eXHIBIT 10.1

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is made and dated as of May 23, 2018 and is
entered into by and among TRANSENTERIX, Inc., a Delaware corporation (“Parent”),
TRANSENTERIX SURGICAL, INC., a Delaware corporation (“TSI”), TRANSENTERIX
INTERNATIONAL, INC., a Delaware corporation (“TII”), SAFESTITCH LLC, a Virginia
limited liability company (“SafeStitch”), and each Domestic Subsidiary of the
foregoing from time to time party hereto (Parent, TSI, TII, SafeStitch and such
Domestic Subsidiaries individually and collectively, jointly and severally,
“Borrower” or “Borrowers”), the several banks and other financial institutions
or entities from time to time parties to this Agreement (collectively, referred
to as “Lender”) and HERCULES CAPITAL, INC., a Maryland corporation, in its
capacity as administrative agent and collateral agent for itself and Lender (in
such capacity, “Agent”).

RECITALS

A.

Borrower has requested Lender to make available to Borrower a term loan in the
aggregate principal amount of $20,000,000 (the “Tranche I Loan”), all of which
will be funded on the Closing Date;

B.

Borrower has requested Lender to make available to Borrower, during the Tranche
II Loan Availability Period, an additional term loan in the aggregate principal
amount of $10,000,000 (the “Tranche II Loan”), subject to Borrower’s
satisfaction of the Tranche II Loan Conditions;

C.

Borrower has requested Lender to make available to Borrower, during the Tranche
III Loan Availability Period, an additional term loan in the aggregate principal
amount of $10,000,000 (the “Tranche III Loan” and together with the Tranche I
Loan and the Tranche II Loan, the “Term Loans” and each a “Term Loan”), subject
to Borrower’s satisfaction of the Tranche III Loan Conditions; and

D.

Lender is willing to make the Term Loans on the terms and conditions set forth
in this Agreement.

AGREEMENT

NOW, THEREFORE, each Borrower, Agent and Lender agree as follows:

SECTION 1.  DEFINITIONS AND RULES OF CONSTRUCTION

1.1Unless otherwise defined herein, the following capitalized terms shall have
the following meanings:

“Account Control Agreement” means any agreement entered into by and among Agent,
a Loan Party and a third party Bank or other institution (including a Securities
Intermediary) in which a Loan Party maintains a Deposit Account or an account
holding Investment Property and which perfects Agent’s first priority security
interest in the subject account or accounts.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially
the form of Exhibit H, which account numbers shall be redacted for security
purposes if and when filed publicly by Parent.

“Advance(s)” means any Term Loan funds advanced under this Agreement

“Advance Date” means the funding date of any Advance.

“Advance Request” means a request for an Advance submitted by Parent to Agent in
substantially the form of Exhibit A, which account numbers shall be redacted for
security purposes if and when filed publicly by Parent.

“Affiliate” means (i) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question, (ii) any
Person directly or indirectly owning, controlling or holding with power to vote
10% or more of the outstanding voting Equity Interests of another Person, or
(iii) any Person 10% or more of whose outstanding voting Equity Interests are
directly or indirectly owned, controlled or held by another Person with power to
vote such securities. As used in the definition of “Affiliate,” the term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

“Agent” has the meaning given to it in the preamble to this Agreement.

“Agreement” means this Loan and Security Agreement, as amended from time to
time.

“Amortization Date” means December 1, 2020.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to a Loan Party or any of its Subsidiaries or Affiliates
from time to time concerning or relating to bribery or corruption, including
without limitation the United States Foreign Corrupt Practices Act of 1977, as
amended, the UK Bribery Act 2010 and other similar legislation in any other
jurisdictions.

“Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to
terrorism or money laundering, including without limitation Executive Order No.
13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising
or implementing the Bank Secrecy Act, and the laws administered by OFAC.

“Assignee” has the meaning given to it in Section 11.13.

“Blocked Person” means any Person:  (i) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224; (ii) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224; or (v) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Borrower” or “Borrowers” has the meaning given to it in the preamble to this
Agreement.

“Borrower Products” means all products, software, service offerings, technical
data or technology currently being designed, manufactured, sold, licensed or
distributed by Borrower or any of its Subsidiaries or which Borrower or any of
its Subsidiaries intend to sell, license, or distribute in the future including
any products or service offerings under development.

“Business Day” means any day other than Saturday, Sunday and any other day on
which banking institutions in the State of California or the State of New York
are closed for business.

“Cash” means all cash, cash equivalents and liquid funds.

“Change in Control” means (i) any reorganization, recapitalization,
consolidation or merger (or similar transaction or series of related
transactions) of Parent, sale or exchange of outstanding shares (or similar
transaction or series of related transactions) of Parent in which the holders of
Parent’s outstanding shares immediately before consummation of such transaction
or series of related transactions do not, immediately after consummation of such
transaction or series of related transactions, retain shares representing more
than 50% of the voting power of the surviving entity of such transaction or
series of related transactions (or the parent of such surviving entity if such
surviving entity is wholly owned by such parent), in each case without regard to
whether Parent is the surviving entity; or (ii) Parent ceases to own, directly
or indirectly, 100% of the Equity Interests of any other Loan Party.

“Claims” has the meaning given to it in Section 11.10.

“Closing Date” means the date of this Agreement.

“Collateral” means the property described in Section 3.3.

“Confidential Information” has the meaning given to it in Section 11.12.

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation of another,
including any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise directly or indirectly liable; provided, however,
that the term “Contingent Obligation” shall not include (i) endorsements for
collection or deposit in the ordinary course of business or (ii) any indemnity
obligations of such Person to any seller, buyer, licensee or licensor, as
applicable, incurred in connection with an acquisition, divestiture, license,
assignment or other disposition of assets permitted under this Agreement. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determined amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith; provided, however, that such amount shall not in any event exceed
the maximum amount of the obligations under the guarantee or other support
arrangement.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration, in which agreement Borrower or any of its
Subsidiaries now holds or hereafter acquires any interest.

“Copyrights” means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States of America, any State thereof, or of
any other country.

“Deposit Accounts” means any “deposit accounts,” as such term is defined in the
UCC, and includes any checking account, savings account, or certificate of
deposit.

“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.

“Due Diligence Fee” means $30,000, which fee has been paid to Agent prior to the
Closing Date, and shall be deemed fully earned on such date regardless of the
early termination of this Agreement.

“Equity Interests” means, with respect to any Person, the capital stock,
partnership or limited liability company interest, or other equity securities or
equity ownership interests of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

“EU/Vulcanos License Agreement” is that certain License Agreement, dated
September 18, 2015, between The European Union and TransEnterix Italia (f/k/a
Vulcanos s.r.L).

“Event of Default” has the meaning given to it in Section 9.

“Excluded Account” means any Account (including, for the avoidance of doubt, any
Cash contained therein): (i) used exclusively for payroll, payroll taxes and
other employee wage and benefit payments maintained in the ordinary course of
business and consistent with past practice and with a balance no greater than
the payroll, payroll taxes and other employee wages and benefit payment
obligations that are to be paid during any one month period; or (ii)
constituting a “zero balance” Account.

“Facility Charge” means one percent of the Maximum Term Loan Amount, or
$400,000.

“Financial Statements” has the meaning given to it in Section 7.1.

“Foreign Collateral” has the meaning give to it in Section 3.3.

“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized
under the laws of any state within the United States of America.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Guarantors” means any Person providing a Guaranty in favor of Agent for the
benefit of Lender, and includes each Material Foreign Subsidiary (whether
existing on the Closing Date or formed following the Closing Date). As of the
Closing Date, the Guarantors include TransEnterix Europe and TransEnterix
Italia.

“Guaranty” means any guarantee of all or any part of the Secured Obligations, as
the same may from time to time be amended, restated, modified or otherwise
supplemented.

“Guaranty Documents” means each Guaranty and each Account Control Agreement (to
be executed by a Guarantor) and security agreement or similar agreement or
instrument executed and or delivered in connection therewith, together with all
other agreements required by Agent hereunder from any Guarantor, all in form and
substance acceptable to Agent.

“Immaterial Foreign Subsidiary” and “Immaterial Foreign Subsidiaries” means any
Foreign Subsidiary or Foreign Subsidiaries that are not Material Foreign
Subsidiaries.

“Indebtedness” means indebtedness of any kind in respect of (i) all indebtedness
for borrowed money or the deferred purchase price of property or services
(excluding trade credit entered into in the ordinary course of business due
within 90 days), including reimbursement and other obligations with respect to
surety bonds and letters of credit, (ii) all obligations evidenced by notes,
bonds, debentures or similar instruments, (iii) all capital lease obligations;
(iv) any obligations with respect to undrawn letters of credit, corporate credit
cards or merchant services; and (v) all obligations arising under any interest
rate, currency or commodity swap agreement, interest rate cap agreement,
interest rate collar agreement, or other agreement or arrangement designated to
protect a Person against fluctuation in interest rates, currency exchange rates
or commodity prices and (vi) all Contingent Obligations.

“Indemnified Person” has the meaning give to it in Section 6.3.

“Intellectual Property” means the Loan Parties’ and their Subsidiaries’
Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask
works; the Loan Parties’ and their Subsidiaries’ applications therefor and
reissues, extensions, or renewals thereof; and the Loan Parties’ and their
Subsidiaries’ goodwill associated with any of the foregoing, together with the
Loan Parties’ and their Subsidiaries’ rights to sue for past, present and future
infringement of Intellectual Property and the goodwill associated therewith.

“Intellectual Property Security Agreement” means an Intellectual Property
Security Agreement among the applicable Loan Parties, Agent and Lender under
this Agreement, in form and substance reasonably acceptable to Agent.
“Inventory” means “inventory” as defined in Article 9 of the UCC.

“Investment” means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any loan, advance
or capital contribution (in the form of cash or assets) to any Person or the
acquisition of any asset of another Person.

“Joinder Agreement” means for each Domestic Subsidiary, a completed and executed
Joinder Agreement in substantially the form attached hereto as Exhibit G.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Lender” has the meaning given to it in the preamble to this Agreement.

“Liabilities” has the meaning given to it in Section 6.3.

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, levy, lien or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
against any property, any conditional sale or other title retention agreement,
and any lease in the nature of a security interest.

“Loan” means the Advances made under this Agreement.

“Loan Documents” means this Agreement, the Guaranty Documents, the Intellectual
Property Security Agreement, the Notes (if any), the ACH Authorization, the
Account Control Agreements, the Joinder Agreements, all UCC Financing
Statements, and any other documents executed in connection with the Secured
Obligations or the transactions contemplated hereby, as the same may from time
to time be amended, modified, supplemented or restated.

“Loan Party” means each Borrower and each Guarantor, and “Loan Parties” means
Borrowers and the Guarantors, collectively.

“Material Adverse Effect” means a material adverse effect upon: (i) the
business, operations, properties, assets or financial condition of the Loan
Parties and their Subsidiaries taken as a whole; or (ii) the ability of the Loan
Parties, taken as a whole, to perform or pay the Secured Obligations in
accordance with the terms of the Loan Documents, or the ability of Agent or
Lender to enforce any of its rights or remedies with respect to the Secured
Obligations; or (iii) the Collateral, taken as a whole, or Agent’s Liens on the
Collateral or the priority of such Liens.

“Material Foreign Subsidiary” is any Foreign Subsidiary with assets in excess of
five percent of the aggregate amount of the assets of Parent and its
Subsidiaries on a consolidated basis for three consecutive months.

“Maximum Term Loan Amount” means $40,000,000.

“Maximum Rate” has the meaning given to it in Section 2.2.

“Net Revenue” means the revenue earned by Parent, on a consolidated basis, as
recognized and calculated by Parent in accordance with GAAP, and excluding (i)
rebates, (ii) wholesaler fees, (iii) returns, (iv) chargebacks and (v) any other
discounts or credits incurred, in each case to the extent not already excluded
in the calculation of Parent’s revenue under GAAP.

“Note” or “Notes” means a Term Note.

“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

“Parent” has the meaning give to it in the preamble to this Agreement.

“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Borrower or any of its Subsidiaries now holds or
hereafter acquires any interest.

“Patents” means all letters patent of, or rights corresponding thereto, in the
United States of America or in any other country, all registrations and
recordings thereof, and all applications for letters patent of, or rights
corresponding thereto, in the United States of America or any other country.

“Performance Milestone I” means Parent having recognized, on a consolidated
basis, Net Revenue for the 2018 fiscal year from sales of Senhance Systems
[*****************************************************************************************************************************],
as verified by Agent acting reasonably.

“Performance Milestone II” means Parent having recognized, on a consolidated
basis, Net Revenue from sales of Senhance Systems
[*******************************************************************************],
as verified by Agent acting reasonably.

“Permitted Indebtedness” means: (i) Indebtedness of any Loan Party in favor of
Lender or Agent arising under this Agreement or any other Loan Document; (ii)
Indebtedness existing on the Closing Date which is disclosed in, and subject to
the limitations set forth in, Schedule 1A; (iii) Indebtedness of up to [*******]
outstanding at any time secured by a Lien described in clause (vii) of the
defined term “Permitted Liens;” provided that such Indebtedness does not exceed
the cost of the property or assets financed with such Indebtedness; (iv)
Indebtedness to trade creditors incurred in the ordinary course of business; (v)
Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated
Indebtedness; (vii) reimbursement obligations in connection with letters of
credit and bankers’ guarantees that are secured by Cash and issued on behalf of
a Borrower or a Subsidiary thereof and Indebtedness incurred in the ordinary
course of business with respect to corporate credit cards and/or merchant
services (including any guarantees entered into connection such corporate credit
cards and/or merchant services), all in an aggregate amount not to exceed
[********] at any time outstanding and reimbursement obligations for letters of
credit and/or bankers’ guarantees under this clause (vii) in an amount not to
exceed [*******] may be secured by Liens described in clause (xiv) of the
definition of “Permitted Liens;” (viii) other unsecured Indebtedness in an
amount not to exceed [********] at any time outstanding; and (ix) extensions,
refinancings and renewals of any items of Permitted Indebtedness; provided that
the principal amount is not increased or the terms modified to impose materially
more burdensome terms upon the Loan Parties or their Subsidiaries, as the case
may be.

“Permitted Investment” means: (i) Investments existing on the Closing Date which
are disclosed in Schedule 1B; (ii) (a) Cash, (b) marketable direct obligations
issued or

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one year from the date of acquisition thereof
currently having a rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Services, (c) commercial paper maturing no more
than one year from the date of creation thereof and currently having a rating of
at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s
Investors Service, (d) certificates of deposit issued by any bank with assets of
at least $500,000,000 maturing no more than one year from the date of investment
therein, (e) money market accounts and (f) any Investments permitted by
Borrower’s investment policy, as amended from time to time; provided that such
investment policy (and any such amendment thereto) has been approved in writing
by Agent; (iii) repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase agreements in
an aggregate amount not to exceed [*******] in any fiscal year; provided that no
Event of Default has occurred and is continuing or could exist after giving
effect to any such repurchases; (iv) Investments accepted in connection with
Permitted Transfers; (v) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or suppliers and
in settlement of delinquent obligations of, and other disputes with, customers
or suppliers arising in the ordinary course of Borrower’s business; (vi)
Investments consisting of notes receivable of, or prepaid royalties and other
credit extensions, to customers and suppliers who are not Subsidiaries or
Affiliates, in the ordinary course of business; (vii) Investments consisting of
loans to employees, officers or directors relating to the purchase of capital
stock of Borrower pursuant to employee stock purchase plans or other similar
agreements approved by Borrower’s Board of Directors, in an aggregate amount not
to exceed [*******] outstanding at any time during any fiscal year, when taken
together with Investments made under clause (viii) of this definition; (viii)
Investments consisting of travel advances and employee relocation loans and
other employee, officer or director loans and advances (or guarantees thereof)
in the ordinary course of business, in an aggregate amount not to exceed
[*******] outstanding at any time during any fiscal year, when taken together
with Investments made under clause (vii) of this definition; (ix) Investments
(a) by a Borrower or a Guarantor in another Borrower or a another Guarantor;
provided that no Event of Default has occurred and is continuing or could exist
after giving effect to any such Investments, (b) in a newly-formed Domestic
Subsidiaries; provided that no Event of Default has occurred and is continuing
or could exist after giving effect to any such Investments; provided that such
Domestic Subsidiary enters into a Joinder Agreement and execute such other
documents in accordance with Section 7.13 prior to such Investment being made;
(x) Investments by a Loan Party or any Immaterial Foreign Subsidiaries in any
Immaterial Foreign Subsidiaries, other than TransEnterix Japan (including
indirectly through another Immaterial Foreign Subsidiary), which are not in
excess of [*******] in the aggregate; provided that no Event of Default has
occurred and is continuing or could exist after giving effect to any such
Investments; provided further that for purposes of the [********] cap the
aggregate amount of such Investments shall be determined net of cash payments of
principal, dividends or redemptions received by the applicable Loan Party or
Immaterial Foreign Subsidiary arising directly as a result of such Investments;
(xi) Investments by an Loan Party or Immaterial Foreign Subsidiaries in
TransEnterix Japan in an amount not to exceed [*********] during any fiscal
year; provided that no Event of Default has occurred and is continuing or could
exist after giving effect to any such Investments; provided further that for
purposes of the [********] cap the aggregate amount of such Investments shall be
determined net of cash payments of principal, dividends or redemptions received
by the applicable Loan Party or Immaterial Foreign

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Subsidiary arising directly as a result of such Investments; (xii) joint
ventures or strategic alliances in the ordinary course of Borrower’s business
consisting of the nonexclusive licensing of technology, the development of
technology or the providing of technical support; provided that (a) any cash
Investments by Borrower do not exceed [*******] in the aggregate in any fiscal
year and (b) for purposes of such limitation the aggregate amount of such
Investments shall be determined net of cash payments of principal, dividends or
redemptions to the extent received by a Borrower or a Guarantor; and (xiii)
additional Investments that do not exceed [*******] in the aggregate; provided
that for purposes of such limitation the aggregate amount of such Investments
shall be determined net of cash payments of principal, dividends or redemptions
to the extent received by a Borrower or a Guarantor.

