of TRANZYME, INC., a Delaware corporation ("Tranzyme"), and TRANZYME PHARMA INC., a Canadian corporation ("Tranzyme-Canada") (Tranzyme and Tranzyme-Canada are referred to herein individually and collectively, jointly and severally, solidarily, as "Borrower"), does hereby certify to OXFORD FINANCE CORPORATION, ("Oxford" and "Lender"), as collateral agent (the "Collateral Agent") and COMPASS HORIZON FUNDING COMPANY LLC ("Horizon") in connection with that certain Loan and Security Agreement dated on or about the date hereof by and between Borrower and Collateral Agent (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 and Guarantor are 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 proceeds for the Term Loan shall be disbursed as follows:
Disbursement from Oxford: |
|||||
Loan Amount |
$ | 8,000,000 | |||
—Deposit Received |
|||||
Less: |
|||||
—Existing Debt Payoff |
|||||
—Oxford's Legal Fees |
|||||
—Oxford's Facility Fee |
Net Proceeds due from Oxford: |
||||
|
$ | |||
|
$ | |||
|
$ |
Disbursement from Horizon: |
|||||
Loan Amount |
$ | 5,000,000 | |||
—Deposit Received |
|||||
Less: |
|||||
—Existing Debt Payoff |
|||||
—Horizon's Legal Fees |
|||||
—Horizon's Facility Fee |
1
Net Proceeds due from Horizon: |
||||
|
$ | |||
|
$ | |||
|
$ |
The aggregate net proceeds of the Term Loan in the amount of $ shall be transferred to Borrower's account as follows:
Account
Name:
Bank Name:
Bank Address:
Account Number:
ABA Number:
Dated: September , 2010
BORROWER: | ||||
TRANZYME, INC. |
||||
By |
||||
Name: | |
|||
Title: | |
|||
TRANZYME PHARMA INC. |
||||
By |
||||
Name: | |
|||
Title: | |
|||
LENDERS AND COLLATERAL AGENT: |
||||
OXFORD FINANCE CORPORATION, as Collateral Agent and as a Lender |
||||
By |
||||
Name: | |
|||
Title: | |
|||
COMPASS HORIZON FUNDING COMPANY LLC, as a Lender |
||||
By |
||||
Name: | |
|||
Title: | |
2
EXHIBIT C—COMPLIANCE CERTIFICATE
TO: | Oxford Finance Corporation, as Collateral Agent | ||
FROM: |
Tranzyme, Inc. and Tranzyme Pharma Inc. |
The undersigned authorized officer of TRANZYME, INC., a Delaware corporation ("Tranzyme"), and TRANZYME PHARMA INC., a Canadian corporation ("Tranzyme-Canada") (Tranzyme and Tranzyme-Canada are referred to herein individually and collectively, jointly and severally, solidarily, as "Borrower") hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement among Borrower, Collateral Agent, and the Lenders (the "Agreement"),
(i) Borrower is in complete compliance for the period ending with all required covenants except as noted below;
(ii) There are no Events of Default, except as noted below;
(iii) 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 except as noted below; 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.
(iv) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement;
(v) 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
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. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
3
Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under "Complies" column.
