Exhibit 10.1

 

Execution Version

 

LIMITED FORBEARANCE AGREEMENT

 

This LIMITED FORBEARANCE AGREEMENT is made as of November 21, 2018 (this
“Agreement”), among Synergy Pharmaceuticals Inc., a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (as defined in the Loan Agreement
referred to below) party hereto, the Lenders (as defined in the Loan Agreement
referred to below), and CRG Servicing LLC, a Delaware limited liability company
(“CRG Servicing”), as administrative agent and collateral agent for the Lenders
(in such capacities, together with its successors and assigns, “Agent” and,
collectively with Lenders, “CRG Parties”).

 

RECITALS

 

A.                                    Borrower, the Subsidiary Guarantors and
the CRG Parties are party to the Term Loan Agreement, dated as of September 1,
2017 (as amended as of February 26, 2017, August 28, 2018, October 29, 2018,
November 13, 2018 and November 16, 2018 and as further amended, restated,
modified or supplemented from time to time, the “Loan Agreement”), among
Borrower, the Subsidiary Guarantors party thereto, the lenders party thereto
(each a “Lender” and, collectively, the “Lenders”), and Agent.  Capitalized
terms used herein without definition have the meanings assigned thereto in the
Loan Agreement.

 

B.                                    As of the date hereof, the Events of
Default identified on Exhibit A hereto have occurred and are continuing
(collectively, the “Designated Defaults”).

 

C.                                    Notwithstanding the existence of the
Designated Defaults, Borrower and Subsidiary Guarantors requested that CRG
Parties, during the Forbearance Period (defined below), temporarily forbear from
exercising their rights and remedies under the Loan Agreement, the other Loan
Documents and applicable law with respect to such Designated Defaults (and only
with respect thereto).

 

D.                                    Subject to the terms and conditions set
forth herein, CRG Parties have agreed to forbear from exercising certain of
their default-related rights and remedies against Obligors with respect to the
Designated Defaults (and only with respect thereto).

 

E.                                     These Recitals shall be construed as part
of this Agreement.

 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is
hereby acknowledged, and in consideration of the premises and the mutual
covenants contained herein, subject to the satisfaction of the conditions
described in Section 5, the parties hereto hereby agree as follows:

 

SECTION 1.                                   Definitions.

 

(a)                                 Certain Defined Terms.  As used herein, the
following terms have the following respective meanings:

 

“Agreement” has the meaning set forth in the introduction hereto.

 

“Designated Defaults” has the meaning set forth in the Recitals hereof.

 

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“Forbearance Period” means the period commencing on November 20, 2018 and ending
on the earlier to occur of (i) December 5, 2018 (11:59 p.m. Central time) and
(ii) the occurrence of any default or Event of Default other than a Liquidity
Covenant Default under the Loan Agreement or the other Loan Documents, other
than the Designated Defaults.

 

“Liquidity Covenant Default” means a default during the Forbearance Period
resulting from a breach of Section 10.02 of the Loan Agreement that would give
rise to an Event of Default under Section 11.01(d) but for the forbearance set
forth herein.

 

“Loan Agreement” has the meaning set forth in the Recitals hereof.

 

SECTION 2.                                   Acknowledgment.

 

(a)                                 Acknowledgment of Obligations.  Each Obligor
hereby acknowledges, confirms and agrees that, as of November 20, 2018, the
Obligors are unconditionally indebted to the Lenders in respect of the Loans in
an aggregate amount no less than the amounts set forth in Exhibit B without
offset, recoupment, defense or counterclaim of any kind, nature or description
whatsoever, all of which (if any exist, and which the Obligors hereby
acknowledge do not exist) are hereby waived by the Obligors.

 

(b)                                 Acknowledgment of Security Interest.  Each
Obligor hereby acknowledges, confirms and agrees that Secured Parties have, as
of the date hereof, and shall continue to have, a valid, enforceable and
perfected first-priority (subject only to Permitted Priority Liens) liens upon
and security interests in the Collateral, to the extent contemplated by the
Security Documents.