“Permitted Liens” means any and all of the following: (i) Liens in favor of
Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in
Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings so long as adequate reserves therefor are maintained in
accordance with GAAP; (iv) Liens securing claims or demands of materialmen,
artisans, mechanics, carriers, warehousemen, landlords, suppliers and other like
Persons arising in the ordinary course business and which are not delinquent or
which are being contested in good faith proceedings so long as adequate reserves
therefor are maintained in accordance with GAAP; (v) Liens arising from
judgments, decrees or attachments in circumstances which do not constitute an
Event of Default hereunder; (vi) the following deposits, to the extent made in
the ordinary course of business: deposits under worker’s compensation,
unemployment insurance, social security and other similar laws, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure indemnity, performance or other similar bonds for
the performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure statutory obligations (other than Liens arising
under ERISA or environmental Liens) or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds; (vii) Liens on property or assets
constituting purchase money Liens and Liens in connection with capital leases,
in each case, securing Indebtedness permitted in clause (iii) of “Permitted
Indebtedness;” (viii) Liens incurred in connection with Subordinated
Indebtedness; (ix) leasehold interests in leases or subleases and licenses
granted in the ordinary course of business and not interfering in any material
respect with the business of the licensor; (x) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of custom
duties which are not delinquent or which are being contested in good faith by
appropriate proceedings so long as adequate reserves therefor are maintained in
accordance with GAAP; (xi) Liens on insurance proceeds securing the payment of
financed insurance premiums that are promptly paid on or before the date they
become due (provided that such Liens extend only to such insurance proceeds and
not to any other property or assets); (xii) bankers’ liens, statutory and common
law rights of set-off and other similar rights as to deposits of Cash and
securities in favor of banks, other depository institutions and brokerage firms;
(xiii) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business so
long as they do not materially impair the value or marketability of the related
property; (xiv) Liens on Cash and Deposit Accounts holding such Cash securing
obligations permitted under clause (vii) of the definition of Permitted
Indebtedness; (xv) other Cash security deposits or similar arrangements in
connection with real property or automobiles leases in an aggregate amount not
to exceed [*******] at any time; and (xvi) Liens incurred in connection

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
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with the extension, renewal or refinancing of the Indebtedness permitted under
clause (x) of the definition of “Permitted Indebtedness” and secured by the
applicable Liens of the type described above; provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the Permitted Indebtedness secured by
such Lien (as such principal amount may have been reduced by any payments
thereon) does not increase.

“Permitted Transfers” means (i) sales of Inventory in the ordinary course of
business; (ii) non-exclusive licenses and similar arrangements for the use of
Intellectual Property in the ordinary course of business and licenses that could
not result in a legal transfer of title of the licensed property but that may be
exclusive in respects other than territory and that may be exclusive as to
territory only as to discreet geographical areas outside of the United States of
America in the ordinary course of business; (iii) subject to all other
limitations under this Agreement, dispositions of worn-out, obsolete or surplus
equipment or other fixed assets at fair market value in the ordinary course of
business; (iv) subject to all other limitations under this Agreement, the
transfer, sale, lease, assignment, disposition or other conveyance of any
equitable, beneficial or legal interest in assets from (a) a Loan Party to
another Loan Party, (b) from an Immaterial Foreign Subsidiary to a Loan Party or
(c) from a Loan Party or an Immaterial Foreign Subsidiary to an Immaterial
Foreign Subsidiary; (v) a transaction permitted by Section 7.9; and (vi) other
transfers, sales, leases assignments or other dispositions of assets having a
fair market value of not more than [********] in the aggregate in any fiscal
year.

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, other entity or government.

“Prepayment Charge” has the meaning given to it in Section 2.4(a).

“Projected Net Revenue” has the meaning give to it in Section 7.21(b).

“Receivables” means (i) all of each Loan Party’s Accounts, Instruments,
Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of
any letter of credit, and Letter of Credit Rights, and (ii) all customer lists,
software, and business records related thereto.

“Required Lenders” means at any time, the holders of more than 50% of the sum of
the aggregate unpaid principal amount of the Term Loans then outstanding.

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (i) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (ii) any Person operating, organized or resident in a Sanctioned
Country, or (iii) any Person controlled by any such Person.

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (i) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (ii) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

“SafeStitch” has the meaning given to it in the preamble to this Agreement.

“Secured Obligations” means each Loan Party’s obligations under this Agreement
and any Loan Document, including any obligation to pay any amount now owing or
later arising.

“Senhance System” means the Senhance Surgical Robotic System, including related
disposables, software and services.

“SOFAR Lien” means that certain 24 month Lien (expiring September 18, 2017) on
10% of the ownership interest of TransEnterix Italia originally granted by TII,
as the direct parent of TransEnterix Italia at such time, to SOFAR, S.p.A.
(“SOFAR”) in accordance with the terms of that certain Quota Pledge Agreement,
dated September 21, 2015 (“Quota Pledge Agreement”), by and between TII and
SOFAR in order to secure Parent’s/TII’s obligations under the SOFAR/Vulcanos
Interest Purchase Agreement and Parent’s obligations to register in the name of,
and deliver to, SOFAR 1,554,341 shares of Parent’s stock by the end of the
Escrow Period (as defined in the SOFAR/Vulcanos Interest Purchase Agreement. The
Quota Pledge Agreement was modified pursuant to a Letter Agreement, dated July
22, 2016, among Parent, TII, TransEnterix Europe and SOFAR to reflect that
TransEnterix Europe, as the direct of owner of TransEnterix Italia following the
reorganization resulting in TransEnterix Italia becoming a direct subsidiary of
TransEnterix Europe, was the new pledger of the Lien of the 10% ownership
interests in TransEnterix Italia to SOFAR under the terms of such Quota Pledge
Agreement.

“SOFAR Third Tranche” means the “Third Tranche” as defined in Section
2.2(d)(iii) of the SOFAR/Vulcanos Interest Purchase Agreement.

“SOFAR/Vulcanos Interest Purchase Agreement” means that certain Membership
Interest Purchase Agreement, dated September 18, 2015, among Parent, TII, SOFAR
and Vulcanos, S.R.L. pursuant to which TII purchased all of the outstanding
equity units of Vulcanos S.R.L.

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to Agent in its
sole discretion and subject to a subordination agreement in form and substance
satisfactory to Agent in its sole discretion.

“Subsequent Financing” means the closing of equity financing by Parent (other
than, for the avoidance of doubt, any at-the-market (ATM) offering) that is
offered to multiple investors and which becomes effective after the Closing
Date.

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Subsidiary” means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which a Loan Party owns or controls 50%
or more of the outstanding voting Equity Interests, including each entity listed
on Schedule 1 hereto.

“Surgibot License Agreement” is that certain License Agreement, dated March 22,
2018, between Great Belief International Limited and Parent.

“TII” has the meaning given to it in the preamble to this Agreement.

“TSI” has the meaning given to it in the preamble to this Agreement.

“Term Loan Commitment” means as to any Lender, the obligation of such Lender, if
any, to make an Advance to Borrower in a principal amount not to exceed the
amount set forth under the heading “Term Loan Commitment” opposite such Lender’s
name on Schedule 1.1.

“Term Loan” or “Term Loans” has the meaning given to it in the Recitals.

“Term Loan Interest Rate” means for any day a per annum rate of interest equal
to the greater of (i) 9.55% or (ii) 9.55% plus the prime rate as reported in The
Wall Street Journal minus 5.00%; provided, however, if Borrower requests and
Lender makes the Tranche III Loan then commencing on the first interest payment
date in the first fiscal quarter following the Tranche III Loan Advance, the
“Term Loan Interest Rate” shall mean for any day a per annum rate of interest
equal to the greater of (x) 9.20% or (y) 9.20% plus the prime rate as reported
in The Wall Street Journal minus 5.00%.

“Term Loan Maturity Date” means June 1, 2022.

“Term Note” means a Promissory Note in substantially the form of Exhibit B.

“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration that a Borrower or any of its Subsidiaries
now holds or hereafter acquires any interest.

“Trademarks” means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States of America, any State thereof or any other
country or any political subdivision thereof.

“Tranche I Loan” has the meaning given to it in the Recitals.

“Tranche II Loan” has the meaning given to it in the Recitals.

“Tranche II Loan Availability Period” means the period commencing on the Closing
Date and ending on December 31, 2018.

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Tranche II Loan Conditions” means satisfaction of each of the following: (i) no
default or Event of Default shall have occurred and be continuing and (ii) on or
before December 31, 2018 Borrower shall have achieved Performance Milestone I.

“Tranche III Loan” has the meaning given to it in the Recitals.

“Tranche III Loan Availability Period” means the period commencing on [******
****] and ending on [****************].

“Tranche III Loan Conditions” means satisfaction of each of the following: (i)
no default or Event of Default shall have occurred and be continuing and (ii) on
or before [******** *******] Borrower shall have achieved Performance Milestone
II.

“TransEnterix Europe” TransEnterix Europe S.A.R.L., a limited private company
under the laws of Luxembourg.

“TransEnterix Italia” means TransEnterix Italia S.R.L., a limited company under
the laws of Italy.

“TransEnterix Japan” means TransEnterix Japan K.K., a corporation under the laws
of Japan.

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of California; provided 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, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of New York, then the term “UCC”
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.  

“UCC Collateral” has the meaning give to it in Section 3.1.

Unless otherwise specified, all references in this Agreement or any Annex or
Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”
shall refer to the corresponding Section, subsection, Exhibit, Annex, or
Schedule in or to this Agreement. Unless otherwise specifically provided herein,
any accounting term used in this Agreement or the other Loan Documents shall
have the meaning customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed in accordance with GAAP,
consistently applied. Unless otherwise defined herein or in the other Loan
Documents, terms that are used herein or in the other Loan Documents and defined
in the UCC shall have the meanings given to them in the UCC. Anything in this
Agreement to the contrary notwithstanding, any obligation of a Person under a
lease that is not required to be classified and accounted for as a capital lease
on the balance sheet of such Person under GAAP as in effect on the Closing Date
shall not be treated as a capital lease solely as a result of the adoption of
any changes in, or changes in the application of, GAAP after the Closing Date.

SECTION 2.  THE LOAN

2.1Term Loans.

 

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(a)Advances. Subject to the terms and conditions of this Agreement:

(i)Lender will severally (and not jointly) make, in an amount not to exceed its
respective Term Loan Commitment, and Borrower agrees to draw, an Advance in an
amount equal to the Tranche I Loan on the Closing Date;

(ii)during the Tranche II Loan Availability Period, and subject to Borrower’s
satisfaction of the Tranche II Loan Conditions, Borrower may request an
additional Advance in an amount equal to the Tranche II Loan; and

(iii)during the Tranche III Loan Availability Period, and subject to Borrower’s
satisfaction of the Tranche III Loan Conditions, Borrower may request an
additional Advance in an amount equal to the Tranche III Loan.

(b)Advance Request. To obtain an Advance, Borrower shall complete, sign and
deliver an Advance Request (at least three Business Days before the Advance Date
other than the Closing Date, which shall be at least one Business Day) to Agent.
Lender shall fund the applicable Advance in the manner requested by the Advance
Request; provided that each of the conditions precedent to an Advance are
satisfied as of the requested Advance Date.

(c)Interest. The principal balance of each Advance shall bear interest thereon
from such Advance Date at the Term Loan Interest Rate based on a year consisting
of 360 days, with interest computed daily based on the actual number of days
elapsed. The Term Loan Interest Rate will float and change on the day the prime
rate changes from time to time.

(d)Payment.  Borrower will pay interest on each Advance on the first Business
Day of each month, beginning the month after the Advance Date. Borrower shall
repay the aggregate Term Loan principal balance that is outstanding on the day
immediately preceding the Amortization Date, in equal monthly installments of
principal and interest (mortgage style) beginning on the Amortization Date and
continuing on the first Business Day of each month thereafter until the Secured
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement) are
repaid. The entire Term Loan principal balance then outstanding and all accrued
but unpaid interest hereunder, shall be due and payable on Term Loan Maturity
Date. Borrower shall make all payments under this Agreement without setoff,
recoupment or deduction and regardless of any counterclaim or defense. Lender
will initiate debit entries to Borrower’s account as authorized on the ACH
Authorization (i) on each payment date of all periodic obligations payable to
Lender under each Advance and (ii) out-of-pocket legal fees and costs incurred
by Agent or Lender in connection with Section 11.11; provided that, with respect
to clause (i) above, in the event that Lender or Agent informs Borrower that
Lender will not initiate a debit entry to Borrower’s account for a certain
amount of the periodic obligations due on a specific payment date, Borrower
shall pay to Lender such amount of periodic obligations in full in immediately
available funds on such payment date; provided, further, that, with respect to
clause (i) above, if Lender or Agent informs Borrower that Lender will not
initiate a debit entry as described above later than the date that is three
Business Days prior to such payment date, Borrower shall pay to Lender such
amount of periodic obligations in full in immediately available funds on the
date that is three Business Days after the date on which Lender or Agent
notifies Borrower of such and Borrower’s failure to

 

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make such payment on the original scheduled payment date therefor shall not
constitute an Event of Default hereunder; provided, further, that, with respect
to clause (ii) above, in the event that Lender or Agent informs Borrower that
Lender will not initiate a debit entry to Borrower’s account for certain amount
of such out-of-pocket legal fees and costs incurred by Agent or Lender, Borrower
shall pay to Lender such amount in full in immediately available funds within
three Business Days and Borrower’s failure to make such payment on the original
scheduled payment or demand date therefor shall not constitute an Event of
Default hereunder.

2.2Maximum Interest.  Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to contract for, charge or
receive interest at a rate that is greater than the maximum rate permissible by
law that a court of competent jurisdiction shall deem applicable hereto (which
under the laws of the State of New York shall be deemed to be the laws relating
to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a
court of competent jurisdiction shall finally determine that Borrower has
actually paid to Lender an amount of interest in excess of the amount that would
have been payable if all of the Secured Obligations had at all times borne
interest at the Maximum Rate, then such excess interest actually paid by
Borrower shall be applied as follows: first, to the payment of the Secured
Obligations consisting of the outstanding principal; second, after all principal
is repaid, to the payment of Lender’s accrued interest, costs, expenses,
professional fees and any other Secured Obligations; and third, after all
Secured Obligations are repaid, the excess (if any) shall be refunded to
Borrower.  

2.3Default Interest.  In the event any payment is not paid on the scheduled
payment date, an amount equal to five percent of the past due amount shall be
payable on demand. In addition, upon the occurrence and during the continuation
of an Event of Default hereunder, all Secured Obligations, including principal,
interest, compounded interest, and professional fees, shall bear interest at a
rate per annum equal to the rate set forth in Section 2.1(c) plus four percent
per annum. In the event any interest is not paid when due hereunder, delinquent
interest shall be added to principal and shall bear interest on interest,
compounded at the rate set forth in Section 2.1(c) or this Section 2.3, as
applicable.

2.4Prepayment.  

(a)At its option upon at least seven Business Days prior written notice to
Agent, Borrower may prepay all, but not less than all, of the outstanding
Advances by paying the entire principal balance and all accrued and unpaid
interest thereon, together with a prepayment charge equal to the following
percentages of the outstanding Advances being prepaid (the “Prepayment Charge”):
if the outstanding Advances are prepaid in any of the first 12 months following
the Closing Date, 3.0% of such outstanding Advances; if the outstanding Advances
are prepaid after 12 months but prior to 24 months following the Closing Date,
2.0% of such outstanding Advances; and if the outstanding Advances are prepaid
after 24 months following the Closing Date but prior to the Term Loan Maturity
Date, 1.0% of such outstanding Advances.

(b)Borrower agrees that the Prepayment Charge is a reasonable calculation of
Lender’s lost profits in view of the difficulties and impracticality of
determining actual damages resulting from an early repayment of the Advances.
Borrower shall prepay the outstanding amount of all principal and accrued
interest through the prepayment date and the Prepayment

 

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Charge upon the occurrence of a Change in Control. Notwithstanding the
foregoing, Agent and Lender agree to waive the Prepayment Charge if Agent and
Lender or, as applicable, an affiliate of thereof (in their sole and absolute
discretion) agree in writing to refinance the Advances prior to the Maturity
Date.

2.5End of Term Charge.  On the earliest to occur of (i) the Term Loan Maturity
Date, (ii) the date that Borrower prepays the outstanding Secured Obligations
(other than any inchoate indemnity obligations and any other obligations which,
by their terms, are to survive the termination of this Agreement) in full, or
(iii) the date that the Secured Obligations become due and payable, Borrower
shall pay Lender an amount equal to (x) $1,390,000, plus (y) if Borrower
requests and Lender funds the Tranche II Loan, an additional $695,000, and plus
(z) if Borrower requests and Lender funds the Tranche III Loan, an additional
$695,000. Notwithstanding the required payment date of such charge, it shall be
deemed earned by Lender as of the Closing Date in the case of the Tranche I
Loan, and on each applicable Advance Date for the Tranche II Loan and Tranche
III Loan, as the case may be.

2.6Notes.  If so requested by Lender by written notice to Parent, then each
Borrower shall execute and deliver to Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of Lender pursuant to
Section 11.13) (promptly after Parent’s receipt of such notice) a Note or Notes
to evidence Lender’s Loans.

2.7Pro Rata Treatment.  Each payment (including prepayment) on account of
principal, interest, any fee and any reduction of the Term Loans shall be made
pro rata according to the Term Loan Commitments of the relevant Lender.

SECTION 3.  SECURITY INTEREST

3.1As security for the prompt and complete payment when due (whether on the
payment dates or otherwise) of all the Secured Obligations, each Borrower grants
to Agent a security interest in all of such Borrower’s right, title, and
interest in, to and under all of such Borrower’s personal property and other
assets including without limitation the following (except as set forth herein)
whether now owned or hereafter acquired (collectively, the “UCC Collateral”):
(a) Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles; (e)
Inventory; (f) Investment Property; (g) Deposit Accounts; (h) Cash; (i) Goods;
and all other tangible and intangible personal property of such Borrower whether
now or hereafter owned or existing, leased, consigned by or to, or acquired by,
such Borrower and wherever located, and any of such Borrower’s property in the
possession or under the control of Agent; and, to the extent not otherwise
included, all Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of each of
the foregoing.