|
Reporting Covenant | Requirement | |
Complies | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
1) | Financial statements | Monthly within 30 days | Yes | No | N/A | |||||||
2) |
Annual (CPA Audited) statements |
Within 180 days after Fiscal Year End |
Yes |
No |
N/A |
|||||||
3) |
Annual Financial Projections/Budget (prepared on a monthly basis) |
Annually (w/n 10 days of FYE). and when revised |
Yes |
No |
N/A |
|||||||
4) |
A/R & A/P agings |
If applicable |
Yes |
No |
N/A |
|||||||
5) |
8-K, 10-K and 10-Q Filings |
If applicable |
Yes |
No |
N/A |
|||||||
6) |
IP Report |
If applicable |
Yes |
No |
N/A |
|||||||
7) |
Total amount of Borrower's cash and cash equivalents at the last day of the measurement period |
$ |
||||||||||
8) |
Month |
QTD |
YTD |
|||||||||
Deposit and Securities Accounts |
(Please list all accounts; attach separate sheet if additional space needed) |
4
|
Bank | Account Number | |
New Account? | Acct Control Agmt in place? (only required for accounts in US) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1) | Silicon Valley Bank | Yes | No | Yes | No | |||||||||
2) |
Royal Bank of Canada |
Yes |
No |
Yes |
No |
|||||||||
3) |
Yes |
No |
Yes |
No |
||||||||||
4) |
Yes |
No |
Yes |
No |
||||||||||
5) |
Yes |
No |
Yes |
No |
||||||||||
6) |
Yes |
No |
Yes |
No |
Financial Covenants | Requirement | Actual | Compliance | |||||||||||
N/A |
$ |
$ |
||||||||||||
Other Matters |
||||||||||||||
Have there been any changes in management? |
Yes |
No |
||||||||||||
Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Agreement? |
Yes |
No |
||||||||||||
Have there been any new or pending claims or causes of action against Borrower that involve more than $200,000? |
Yes |
No |
||||||||||||
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.) |
LENDERS USE ONLY | ||||||||||||
TRANZYME, INC. |
DATE |
|||||||||||
TRANZYME PHARMA INC. | ||||||||||||
By: |
Received by: |
Verified by: |
||||||||||
Name: |
Date: |
Date: |
||||||||||
Title: |
Compliance Status |
Yes |
No |
5
EXHIBIT D
SECURED PROMISSORY NOTE
$ | Dated: September ,2010 |
FOR VALUE RECEIVED, the undersigned, TRANZYME, INC., a Delaware corporation ("Tranzyme"), and TRANZYME PHARMA INC., a Canadian corporation ("Tranzyme-Canada") (Tranzyme and Tranzyme-Canada are referred to herein individually and collectively, jointly and severally, solidarily, as "Borrower"), HEREBY PROMISES TO PAY to the order of [Compass/ OXFORD] ("Lender") the principal amount of Dollars ($ ) or such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of Term Loan, at the rates and in accordance with the terms of the Loan and Security Agreement by and between Borrower and Oxford Finance Corporation, as Collateral Agent, and the Lenders, including without limitation, Oxford Finance Corporation, and Compass Horizon Funding Company LLC (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement"); capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Loan Agreement. If not sooner paid, the entire principal amount and all accrued interest hereunder and under the Loan Agreement shall be due and payable on Term Loan Maturity Date as set forth in the Loan Agreement.
Borrower agrees to pay any initial partial monthly interest payment from the date of this Note to the first Payment Date on the first Payment Date.
Principal, interest and all other amounts due with respect to the Term 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. 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 Loan 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 Loan, interest on the Term 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 laws of the State of New York.
Note Register; Ownership of Note. 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.
6
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.
BORROWER: | ||||
TRANZYME, INC. |
||||
By |
||||
Name: | |
|||
Title: | |
|||
TRANZYME PHARMA INC. |
||||
By |
||||
Name: | |
|||
Title: | |
7
EXHIBIT E
FORM OF UNCONDITIONAL GUARANTY
UNCONDITIONAL GUARANTY
This continuing Unconditional Guaranty ("Guaranty") is entered into as of , 2010, by Tranzyme Holdings ULC ("Guarantor"), in favor of Compass Horizon Funding Company LLC ("Horizon") and Oxford Finance Corporation ("Oxford").
A. Concurrently herewith, Horizon and Oxford as lenders (collectively, "Lenders"), Tranzyme, Inc., a Delaware corporation, and Tranzyme Pharma Inc., a Canadian corporation, as borrowers (collectively, "Borrowers") and Oxford , as agent for the Lenders, are entering into that certain Loan and Security Agreement dated as of September , 2010, (as amended, restated, or otherwise modified from time to time, the "Loan Agreement") pursuant to which Lenders agreed to make certain advances of money and to extend certain financial accommodations to Borrowers (collectively, the "Loans"), subject to the terms and conditions set forth therein. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement.