 

(c)                                  Acknowledgment of Default.  Each Obligor
hereby acknowledges and agrees that the Designated Defaults have occurred and
are continuing as of the date hereof, each of which constitutes an Event of
Default, and, as a result of the Designated Defaults, as well as any other
Defaults or Events of Default that may exist, CRG Parties are entitled to
exercise any and all default-related rights and remedies under the Loan
Agreement, the other Loan Documents, and/or applicable law, including without
limitation, to accelerate the Obligations  or to exercise rights against
Collateral and that no Obligor has any valid defense to the enforcement of such
default-related rights and remedies.  Each Obligor hereby acknowledges and
agrees that the first to occur of the Designated Defaults occurred no later than
October 30, 2018 and has continued to date, however, CRG Parties hereby
acknowledge, confirm and agree that they have waived such Designated Defaults
through and including November 20, 2018.

 

(d)                                 Acknowledgment of Exercise of Remedies. 
Each Obligor hereby acknowledges, confirms, and agrees that (i) on November 20,
2018, CRG Parties duly provided notice to the Borrower that various defaults and
Events of Default (including, without limitation, the Designated Defaults) have
occurred and are continuing; and (ii) such action by CRG Parties was a proper
exercise of their rights and remedies, and was made in accordance with the
provisions of the Loan Agreement, the other Loan Documents, and applicable law.

 

SECTION 3.                                   Forbearance.  Subject to Section 5,
during the Forbearance Period, CRG Parties will not take action, on account of
the Designated Defaults or the Liquidity Covenant Default only, to accelerate
the Obligations of the Obligors under the Loan Documents or

 

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otherwise exercise their default rights and remedies.  Automatically and without
any notice or action by CRG Parties, upon termination or expiration of the
Forbearance Period, CRG Parties shall be entitled (but not required) to exercise
any of the rights and remedies with respect to the Designated Defaults (or
otherwise) available to them under the Loan Documents or applicable law.  For
the avoidance of doubt, during the Forbearance Period, the rights and remedies
of CRG Parties shall not be limited, adversely affected, or otherwise subject to
forbearance or restraint on account of any Default, Event of Default, or other
reason, other than a Designated Default or a Liquidity Covenant Default.  For
the avoidance of doubt, interest on the Loans and other due and payable
Obligations shall continue to accrue at the Default Rate during the Forbearance
Period, without being affected by this forbearance.

 

SECTION 4.                                   Conditions to Effectiveness.

 

The effectiveness of Section 3 is expressly conditioned upon the satisfaction
and delivery of each of the applicable conditions set forth below:

 

(a)                                 Agent shall have received the following
documents, each of which shall be in form and substance acceptable to Lenders:

 

(i)                                     this Agreement duly executed and
delivered by Obligors and CRG Parties.

 

(b)                                 Obligors shall have paid or reimbursed
Lenders for Lenders’ reasonable out of pocket costs and expenses incurred in
connection with this Agreement that have been invoiced at least one Business Day
prior to the date hereof, including Lenders’ reasonable out of pocket legal fees
and costs, pursuant to Section 13.03(a)(i)(z) of the Loan Agreement.

 

(c)                                  The representations and warranties in
Section 7 shall be true and correct on the date hereof.

 

(d)                                 As a condition to the continued
effectiveness of Section 3 hereof, the Obligors covenant to:

 

(i)                                     negotiate in good faith with CRG Parties
regarding all offers and expressions of interest related to or involving (in
whole or in part) a refinancing or restructuring of the Obligations or the sale
of Obligors’ assets that are CRG Parties’ collateral, the chapter 11 process,
any use of cash collateral or incremental financing, or any bidding procedures
or other section 363-related activities that the Obligors may consider during
the Forbearance Period;

 

(ii)                                  continue to provide the CRG Parties and
their professionals with access to the electronic data room created by or on
behalf of Obligors for the purpose of disseminating certain confidential
information to CRP Parties and their professionals;

 