 

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3.2Notwithstanding the broad grant of the security interest set forth in Section
3.1, above, the Collateral shall not include: (a) the Equity Interests of any
Foreign Subsidiaries other than (i) TransEnterix Italia and TransEnterix Europe,
(ii) any other Material Foreign Subsidiary that is or becomes a Guarantor and
(iii) more than 65% of the Equity Interests of any other Foreign Subsidiary as
may be agreed to in writing by Agent in its reasonable discretion; (b) any
“intent to use” trademarks at all times prior to the first use thereof, whether
by the actual use thereof in commerce, the recording of a statement of use with
the United States Patent and Trademark Office or otherwise; provided that upon
submission and acceptance by the United States Patent and Trademark Office of an
amendment to allege use of an intent-to-use trademark application pursuant to 15
U.S.C. Section 1060(a) (or any successor provision) such intent-to-use
application shall constitute Collateral; (c) non-assignable licenses or
contracts, which by their terms require the consent of the licensor thereof or
another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Sections 9406,
9407 and 9408 of the UCC); (d) motor vehicles and other equipment subject to a
certificate of title statute; and (e) assets subject to a Lien permitted by
clause (vii) of the definition of Permitted Liens.

3.3TransEnterix Europe and TransEnterix Italia have entered into (or pursuant to
Section 7.5(b) will enter into) the applicable Guaranty Documents, in each case
pursuant to which they shall guarantee Borrower’s obligations hereunder and
shall grant security interests in, to and under the collateral described therein
(such collateral, collectively, the “Foreign Collateral”, and with the UCC
Collateral, collectively, the “Collateral”) in favor of Agent for the benefit of
Lender.

SECTION 4.  CONDITIONS PRECEDENT TO LOAN

The obligations of Lender to make the Loan hereunder are subject to the
satisfaction by Borrower of the following conditions:

4.1Initial Advance.  On or prior to the Closing Date, Parent shall have
delivered to Agent the following:

(a)the Loan Documents (other than any Loan Documents and legal opinions to be
delivered after the Closing Date pursuant to Section 7.5(b)) duly executed by
each applicable Loan Party, a legal opinion of Parent’s counsel and all other
documents and instruments reasonably required by Agent to effectuate the
transactions contemplated hereby or to create and perfect the Liens of Agent
with respect to all Collateral, in all cases in form and substance reasonably
acceptable to Agent;

(b)certified copy of resolutions of each Borrower’s respective board of
directors evidencing approval of the Loan and the other transactions evidenced
by the Loan Documents;

(c)certified copies of the constitutional documents and bylaws (or local law
equivalents), as amended and/or amended and restated through the Closing Date,
of each Borrower;

 

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(d)(if applicable) a certificate of good standing for each Borrower from its
jurisdiction of incorporation and similar certificates from all other
jurisdictions in which a Borrower does business and where the failure to be
qualified could have a Material Adverse Effect;

(e)payment of the Facility Charge and reimbursement of Agent’s and Lender’s
current expenses reimbursable pursuant to this Agreement, which amounts may be
deducted from the initial Advance;

(f)all certificates of insurance for each insurance policy required under this
Agreement;

(g)executed payoff letters from Innovatus Life Sciences Lending Fund I, LP,
along with reasonable evidence that UCC Financing Statement Amendments have been
filed to terminate any prior UCC Financing Statements filed by Innovatus Life
Sciences Lending Fund I, LP with respect to any Collateral;

(h)payment of the Due Diligence Fee; and

(i)such other documents as Agent may reasonably request.

4.2All Advances.  On the Closing Date and each Advance Date:

(a)Agent shall have received (i) an Advance Request for the relevant Advance as
required by Section 2.1(b), duly executed by Parent’s Chief Executive Officer or
Chief Financial Officer, and (ii) any other documents Agent may reasonably
request.

(b)The representations and warranties set forth in this Agreement shall be true
and correct in all material respects on and as of the applicable Advance Date
with the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date.

(c)The Loan Parties shall be in compliance with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Advance no Event of
Default shall have occurred and be continuing.

(d)Each Advance Request shall be deemed to constitute a representation and
warranty by the Borrowers on the relevant Advance Date as to the matters
specified in paragraphs (b) and (c) of this Section 4.2 and as to the matters
set forth in the Advance Request.

(e)The Borrowers shall have satisfied any conditions or milestones applicable to
such Advance.

4.3No Default.  As of the Closing Date and each Advance Date, (i) no fact or
condition exists that could (or could, with the passage of time, the giving of
notice, or both) constitute an Event of Default and (ii) no event that has had
or could reasonably be expected to have a Material Adverse Effect shall have
occurred and be continuing.

 

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SECTION 5.  REPRESENTATIONS AND WARRANTIES OF BORROWERS

Each Borrower represents and warrants on behalf of itself, each of the other
Loan Parties and any other Subsidiaries of a Borrower or any other Loan Party as
follows.

5.1Corporate Status.  Each Loan Party is a corporation or other entity, as
applicable, duly organized, legally existing and in good standing under the laws
of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other entity, as applicable, in all jurisdictions in which the
nature of its business or location of its properties require such qualifications
and where the failure to be qualified could reasonably be expected to have a
Material Adverse Effect. Each Loan Party’s present name, former names (if any),
locations, place of formation, tax identification number, organizational
identification number and other information are correctly set forth in Exhibit
C, as may be updated by the Borrowers pursuant to a Compliance Certificate
provided to Agent after the Closing Date.

5.2Collateral.  The Loan Parties own the Collateral, free of all Liens, except
for Permitted Liens. The Loan Parties have the power and authority to grant to
Agent a Lien in the Collateral as security for the Secured Obligations.

5.3Consents.  Each Loan Party’s execution, delivery and performance, as
applicable, of this Agreement and all other Loan Documents (i) has been duly
authorized by all necessary corporate or other entity, as applicable, action of
the applicable Loan Party, (ii) will not result in the creation or imposition of
any Lien upon the Collateral, other than Permitted Liens and the Liens created
by this Agreement and the other Loan Documents, (iii) does not violate any
provisions of any Loan Party’s organizational documents and/or certificates or
bylaws (as applicable), (iv) does not violate any law, regulation, order,
injunction, judgment, decree or writ to which a Loan Party is subject, and
(v) does not violate any material contract or material agreement, or require the
consent or approval of any other Person which has not already been obtained. The
individual or individuals executing the Loan Documents are duly authorized to do
so.

5.4Material Adverse Effect.  No event that has had or would reasonably be
expected to have a Material Adverse Effect has occurred and is continuing. No
Loan Party is aware of any event likely to occur that is reasonably expected to
result in a Material Adverse Effect.

5.5Actions Before Governmental Authorities.  There are no actions, suits or
proceedings at law or in equity or by or before any governmental authority now
pending or, to the knowledge of the Loan Parties, threatened against or
affecting the Loan Parties, any of their Subsidiaries or their respective
property, that is reasonably expected to result in a Material Adverse Effect.

5.6Laws.  Neither any Loan Party nor any of its Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any governmental authority, where such violation or
default is reasonably expected to result in a Material Adverse Effect. No Loan
Party is in default (beyond any notice or grace period) in any material manner
under any provision of any material agreement or instrument evidencing material
Indebtedness, or any other material agreement to which it is a party or by which
it is bound.

 

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Neither any Loan Party nor any of its Subsidiaries is an “investment company” or
a company “controlled” by an “investment company” under the Investment Company
Act of 1940, as amended. Neither any Loan Party nor any of its Subsidiaries is
engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of Governors). Each
Loan Party and each of its Subsidiaries has complied in all material respects
with the Federal Fair Labor Standards Act. Neither any Loan Party 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. Neither any Loan Party’s nor
any of its Subsidiaries’ properties or assets has been used by such Loan Party
or such Subsidiary or, to the knowledge of the Loan Parties, by previous
Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than in material compliance with applicable laws. The
Loan Parties and each of their Subsidiaries has 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, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

None of the Loan Parties, any of their Subsidiaries, or any Loan Party’s or its
Subsidiaries’ Affiliates or any of their respective agents acting or benefiting
in any capacity in connection with the transactions contemplated by this
Agreement is (i) in violation of any Anti-Terrorism Law applicable to it, (ii)
engaging in or conspiring to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law applicable to it, or (iii) is a
Blocked Person. None of the Loan Parties, any of their Subsidiaries, or to the
knowledge of the Loan Parties, any of their Affiliates or agents, acting or
benefiting in any capacity in connection with the transactions contemplated by
this Agreement, (x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deals in, or otherwise engages in any transaction relating to,
any property or interest in property blocked pursuant to Executive Order No.
13224, any similar executive order or other Anti-Terrorism Law applicable to it.
None of the funds to be provided under this Agreement will be used, directly or
indirectly, (a) for any activities in violation of any applicable anti-money
laundering, economic sanctions and anti-bribery laws and regulations laws and
regulations or (b) for any payment to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

5.7Information Correct and Current.  No written information, report, Advance
Request, financial statement, exhibit or schedule furnished, by or on behalf of
any Loan Party to Agent in connection with any Loan Document or included therein
or delivered pursuant thereto contained, or, when taken as a whole, contains or
will contain any material misstatement of fact or, when taken together with all
other such information or documents, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not materially
misleading at the time such statement was made or deemed made. Additionally, any
and all financial or business

 

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projections provided by a Loan Party to Agent, whether prior to or after the
Closing Date, shall be (i) provided in good faith and based on the then most
current data and information available to the Loan Parties, and (ii) the then
most current projections provided to Parent’s Board of Directors.

5.8Tax Matters.  Except as described on Schedule 5.8 and except those being
contested in good faith with adequate reserves under GAAP, (a) the Loan Parties
and each of their Subsidiaries has filed all material federal, state and local
tax returns that it is required to file, (b) the Loan Parties and each of their
Subsidiaries has duly paid or fully reserved for all taxes or installments
thereof (including any interest or penalties) as and when due, which have or may
become due pursuant to such returns, and (c) the Loan Parties and each of their
Subsidiaries has paid or fully reserved for any material tax assessment received
by the Loan Parties or any of their Subsidiaries for the three years preceding
the Closing Date, if any (including any taxes being contested in good faith and
by appropriate proceedings).

5.9Intellectual Property Claims.  Each Loan Party or its applicable Subsidiary
is the sole owner of, or otherwise has the right to use, the Intellectual
Property material to such Loan Party’s and each such Subsidiary’s business.
Except as described on Schedule 5.9, (i) each of the material Copyrights,
Trademarks and Patents is valid and enforceable, (ii) no material part of the
Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and (iii) no claim has been made to any Loan Party or any Subsidiary that
any material part of the Intellectual Property violates the rights of any third
party. Exhibit D is a true, correct and complete list of each Loan Party’s and
each of its Subsidiary’s Patents, registered Trademarks, registered Copyrights,
and agreements under which any Loan Party or any of its Subsidiaries licenses
Intellectual Property that is material to the Loan Parties and their
Subsidiaries’ business from third parties (other than shrink-wrap software
licenses), together with application or registration numbers, as applicable,
owned by a Loan Party or any of its Subsidiaries, in each case as of the Closing
Date. Neither any Loan Party nor any Subsidiary thereof is in material breach
of, nor has any Loan Party or any Subsidiary thereof failed to perform any
material obligations under, any of the foregoing contracts, licenses or
agreements and, to the knowledge of the Loan Parties, no third party to any such
contract, license or agreement is in material breach thereof or has failed to
perform any material obligations thereunder.

5.10Intellectual Property.  Except as described on Schedule 5.10, the Loan
Parties and each Subsidiary thereof have all material rights with respect to
Intellectual Property necessary or material in the operation or conduct of the
Loan Parties’ and each of their Subsidiary’s business as currently, and as
proposed to be, conducted by the Loan Parties and their Subsidiaries. Without
limiting the generality of the foregoing, except as set forth on Schedule 5.10,
each Loan Party and each Subsidiary thereof have the right to freely transfer,
license or assign Intellectual Property necessary or material in the operation
or conduct of the Loan Parties’ and their Subsidiaries’ businesses as currently,
and as proposed to be, conducted by the Loan Parties’ and their Subsidiaries,
without condition, restriction or payment of any kind (other than license
payments in the ordinary course of business) to any third party, and the Loan
Parties and each Subsidiary thereof own or have the right to use, pursuant to
valid licenses, all software development tools, library functions, compilers and
all other third-party software and

 

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other items that are material to the Loan Parties’ and their Subsidiaries’
businesses and used in the design, development, promotion, sale, license,
manufacture, import, export, use or distribution of Borrower Products except
customary covenants in inbound license agreements and equipment leases where any
Loan Party or any Subsidiary thereof is the licensee or lessee.

5.11Borrower Products.  Except as described on Schedule 5.11, no Intellectual
Property owned by any of the Loan Parties or any Subsidiary thereof or any
Borrower Product has been or is subject to any actual or, to the knowledge of
the Loan Parties, threatened litigation, proceeding (including any proceeding in
the United States Patent and Trademark Office or any corresponding foreign
office or agency) or outstanding decree, order, judgment, settlement agreement
or stipulation that restricts in any manner any Loan Parties or any of its
Subsidiary’s use, transfer or licensing thereof or that may affect the validity,
use or enforceability thereof. There is no decree, order, judgment, agreement,
stipulation, arbitral award or other provision entered into in connection with
any litigation or proceeding that obligates a Loan Party or any Subsidiary
thereof to grant licenses or ownership interest in any future Intellectual
Property that is necessary or material in the operation or conduct of the
business of the Loan Parties and their Subsidiaries or Borrower Products. None
of the Loan Parties nor any of their Subsidiaries has received any written
notice or claim, or, to the knowledge of the Loan Parties, oral notice or claim,
challenging or questioning any Loan Party’s or any of its Subsidiary’s ownership
in any Intellectual Property that is necessary or material in the operation or
conduct of the business of the Loan Parties and their Subsidiaries (or written
notice of any claim challenging or questioning the ownership in any licensed
Intellectual Property that is necessary or material in the operation or conduct
of the business of the Loan Parties and their Subsidiaries of the owner thereof)
or suggesting that any third party has any claim of legal or beneficial
ownership with respect thereto nor, to the knowledge of the Loan Parties, is
there a reasonable basis for any such claim. Neither any Loan Party’s or any of
its Subsidiary’s use of its Intellectual Property that is necessary or material
to the conduct of the business of the Loan Parties and their Subsidiaries nor
the production and sale of Borrower Products infringes the Intellectual Property
rights of others.

5.12Financial Accounts.  Exhibit E, as may be updated by Borrowers in a
Compliance Certificate provided to Agent after the Closing Date, is a true,
correct and complete list of (a) all banks and other financial institutions at
which any Loan Party or Subsidiary thereof maintains Deposit Accounts and (b)
all institutions at which a Loan Party or any Subsidiary thereof maintains an
account holding Investment Property, and such exhibit correctly identifies the
name, address and telephone number of each bank or other institution, the name
in which the account is held, a description of the purpose of the account, and
the complete account number therefor.

5.13Employee Loans.  Except for Permitted Investments, no Loan Party has any
outstanding loans to any employee, officer or director of a Loan Party, nor has
any Loan Party guaranteed the payment of any loan made to an employee, officer
or director of a Loan Party by a third party.

5.14Capitalization and Subsidiaries.  Each Loan Party’s (other than the
Parent’s) capitalization as of the Closing Date is set forth on Schedule 5.14
annexed hereto. No

 

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Loan Party owns any stock, partnership interest or other securities of any
Person, except for Permitted Investments. Attached as Schedule 5.14, as may be
updated by Borrowers in a Compliance Certificate provided after the Closing
Date, is a true, correct and complete list of each Subsidiary.

5.15Foreign Subsidiary Voting Rights. No decision or action in any governing
document of any Foreign Subsidiary requires a vote of greater than 50.1% of the
Equity Interests or voting rights of such Foreign Subsidiary.

SECTION 6.  INSURANCE; INDEMNIFICATION

6.1Coverage.  The Loan Parties shall cause to be carried and maintained
commercial general liability insurance, on an occurrence form, against risks
customarily insured against in the Loan Parties’ line of business. Such risks
shall include the risks of bodily injury, including death, property damage,
personal injury, advertising injury, and contractual liability per the terms of
the indemnification agreement found in Section 6.3. Parent must maintain a
minimum of [*********] of commercial general liability insurance for each
occurrence. Parent has and agrees to maintain a minimum of [*********] of
directors’ and officers’ insurance for each occurrence and [*********] in the
aggregate. So long as there are any Secured Obligations outstanding, Borrowers
shall also cause to be carried and maintained insurance upon the Collateral,
insuring against all risks of physical loss or damage howsoever caused, in an
amount not less than the full replacement cost of the Collateral; provided that
such insurance may be subject to standard exceptions and deductibles.

6.2Certificates.  Borrower shall deliver to Agent certificates of insurance that
evidence Borrower’s compliance with its insurance obligations in Section 6.1 and
the obligations contained in this Section 6.2. Borrower’s insurance certificate
shall state Agent (shown as “Hercules Capital, Inc.,” as “Agent”) is an
additional insured for commercial general liability, a loss payee for all risk
property damage insurance, subject to the insurer’s approval, and a loss payee
for property insurance and additional insured for liability insurance for any
future insurance that Borrower may acquire from such insurer. Attached to the
certificates of insurance will be additional insured endorsements for liability
and lender’s loss payable endorsements for all risk property damage insurance.
All certificates of insurance will provide for a minimum of 30 days advance
written notice to Agent of cancellation (other than cancellation for non-payment
of premiums, for which 10 days’ advance written notice shall be sufficient) or
any other change adverse to Agent’s interests. Any failure of Agent to
scrutinize such insurance certificates for compliance is not a waiver of any of
Agent’s rights, all of which are reserved. If requested by Agent, Borrower shall
provide Agent within a reasonable time after such request with copies of each
insurance policy, and upon entering or amending any insurance policy required
hereunder, Borrower shall provide Agent with copies of such policies and shall
promptly deliver to Agent updated insurance certificates with respect to such
policies.