B. In consideration of the agreement of Lenders to make the Loans to Borrowers under the Loan Agreement, Guarantor is willing to guaranty the full payment and performance by Borrowers of all of their respective obligations thereunder and under the other Loan Documents, all as further set forth herein.
NOW, THEREFORE, to induce Lenders to enter into the Loan Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Guarantor hereby represents, warrants, covenants and agrees as follows:
Section 1. Guaranty.
1.1 Unconditional Guaranty of Payment. In consideration of the foregoing, Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Lenders, the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all Obligations. The liability of Guarantor under this Guaranty is unlimited and extends to the full amount of the Obligations. Guarantor agrees that it shall execute such other documents or agreements and take such action as Lenders shall reasonably request to effect the purposes of this Guaranty.
1.2 Solidarity. Guarantor shall be bound to Lenders as solidary surety. As a result of the foregoing, Guarantor, Borrowers and any other person(s) presently or in the future guaranteeing any of the Obligations towards Lenders are and shall be obliged to Lenders for the same thing such that each of Guarantor, Borrowers and any other person(s) presently or in the future guaranteeing any or all of the Obligations may be compelled separately to pay or fulfill all of the Obligations.
1.3 Separate Obligations. These obligations are independent of Borrowers' obligations and separate actions may be brought against Guarantor (whether action is brought against Borrowers or whether Borrowers are joined in the action).
Section 2. Representations and Warranties.
Guarantor hereby represents and warrants that:
(a) Guarantor has all requisite power and authority to execute and deliver this Guaranty and each Loan Document executed and delivered by Guarantor pursuant to the Loan Agreement or this Guaranty and to perform its obligations thereunder and hereunder.
1
(b) The execution, delivery and performance by Guarantor of this Guaranty (i) do not contravene any law or any contractual restriction binding on or affecting Guarantor or by which Guarantor's property may be affected; (ii) do not require any authorization or approval or other action by, or any notice to or filing with, any governmental authority or any other Person under any indenture, hypothec, mortgage, deed of trust, lease, agreement or other instrument to which Guarantor is a party or by which Guarantor or any of its property is bound, except such as have been obtained or made; and (iii) do not result in the imposition or creation of any Lien upon any property of Guarantor.
(c) This Guaranty is a valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, except as the enforceability thereof may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally.
(d) To the Guarantor's knowledge, there is no action, suit or proceeding affecting Guarantor pending or threatened before any court, arbitrator, or governmental authority, domestic or foreign, which may have a material adverse effect on the ability of Guarantor to perform its obligations under this Guaranty.
(e) Guarantor's obligations hereunder are not subject to any offset or defense against Lenders or Borrowers of any kind.
(f) To ensure the legality, validity, enforceability or admissibility into evidence of this Guaranty in the jurisdiction in which Guarantor is domiciled, it is not necessary that (i) this Guaranty be filed or recorded with any court or other authority in such jurisdiction, (ii) any other filings, notices, authorizations, approvals be obtained or other actions taken, or (iii) any stamp or similar tax be paid on or with respect to this Guaranty, or, if any of the foregoing actions are necessary, they have been duly taken.
(g) Neither Guarantor nor its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under applicable law.
(h) [Reserved].
(i) Guarantor covenants, warrants, and represents to Lenders that all representations and warranties contained in this Guaranty shall be true at the time of Guarantor's execution of this Guaranty, and shall continue to be true so long as this Guaranty remains in effect. Guarantor expressly agrees that any misrepresentation or breach of any warranty whatsoever contained in this Guaranty shall be deemed material.
Section 3. General Waivers. Guarantor expressly waives:
(a) Any right to require Lenders to (i) proceed against Borrowers or any other person; (ii) proceed against or exhaust any security or (iii) pursue any other remedy. Lenders may exercise or not exercise any right or remedy they have against Borrowers or any security they hold (including the right to foreclose by judicial or nonjudicial sale) without affecting Guarantor's liability hereunder.