(iii)                               continue to permit the CRG Parties to
exercise their board of directors supervisor rights as provided in Section 8.15
of the Loan Agreement (as amended by Amendment and Waiver No. 3, dated as of
October 30, 2018), provided such right shall remain and be exercised in a manner
to permit Obligors to protect applicable privileges; and

 

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(iv)                              maintain all accounts with respect to which a
control agreement has been executed in favor of the CRG Parties and is in effect
or over which the Secured Parties have “control” (as defined in the Uniform
Commercial Code) and cause all cash or cash equivalents of the Obligors to be
deposited in such accounts at all times and not to open any new accounts unless
and until enforceable control agreements have become effective; provided,
however, that the Obligors shall be permitted, in the ordinary course of
business, to maintain and utilize (including by depositing cash or cash
equivalents therein) the account denominated “Synergy Pharmaceuticals Inc. BENE
Pharmametrics Inc. FBO Account” at Wells Fargo Bank, N.A. without the
requirement to execute a control agreement with respect thereto.

 

SECTION 5.                                   Reservation of Rights.

 

(a)                                 Each CRG Party has not waived, is not by
this Agreement waiving, and has no intention of waiving under this Agreement or
any Loan Document, any Defaults, Events of Default, or other noncompliance which
may be continuing on the date hereof or any Defaults, Events of Default, or
other noncompliance that may occur after the date hereof (whether the same or
similar to the Designated Defaults or otherwise), and no CRG Party has agreed to
forbear with respect to any of its rights or remedies concerning any Defaults,
Events of Default, or other noncompliance (other than, during the Forbearance
Period, the Designated Defaults or Liquidity Covenant Default to the extent
expressly set forth herein), which may have occurred or are continuing as of the
date hereof or which may occur after the date hereof.

 

(b)                                 Neither any “day-by-day” discretionary
extensions of credit or releases or permitted uses of cash constituting
Collateral or proceeds thereof by the Any CRG Party, nor anything in this
Agreement or in any ongoing discussions or negotiations between any CRG Party,
on the one hand, and any Obligor or Affiliate of an Obligor, on the other hand,
nor any delay on the part of CRG Parties in exercising any of their respective
rights and remedies under the Loan Agreement, the other Loan Documents and/or
applicable law, shall directly or indirectly: (i) create any obligation to
forbear or otherwise refrain from taking any enforcement action, exercising any
right or remedy or asserting any defense, or to make any further extensions of
credit or releases or permitted uses of cash constituting Collateral or proceeds
thereof (other than during the Forbearance Period, with respect to the
Designated Defaults and the Liquidity Covenant Default to the extent expressly
set forth herein), (ii) constitute a consent to or waiver of any past, present
or future Default or Event of Default or other violation of any provisions of
the Loan Agreement or any other Loan Document, (iii) amend, modify or operate as
a waiver of any provision of the Loan Agreement or any other Loan Document or
any right, defense, power, privilege or remedy of any CRG Party thereunder or
under applicable law or constitute an agreement to forbear or otherwise refrain
(other than during the Forbearance Period, with respect to the Designated
Defaults and the Liquidity Covenant Default to the extent expressly set forth
herein) or to restructure or modify any of the Obligations in any respect or
otherwise modify the capital structure or Collateral of any or all of the
Obligors, or (iv) constitute a course of dealing or other basis for altering any
rights, defenses, remedies or obligations of any CRG Party under the Loan
Documents or any Obligations.  Nothing contained in this Agreement shall confer
on any Obligor or Person any right to notice or cure periods with respect to any
Event of Default or other defaults or matters which rights remain as set forth
in the Loan Documents.