 

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6.3Indemnity.  Each Borrower agrees to indemnify and hold Agent, Lender and
their officers, directors, employees, agents, in-house attorneys,
representatives and shareholders (each, an “Indemnified Person”) harmless from
and against any and all claims, costs, expenses, damages and liabilities
(including such claims, costs, expenses, damages and liabilities based on
liability in tort, including strict liability in tort), including reasonable and
documented attorneys’ fees and disbursements and other costs of investigation or
defense (including those incurred upon any appeal) (collectively,
“Liabilities”), that may be instituted or asserted against or incurred by such
Indemnified Person as the result of credit having been extended, suspended or
terminated under this Agreement and the other Loan Documents or the
administration of such credit, or in connection with or arising out of the
transactions contemplated hereunder and thereunder, or any actions or failures
to act in connection therewith, or arising out of the disposition or utilization
of the Collateral, excluding in all cases Liabilities to the extent resulting
solely from any Indemnified Person’s gross negligence or willful misconduct.
Each Borrower agrees to pay, and to save Agent and Lender harmless from, any and
all liabilities with respect to, or resulting from any delay in paying, any and
all excise, sales or other similar taxes (excluding taxes imposed on or measured
by the net income of Agent or Lender) that may be payable or determined to be
payable with respect to any of the Collateral or this Agreement. In no event
shall any Indemnified Person nor any Borrower be liable on any theory of
liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings). This Section
6.3 shall survive the repayment of indebtedness under, and otherwise shall
survive the expiration or other termination of, the Loan Agreement.

SECTION 7.  COVENANTS OF THE LOAN PARTIES

Each Borrower agrees as follows, and each Borrower agrees to cause the other
Loan Parties and any other Subsidiaries of the Loan Parties to comply with the
following as if such other Persons were direct parties to this Agreement.

7.1Financial Reports.  Parent shall furnish to Agent the financial statements
and reports listed hereinafter (the “Financial Statements”), and the Borrowers
shall furnish the other information and reports listed hereinafter:

(a)as soon as practicable (and in any event within 30 days) after the end of
each month, unaudited interim and year-to-date financial statements as of the
end of such month (prepared on a consolidated), including balance sheet and
related statements of income and cash flows accompanied by a report detailing
any material contingencies (including the commencement of any material
litigation by or against a Loan Party) or any other occurrence that could
reasonably be expected to have a Material Adverse Effect, all certified by
Parent’s Chief Executive Officer or Chief Financial Officer to the effect that
they have been prepared in accordance with GAAP, except (i) for the absence of
footnotes, (ii) that they are subject to normal year-end adjustments, and (iii)
they do not contain certain non-cash items that are customarily included in
quarterly and annual financial statements;

 

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(b)as soon as practicable (and in any event within 45 days) after the end of
each calendar quarter, unaudited interim and year-to-date financial statements
as of the end of such calendar quarter (prepared on a consolidated), including
balance sheet and related statements of income and cash flows accompanied by a
report detailing any material contingencies (including the commencement of any
material litigation by or against a Loan Party) or any other occurrence that
could reasonably be expected to have a Material Adverse Effect, certified by
Parent’s Chief Executive Officer or Chief Financial Officer to the effect that
they have been prepared in accordance with GAAP, except (i) for the absence of
footnotes, and (ii) that they are subject to normal year-end adjustments;

(c)as soon as practicable (and in any event within 90 days) after the end of
each fiscal year, unqualified audited financial statements as of the end of such
year (prepared on a consolidated and consolidating basis, if applicable),
including balance sheet and related statements of income and cash flows, and
setting forth in comparative form the corresponding figures for the preceding
fiscal year, certified by a firm of independent certified public accountants
selected by Parent and reasonably acceptable to Agent, accompanied by any
management report from such accountants;

(d) together with the monthly financial statements that are required to be
delivered pursuant to Section 7.1(a), a Compliance Certificate in the form of
Exhibit F;

(e)concurrently with the delivery of the monthly Compliance Certificate pursuant
to Section 7.1(d), a report showing agings of accounts receivable and accounts
payable in respect of the month for which such Compliance Certificate was
delivered;

(f)within five days after the sending or filing thereof, as the case may be,
copies of any proxy statements, financial statements or reports that Parent has
made available to holders of its Equity Interests and copies of any regular,
periodic and special reports or registration statements that Parent files with
the Securities and Exchange Commission or any governmental authority that may be
substituted therefor, or any national securities exchange;

(g)at the same time and in the same manner as it gives to its directors, copies
of all notices, minutes, consents and other materials that Parent provides to
its directors in connection with meetings of the Board of Directors; provided
that, in all cases, Parent may exclude confidential compensation information,
trade secrets, competitively sensitive information and any other information
that Parent reasonably determines should be excluded in order to maintain
attorney-client privilege, the confidentiality of such information or as
required to comply with applicable laws;

(h)promptly after their approval by the Board of Directors, and in any event,
within 30 days following the end of Parent’s fiscal year, a budget for the
fiscal year immediately following such fiscal year end as approved by the Board
of Directors, as well as financial and business projections, operating plans and
other financial information reasonably requested by Agent; and  

(i)prompt notice if any Loan Party or any Subsidiary thereof has knowledge that
any Loan Party, or any Subsidiary or Affiliate of any Loan Party, is listed on
the OFAC Lists

 

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or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or
(d) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering.

Parent shall not (without the consent of Agent, such consent not to be
unreasonably withheld or delayed), make any change in its, any other Loan
Party’s (a) accounting policies or reporting practices, except as required by
GAAP or (b) fiscal years or fiscal quarters. The fiscal year of Parent shall end
on December 31.

The executed Compliance Certificate may be sent via email to Agent at
legal@herculestech.com. All Financial Statements required to be delivered
pursuant to clauses (a), (b) and (c) shall be sent via e-mail to
financialstatements@herculestech.com with a copy to legal@herculestech.com
provided, that if e-mail is not available or sending such Financial Statements
via e-mail is not possible, they shall be faxed to Agent at: (650) 473-9194,
attention Account Manager: TransEnterix, Inc.

Notwithstanding the foregoing, documents required to be delivered under Sections
7.1(a), (b), (c) or (f), to the extent any such documents are included in
materials otherwise filed by Parent with the U.S. Securities and Exchange
Commission, may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date on which Parent emails a link thereto to
Agent; provided that Parent shall directly provide Agent all Financial
Statements required to be delivered pursuant to Section 7.1(a).

7.2Management Rights.  The Loan Parties shall permit any representative that
Agent or Lender authorizes, including its attorneys and accountants, to inspect
the Collateral and examine and make copies and abstracts of the books of account
and records of the Loan Parties at reasonable times and upon reasonable notice
during normal business hours; provided, however, that so long as no Event of
Default has occurred and is continuing, such examinations shall be limited to no
more often than once per fiscal year. In addition, any such representative shall
have the right to meet with senior management and senior officers of the Loan
Parties to discuss such books of account and records. In addition, Agent or
Lender shall be entitled upon five days’ prior written notice, at reasonable
times (during normal business hours) and intervals to consult with and advise
the senior management and senior officers of the Loan Parties concerning
significant business issues affecting the Loan Parties. Such consultations shall
not unreasonably interfere with the Loan Parties’ business operations. The
parties intend that the rights granted Agent and Lender shall constitute
“management rights” within the meaning of 29 C.F.R. Section
2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by
Agent or Lender with respect to any business issues shall not be deemed to give
Agent or Lender, nor be deemed an exercise by Agent or Lender of, control over
any Loan Party’s management or policies.

7.3Further Assurances. The Loan Parties shall from time to time execute, deliver
and file, alone or with Agent, any financing statements, security agreements,
collateral assignments, notices, control agreements, or other documents to
perfect or give the highest priority to Agent’s Lien on the Collateral. The Loan
Parties shall from time to time procure any instruments or documents as may be
reasonably requested by Agent, and take all further action that may be
necessary, or that Agent may reasonably request, to perfect and protect the
Liens granted hereby and thereby. In addition, and for such purposes only,
Borrower hereby authorizes

 

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Agent to execute and deliver on behalf of Borrower and to file such financing
statements (including an indication that the financing statement covers “all
assets or all personal property” of Borrower in accordance with Section 9-504 of
the UCC), collateral assignments, notices, control agreements, security
agreements and other documents without the signature of Borrower either in
Agent’s name or in the name of Agent as agent and attorney-in-fact for Borrower.
The Loan Parties shall protect and defend their title to the Collateral and
Agent’s Lien thereon against all Persons claiming any interest adverse to any
Loan Party or Agent, other than Permitted Liens.

7.4Indebtedness.  The Loan Parties shall not create, incur, assume, guarantee or
be or remain liable with respect to any Indebtedness, or permit any Subsidiary
so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take
any actions which impose on the Loan Parties an obligation to prepay any
Indebtedness, except for (a) the conversion of Indebtedness into equity
securities and the payment of Cash in lieu of fractional shares in connection
with such conversion, (b) (i) purchase money Indebtedness pursuant to its then
applicable payment schedule or (ii) Indebtedness owed under corporate credit
cards to the extent constituting Permitted Indebtedness and prepaid in the
ordinary course of business, (c) prepayment by any Subsidiary of
(i) inter-company Indebtedness owed by such Subsidiary to any Loan Party, or
(ii) if such Subsidiary is not a Loan Party, intercompany Indebtedness owed by
such Subsidiary to another Subsidiary that is not a Loan Party, or (d) as
otherwise permitted hereunder or approved in writing by Agent.

7.5Collateral.  

(a)The Loan Parties shall at all times keep the Collateral and all other
property and assets used in their business or in which a Loan Party now or
hereafter holds any interest free and clear from any Liens whatsoever (except
for Permitted Liens), and the Loan Parties shall give Agent prompt written
notice of any legal process affecting Collateral, such other property and
assets, in each case, having a value in excess of [******] individually or
[********] in the aggregate. Each Loan Party shall cause its Subsidiaries to
protect and defend such Subsidiary’s title to its assets from and against all
Persons claiming any interest adverse to such Subsidiary, except those Persons
holding Permitted Liens, and the Loan Parties shall cause their Subsidiaries at
all times to keep such Subsidiary’s property and assets free and clear from any
Liens whatsoever (except for Permitted Liens), and shall give Agent prompt
written notice of any legal process affecting such Subsidiary’s assets having a
value in excess of [*******] individually or [********] in the aggregate. The
Loan Parties shall not agree with any Person other than Agent or Lender not to
encumber any of their property, other than (a) customary restrictions and
conditions contained in any agreement relating to the sale of property permitted
under Section 7.8, (b) any agreements governing any Permitted Indebtedness or
any other agreement governing any Permitted Lien, (c) customary provisions
restricting assignment of any licensing agreement in the ordinary course of
business (in which a Loan Party or its Subsidiaries are the licensee), including
the EU/Vulcanos License Agreement and the Surgibot License Agreement and (e)
customary provisions restricting subletting, sublicensing or assignment of any
lease governing any leasehold interests of a Loan Party.

(b)Within 30 days following the Closing Date, the Guarantors  shall deliver to
Agent (i) fully executed Guaranty Documents for each Guarantor; (ii) a legal
opinion from

 

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each Guarantor’s legal counsel, in form and substance reasonably acceptable to
Agent; (iii) as applicable, the deliverables required for the Borrowers under
Sections 4.1(b), (c) and (d); and such other certificates with respect to the
Guaranty Documents as Agent may reasonably request.

(c)Within 60 days following the Closing Date, the Loan Parties shall deliver to
Agent fully executed landlord consents and waivers and bailee waivers (all in
form and substance reasonably acceptable to Agent) for each of location listed
on Exhibit C under the heading “Required Consents and Waivers.”

7.6Investments.  The Loan Parties shall not directly or indirectly acquire or
own, or make any Investment in or to any Person, or permit any of their
Subsidiaries to do so, other than Permitted Investments.

7.7Distributions.  The Loan Parties shall not, and shall not allow any other
Subsidiaries to, (a) repurchase or redeem any class of stock or other Equity
Interest other than pursuant to employee, director or consultant repurchase
plans or other similar agreements and not to exceed [********] per year in the
aggregate, or (b) declare or pay any cash dividend or make a cash distribution
on any class of stock or other Equity Interest, except that a Subsidiary
(including through another Subsidiary) may pay dividends or make distributions
to a Loan Party, or (c) waive, release or forgive any Indebtedness owed by any
employees, officers or directors in excess of [********] in the aggregate.
Borrowers shall cause the Guarantors and the Immaterial Foreign Subsidiaries to
make regular dividends and/or distributions, directly or indirectly, to
Borrowers, in all cases consistent with past practices and in accordance with
budgets and operating plans approved by Parent’s Board of Directors; and
Borrowers shall not permit any Guarantors or Immaterial Foreign Subsidiaries to
hold any cash or assets that would materially exceed such levels required for
the operation of any such Guarantor’s or Immaterial Foreign Subsidiary’s
business, in all cases consistent with past practices and in accordance with
budgets and operating plans approved by Parent’s Board of Directors.

7.8Transfers.  Except for Permitted Transfers, the Loan Parties shall not, and
shall not allow any other Subsidiary to, voluntarily or involuntarily transfer,
sell, lease, license, lend or in any other manner convey any equitable,
beneficial or legal interest in any material portion of its assets; provided,
however, (a) all Permitted Transfers shall be subject to the limitations set
forth in the definition of Permitted Investments, as applicable, and (b) and at
no time shall any transfer, sale, lease, license or other conveyance result the
Immaterial Foreign Subsidiaries collectively owning or holding assets in excess
of 15% of the aggregate amount of all assets of Parent and its Subsidiaries on a
consolidated basis.

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

7.9Mergers or Acquisitions.  The Loan Parties shall not merge or consolidate, or
permit any other Subsidiary to (i) merge or consolidate, with or into any other
business organization (other than mergers or consolidations of (a) a Guarantor
or an Immaterial Foreign Subsidiary into a Borrower, (b) a Borrower into another
Borrower, (c) a Guarantor into another Guarantor (so long as the surviving
entity is in compliance with the terms of this Agreement and the Guaranty
Documents) or (d) an Immaterial Foreign Subsidiary into another Immaterial
Foreign Subsidiary; provided that, in each case, the Parent shall deliver prompt
written notice thereof to Agent); or (ii) acquire, or permit any of their
respective Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person, other than in connection with a Permitted
Transfer.

7.10Taxes.  Each Loan Party and its Subsidiaries shall pay when due all material
taxes, fees or other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed against such Loan
Party or any of its Subsidiaries, Agent, Lender or the Collateral or upon such
Loan Party’s or any of its Subsidiaries’ ownership, possession, use, operation
or disposition thereof or upon such Loan Party’s or any of its Subsidiaries’
rents, receipts or earnings arising therefrom. Each Loan Party file on or before
the due date therefor all personal property tax returns in respect of the
Collateral. Notwithstanding the foregoing, the Loan Parties may contest, in good
faith and by appropriate proceedings, taxes for which a Loan Party maintains
adequate reserves therefor in accordance with GAAP.

7.11Corporate Changes.  No Loan Party shall change its respective corporate
name, legal form or jurisdiction of formation without 30 days’ prior written
notice to Agent. Neither any Loan Party nor any Subsidiary thereof shall suffer
a Change in Control. Neither any Loan Party nor any Subsidiary thereof shall
relocate its chief executive office or its principal place of business unless:
(i) it has provided prior written notice to Agent; and (ii) such relocation
shall be within the continental United States of America, in the case of a
Borrower or any Domestic Subsidiary, and such other jurisdiction as permitted by
Agent (acting reasonably), in the case of a Foreign Subsidiary. Neither any Loan
Party nor any Subsidiary thereof shall relocate any item of Collateral (other
than (x) sales of Inventory or Inventory provided to potential customers on a
trial basis, in each case, in the ordinary course of business, (y) relocations
of Equipment having an aggregate value of up to [********] in any fiscal year,
and (z) relocations of Collateral from a location described on Exhibit C to
another location described on Exhibit C) unless (i) it has provided prompt
written notice to Agent, (ii) such relocation is within the continental United
States of America, in the case of a Borrower or any Domestic Subsidiary, and
such other jurisdiction as permitted by Agent (acting reasonably), in the case
of a Foreign Subsidiary; and (iii) if such relocation is to a third party
bailee, it has delivered a bailee agreement in form and substance reasonably
acceptable to Agent.  

7.12Deposit Accounts.

(a)None of the Borrowers shall maintain any Deposit Accounts, or accounts
holding Investment Property, except (i) with respect to which Agent has an
Account Control Agreement or (ii) Excluded Accounts.

 

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(b)None of the Guarantors shall maintain any Deposit Accounts, or accounts
holding Investment Property, except (i) with respect to which Agent has received
a pledge agreement or similar agreement or arrangement as a result of which
Agent shall have a perfected first lien security interest therein, all in form
and substance acceptable to Agent or (ii) Excluded Accounts.

(c)No Immaterial Foreign Subsidiary shall maintain any Deposit Accounts, or
accounts holding Investment Property (other than Excluded Accounts), in excess
of [********], and the aggregate amount that all Immaterial Foreign Subsidiaries
may maintain in Deposit Accounts, or accounts holding Investment Property, shall
not exceed [*********]; provided, however, if the Immaterial Foreign
Subsidiaries exceed (or any Immaterial Subsidiary exceeds) the foregoing
limitation as a result of their (or its) receipt of Cash from the collection of
customer accounts receivables or otherwise, it will not be deemed a breach of
the foregoing covenant so long as the applicable Immaterial Foreign Subsidiaries
make necessary dividends or distributions to a Borrower or Guarantor within 30
days after the date on which such Cash was received.