(b) Any defenses from disability or other defense of Borrowers or from the cessation of Borrowers' liabilities.
(c) The benefit of discussion, such that Lenders shall not be bound to exercise, continue or exhaust any recourses against Borrowers, any other persons or any security or guarantees from which Lenders may at any time benefit, before being entitled to seek payment or fulfillment of the Obligations from Guarantor.
2
(d) The benefit of division, such that Guarantor shall not be entitled to require that Lenders divide their claims for the Obligations and to reduce their claims to the amount of any share or portion of Guarantor, Borrowers or other guarantors.
(e) Any setoff, defense or counterclaim against Lenders.
(f) Any defense from the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrowers. Until Borrowers' obligations to Lenders have been paid in full and all of Borrowers' financing arrangements with Bank have been terminated, Guarantor has no right of subrogation or reimbursement or other rights against Borrowers.
(g) Any right to enforce any remedy that Lenders have against Borrowers.
(h) Any rights to participate in any security held by Lenders.
(i) Any demands for performance, notices of nonperformance or of new or additional indebtedness incurred by Borrowers to Lenders. Guarantor is responsible for being and keeping itself informed of Borrowers' financial condition.
(j) The benefit of any act or omission by Lenders which directly or indirectly results in or aids the discharge of Borrowers from any of the Obligations by operation of law or otherwise.
Section 4. Waiver re: Subrogation. The obligations of Guarantor hereunder shall be neither extinguished, lessened nor affected by any loss of or any unenforceability of any other guarantees or security from which Lenders may, presently or in the future, benefit in connection with the Obligations, whether such loss or unenforceability be caused or occasioned by any act or omission (negligent or otherwise) of Lenders or any person(s) for whom same may be responsible. Notwithstanding any provision of law to the contrary, the obligations of Guarantor hereunder shall be neither extinguished, lessened nor affected by any act or omission resulting in the inability of Guarantor to be subrogated in any rights, hypothecs or other security benefiting Lenders for the Obligations. Lenders shall not be under any obligation whatsoever in favour of Guarantor to marshal, exercise or pursue any other guarantees or security or any monies or properties which Lenders may be entitled to receive or to which they may have a claim and Guarantor hereby waives the benefits, if any, of any right to assert any defenses in connection therewith.
Section 5. Continuing Nature. This Guaranty shall be a continuing guaranty, shall cover all of the Obligations and shall apply to and guarantee any ultimate balance of the Obligations due or remaining unpaid or unfulfilled to Lenders. This Guaranty is and shall continue to be in addition to and not in substitution of, any other guarantees or other security which Lenders may, presently or in the future, hold and/or enjoy in connection with the Obligations.
Section 6. Certain rights of Lenders. Lenders shall be entitled, as they see fit to:
(a) Grant time, renewals, extensions, indulgences, releases and discharges to Borrowers or others and/or of all security or guarantees;
(b) Take security or other guarantees from Borrowers or others and give the same and any or all existing security or guarantees to Borrowers or others.
(c) Abstain from taking security or guarantees from Borrowers or others or from perfecting security or guarantees of Borrowers or others;
(d) Cease or refrain from giving credit or making loans or advances to Borrowers or others;
(e) Accept compensation from and otherwise deal with Borrowers or others and with all security or guarantees; and/or
3
(f) Apply all monies at any time received from Borrowers or others or from security or guarantees upon such part of the Obligations as Lenders deems appropriate as well as to change any such application in whole or in part from time to time as they deem appropriate, all without in any way extinguishing, lessening or affecting the obligations of Guarantor under this Guaranty.