 

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(c)                                  CRG Parties have not waived the Designated
Defaults and (subject to the express provisions of Section 3) each CRG Party
expressly reserves all of its rights, defenses, powers, privileges and remedies
under the Loan Agreement, other Loan Documents and/or applicable law, including,
without limitation, subject to Section 3 solely with respect to the Designated
Defaults, its right at any time, as applicable, (i) to determine not to make
further Loans under the Loan Agreement or releases or permitted uses of cash
constituting Collateral or proceeds thereof as a result of the Designated
Defaults or the Liquidity Covenant Default, (ii) to charge the Default Rate of
interest in respect of the Obligations (as of any date from and after
November 20, 2018; for the avoidance of doubt, the Default Rate of interest
shall not accrue at any time prior to November 20, 2018), (iii) to commence any
legal or other action to collect or enforce any or all of the Obligations from
any or all of the Borrower, the other Obligors, and any other Person liable
therefor and/or any Collateral, (iv) to foreclose or otherwise realize, collect,
or recover on any or all of the Collateral and/or as appropriate, set-off,
recoup or apply to the payment of any or all of the Obligations, any or all of
the Collateral, (v) to take any other enforcement action or otherwise exercise
any or all rights and remedies provided for by any or all of the Loan Agreement,
other Loan Documents or applicable law, and (vi) to reject any forbearance,
financial restructuring or other proposal made by or on behalf of any Obligor or
any creditor or equity holder.  Subject to Section 3 solely with respect to the
Designated Defaults and the Liquidity Covenant Defaults, each CRG Party may
exercise its rights, defenses, powers, privileges and remedies, including those
set forth in (i) through (vi) above at any time in its sole and absolute
discretion without further notice.  No oral representations or course of dealing
on the part of any CRG Party or any of its officers, employees or agents, and no
failure or delay by any CRG Party with respect to the exercise of any right,
defense, power, privilege or remedy under any of the Loan Agreement, other Loan
Documents or applicable law shall operate as a waiver thereof, and the single or
partial exercise of any such right, defense, power, privilege or remedy shall
not preclude any later exercise of any other right, defense, power, privilege or
remedy.

 

SECTION 6.                                   Release; Covenant Not to Sue;
Acknowledgement.

 

(a)                                 Each Obligor and its Affiliates hereby
absolutely and unconditionally release and forever discharge each CRG Party and
any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents,
attorneys, consultants, representatives and employees of any of the foregoing
(each a “Released Party”), from any and all claims, demands, defenses or causes
of action of any kind, nature or description relating to or arising out of or in
connection with or as a result of any of the Obligations, the Loan Agreement,
any other Loan Documents or any agreement related to any of the foregoing,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, which any Obligor has had, now has or has made claim
to have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising from the beginning of time to and including
the date of this Agreement, whether such claims, demands, defenses, and causes
of action are matured or unmatured, known or unknown, contingent, liquidated, or
otherwise.  It is the intention of each Obligor and each of its Affiliates in
providing this release that the same shall be effective as a bar to each and
every claim, demand and cause of action specified.  Each Obligor and its
Affiliates acknowledge that it may hereafter discover facts different from or in
addition to those now known or believed to be true with respect to such claims,
demands,

 

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defenses, or causes of action and agree that this instrument shall be and remain
effective in all respects notwithstanding any such differences or additional
facts.  Each Obligor and its Affiliates understand, acknowledge and agree that
the release set forth above may be pleaded as a full and complete defense and
may be used as a basis for an injunction against any action, suit or other
proceeding which may be instituted, prosecuted or attempted in breach of the
provisions of such release.

 

(b)                                 Each Obligor and its Affiliates, on behalf
of itself and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably, covenant and agree with and in
favor of each Released Party above that it will not sue (at law, in equity, in
any regulatory proceeding or otherwise) any Released Party on the basis of any
claim released, remised and discharged by any Obligor pursuant to the above
release.  If any Obligor, any of its Affiliates or any of their successors,
assigns or other legal representations violates the foregoing covenant, each
Obligor and its Affiliates, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any
Released Party may sustain as a result of such violation, all reasonable
attorneys’ fees and costs incurred by such Released Party as a result of such
violation.

 

(c)                                  Each Obligor hereby acknowledges its status
as a Obligor and affirms its obligations under the Loan Agreement and the other
Loan Documents and represents and warrants that, to its knowledge, there are no
liabilities, claims, suits, debts, liens, losses, causes of action, demands,
rights, damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent, which any Obligor may have or
claim to have against any Released Party arising with respect to the
Obligations, the Loan Agreement or any other Loan Documents.