(d)So long as any Secured Obligations are outstanding, Borrowers shall maintain
in Deposit Account(s) subject to Account Control Agreement(s) an amount of
unrestricted Cash or Investment Property equal to the lesser of: (i) (x) 120% of
the then-outstanding principal balance of the Term Loans, accrued interest
thereon and any other fees expressly required to be paid under this Agreement to
the extent accrued and payable plus (y) an amount equal to the then-outstanding
balance of Parent’s accounts payable (on a consolidated basis and as determined
in accordance with GAAP) that are more than 90 days past due; and (ii) 80% of
the Cash of all Loan Parties and their Subsidiaries on a consolidated basis.
Parent shall provide Agent with such information as Agent may reasonably require
in connection with its testing of the requirements under this Section 7.12(d).

7.13Subsidiaries. Parent shall notify Agent of each Subsidiary (including any
Subsidiary of another Loan Party or any direct or indirect subsidiaries thereof)
formed subsequent to the Closing Date, and (within 15 days after formation of
such Subsidiary or such later date agreed to in writing by Agent) Borrowers
shall (or shall cause the other Loan Parties to) (a) cause (i) any such
Subsidiary that is a Domestic Subsidiary to execute and deliver to Agent a
Joinder Agreement and (ii) any such Subsidiary that is a Material Foreign
Subsidiary to become a Guarantor and to execute and deliver to Agent all related
Guaranty Documents, and (b) grant and pledge to the Agent a perfected security
interest in the shares of each such new Domestic Subsidiary or Material Foreign
Subsidiary.

7.14Notification of Event of Default.  Parent shall notify Agent immediately of
the occurrence of any Event of Default.

7.15Use of Proceeds.  Each Borrower agrees that the proceeds of the Loans shall
be used solely (a) to refinance existing indebtedness, (b) to pay related fees
and expenses in connection with this Agreement and (c) for working capital and
general corporate purposes. The proceeds of the Loans will not be used in
violation of Anti-Corruption Laws or applicable Sanctions.

 

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7.16Foreign Subsidiary Voting Rights. The Loan Parties shall not, and shall not
permit any Subsidiary, to amend or modify any governing document of any Foreign
Subsidiary of a Loan Party the effect of which is to require a vote of greater
than 50.1% of the Equity Interests or voting rights of such entity for any
decision or action of such entity.

7.17Compliance with Laws.

The Loan Parties shall maintain, and shall cause their Subsidiaries to maintain,
compliance with all applicable laws, rules or regulations (including any law,
rule or regulation with respect to the making or brokering of loans or financial
accommodations), except where the failure to so comply could not reasonably be
expected to result in a Material Adverse Effect, and shall, or cause their
direct and indirect Subsidiaries to, obtain and maintain all required
governmental authorizations, approvals, licenses, franchises, permits or
registrations reasonably necessary in connection with the conduct of the Loan
Parties’ business.

Neither any Loan Party nor any of its Subsidiaries shall, nor shall any Loan
Party or any of its Subsidiaries permit any Affiliate to, directly or
indirectly, knowingly enter into any documents, instruments, agreements or
contracts with any Person listed on the OFAC Lists. Neither any Loan Party nor
any of its Subsidiaries shall, nor shall any Loan Party or any of its
Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any
business or engage in any transaction or dealing with any Blocked Person,
including, without limitation, the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224 or any
similar executive order or other Anti‑Terrorism Law applicable thereto, or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti‑Terrorism Law
applicable thereto.

The Loan Parties have implemented and maintain in effect policies and procedures
designed to ensure compliance by them and their Subsidiaries and their
respective directors, officers, employees and agents with applicable
Anti-Corruption Laws and applicable Sanctions, and the Loan Parties and their
Subsidiaries and their respective officers and employees and to the knowledge of
the Loan Parties and their directors and agents, are in compliance with
applicable Anti-Corruption Laws and applicable Sanctions in all material
respects.  

None of the Loan Parties, any of their Subsidiaries or any of their respective
directors, officers or employees, or to the knowledge of the Loan Parties, any
agent for the Loan Parties or their Subsidiaries that will act in any capacity
in connection with or benefit from the credit facility established hereby, is a
Sanctioned Person. No Loan, use of proceeds or other transaction contemplated by
this Agreement will violate applicable Anti-Corruption Laws or applicable
Sanctions.

 

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7.18Intellectual Property.  Each Loan Party and each Subsidiary shall (a)
protect, defend and maintain the validity and enforceability of its Intellectual
Property that is necessary and material in the operation and conduct of the
business of the Loan Parties and their Subsidiaries; (b) promptly advise Agent
in writing of material infringements of its Intellectual Property that is
necessary and material in the operation and conduct of the business; and (c) not
allow any Intellectual Property that is necessary and material to the business
of the Loan Parties and their Subsidiaries to be abandoned, forfeited or
dedicated to the public without Agent’s written consent. If a Loan Party thereof
(i) obtains any Patent, registered Trademark, registered Copyright, registered
mask work, or any pending application for any of the foregoing, whether as
owner, licensee or otherwise, or (ii) applies for any Patent or the registration
of any Trademark, then Parent shall immediately provide written notice thereof
to Agent and, subject to any applicable qualifications under Section 3.2, shall
execute such intellectual property security agreements and other documents and
take such other actions as Agent may reasonably request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Agent in such property. If a Loan Party thereof decides to
register any Copyrights or mask works in the United States Copyright Office, the
Loan Parties shall (x) provide Agent with at least 5 days prior written notice
of such intent to register such Copyrights or mask works together with a copy of
the application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) subject to any applicable qualifications under
Section 3.2, execute an intellectual property security agreement and such other
documents and take such other actions as Agent may request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Agent in the Copyrights or mask works intended to be
registered with the United States Copyright Office; and (z) subject to any
applicable qualifications under Section 3.2, record such intellectual property
security agreement with the United States Copyright Office contemporaneously
with filing the Copyright or mask work application(s) with the United States
Copyright Office. The Loan Parties shall promptly provide to Agent copies of all
applications that it files for Patents or for the registration of Trademarks,
Copyrights or mask works, if applicable, together with evidence of the recording
of the intellectual property security agreement required for Agent to perfect
and maintain a first priority perfected security interest in such property.

7.19Transactions with Affiliates. The Loan Parties shall not and shall not
permit any Subsidiary to, directly or indirectly, enter into or permit to exist
any transaction of any kind with any Affiliate of any Loan Party or any such
Subsidiary on terms that are less favorable to any such Loan Party or
Subsidiary, as the case may be, than those that might be obtained in an arm’s
length transaction from a Person who is not an Affiliate of any such Loan Party
or Subsidiary.  

7.20SOFAR/Vulcanos Interest Purchase Agreement.

(a)So long as there are any Secured Obligations outstanding (other than inchoate
indemnity obligations and any other obligations which, by their terms, are to
survive the termination of this Agreement), no Loan Party shall (a) permit or
cause to be paid in Cash all or any part of the SOFAR Third Tranche without
Agent’s prior written consent or (b) suffer or permit any modification,
amendment and/or restatement of all or any part of the SOFAR/Vulcanos Interest
Purchase Agreement, other than any (i) modification or amendment

 

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(x) resulting in any delay in or deferral of any required payments or (y)
providing for any amounts due to be paid in Parent’s Equity Interests in lieu of
Cash payments, or (ii) immaterial modification or amendment not otherwise
impacting the SOFAR Third Tranche.

(b)Section 7.20(a) notwithstanding, Borrowers may pay the SOFAR Third Tranche in
Cash without Agent’s prior written consent only if each of the following
conditions are satisfied (and no such payment of the SOFAR Third Tranche shall
be made until the satisfaction of each condition): (i) Parent shall have
recognized, on a consolidated basis, trailing Net Revenue over a period of a
calendar quarter of at least [**********] (as verified by Agent acting
reasonably) and (ii) Parent shall have
[****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
******************************************************].

(c)Parent confirms that the SOFAR Lien was terminated on or about September 18,
2017.

7.21Financial Covenant.

(a)Beginning with the month ending [*************] and for each month ending
thereafter, Net Revenue for the trailing six-month period ending on each such
date shall equal at least [***] of the Projected Net Revenue for such applicable
six-month period. Parent shall provide Agent with such information as Agent may
reasonably require in connection with its testing of this financial covenant.

(b)For purposes of this Section 7.21, “Projected Net Revenue” means the Net
Revenue projected by Parent for the applicable periods as set forth in the
operating plan delivered to and accepted by Agent on or before the Closing Date,
as such operating plan may be updated from time to time with the approval of
Parent’s Board of Directors and Agent.  

SECTION 8.  RIGHT TO INVEST

Lender or its assignee or nominee shall have the right, in its discretion, to
participate in any Subsequent Financing in an amount of up to $2,000,000 on the
same terms, conditions and pricing afforded to others participating in any such
Subsequent Financing. This Section 8, and all rights and obligations hereunder,
shall survive the repayment of indebtedness under, and otherwise shall survive
the expiration or other termination of, the Loan Agreement.

SECTION 9.  EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an event of
default (“Event of Default”) under this Agreement:

9.1Payments.  Any Loan Party fails to pay any amount due under this Agreement or
any of the other Loan Documents on the due date; provided, however, that an

 

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Event of Default shall not occur on account of a failure to pay due solely to an
administrative or operational error of Agent or Lender or the applicable
Borrower’s bank if such Loan Party had the funds to make the payment when due
and makes the payment within three Business Days following any Borrower’s
knowledge of such failure to pay; or

9.2Covenants. Any Loan Party breaches or defaults in the performance of, as
applicable, any covenant or Secured Obligation under this Agreement, any of the
other Loan Documents or any other agreement among any Loan Party, Agent and
Lender, and (a) with respect to a default under any covenant under this
Agreement (other than under Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.20
and 7.21), any other Loan Document or any other agreement among any Loan Party,
Agent and Lender, such default continues for more than 15 days after the earlier
of the date on which (i) Agent or Lender has given notice of such default to the
Loan Parties and (ii) any Loan Party has actual knowledge of such default or (b)
with respect to a default under any of Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9,
7.14, 7.20 and 7.21 the occurrence of such default; or

9.3Material Adverse Effect.  An event or circumstance has occurred that has or
could reasonably be expected to have a Material Adverse Effect; or

9.4Representations.  Any representation or warranty made by any Loan Party in
any Loan Document shall have been false or misleading in any material respect
when made or when deemed made; or

9.5Insolvency.  Any Loan Party (A) (i) shall make an assignment for the benefit
of creditors; or (ii) shall be unable to pay its debts as they become due, or be
unable to pay or perform under the Loan Documents, or shall become insolvent; or
(iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any
petition, answer, or document seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such
circumstances; or (v) shall seek or consent to or acquiesce in the appointment
of any trustee, receiver, or liquidator of any Loan Party or of all or any
substantial part (i.e., 33-1/3% or more) of the assets or property of such Loan
Party; or (vi) shall cease operations of its business as its business has
normally been conducted; or (vii) a Loan Party or its directors or majority
shareholders, shall take any action initiating any of the foregoing actions
described in clauses (i) through (vi); or (B) either (i) 45 days shall have
expired after the commencement of an involuntary action against such Loan Party
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, without such action being dismissed or all orders or proceedings
thereunder affecting the operations or the business of the Loan Party being
stayed; or (ii) a stay of any such order or proceedings shall thereafter be set
aside and the action setting it aside shall not be timely appealed; or (iii) a
Loan Party shall file any answer admitting or not contesting the material
allegations of a petition filed against such Loan Party in any such proceedings;
or (iv) the court in which such proceedings are pending shall enter a decree or
order granting the relief sought in any such proceedings; or (v) 45 days shall
have expired after the appointment, without the consent or acquiescence of such
Loan Party, of any trustee, receiver or liquidator of such Loan Party or of all
or any substantial part of the properties of such Loan Party without such
appointment being vacated; or

9.6Attachments; Judgments.  Any material portion of the Loan Parties’ assets are
attached or seized, or a levy is filed against any such assets, or a judgment or

 

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judgments is/are entered for the payment of money (not covered by independent
third party insurance as to which liability has not been rejected by such
insurance carrier), individually or in the aggregate, of at least [*******] and
shall remain unsatisfied, unvacated or unstayed for a period of 15 days after
the entry thereof, or a Loan Party is enjoined or in any way prevented by court
order for a period of 15 days from conducting a material part of its business;
or

9.7Other Obligations.  The occurrence of any default under any other agreement
or obligation of a Loan Party or any of its Subsidiaries involving any
Indebtedness in excess of [********] and which has resulted in the right by the
holder of such Indebtedness (whether or not exercised) to accelerate the
maturity of such indebtedness following the expiration of any applicable cure
periods under the agreements relating to such Indebtedness.

9.8Guaranty. (a) Any Guaranty Document terminates or ceases for any reason to be
in full force and effect, (b) any Guarantor does not perform any obligation or
covenant under any Guaranty Document (subject to any applicable cure provisions
under the Guaranty Documents), or (c) any circumstance described in Section 9
occurs with respect to any Guarantor; provided, that the circumstances under
Section 9.3 shall be determined with respect to the Guarantors and the other
Loan Parties taken as a whole in accordance with the provisions of the
definition of Material Adverse Effect.

SECTION 10.  REMEDIES

10.1General.  Upon and during the continuance of any one or more Events of
Default, (i) Agent may, and at the direction of the Required Lenders shall,
accelerate and demand payment of all or any part of the Secured Obligations
together with a Prepayment Charge and declare them to be immediately due and
payable (provided, that upon the occurrence of an Event of Default of the type
described in Section 9.5, all of the Secured Obligations shall automatically be
accelerated and made due and payable, in each case without any further notice or
act), (ii) Agent may, at its option, sign and file in a Loan Party’s name any
and all collateral assignments, notices, control agreements, security agreements
and other documents it deems necessary or appropriate to perfect or protect the
repayment of the Secured Obligations, and in furtherance thereof, each Loan
Party hereby grants Agent an irrevocable power of attorney coupled with an
interest, and (iii) Agent may notify any Loan Party’s account debtors to make
payment directly to Agent, compromise the amount of any such account on such
Loan Party’s behalf and endorse Agent’s name without recourse on any such
payment for deposit directly to Agent’s account. Agent may, and at the direction
of the Required Lenders shall, exercise all rights and remedies with respect to
the Collateral under the Loan Documents or otherwise available to it under the
UCC and other applicable law, including the right to release, hold, sell, lease,
liquidate, collect, realize upon, or otherwise dispose of all or any part of the
Collateral and the right to occupy, utilize, process and commingle the
Collateral. All Agent’s rights and remedies shall be cumulative and not
exclusive.

10.2Collection; Foreclosure.  Upon the occurrence and during the continuance of
any Event of Default, Agent may, and at the direction of the Required Lenders
shall, at any time or from time to time, apply, collect, liquidate, sell in one
or more sales, lease or otherwise dispose of, any or all of the Collateral, in
its then condition or following any commercially reasonable preparation or
processing, in such order as Agent may elect. Any such sale may be made either
at public or private sale at its place of business or elsewhere. Each Loan Party
agrees that any such public or private sale may occur upon 10 calendar days’
prior written

 

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notice to the Loan Parties. Agent may require the Loan Parties to assemble the
Collateral and make it available to Agent at a place designated by Agent that is
reasonably convenient to Agent and the applicable Loan Party. The proceeds of
any sale, disposition or other realization upon all or any part of the
Collateral shall be applied by Agent in the following order of priorities:

 

First, to Agent and Lender in an amount sufficient to pay in full Agent’s and
Lender’s reasonable costs and professionals’ and advisors’ fees and expenses as
described in Section 11.11;

 

Second, to Lender in an amount equal to the then unpaid amount of the Secured
Obligations (including principal, interest, and the default interest under
Section 2.3), in such order and priority as Agent may choose in its sole
discretion; and

 

Finally, after the full and final payment in Cash of all of the Secured
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement), to any
creditor holding a junior Lien on the Collateral, or to the Loan Parties or
their representatives or as a court of competent jurisdiction may direct.

Agent shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.

10.3No Waiver.  Agent shall be under no obligation to marshal any of the
Collateral for the benefit of the Loan Parties or any other Person, and each
Loan Party expressly waives all rights, if any, to require Agent to marshal any
Collateral.

10.4Cumulative Remedies.  The rights, powers and remedies of Agent hereunder
shall be in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of or election
of remedies with respect to any other rights, powers and remedies of Agent.

SECTION 11.  MISCELLANEOUS

11.1Severability.  Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective only to the extent and duration of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

11.2Notice.  Except as otherwise provided herein, any notice, demand, request,
consent, approval, declaration, service of process or other communication
(including the delivery of Financial Statements) that is required, contemplated,
or permitted under the Loan Documents or with respect to the subject matter
hereof shall be in writing, and shall be deemed to have been validly served,
given, delivered, and received upon the earlier of: (i) the day of transmission
by electronic mail or hand delivery or delivery by an overnight express service
or overnight mail delivery service; or (ii) the third calendar day after deposit
in the United States of America mails,

 

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with proper first class postage prepaid, in each case addressed to the party to
be notified as follows:

(a)If to Agent:

HERCULES CAPITAL, INC.
Legal Department
Attention: Chief Legal Officer and [**********]
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
email: [**********************************]
Telephone: [***********]

(b)If to Lender:

HERCULES CAPITAL, INC.
Legal Department
Attention: Chief Legal Officer and [**********]
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
email: [**********************************]
Telephone: [***********]

(c)If to any Loan Party:

c/o TRANSENTERIX, INC.

635 Davis Drive, Suite 300

Morrisville, NC 27560

Attention: Joseph Slattery, Executive Vice President/Chief Financial Officer,
and Joshua Weingard, Chief Legal Officer

email: [**********************]
Telephone: [***********]

email: [**********************]

Telephone: [***********]

 

with a copy to:

Ballard Spahr LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
Attn: Mary Mullany
email: [**********************]

Telephone: [***********]

 

or to such other address as each party may designate for itself by like notice.

 

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11.3Entire Agreement; Amendments.  