Section 7. Reinstatement. Notwithstanding any provision of the Loan Agreement to the contrary, the liability of Guarantor hereunder shall be reinstated and revived and the rights of Lenders shall continue if and to the extent that for any reason any payment by or on behalf of Guarantor or Borrowers is rescinded or must be otherwise restored by Lenders, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, all as though such amount had not been paid. The determination as to whether any such payment must be rescinded or restored shall be made by Lenders in their sole discretion; provided, however, that if Lenders choose to contest any such matter at the request of Guarantor, Guarantor agrees to indemnify and hold harmless Lenders from all costs and expenses (including, without limitation, reasonable attorneys' fees) of such litigation. To the extent any payment is rescinded or restored, Guarantor's obligations hereunder shall be revived in full force and effect without reduction or discharge for that payment.
Section 8. Withholding. In the event any payments are received by Lenders from Guarantor hereunder, such payments will be made subject to applicable withholding for any taxes, levies, fees, deductions, withholding, restrictions or conditions of any nature whatsoever. Specifically, if at any time any governmental authority, applicable law, regulation or international agreement requires Guarantor to make any such withholding or deduction from any such payment or other sum payment hereunder to Lenders, Guarantor hereby covenants and agrees that the amount due from Guarantor with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Lenders receive a net sum equal to the sum which they would have received had no withholding or deduction been required and Guarantor shall pay the full amount withheld or deducted to the relevant governmental authority. Guarantor will, upon request, furnish Lenders with proof satisfactory to Lenders indicating that Guarantor has made such withholding payment provided, however, that Guarantor need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Guarantor. The agreements and obligations of Guarantor contained in this Section shall survive the termination of this Guaranty.
Section 9. Useful Information. At the written request of Guarantor, Lenders shall provide Guarantor with any useful information respecting the content and the terms and conditions of the Obligations and the progress made in the performance of the Obligations, the whole subject to the provisions hereof. Any request by Guarantor for useful information hereunder shall be in writing and shall be as precise as possible in the circumstances. Lenders shall not be bound to furnish any useful information which shall not have been requested in writing. Borrowers, by their signature hereto, as hereinafter provided, hereby unconditionally and irrevocably consent to Lenders providing any present or future information concerning Borrowers to Guarantor.
Section 10. No Waiver; Amendments. No failure on the part of Lenders to exercise, no delay in exercising and no course of dealing with respect to, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. This Guaranty may not be amended or modified except by written agreement between Guarantor and Lenders, and no consent or waiver hereunder shall be valid unless in writing and signed by Lenders.
Section 11. Compromise and Settlement. No compromise, settlement, release, renewal, extension, indulgence, change in, waiver or modification of any of the Obligations or the release or
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discharge of Borrowers from the performance of any of the Obligations shall release or discharge Guarantor from this Guaranty or the performance of the obligations hereunder.
Section 12. Notice. Any notice or other communication herein required or permitted to be given shall be in writing and may be delivered in person or sent by facsimile transmission, email, overnight courier, or by mail, registered or certified, return receipt requested, postage prepaid and addressed as follows:
If to Guarantor: | Tranzyme Holdings ULC 0000 Xxxxxxx Xxxx., Xxxxx 000 Xxxxxx, Xxxxx Xxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxxxxx Fax: (000) 000-0000 Email: xxxxxxxxxxx@xxxxxxxx.xxx |
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with a copy to: |
Xxxxxxx XxXxxxxx Suite 900 Xxxxx'x Wharf Tower 1 0000 Xxxxx Xxxxx Xxxxxx P.O. Box 997 Halifax NS B3J 2X2 Attention: Xxxxxxx Xxxxx Fax: (000) 000-0000 |
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If to Lenders: |
Oxford Finance Corporation 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx, Xxxxxxxx 00000 Attention: General Counsel Fax: (000) 000-0000 |
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with a copy to: |
Xxxxxx & Xxxxxxxxxx LLP Xxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 Attn: Xxxx Xxxxxx, Esquire Fax No.: (000) 000-0000 Email: XXxxxxx@xxxxxxxxx.xxx |
or at such other address as may be substituted by notice given as herein provided. Every notice, demand, request, consent, approval, declaration or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered or sent by facsimile transmission or three (3) Business Days after the same shall have been deposited in the mail. If sent by overnight courier service, the date of delivery shall be deemed to be the next Business Day after deposited with such service.