 

(d)                                 In connection with the releases granted
herein, to the extent applicable, the Obligors expressly waive any and all
rights conferred upon them by the provisions of Section 1542 of the Civil Code
of California and/or any other federal or state statute or common law principle
of similar effect. Section 1542 of the Civil Code of California reads as
follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

The Obligors understand and acknowledge the significance and consequence of
their waiver of Section 1542 of the California Civil Code, as well as any other
federal or state statute or common law principle of similar effect.

 

SECTION 7.                                   Representations and Warranties of
Obligors.

 

In order to induce CRG Parties to enter into this Agreement, each Obligor hereby
jointly and severally represents, warrants and covenants to CRG Parties, as of
the date hereof and any other date on which representations and warranties are
otherwise remade or deemed remade under the Loan Agreement that:

 

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(a)                                 Representations, Warranties.  (i) After
giving effect to this Agreement, no representation or warranty of any Obligor
contained in the Loan Agreement or any of the Loan Documents, including this
Agreement, shall be untrue or incorrect in any material respect as of the date
hereof, except to the extent that such representation or warranty expressly
relates to an earlier date, and except for the representations and warranties
contained in Section 7.04(b) and Section 7.11 of the Loan Agreement and (ii) no
Default or Event of Default (other than the Designated Defaults) has occurred or
is continuing, or would result after giving effect hereto.

 

(b)                                 Authorization, Etc.  Each Obligor has the
power and authority to execute, deliver and perform this Agreement.  Each
Obligor has taken all necessary action (including, without limitation, obtaining
approval of its stockholders, if necessary) to authorize its execution, delivery
and performance of this Agreement.  No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority, and no consent of any
other Person, is required in connection with any Obligor’s execution, delivery
and performance of this Agreement, except for those already duly obtained.  This
Agreement has been duly executed and delivered by each Obligor and constitutes
the legal, valid and binding obligation of each Obligor, enforceable against it
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditor rights generally or by equitable principles relating to
enforceability.  No Obligor’s execution, delivery or performance of this
Agreement (i) contravenes the terms of any of such Obligor’s organization
documents; (ii) conflicts with or constitutes a violation or breach of, or
constitutes a default under, or results in the creation or imposition of any
Lien (other than pursuant to the Security Documents) upon the property of any
Obligor by reason of the terms of any material obligation under any Contract to
which such Obligor is a party (including without limitation obligations arising
from agreements relating to any such Contract to which any Obligor is a party or
which is binding upon it); or (iii) violates any Requirement of Law in any
material respect.

 

(c)                                  Security.  The Secured Parties’ security
interests in the Collateral continue to be perfected, valid, binding and
enforceable first-priority (subject only to Permitted Priority Liens) security
interests which secure the Obligations and no tax or judgment liens are
currently of record against any Obligor. Neither the Borrower nor any Subsidiary
Guarantor holds or controls, or will hold or control during the Forbearance
Period, cash or cash equivalents that is unencumbered (other than in accordance
with the Loan Documents).

 

SECTION 8.                                   Reference to and Effect on Loan
Documents.

 

(a)                                 Ratification.  Except as specifically
provided in this Agreement, the Loan Agreement and the other Loan Documents
shall remain in full force and effect and each Obligor hereby ratifies and
reaffirms each term and condition set forth in the Loan Agreement and in the
other Loan Documents, effective as of the date hereof.

 

(b)                                 No Waiver.  This Agreement is only
applicable and shall only be effective in the specific instances and for the
specific purposes for which made or given.  Except as specifically provided in
this Agreement, the execution, delivery and effectiveness of this Agreement
shall not operate as a waiver or forbearance of any right, power or remedy of
any CRG Party under the Loan Agreement or any of the Loan Documents, or
constitute a consent, waiver or modification with respect to any provision of
the Loan Agreement or any of the Loan Documents which shall

 

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remain in full force and effect.  Upon the effectiveness of this Agreement each
reference in (i) the Loan Agreement to “this Agreement,” “hereunder,” “hereof,”
or words of similar import and (ii) any Loan Document to “the Agreement” shall,
in each case and except as otherwise specifically stated therein, mean and be a
reference to the Loan Agreement as modified hereby.