(a)This Agreement and the other Loan Documents constitute the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof
and thereof, and supersede and replace in their entirety any prior proposals,
term sheets, non-disclosure or confidentiality agreements, letters, negotiations
or other documents or agreements, whether written or oral, with respect to the
subject matter hereof or thereof (including Agent’s proposal letter dated April
10, 2018).  

(b)Neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.3(b). The Required Lenders and each Loan Party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, Agent and the Loan Parties party to the relevant Loan Document may,
from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of Lenders or of the Loan Parties hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or Agent, as
the case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (A) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender’s
Term Loan Commitment, in each case without the written consent of each Lender
directly affected thereby; (B) eliminate or reduce the voting rights of any
Lender under this Section 11.3(b) without the written consent of such Lender;
(C) (v) reduce any percentage specified in the definition of Required Lenders,
(w) consent to the assignment or transfer by the Loan Parties of any of its
rights and obligations under this Agreement and the other Loan Documents, (x)
release all or substantially all of the Collateral, (y) release any Guarantor of
all or any portion of the Secured Obligations or its guaranty obligations with
respect thereto, or (z) release a Loan Party from its obligations under the Loan
Documents, in each case without the written consent of all Lenders; or (D)
amend, modify or waive any provision of Section 11.17 without the written
consent of Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each Lender and shall be binding upon the
Loan Parties, Lender, Agent and all future holders of the Loans.

11.4No Strict Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

11.5No Waiver.  The powers conferred upon Agent and Lender by this Agreement are
solely to protect its rights hereunder and under the other Loan Documents and
its interest in the Collateral and shall not impose any duty upon Agent or
Lender to exercise any such powers. No omission or delay by Agent or Lender at
any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by the Loan
Parties at any time designated, shall be a waiver of any such right or remedy to
which Agent or Lender is entitled, nor shall it in any way affect the right of
Agent or Lender to enforce such provisions thereafter.

11.6Survival.  All agreements, representations and warranties contained in this
Agreement and the other Loan Documents or in any document delivered pursuant
hereto or thereto shall be for the benefit of Agent and Lender and shall survive
the execution and delivery of this Agreement. Sections 6.3, 8 and 11.14 shall
survive the termination of this Agreement.

11.7Successors and Assigns.  The provisions of this Agreement and the other Loan
Documents shall inure to the benefit of and be binding on the Loan Parties and
their permitted assigns (if any). The Loan Parties shall not assign their
obligations under this Agreement or any of the other Loan Documents without
Agent’s express prior written consent, and any such attempted assignment shall
be void and of no effect. Agent and Lender may assign, transfer, or endorse its
rights hereunder and under the other Loan Documents without prior notice to the
Loan Parties, and all of such rights shall inure to the benefit of Agent’s and
Lender’s successors and assigns; provided that as long as no Event of Default
has occurred and is continuing, neither Agent nor any Lender may assign,
transfer or endorse its rights hereunder or under the Loan Documents to any
party that is a direct competitor of any Loan Party (as reasonably determined by
Agent), it being acknowledged that in all cases, any transfer to an Affiliate of
any Lender or Agent shall be allowed.

11.8Governing Law.  This Agreement and the other Loan Documents (other than the
Guarantor Documents) have been negotiated and delivered to Agent and Lender in
the State of New York, and shall have been accepted by Agent and Lender in the
State of New York. Payment to Agent and Lender by Borrower of the Secured
Obligations is due in the State of New York. This Agreement and the other Loan
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York, excluding conflict of laws principles that
would cause the application of laws of any other jurisdiction.

11.9Consent to Jurisdiction and Venue.  All judicial proceedings (to the extent
that the reference requirement of Section 11.10 is not applicable) arising in or
under or related to this Agreement or any of the other Loan Documents may be
brought in any state or federal court located in the State of New York. By
execution and delivery of this Agreement, each party hereto generally and
unconditionally: (a) consents to nonexclusive personal jurisdiction in the State
of New York located in the City of New York, Borough of Manhattan, or of the
United States of America for the Southern District of New York; (b) waives any
objection as to jurisdiction or venue in the State of New York located in the
City of New York, Borough of Manhattan, or of the United States of America for
the Southern District of New York; (c) agrees not to assert any defense based on
lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably
agrees to be bound by any judgment rendered thereby in connection with this

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Agreement or the other Loan Documents. Service of process on any party hereto in
any action arising out of or relating to this Agreement shall be effective if
given in accordance with the requirements for notice set forth in Section 11.2,
and shall be deemed effective and received as set forth in Section 11.2. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of either party to bring proceedings in the courts
of any other jurisdiction.

11.10Mutual Waiver of Jury Trial / Judicial Reference.  Because disputes arising
in connection with complex financial transactions are most quickly and
economically resolved by an experienced and expert Person and the parties wish
applicable state and federal laws to apply (rather than arbitration rules), the
parties desire that their disputes be resolved by a judge applying such
applicable laws. EACH OF THE LOAN PARTIES, AGENT AND LENDER SPECIFICALLY WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY,
“CLAIMS”) ASSERTED BY THE LOAN PARTIES AGAINST AGENT, LENDER OR THEIR RESPECTIVE
ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST ANY LOAN
PARTY. This waiver extends to all such Claims, including Claims that involve
Persons other than Agent, the Loan Parties and Lender; Claims that arise out of
or are in any way connected to the relationship among the Loan Parties, Agent
and Lender; and any Claims for damages, breach of contract, tort, specific
performance, or any equitable or legal relief of any kind, arising out of this
Agreement, any other Loan Document.  

11.11Professional Fees.  Borrower promises to pay Agent’s and Lender’s fees and
expenses necessary to finalize the loan documentation, including but not limited
to reasonable attorneys’ fees, UCC searches, filing costs, and other
miscellaneous expenses. In addition, Borrower promises to pay any and all
reasonable attorneys’ and other reasonable and documented professionals’ fees
and expenses incurred by Agent and Lender after the Closing Date in connection
with or related to:  (a) the Loan; (b) the administration, collection, or
enforcement of the Loan; (c) the amendment or modification of the Loan
Documents; (d) any waiver, consent, release, or termination under the Loan
Documents; (e) the protection, preservation, audit, field exam, sale, lease,
liquidation, or disposition of Collateral or the exercise of remedies with
respect to the Collateral; (f) any legal, litigation, administrative,
arbitration, or out of court proceeding in connection with or related to
Borrower or the Collateral, and any appeal or review thereof; and (g) any
bankruptcy, restructuring, reorganization, assignment for the benefit of
creditors, workout, foreclosure, or other action related to Borrower, the
Collateral, the Loan Documents, including representing Agent or Lender in any
adversary proceeding or contested matter commenced or continued by or on behalf
of Borrower’s estate, and any appeal or review thereof.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

11.12Confidentiality.  Agent and Lender acknowledge that certain items of
Collateral and information provided to Agent and Lender by the Loan Parties are
confidential and proprietary information of the Loan Parties, if and to the
extent such information either (x) is marked as confidential by the Loan Parties
at the time of disclosure, or (y) should reasonably be understood to be
confidential (the “Confidential Information”). Accordingly, Agent and Lender
agree that any Confidential Information it may obtain in the course of
acquiring, administering, or perfecting  Agent’s security interest in the
Collateral shall not be disclosed to any other Person or entity in any manner
whatsoever, in whole or in part, without the prior written consent of Parent,
except that Agent and Lender may disclose any such information: (a) to its own
directors, officers, employees, accountants, counsel and other professional
advisors and to its Affiliates if Agent or Lender in their sole discretion
determines that any such party should have access to such information in
connection with such party’s responsibilities in connection with the Loan or
this Agreement and; provided that such recipient of such Confidential
Information either (i) agrees to be bound by the confidentiality provisions of
this paragraph or (ii) is otherwise subject to confidentiality restrictions that
reasonably protect against the disclosure of Confidential Information; (b) if
such information is generally available to the public; (c) if required or
appropriate in any report, statement or testimony submitted to any governmental
authority having or claiming to have jurisdiction over Agent or Lender; (d) if
required or appropriate in response to any summons or subpoena or in connection
with any litigation, to the extent permitted or deemed advisable by Agent’s or
Lender’s counsel; (e) to comply with any legal requirement or law applicable to
Agent or Lender; (f) to the extent reasonably necessary in connection with the
exercise of any right or remedy under any Loan Document, including Agent’s sale,
lease, or other disposition of Collateral after default; (g) to any participant
or assignee of Agent or Lender or any prospective participant or assignee;
provided that such participant or assignee or prospective participant or
assignee agrees in writing to be bound by this Section prior to disclosure; or
(h) otherwise with the prior consent of Parent; provided that any disclosure
made in violation of this Agreement shall not affect the obligations of the Loan
Parties or any of their Affiliates or any guarantor under this Agreement or the
other Loan Documents. Agent’s and Lender’s obligations under this Section 11.12
shall supersede all of their respective obligations under any nondisclosure
agreement with the Loan Parties existing prior to the Closing Date.

11.13 Assignment of Rights.  Each Loan Party acknowledges and understands that
Agent or Lender may, subject to Section 11.7, sell and assign all or part of its
interest hereunder and under the Loan Documents to any Person or entity (an
“Assignee”). After such assignment the term “Agent” or “Lender” as used in the
Loan Documents shall mean and include such Assignee, and such Assignee shall be
vested with all rights, powers and remedies of Agent and Lender hereunder with
respect to the interest so assigned; but with respect to any such interest not
so transferred, Agent and Lender shall retain all rights, powers and remedies
hereby given. No such assignment by Agent or Lender shall relieve any Loan Party
of any of its obligations hereunder. Lender agrees that in the event of any
transfer by it of the Note(s)(if any), it will endorse thereon a notation as to
the portion of the principal of the Note(s), which shall have been paid at the
time of such transfer and as to the date to which interest shall have been last
paid thereon.

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

11.14Revival of Secured Obligations.  This Agreement and the Loan Documents
shall remain in full force and effect and continue to be effective if any
petition is filed by or against any Loan Party for liquidation or
reorganization, if any Loan Party becomes insolvent or makes an assignment for
the benefit of creditors, if a receiver or trustee is appointed for all or any
significant part of any Loan Party’s assets, or if any payment or transfer of
Collateral is recovered from Agent or Lender. The Loan Documents and the Secured
Obligations and Collateral security shall continue to be effective, or shall be
revived or reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations or any transfer of Collateral to Agent,
or any part thereof is rescinded, avoided or avoidable, reduced in amount, or
must otherwise be restored or returned by, or is recovered from, Agent, Lender
or by any obligee of the Secured Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment,
performance, or transfer of Collateral had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, avoided, avoidable,
restored, returned, or recovered, the Loan Documents and the Secured Obligations
(other than inchoate indemnity obligations and any other obligations which, by
their terms, are to survive the termination of this Agreement) shall be deemed,
without any further action or documentation, to have been revived and reinstated
except to the extent of the full, final, and indefeasible payment to Agent or
Lender in Cash.

11.15Counterparts.  This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.

11.16No Third Party Beneficiaries.  No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any Person other than
Agent, Lender and the Loan Parties unless specifically provided otherwise
herein, and, except as otherwise so provided, all provisions of the Loan
Documents will be personal and solely among Agent, Lender and the Loan Parties.

11.17Agency.  

(a)Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its
behalf as Agent hereunder and under the other Loan Documents and authorizes
Agent to take such actions on its behalf and to exercise such powers as are
delegated to Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.

(b)Lender agrees to indemnify Agent in its capacity as such (to the extent not
reimbursed by the Loan Parties and without limiting the obligation of the Loan
Parties to do so), according to its respective Term Loan Commitment percentages
(based upon the total outstanding Term Loan Commitments) in effect on the date
on which indemnification is sought under this Section 11.17, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time be imposed on, incurred by or asserted against Agent in any way
relating to or arising out of, this Agreement, any of the other Loan Documents
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
Agent under or in connection with any of the foregoing; The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

(c)The Person serving as Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not Agent and the term “Lender” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include each such Person
serving as Agent hereunder in its individual capacity.

(d)Agent shall have no duties or obligations except those expressly set forth
herein and in the other Loan Documents. Without limiting the generality of the
foregoing, Agent shall not:

 

(i)

be subject to any fiduciary or other implied duties, regardless of whether any
default or any Event of Default has occurred and is continuing;

 

(ii)

have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that Agent is required to exercise as directed in
writing by Lender; provided that Agent shall not be required to take any action
that, in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(iii)

except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and Agent shall not be liable for the failure to disclose, any
information relating to the Loan Parties or any of their Affiliates that is
communicated to or obtained by any Person serving as Agent or any of its
Affiliates in any capacity.

(e)Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of Lender or as Agent shall believe in good faith
shall be necessary, under the circumstances or (ii) in the absence of its own
gross negligence or willful misconduct.

(f)Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Section 4 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to Agent.

(g)Agent may rely, and shall be fully protected in acting, or refraining to act,
upon, any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent,

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

order, bond or other paper or document that it has no reason to believe to be
other than genuine and to have been signed or presented by the proper party or
parties or, in the case of cables, telecopies and telexes, to have been sent by
the proper party or parties. In the absence of its gross negligence or willful
misconduct, Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to Agent and conforming to the requirements of the Loan
Agreement or any of the other Loan Documents. Agent may consult with counsel,
and any opinion or legal advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, not taken or
suffered by Agent hereunder or under any Loan Documents in accordance therewith.
Agent shall have the right at any time to seek instructions concerning the
administration of the Collateral from any court of competent jurisdiction. Agent
shall not be under any obligation to exercise any of the rights or powers
granted to Agent by this Agreement, the Loan Agreement and the other Loan
Documents at the request or direction of Lenders unless Agent shall have been
provided by Lender with adequate security and indemnity against the costs,
expenses and liabilities that may be incurred by it in compliance with such
request or direction.

11.18Publicity.  None of the parties hereto nor any of its respective member
businesses and Affiliates shall, without the other parties’ prior written
consent (which shall not be unreasonably withheld or delayed), publicize or use
(a) the other party's name (including a brief description of the relationship
among the parties hereto), logo or hyperlink to such other parties’ web site,
separately or together, in written and oral presentations, advertising,
promotional and marketing materials, client lists, public relations materials or
on its web site (together, the “Publicity Materials”); (b) the names of officers
of such other parties in the Publicity Materials; and (c) such other parties’
name, trademarks, servicemarks in any news or press release concerning such
party; provided, however, notwithstanding anything to the contrary herein, no
such consent shall be required (i) to the extent necessary to comply with the
requests of any regulators, legal requirements or laws applicable to such party,
pursuant to any listing agreement with any national securities exchange (so long
as such party provides prior notice to the other party hereto to the extent
reasonably practicable) and (ii) to comply with Section 11.12.

11.19Multiple Loan Parties.

(a)Agent.  Each of the Loan Parties hereby irrevocably appoints Parent as its
agent, attorney-in-fact and legal representative for all purposes, including
requesting disbursement of the Term Loan and receiving account statements and
other notices and communications to the Loan Parties (or any of them) from Agent
or any Lender. Agent may rely, and shall be fully protected in relying, on any
request for the Term Loan, disbursement instruction, report, information or any
other notice or communication made or given by Parent, whether in its own name
or on behalf of one or more of the other Loan Parties, and Agent shall not have
any obligation to make any inquiry or request any confirmation from or on behalf
of any other Loan Party as to the binding effect on it of any such request,
instruction, report, information, other notice or communication, nor shall the
joint and several character of the Loan Parties’ obligations hereunder be
affected thereby.

(b)Waivers.  Each Loan Party hereby waives:  (i) any right to require Agent to
institute suit against, or to exhaust its rights and remedies against, any other
Loan Party or any

 

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REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

other person, or to proceed against any property of any kind which secures all
or any part of the Secured Obligations, or to exercise any right of offset or
other right with respect to any reserves, credits or deposit accounts held by or
maintained with Agent or any Indebtedness of Agent or any Lender to any other
Loan Party, or to exercise any other right or power, or pursue any other remedy
Agent or any Lender may have; (ii) any defense arising by reason of any
disability or other defense of any other Loan Party or any guarantor or any
endorser, co-maker or other person, or by reason of the cessation from any cause
whatsoever of any liability of any other Loan Party or any guarantor or any
endorser, co-maker or other person, with respect to all or any part of the
Secured Obligations, or by reason of any act or omission of Agent or others
which directly or indirectly results in the discharge or release of any other
Loan Party or any guarantor or any other person or any Secured Obligations or
any security therefor, whether by operation of law or otherwise; (iii) any
defense arising by reason of any failure of Agent to obtain, perfect, maintain
or keep in force any Lien on, any property of any Loan Party or any other
person; (iv) any defense based upon or arising out of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any other Loan Party or any
guarantor or any endorser, co-maker or other person, including without
limitation any discharge of, or bar against collecting, any of the Secured
Obligations (including without limitation any interest thereon), in or as a
result of any such proceeding. Until all of the Secured Obligations (other than
inchoate indemnity obligations and any other obligations which, by their terms,
are to survive the termination of this Agreement) have been paid, performed, and
discharged in full, nothing shall discharge or satisfy the liability of any Loan
Party hereunder except the full performance and payment of all of the Secured
Obligations. If any claim is ever made upon Agent for repayment or recovery of
any amount or amounts received by Agent in payment of or on account of any of
the Secured Obligations, because of any claim that any such payment constituted
a preferential transfer or fraudulent conveyance, or for any other reason
whatsoever, and Agent repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over Agent or any of its property, or by reason of any settlement
or compromise of any such claim effected by Agent with any such claimant
(including without limitation the any other Loan Party), then and in any such
event, each Loan Party agrees that any such judgment, decree, order, settlement
and compromise shall be binding upon such Loan Party, notwithstanding any
revocation or release of this Agreement or the cancellation of any note or other
instrument evidencing any of the Secured Obligations, or any release of any of
the Secured Obligations, and each Loan Party shall be and remain liable to Agent
and Lenders under this Agreement for the amount so repaid or recovered, to the
same extent as if such amount had never originally been received by Agent or any
Lender, and the provisions of this sentence shall survive, and continue in
effect, notwithstanding any revocation or release of this Agreement. Each Loan
Party hereby expressly and unconditionally waives all rights of subrogation,
reimbursement and indemnity of every kind against any other Loan Party, and all
rights of recourse to any assets or property of any other Loan Party, and all
rights to any collateral or security held for the payment and performance of any
Secured Obligations, including (but not limited to) any of the foregoing rights
which a Loan Party may have under any present or future document or agreement
with any other Loan Party or other person, and including (but not limited to)
any of the foregoing rights which any Loan Party may have under any equitable
doctrine of subrogation, implied contract, or unjust enrichment, or any other
equitable or legal doctrine.