Section 13. Entire Agreement. This Guaranty constitutes and contains the entire agreement of the parties and supersedes any and all prior and contemporaneous agreements, negotiations, correspondence, understandings and communications between Guarantor and Lenders, whether written or oral, respecting the subject matter hereof.
Section 14. Severability. If any provision of this Guaranty is held to be unenforceable under applicable law for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of Guarantor and Lenders to the extent possible. In any event, all other provisions of this Guaranty shall be deemed valid and enforceable to the full extent possible under applicable law.
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Section 15. Subordination of Indebtedness. Any indebtedness or other obligation of Borrowers now or hereafter held by or owing to Guarantor is hereby subordinated in time and right of payment to all obligations of Borrowers to Lenders, except as such indebtedness or other obligation is expressly permitted to be paid under the Loan Agreement. Any notes now or hereafter evidencing such indebtedness of Borrowers to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lenders.
Section 16. Payment of Expenses. Guarantor shall pay, promptly on demand, all Expenses incurred by Lenders in defending and/or enforcing this Guaranty. For purposes hereof, "Expenses" shall mean costs and expenses (including reasonable fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) for defending and/or enforcing this Guaranty (including those incurred in connection with appeals or proceedings by or against Guarantor under the Bankruptcy and Insolvency Act (Canada), 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).
Section 17. Assignment; Governing Law. This Guaranty shall be binding upon and inure to the benefit of Guarantor, Lenders and their respective successors and assigns, except that Guarantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Lenders, which may be granted or withheld in Lenders' sole discretion. Any such purported assignment by Guarantor without Lenders' written consent shall be void. This Guaranty shall be governed by, and construed in accordance with, the laws of the province of Quebec and the laws of Canada applicable therein.
Section 18. Jurisdiction. Guarantor hereby irrevocably agrees that any legal action or proceeding with respect to this Guaranty or any of the agreements, documents or instruments delivered in connection herewith may be brought in the courts of applicable jurisdiction of the Province of Quebec, and, by execution and delivery hereof, Guarantor accepts and consents to, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Nothing herein shall limit the right of Lenders to bring proceedings against Guarantor in the courts of any other jurisdiction. Guarantor hereby waives, to the full extent permitted by law, any right to stay or to dismiss any action or proceeding brought before said courts on the basis of forum non conveniens.
Section 19. Waiver of Jury Trial. EACH OF LENDERS AND GUARANTOR HEREBY WAIVES, WHERE APPLICABLE AND TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND ANY RELATED INSTRUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
Section 20. Language. Each of the undersigned hereto acknowledges that the undersigned has requested and is satisfied that the foregoing as well as all notices, actions and legal proceedings be drawn up in the English language./Chacun des soussignés à ce document reconnaît que le soussigné a exigé que ce qui précède ainsi que tous avis, actions ou procédures légales soient rédigés et exécutés en anglais et s'en déclare satisfait.
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EXECUTED THIS DAY OF , 2010.
GUARANTOR: | ||
TRANZYME HOLDINGS ULC |
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Per: | ||
Name: Title: |
Borrowers hereby consent fully to all of the terms, conditions and contents hereof in general and irrevocably and unconditionally consent to the furnishing of information by Lenders to Guarantor pursuant to Section 9 hereof in particular.
BORROWERS: | ||
TRANZYME INC. |
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Per: | ||
Name: Title: |
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TRANZYME PHARMA INC. |
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Per: | ||
Name: Title: |
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LOAN AND SECURITY AGREEMENT
SCHEDULE 1.1 LENDERS AND COMMITMENTS
EXHIBIT A
EXHIBIT B Loan Payment/Advance Request Form DISBURSEMENT LETTER
EXHIBIT C—COMPLIANCE CERTIFICATE
EXHIBIT D SECURED PROMISSORY NOTE
EXHIBIT E FORM OF UNCONDITIONAL GUARANTY
RECITALS