 

SECTION 9.                                   Affirmation of Subsidiary
Guarantors.

 

(a)                                 Each Subsidiary Guarantor hereby
acknowledges that it has reviewed the terms and provisions of this Agreement and
consents to any modification of the Loan Documents effected pursuant to this
Agreement.  Each Subsidiary Guarantor hereby confirms to the Agent and the other
Secured Parties that, after giving effect to this Agreement, the Guarantee of
such Subsidiary Guarantor and each other Loan Document to which such Subsidiary
Guarantor is a party continues in full force and effect and is the legal, valid
and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors’ rights generally or by equitable principles relating
to enforceability.  Each Subsidiary Guarantor further acknowledges, confirms and
agrees that Control Agent and the other Lenders have and shall continue to have
a valid, enforceable and perfected first-priority (subject only to Permitted
Priority Liens) lien upon and security interest in the Collateral granted to
Secured Parties pursuant to the Loan Documents or otherwise granted to or held
by Secured Parties.

 

(b)                                 Each Subsidiary Guarantor acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Agreement, such Subsidiary Guarantor is not required by the terms of the
Loan Agreement or any other Loan Document to consent to the waivers or
modifications to the Loan Agreement effected pursuant to this Agreement and
(ii) nothing in the Loan Agreement, this Agreement or any other Loan Document
shall be deemed to require the consent of such Subsidiary Guarantor to any
future waivers or modifications to the Loan Agreement.

 

SECTION 10.                            Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.

 

(a)                                 Governing Law.  This Agreement and the
rights and obligations of the parties hereunder shall be governed by, and
construed in accordance with, the law of the State of New York, without regard
to principles of conflicts of laws that would result in the application of the
laws of any other jurisdiction; provided that Section 5-1401 of the New York
General Obligations Law shall apply.

 

(b)                                 Submission to Jurisdiction.  Each Obligor
agrees that any suit, action or proceeding with respect to this Agreement or any
other Loan Document to which it is a party or any judgment entered by any court
in respect thereof may be brought initially in the federal or state courts in
Houston, Texas or in the courts of its own corporate domicile and irrevocably
submits to the non-exclusive jurisdiction of each such court for the purpose of
any such suit, action, proceeding or judgment.  This Section 5 is for the
benefit of the Lenders only and, as a result, no Lender shall be prevented from
taking proceedings in any other courts with jurisdiction.  To the extent allowed
by applicable Laws, the Lenders may take concurrent proceedings in any number of
jurisdictions.

 

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(c)                                  Waiver of Jury Trial.  Each Obligor and
each Lender hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any suit, action or
proceeding arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby.

 

SECTION 11.                            Miscellaneous.

 

(a)                                 Severability.  In case any provision of or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

(b)                                 Headings.  Headings and captions used in
this Agreement (including the Exhibits, Schedules and Annexes hereto, if any)
are included for convenience of reference only and shall not be given any
substantive effect.

 

(c)                                  Integration.  This Agreement constitutes a
Loan Document and, together with the other Loan Documents, incorporates all
negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the
subject matter hereof.

 

(d)                                 Counterparts.  This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.

 

(e)                                  Controlling Provisions.  In the event of
any inconsistencies between the provisions of this Agreement and the provisions
of any other Loan Document, the provisions of this Agreement shall govern and
prevail.

 

(f)                                   Loan Document.  This Agreement is a Loan
Document.

 

(g)                                  Entire Agreement.  This Agreement,
including all schedules and other documents attached hereto or incorporated by
reference herein or delivered in connection herewith, constitutes the entire
agreement of the signing parties with respect to the subject matter hereof and
supersedes all other understandings, oral or written, with respect to the
subject matter hereof.