(c)Consents.  Each Loan Party hereby consents and agrees that, without notice to
or by the Loan Parties and without affecting or impairing in any way the
obligations or

 

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liability of the Loan Parties hereunder, Agent may, from time to time before or
after revocation of this Agreement, do any one or more of the following in its
sole and absolute discretion:  (i) accept partial payments of, compromise or
settle, renew, extend the time for the payment, discharge, or performance of,
refuse to enforce, and release all or any parties to, any or all of the Secured
Obligations; (ii) grant any other indulgence to any Loan Party or any other
Person in respect of any or all of the Secured Obligations or any other matter;
(iii) accept, release, waive, surrender, enforce, exchange, modify, impair, or
extend the time for the performance, discharge, or payment of, any and all
property of any kind securing any or all of the Secured Obligations or any
guaranty of any or all of the Secured Obligations, or on which Agent at any time
may have a Lien, or refuse to enforce its rights or make any compromise or
settlement or agreement therefor in respect of any or all of such property; (iv)
substitute or add, or take any action or omit to take any action which results
in the release of, any one or more other Loan Parties or any endorsers or
guarantors of all or any part of the Secured Obligations, including, without
limitation one or more parties to this Agreement, regardless of any destruction
or impairment of any right of contribution or other right of a Loan Party; (v)
apply any sums received from any other Loan Party, any guarantor, endorser, or
co-signer, or from the disposition of any Collateral or security, to any
Indebtedness whatsoever owing from such person or secured by such Collateral or
security, in such manner and order as Agent determines in its sole discretion,
and regardless of whether such Indebtedness is part of the Secured Obligations,
is secured, or is due and payable. Each Loan Party consents and agrees that
Agent shall be under no obligation to marshal any assets in favor of a Loan
Party, or against or in payment of any or all of the Secured Obligations. Each
Loan Party further consents and agrees that Agent shall have no duties or
responsibilities whatsoever with respect to any property securing any or all of
the Secured Obligations. Without limiting the generality of the foregoing, Agent
shall have no obligation to monitor, verify, audit, examine, or obtain or
maintain any insurance with respect to, any property securing any or all of the
Secured Obligations.

(d)Independent Liability.  Each Loan Party hereby agrees that one or more
successive or concurrent actions may be brought hereon against such Loan Party,
in the same action in which any other Loan Party may be sued or in separate
actions, as often as deemed advisable by Agent. Each Loan Party is fully aware
of the financial condition of each other Loan Party and is executing and
delivering this Agreement based solely upon its own independent investigation of
all matters pertinent hereto, and such Loan Party is not relying in any manner
upon any representation or statement of Agent or any Lender with respect
thereto. Each Loan Party represents and warrants that it is in a position to
obtain, and each Loan Party hereby assumes full responsibility for obtaining,
any additional information concerning any other Loan Party’s financial condition
and any other matter pertinent hereto as such Loan Party may desire, and such
Loan Party is not relying upon or expecting Agent to furnish to it any
information now or hereafter in Agent’s possession concerning the same or any
other matter.

(e)Subordination.  All Indebtedness of a Loan Party now or hereafter arising
held by another Loan Party is subordinated to the Secured Obligations and the
Loan Party holding the Indebtedness shall take all actions reasonably requested
by Agent to effect, to enforce and to give notice of such subordination.

(SIGNATURES TO FOLLOW)

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

IN WITNESS WHEREOF, Borrowers, Agent and Lender have duly executed and delivered
this Loan and Security Agreement as of the day and year first above written.

 

BORROWERS:

TRANSENTERIX, INC.

 

 

 

 

By:

/s/ Todd M. Pope

Name:

Todd M. Pope

Title:

President and Chief Executive Officer

 

 

 

 

TRANSENTERIX SURGICAL, INC.

 

 

 

 

By:

/s/ Todd M. Pope

Name:

Todd M. Pope

Title:

President and Chief Executive Officer

 

 

TRANSENTERIX INTERNATIONAL, INC.

 

 

 

 

By:

/s/ Todd M. Pope

Name:

Todd M. Pope

Title:

President and Chief Executive Officer

 

 

 

 

SAFESTITCH LLC

 

 

By:  TransEnterix, Inc., its sole member

 

 

By:

/s/ Todd M. Pope

Name:

Todd M. Pope

Title:

President and Chief Executive Officer

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Accepted in Palo Alto, California:

AGENT:

 

 

HERCULES CAPITAL, INC.

 

 

Signature:

/s/ Zhuo Huang

Print Name:

Zhuo Huang

Title:

Associate General Counsel

 

 

LENDER:

 

 

HERCULES CAPITAL, INC.

 

 

Signature:

/s/ Zhuo Huang

Print Name:

Zhuo Huang

Title:

Associate General Counsel

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Table of Exhibits and Schedules

Exhibit A:

Advance Request

 

Attachment to Advance Request

Exhibit B:

Term Note

Exhibit C:

Name, Locations, and Other Information for Loan Parties

Exhibit D:

Patents, Trademarks, Copyrights and Licenses

Exhibit E:

Deposit Accounts and Investment Accounts

Exhibit F:

Compliance Certificate

Exhibit G:

Joinder Agreement

Exhibit H:

ACH Debit Authorization Agreement

Schedule 1

Subsidiaries

Schedule 1.1

Term Loan Commitments

Schedule 1A

Existing Permitted Indebtedness

Schedule 1B

Existing Permitted Investments

Schedule 1C

Existing Permitted Liens

Schedule 5.3

Consents, Etc.

Schedule 5.8

Tax Matters

Schedule 5.9

Intellectual Property Claims

Schedule 5.10

Intellectual Property

Schedule 5.11

Borrower Products

Schedule 5.14

Capitalization

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT A

ADVANCE REQUEST

To:

Agent:

 

 

Date: [●]

 

Hercules Capital, Inc. (the “Agent”)

 

 

 

 

400 Hamilton Avenue, Suite 310

 

 

 

 

Palo Alto, CA 94301

 

 

 

 

email: [********************]

 

 

 

 

Attn: General Counsel

 

 

 

TransEnterix, Inc. and the other parties to the Agreement as Borrowers
(collectively, “Borrower” or “Borrowers”) hereby requests from Hercules Capital,
Inc. (“Lender”) an Advance in the amount of $[●] on [●] (the “Advance Date”)
pursuant to the Loan and Security Agreement among Borrowers, Agent and Lender
(the “Agreement”). Capitalized words and other terms used but not otherwise
defined herein are used with the same meanings as defined in the Agreement.

Please:

 

(a)

Issue a check payable to Borrower

 

or

 

(b)

Wire Funds to Borrower’s account

 

 

 

 

Bank:

 

 

 

Address:

 

 

 

 

 

 

 

ABA Number:

 

 

 

Account Number:

 

 

 

Account Name:

 

 

 

Contact Person:

 

 

 

Phone Number

 

 

 

To Verify Wire Info:

 

 

 

Email address:

 

 

Each Borrower represents that the conditions precedent to the Advance set forth
in the Agreement are satisfied and shall be satisfied upon the making of such
Advance, including but not limited to: (i)  that no event that has had or would
reasonably be expected to have a Material Adverse Effect has occurred and is
continuing; (ii)  that each Loan Party is in compliance with all the terms and
provisions set forth in each applicable Loan Document on its part to be observed
or performed; and (iii) that as of the Advance Date, no fact or condition exists
that could (or could, with the passage of time, the giving of notice, or both)
constitute an Event of Default under the Loan Documents.  Each Borrower
understands and acknowledges that Agent has the right to review the financial
information supporting this representation and, based upon such review in its
sole discretion, Lender may decline to fund the requested Advance in accordance
with the terms and conditions set forth in the Agreement.  

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Each Loan Party hereby represents that its corporate status and locations have
not changed since the date of the Agreement or, if the Attachment to this
Advance Request is completed, are as set forth in the Attachment to this Advance
Request.

Each Borrower agrees to notify Agent promptly before the funding of the Loan if
any of the matters which have been represented above shall not be true and
correct on the Borrowing Date and if Agent has received no such notice before
the Advance Date then the statements set forth above shall be deemed to have
been made and shall be deemed to be true and correct as of the Advance Date,
unless such statements relate to an earlier date.

Executed as of [●].

 

BORROWER:

TRANSENTERIX, INC., on behalf of itself and the other Borrowers

 

SIGNATURE:

 

TITLE:

 

PRINT NAME:

 

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ATTACHMENT TO ADVANCE REQUEST

Dated: [●]

Each Borrower hereby represents and warrants to Agent that Borrower’s current
name and organizational status is as follows:

 

Name:

 

Type of organization:

 

State of organization:

 

Organization file number:

Each Borrower hereby represents and warrants to Agent that the street addresses,
cities, states and postal codes of its current locations are as follows:

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT B

SECURED TERM PROMISSORY NOTE

$[●],000,000

Advance Date:  [●]

 

Maturity Date:  [●]

FOR VALUE RECEIVED, TransEnterix, Inc., a Delaware corporation (the “Parent”,
TransEnterix Surgical, Inc., a Delaware corporation (“TSI”), TransEnterix
International, Inc., a Delaware corporation (“TII”), SafeStitch LLC, a Virginia
limited liability company (“SafeStitch” and together with the Parent, TSI and
TII, collectively, “Borrower” or “Borrowers”) hereby promise to pay to the order
of Hercules Capital, Inc., a Maryland corporation, or the holder of this Note
(the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such
other place of payment as the holder of this Secured Term Promissory Note (this
“Promissory Note”) may specify from time to time in writing, in lawful money of
the United States of America, the principal amount of [●] Million Dollars
($[●],000,000) or such other principal amount as Lender has advanced to
Borrower, together with interest at a rate as set forth in Section 2.1(c) of the
Loan Agreement based upon a year consisting of 360 days, with interest computed
daily based on the actual number of days in each month.  

This Promissory Note is the Note referred to in, and is executed and delivered
in connection with, that certain Loan and Security Agreement dated May 23, 2018,
by and among Borrowers, Hercules Capital, Inc., a Maryland corporation (the
“Agent”), and the several banks and other financial institutions or entities
from time to time party thereto as lender (as the same may from time to time be
amended, modified or supplemented in accordance with its terms, the “Loan
Agreement”), and is entitled to the benefit and security of the Loan Agreement
and the other Loan Documents (as defined in the Loan Agreement), to which
reference is made for a statement of all of the terms and conditions thereof.
All payments shall be made in accordance with the Loan Agreement. All terms
defined in the Loan Agreement shall have the same definitions when used herein,
unless otherwise defined herein. An Event of Default under the Loan Agreement
shall constitute a default under this Promissory Note.  

Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest under the UCC or any applicable law. Borrower agrees to
make all payments under this Promissory Note without setoff, recoupment or
deduction and regardless of any counterclaim or defense.  This Promissory Note
has been negotiated and delivered to Lender and is payable in the State of New
York. This Promissory Note shall be governed by and construed and enforced in
accordance with, the laws of the State of New York, excluding any conflicts of
law rules or principles that would cause the application of the laws of any
other jurisdiction.

 

[remainder of page left blank, the next page is the signature page]

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

BORROWERS:

TRANSENTERIX, INC.

 

 

 

 

By:

 

Name:

 

Title:

 

 

 

 

 

TRANSENTERIX SURGICAL, INC.

 

 

 

 

By:

 

Name:

 

Title:

 

 

 

TRANSENTERIX INTERNATIONAL, INC.

 

 

 

 

By:

 

Name:

 

Title:

 

 

 

 

 

SAFESTITCH LLC

 

 

By:  TransEnterix, Inc., its sole member

 

 

By:

 

Name:

 

Title:

 

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT C

NAME, LOCATIONS, AND OTHER INFORMATION FOR LOAN PARTIES

Present Name

Former Names

(if any)

Locations

Place of Formation

Tax

Identification Number

Organizational Identification Number

TransEnterix, Inc.

SafeStitch Medical, Inc. (legal name until Dec. 2013)

 

TransEnterix, Inc. had Tweety Acquisition Corp merge into it in 2013

635 Davis Drive Suite 300

Morrisville, NC 27560

 

4400 Biscayne Blvd

Miami FL 33137

Delaware, USA

[**********]

[*******]

TransEnterix Surgical, Inc.

TransEnterix, Inc. (legal name until Nov. 2013)

 

TransEnterix (assumed name filings in DE and NC)

 

TransEnterix, Inc. had Tweety Acquisition Corp merge into it in 2013

635 Davis Drive Suite 300

Morrisville, NC 27560

 

4400 Biscayne Blvd

Miami FL 33137

Delaware, USA

[**********]

[*******]

TransEnterix International, Inc.

N/A

635 Davis Drive, Suite 300 Morrisville NC 27560

Delaware, USA

[**********]

[*******]

SafeStitch LLC

N/A

635 Davis Drive Suite 300

Morrisville, NC 27560

 

4400 Biscayne Blvd

Miami FL 33137

Virginia, USA

[**********]

[********]

TransEnterix Europe S.à r.l.

N/A

[*****************

*******************

***************

**********

 

************

*********************]

Grand Duchy of Luxembourg

N/A

[*********]

TransEnterix

Italia S.r.l.

Vulcanos S.r.l.

(prior legal name)

[*******************

****************]

Republic of Italy

N/A

[***********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT D

PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

1.Patents and Patent Applications

 

a.

TransEnterix, Inc.

Reference No.

Title

Patent No./Serial No./Filing Date

[********]

[**********************************
********************]

 

[******************

********************]

 

***********

[********]

[*****************]

[******************

********************

 

***********]

 

b.

TransEnterix Surgical, Inc.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[*******]

[****************************
*******************************
******************************
****************]

[******************

********************

 

***********]

[************]

[****************************
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****************]

[***************

**********************

 

***********]

[***********]

[****************************
*******************************
******************************
****************]

[**********

******************

 

***********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[***********]

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****************]

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*****************

 

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***********]

[*******]

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[*****************

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[*******]

[********************************
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[*****************

*******************

 

***********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[***********]

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--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[**********]

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[********]

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[********]

[********************************]

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[********]

[*********************************
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**************]

[********************

***********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[*******]

[********************************
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[********]

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[************************************
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[**********]

[****************************
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[********************]

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[**********************

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Reference No.

Title

Patent No./App. Serial No./Filing Date

[**********]

[********************************
****************************
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[**********************

****************]

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[*****************************
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******************************
********]

[**********************

****************]

[**********]

[******************************
****************************
***********************************
**********]

[**********************

****************]

 

c.

TransEnterix International, Inc. – [****]

 

d.

SafeStitch LLC – [****]

 

e.

TransEnterix Italia S.r.l.

Application No.

Jurisdiction

Priority Date

Patent No.

Issue Date

[*******************************************************]

[*********]

[**]

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[**]

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[*****************]

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[**********]

 

 

[****************]

[**]

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[*******]

[**]

[**********]

 

 

[*************]

[**]

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[*******]

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[**************]

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[**********]

[**]

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[**********]

[**]

[************]

 

 

 

f.

TransEnterix Europe S.à r.l.

REFERENCE

TITLE

PATENT NUMBER

[******]

[****************************]

[*********]

[*********]

[****************************]

[******************]

[*********]

[****************************]

[*****************]

[*********]

[****************************]

[**********************]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[*********]

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[**********************************]

[************]

[******]

[**********************************]

[************]

[******]

[*******************************
************]

[*********]

[*********]

[*******************************
************]

[******************]

[******]

[*******************************
************]

[*******************]

[*********]

[*******************************
************]

[****************]

[*********]

[*******************************
************]

[**********************]

 

g.

TransEnterix Asia PTE Ltd. – [****]

 

h.

TransEnterix Taiwan Ltd. – [****]

 

i.

TransEnterix Japan K.K. – [****]

2.Trademarks and Trademark Applications

 

a.

TransEnterix, Inc. – [****]

 

b.

TransEnterix Surgical, Inc.

FILE #

TITLE

COUNTRY

STATUS

APPLICATION

NUMBER

[************]

[**********]

[**********
*******]

[*********]

[******]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

FILE #

TITLE

COUNTRY

STATUS

APPLICATION

NUMBER

[************]

[**********]

[********]

[******]

[*******]

[************]

[*********************]

[********]

[******]

[********]

[************]

[***************]

[*****]

[********

********]

[*********]

[************]

[***********]

[*****]

[********]

[*********]

[************]

[***********]

[*****]

[********]

[*********]

[************]

[************
**************]

[*****]

[******]

[*********]

[************]

[***************]

[*****]

[*********]

[*********]

[************]

[***************]

[*****]

[*********]

[*********]

[************]

[***************]

[*****]

[*********]

[*********]

[************]

[***************]

[*****]

[*********]

[*********]

[************]

[********]

[*****]

[******]

[*********]

[************]

[***********
**************]

[*****]

[******]

[*********]

[************]

[***********
**************]

[*****]

[******]

[*********]

[************]

[***********
**************]

[*****]

[******]

[*********]

[************]

[***************]

[*************]

[*********]

[*********]

[************]

[*******]

[*************]

[*********]

[*********]

[************]

[**********]

[*************]

[*********]

[*********]

[************]

[**********************]

[*************]

[******]

[*********]

[************]

[**************]

[******]

[******]

[*********]

[************]

[**************]

[******]

[*********]

[*********]

[************]

[**************]

[******]

[*********]

[*********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

FILE #

TITLE

COUNTRY

STATUS

APPLICATION

NUMBER

[***********]*

[**************]

[******]

[*********]

[***********]

[************]

[**********]

[******]

[******]

[***********]

[************]

[**********************]

[******]

[******]

[***********]

[************]

[**********]

[***************]

[*********]

[**************]

[************]

[**********]

[******]

[******]

[******]

[************]

[***************]

[******]

[*********]

[*******]

[************]

[***************]

[******]

[******]

[*******]

[************]

[***************]

[******]

[******]

[*******]

[************]

[***********]

[******]

[*********]

[******]

[************]

[***********]

[***************]

[*********]

[**********]

[************]

[***********]

[**********]

[*********]

[**********]

[************]

[***************]

[***********]

[*********]

[**********]

[************]

[**********************

**********************]

[***********]

[*********]

[**********]

[************]

[********************
******]

[***********]

[*********]

[**********]

[************]

[*******************************]

[***********]

[*********]

[**********]

[************]

[***********]

[***********]

[*******]

[**********]

[************]

[**********************]

[***********]

[*******]

[**********]

[************]

[********************]

[***********]

[******]

 

[************]

[***********
**************]

[*****]

[******]

[**********]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

FILE #

TITLE

COUNTRY

STATUS

APPLICATION

NUMBER

[************]

[***********

**************]

[*****]

[******]

[**********]

 

c.

TransEnterix International, Inc. – [****]

 

d.

SafeStitch LLC – [****]

 

e.

TransEnterix Italia S.r.l.

 

f.

TransEnterix Europe S.à r.l. – [****]

 

g.

TransEnterix Asia PTE Ltd. – [****]

 

h.

TransEnterix Taiwan Ltd. – [****]

 

i.

TransEnterix Japan K.K. – [****]

3.Copyrights and Copyright Applications

 

a.

TransEnterix, Inc. – [****]

 

b.

TransEnterix Surgical, Inc. – [****]

 

c.

TransEnterix International, Inc. – [****]

 

d.

SafeStitch LLC – [****]

 

e.

TransEnterix Italia S.r.l. – [****]

 

f.

TransEnterix Europe S.à r.l. – [****]

 

g.

TransEnterix Asia PTE Ltd. – [****]

 

h.

TransEnterix Taiwan Ltd. – [****]

 

i.

TransEnterix Japan K.K. – [****]

4.Intellectual Property Licenses

 

a.

TransEnterix, Inc.

 

i.

Exclusive License and Development Agreement dated May 26, 2006 with Creighton
University

 

ii.

[*****************************************************************]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

iii.

License Agreement dated March 22, 2018 with Great Belief International Limited

 

b.

TransEnterix Surgical, Inc. – [****]

 

c.

TransEnterix International, Inc. – [****]

 

d.

SafeStitch LLC – [****]

 

e.

TransEnterix Italia S.r.l.

 

i.

License Contract Between the European Commission and Vulcanos s.r.l.

 

ii.

[******************************************************]

 

f.

TransEnterix Europe S.à r.l.

 

i.

[***********************************************************

***************************************************]

 

g.

TransEnterix Asia PTE Ltd. – [****]

 

h.

TransEnterix Taiwan Ltd. – [****]

 

i.

TransEnterix Japan K.K. – [****]

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT E

DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

Name of Account Owner

Bank Name, Address and Telephone

Account Number

Purpose of Account

TransEnterix Surgical, Inc.

[*********************

**************

******************

***********]

[**********]

[**************]

TransEnterix Surgical, Inc.

[******************

***************

******************

************]

[********]

[**************]

SafeStitch LLC

[*********************

**************

****************

******************

***********]

[**********]

[**************]

TransEnterix

Europe S.à r.l.

[***************

******************

*****************

*************

***********]

[***********************]

[**************]

TransEnterix Europe Sarl

(Swiss Branch)

[***

*************

***********************]

[*********************]

[**************]

TransEnterix Europe Sarl

(Swiss Branch)

[***

*************

***********************]

[**********************]

[**************]

TransEnterix Europe Sarl

(Swiss Branch)

[***

*************

***********************]

[**********************]

[**************

**************]

TransEnterix Europe Sarl

(Swiss Branch)

[***

*************

***********************]

[**********************]

[**************]

TransEnterix Europe Sarl

(Swiss Branch)

[*************

***************]

 

[************************** **]

[************

*******]

TransEnterix

Italia S.r.l.

[******************

*******************

******]

[***************************]

[**************]

TransEnterix

[*****************]

[**********************]

[**************]

Italia S.r.l.

[*****************]

[**********************]

[**************]

TransEnterix

Asia PTE Ltd

[**********]

[************]

[**************]

TransEnterix

Taiwan Ltd.

[****************]

[**************]

[**************]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT F

COMPLIANCE CERTIFICATE

Hercules Capital, Inc. (as “Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301

Reference is made to that certain Loan and Security Agreement dated May 23, 2018
and the Loan Documents (as defined therein) entered into in connection with such
Loan and Security Agreement all as may be amended from time to time (hereinafter
referred to collectively as the “Loan Agreement”) by and among, TransEnterix,
Inc. (“Company”), as a Borrower, the other Borrowers party thereto, the several
banks and other financial institutions or entities from time to time party
thereto (collectively, “Lender”) and Hercules Capital, Inc., as agent for Lender
(“Agent”) and. All capitalized terms not defined herein shall have the same
meaning as defined in the Loan Agreement.

The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provide certification of information
regarding the Company; hereby certifies, in such capacity, that in accordance
with the terms and conditions of the Loan Agreement, each Loan Party is in
compliance for the period ending [●] of all covenants, conditions and terms and
hereby reaffirms that all representations and warranties contained therein are
true and correct on and as of the date of this Compliance Certificate with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date and after
giving effect in all cases to any standard(s) of materiality contained in the
Loan Agreement as to such representations and warranties.  Attached are the
required documents supporting the above certification.  The undersigned further
certifies that these are prepared in accordance with GAAP (except for the
absence of footnotes with respect to unaudited financial statement and subject
to normal year-end adjustments) and are consistent from one period to the next
except as explained below.

REPORTING REQUIREMENT

REQUIRED

CHECK IF ATTACHED

Interim Financial Statements

[******************]

 

Interim Financial Statements

[**************** ****]

 

Audited Financial Statements

[****************]

 

The undersigned hereby also confirms the below disclosed accounts represent all
depository accounts and securities accounts presently open in the name of each
Loan Party or any Subsidiary of a Loan Party, as applicable.

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

Depository AC #

Financial Institution

Account Type (Depository / Securities)

Last Month Ending Account Balance

Purpose of Account

LOAN PARTY Name/Address:

 

 

1

 

 

 

 

 

2

 

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

 

5

 

 

 

 

 

6

 

 

 

 

 

7

 

 

 

 

 

 

LOAN PARTY SUBSIDIARY Name/Address

 

 

1

 

 

 

 

 

2

 

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

 

5

 

 

 

 

 

6

 

 

 

 

 

7

 

 

 

 

 

 

The amounts held in accounts in accordance with Section 7.12(c) were [__] and
[__], respectively, as of [__].

The amounts held in accounts in accordance with Section 7.12(d) was [__] as of
[__], which equals [__] in accordance with Section 7.12(d).

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

As of the applicable month end measurement date, commencing with the month
ending March 31, 2019, Net Revenue for the trailing six month period ending on
such date was $[__], which equaled [__]% of Projected Net Revenue for such six
month period.

 

 

 

[remainder of page left blank, the next page is the signature page]

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[Signature Page to Compliance Certificate dated ______]

 

Very Truly Yours,

TRANSENTERIX, INC., on behalf of itself and the other Borrowers

By:

 

Name:

 

Its:

 

 

 

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT G

FORM OF JOINDER AGREEMENT

This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [●],
and is entered into by and between [●], a [●](“Subsidiary”), and HERCULES
CAPITAL, INC., a Maryland corporation (as “Agent”).  

RECITALS

A.  Subsidiary’s Affiliate, TransEnterix, Inc. (“Company”) and the other parties
as Borrowers thereto have entered into that certain Loan and Security Agreement
dated May 23, 2018, with the several banks and other financial institutions or
entities from time to time party thereto as lender (collectively, “Lender”) and
Agent, as such agreement may be amended (the “Loan Agreement”), together with
the other agreements executed and delivered in connection therewith;

B.  Subsidiary acknowledges and agrees that it will benefit both directly and
indirectly from Company’s execution of the Loan Agreement and the other
agreements executed and delivered in connection therewith;

AGREEMENT

NOW THEREFORE, Subsidiary and Agent agree as follows:

1.

The recitals set forth above are incorporated into and made part of this Joinder
Agreement.  Capitalized terms not defined herein shall have the meaning provided
in the Loan Agreement.

2.

By signing this Joinder Agreement, Subsidiary shall be bound by the terms and
conditions of the Loan Agreement the same as if it were Borrower (as defined in
the Loan Agreement) under the Loan Agreement, mutatis mutandis; provided,
however, that (a) with respect to (i) Section 5.1 of the Loan Agreement,
Subsidiary represents that it is an entity duly organized, legally existing and
in good standing under the laws of [●], (b) neither Agent nor Lender shall have
any duties, responsibilities or obligations to Subsidiary arising under or
related to the Loan Agreement or the other Loan Documents, (c) that if
Subsidiary is covered by Company’s insurance, Subsidiary shall not be required
to maintain separate insurance or comply with the provisions of Sections 6.1 and
6.2 of the Loan Agreement, and (d) that as long as Company satisfies the
requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to
provide Agent separate Financial Statements.  To the extent that Agent or Lender
has any duties, responsibilities or obligations arising under or related to the
Loan Agreement or the other Loan Documents, those duties, responsibilities or
obligations shall flow only to Company and not to Subsidiary or any other Person
or entity.  By way of example (and not an exclusive list): (i) Agent’s providing
notice to Company in accordance with the Loan Agreement or as otherwise agreed
among Company, Agent and Lender shall be deemed provided to Subsidiary; (ii) a
Lender’s providing an Advance to Company shall be deemed an Advance to
Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or
make any other demand on Lender.

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

3.

Subsidiary agrees not to certificate its equity securities without Agent’s prior
written consent, which consent may be conditioned on the delivery of such equity
securities to Agent in order to perfect Agent’s security interest in such equity
securities.

4.

Subsidiary acknowledges that it benefits, both directly and indirectly, from the
Loan Agreement, and hereby waives, for itself and on behalf on any and all
successors in interest (including without limitation any assignee for the
benefit of creditors, receiver, bankruptcy trustee or itself as
debtor-in-possession under any bankruptcy proceeding) to the fullest extent
provided by law, any and all claims, rights or defenses to the enforcement of
this Joinder Agreement on the basis that (a) it failed to receive adequate
consideration for the execution and delivery of this Joinder Agreement or (b)
its obligations under this Joinder Agreement are avoidable as a fraudulent
conveyance.

5.

As security for the prompt, complete and indefeasible payment when due (whether
on the payment dates or otherwise) of all the Secured Obligations, Subsidiary
grants to Agent a security interest in all of Subsidiary’s right, title, and
interest in and to the Collateral.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE TO JOINDER AGREEMENT]

 

SUBSIDIARY:

 

_________________________________

 

By:

 

Name:

 

Title:

 

 

 

Address:

 

 

 

 

 

Telephone:

 

email:

 

 

AGENT:

HERCULES CAPITAL, INC.

 

By:

 

Name:

 

Title:

 

 

 

Address:

 

400 Hamilton Ave., Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com

Telephone: 650-289-3060

 

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT H

ACH DEBIT AUTHORIZATION AGREEMENT

Hercules Capital, Inc.
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301

Re:  Loan and Security Agreement dated May 23, 2018 (the “Agreement”) by and
among TransEnterix, Inc. (the “Parent”), TransEnterix Surgical, Inc.
(“Surgical”), the other parties thereto as Borrowers (together with the Parent
and Surgical, collectively, “Borrower” or “Borrowers”) and Hercules Capital,
Inc., as agent (“Agent”), and the lenders party thereto (collectively, “Lender”)

In connection with the above referenced Agreement, Surgical hereby authorizes
Agent to initiate debit entries for (i) the periodic payments due under the
Agreement and (ii) out-of-pocket legal fees and costs incurred by Agent or
Lender pursuant to Section 2.1(d) of the Agreement to Surgical’s account
indicated below. Surgical authorizes the depository institution named below to
debit to such account.

Depository Name

Branch

City

State and Zip Code

Transit/ABA Number

Account Number

This authority will remain in full force and effect so long as any amounts are
due under the Agreement.

____________________________________________
(Parent)(Please Print)

By: _________________________________________

Date: ________________________________________

 

--------------------------------------------------------------------------------

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

SCHEDULE 1.1

TERM LOAN COMMITMENTS

LENDER

TRANCHE I LOAN

TRANCHE II LOAN

TRANCHE III LOAN

HERCULES CAPITAL, INC.

$20,000,000

$10,000,000

$10,000,000

 

 

 

--------------------------------------------------------------------------------

 

Schedule 1A

Existing Permitted Indebtedness

TransEnterix, Inc.

Lender

Original Principal Amount/ Principal Outstanding

Secured/ Unsecured

[***********]

[*********************************************
***************************************
************************************************]

[********]

[**]

[************************************************
***********************************************
********************************************* ***************]

[********]

 

--------------------------------------------------------------------------------

 

TransEnterix, Inc.

Lender

Original Principal Amount/ Principal Outstanding

Secured/ Unsecured

 

[*****************************************
******************************************
************************************************
*********************************************
***********************************************************************************************
**********************************************
***********************************************
*********************************************
*****************************************
**********************************************
*******************************************
*************************************************
******************************************
************************************** ****************************************
*********************************************
*******************************************
******************************************
*********************************************
********************************************
********************************************************************************************
***********************************************
************************************************
******************************************************************************************
***********************************************
****************************************
************************************************
**********************************************
********************************************
******************************************]

[********]

[**********
**********
*******]

[**********************************************
************************************************
******************************************** ******]

[********]

 

2

 

--------------------------------------------------------------------------------

 

TransEnterix Surgical, Inc.

Lender

Original Principal Amount/ Principal Outstanding

Secured/ Unsecured

[***********
****]

[************************************************ ********]

[*********]

 

TransEnterix International, Inc.

[***********]

[********************************** ****************************
***************************** *******************************
************************** ***********************************
*************************** ***********************************
********************************** ***********************************
***************************** ****************************]

[**********************]

[********* *********** ******* ***** *********** ******* *********** *********
******* *********** ********** ************]

[*********]

 

 

TransEnterix Europe S.à r.l.

Lender

Original Principal Amount/ Principal Outstanding

Maturity Date

Secured/ Unsecured

[***********]

[********************************** ***************]

[*** ********* *****]

[*********]

[******** ********** ************ **********]

[********************************* **********]

 

[*******]

 

3

 

--------------------------------------------------------------------------------

 

TransEnterix Europe S.à r.l.

Lender

Original Principal Amount/ Principal Outstanding

Maturity Date

Secured/ Unsecured

[*** ************* **]

 

[******************************** ********************************** *******]

 

[*******]

[************]

[********************************** *************************]

 

[*******]

[******** ********** ************ **********]

[********************************* *********]

 

[*******]

 

TransEnterix Italia S.r.l.

Lender

Original Principal Amount / Principal Outstanding

Maturity Date

Secured/ Unsecured

[*********** ********** ********* **********]

[**********]

[****** ****** ********** ********** *****]

[*******]

[*********** ********** ********* **********]

[********]

[****** ****** ********** ********** *****]

[*******]

 

 

4

 

--------------------------------------------------------------------------------

 

Schedule 1B

Existing Permitted Investments

None.

 

5

 

--------------------------------------------------------------------------------

 

Schedule 1C

Existing Permitted Liens

 

TransEnterix, Inc.

Name of Holder of Lien/Encumbrance

Description of Property Encumbered

[*******************]

[**********************************]

[**********]

[***************************************]

 

 

TransEnterix Surgical, Inc.

Name of Holder of Lien/Encumbrance

Description of Property Encumbered

[****************** *********]

[********************************]

 

 

TransEnterix Europe S.à r.l.

Name of Holder of Lien/Encumbrance

Description of Property Encumbered

[**************]

[********************************************** *****************************]

[******************* ************************]

[*********************************************** *******]

[************]

[************************************************* **********************]

[******************* ************************]

[************************************************]

[*********************** ****]

[*****************************]

 

6

 

--------------------------------------------------------------------------------

 

 

TransEnterix Italia S.r.l.

Name of Holder of Lien/Encumbrance

Description of Property Encumbered

[************************ ********************]

[************************************************]

[************************ ********************]

[***********************************************]

 

7

 

--------------------------------------------------------------------------------

 

Schedule 5.8

Tax Matters

None.

8

 

--------------------------------------------------------------------------------

 

Schedule 5.9

Intellectual Property Claims

None.

9

 

--------------------------------------------------------------------------------

 

Schedule 5.10

Intellectual Property

1.[*******************************************************]

2.[***************************************************]

10

 

--------------------------------------------------------------------------------

 

Schedule 5.11

Borrower Products

None.

11

 

--------------------------------------------------------------------------------

 

Schedule 5.14

Capitalization

Entity

Ownership

TransEnterix, Inc.

Public Company [TRXC on NYSE American]

TransEnterix Surgical, Inc.

TransEnterix, Inc. (100% - 100 shares)

TransEnterix International, Inc.

TransEnterix, Inc. (100% - 100 shares)

SafeStitch LLC

TransEnterix, Inc. (100%)

TransEnterix Europe S.à r.l.

TransEnterix International, Inc. (100%)

TransEnterix Italia S.r.l.

TransEnterix Europe S.à.r.l. (100%)

TransEnterix Asia PTE Ltd.

(Not a Loan Party)

TransEnterix Europe S.à.r.l. (100%)

TransEnterix Taiwan Ltd.

(Not a Loan Party)

TransEnterix Asia PTE Ltd. (100%)

TransEnterix Japan K.K.

(Not a Loan Party)

TransEnterix Asia PTE Ltd. (100%)

 

 

 

 

12