 

(h)                                 Time of the Essence.  With regard to all
dates and time periods set forth or referred to in this Agreement, time is of
the essence.

 

(i)                                     Reviewed by Attorneys.  Each Obligor
represents and warrants to CRG Parties that it (i) understands fully the terms
of this Agreement and the consequences of the execution and delivery of this
Agreement, (ii) has been afforded an opportunity to have this Agreement reviewed
by, and to discuss this Agreement and the documents executed in connection
herewith, with such attorneys and other persons and advisors as such Obligor may
wish, and (iii) has entered into this Agreement and executed and delivered all
documents in connection herewith of its own free will and accord and without
threat, duress or other coercion of any kind by any Person.  The parties hereto
acknowledge and agree that neither this Agreement nor any of the

 

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other documents executed pursuant hereto shall be construed more favorably in
favor of one party over the other based upon which party drafted the same, it
being acknowledged that all parties hereto contributed substantially to the
negotiation and preparation of this Agreement and the other documents executed
pursuant hereto or in connection herewith.

 

(j)                                    Further Assurances.  Each Obligor agrees
to, and to cause any other Obligor to, take all further actions and execute all
further documents as Agent may from time to time reasonably request to carry out
the transactions contemplated by this Agreement and all other agreements
executed and delivered in connection herewith.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

 

BORROWER:

 

 

 

SYNERGY PHARMACEUTICALS INC.

 

 

 

By

/s/ Gary Gemignani

 

 

Name:

Gary Gemignani

 

 

Title:

EVP, Chief Financial Officer

 

 

 

SUBSIDIARY GUARANTORS:

 

 

 

SYNERGY ADVANCED PHARMACEUTICALS, INC.

 

 

 

By

/s/ Gary Gemignani

 

 

Name:

Gary Gemignani

 

 

Title:

EVP, Chief Financial Officer

 

[Signature Page to Forbearance Agreement]

 

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ADMINISTRATIVE AGENT:

 

 

 

CRG SERVICING LLC

 

 

 

By

/s/ Nathan Hukill

 

 

Nathan Hukill

 

 

President

 

 

 

LENDERS:

 

 

 

CRG PARTNERS III–PARALLEL FUND “A” L.P.

 

 

By

CRG PARTNERS III–PARALLEL FUND “A” GP L.P., its General Partner

 

 

By

CRG PARTNERS III GP LLC, its General Partner

 

 

 

 

 

By

/s/ Nathan Hukill

 

 

 

Nathan Hukill

 

 

 

Authorized Signatory

 

 

 

CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P.

 

 

By

CRG PARTNERS III (CAYMAN) GP L.P., its General Partner

 

 

By

CRG PARTNERS III GP LLC, its General Partner

 

 

 

 

 

By

/s/ Nathan Hukill

 

 

 

Nathan Hukill

 

 

 

Authorized Signatory

 

 

 

 

 

 

Witness:

/s/ Nicole Nesson

 

 

Name: Nicole Nesson

 

 

 

CRG ISSUER 2017-1

 

 

By

CRG SERVICING LLC, acting by power of attorney

 

 

 

 

 

 

By

/s/ Nathan Hukill

 

 

 

Nathan Hukill

 

 

 

Authorized Signatory

 

 

[Signature Page to Forbearance Agreement]

 

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EXHIBIT A
to Forbearance Agreement

 

EVENTS OF DEFAULT

 

1.                                      An Event of Default under
Section 11.01(d) of the Loan Agreement of the Loan Agreement resulting from a
breach of Section 10.01 of the Loan Agreement.

 

Beginning on October 30, 2018, Borrower has not maintained at all times an
Average Market Capitalization, calculated on a trailing five (5) trading day
basis, in an amount equal to at least 200% of the aggregate outstanding
principal amount of Loans (excluding PIK Loans).

 

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EXHIBIT B
to Forbearance Agreement

 

REPAYMENT AMOUNT

 

[Please see attached]

 

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