EX-10.1






Exhibit 10.1



AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT




THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as the same may from time to time
be amended, modified, supplemented or restated, this “Agreement”) dated as of September 26, 2014
(the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an
office located at 133 North Fairfax Street, Alexandria, Virginia 22314 (“Oxford”), as collateral
agent (in such capacity, the “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or
otherwise a party hereto from time to time including Oxford in its capacity as a Lender and SILICON
VALLEY BANK, a California corporation with an office located at 3005 Carrington Mill Boulevard,
Suite 530, Morrisville, North Carolina 27560 (“SVB” or “Bank”) (each a “Lender” and collectively,
the “Lenders”), and TRANSENTERIX, INC., a Delaware corporation, TRANSENTERIX SURGICAL, INC., a
Delaware corporation, and SAFESTITCH LLC, a Virginia limited liability company, each with offices
located at 635 Davis Drive, Suite 300, Morrisville, North Carolina 27560 (individually and
collectively, jointly and severally, “Borrower”), amends and restates in its entirety that certain
Loan and Security Agreement dated as of January 17, 2012 by and among Borrower, Oxford and Bank
(the “Original Agreement”) and provides the terms on which the Lenders shall lend to Borrower and
Borrower shall repay the Lenders. The parties agree as follows:




	1.	 	ACCOUNTING AND OTHER TERMS





1.1 Accounting terms not defined in this Agreement shall be construed in accordance with GAAP.
Calculations and determinations must be made in accordance with GAAP. Capitalized terms not
otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other
terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by
the Code to the extent such terms are defined therein. All references to “Dollars” or “$” are
United States Dollars, unless otherwise noted.




	2.	 	LOANS AND TERMS OF PAYMENT





2.1 Promise to Pay. Borrower hereby unconditionally promises to pay each Lender, the
outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and
unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this
Agreement.



2.2 Term Loans.



(a) Availability.



(i) Subject to the terms and conditions of the Original Agreement, the Lenders, severally and
not jointly, made term loans to Borrower of which the amounts outstanding are in accordance with
each Lender’s Original Term Loan Commitment as set forth on Schedule 1.1 hereto (such term
loans are hereinafter referred to singly as an “Original Term Loan” and collectively as the
“Original Term Loans”). The Original Term Loans shall, from and after the Effective Date, be
governed by the terms and provisions of this Agreement. After repayment, no Original Term Loans
may be re-borrowed.



(ii) Subject to the terms and conditions of this Agreement, the Lenders agree,
severally and not jointly, to lend to Borrower on the Effective Date, term loans as follows:



(1) SVB shall be deemed to have made a term loan to Borrower in the amount equal to Two
Million Eight Hundred One Thousand Eight Hundred Twenty Two and 50/100 Dollars ($2,801,822.50) (the
“SVB Pay Off Term Loan”), the proceeds of which will be deemed to repay all Obligations owing from
Borrower to SVB in respect of the Original Term Loans made by SVB under the Original Agreement.
After repayment, the SVB Pay Off Term Loan may not be re-borrowed;



(2) the Secured Promissory Notes issued by Borrower evidencing the Original Term Loans made by
Oxford (the amount outstanding on the Effective Date, the “Original Oxford Term Loans”) under the
Original Agreement shall be amended and restated to evidence the remaining principal amount 1.



1



outstanding under each such Secured Promissory Note as of the Effective Date, as follows: (x) the
Secured Promissory Note issued by Borrower to Oxford in the original principal face amount of Three
Million Dollars ($3,000,000.00) shall be replaced with an amended and restated Secured Promissory
Note in the principal face amount of One Million Six Hundred Eighty One Thousand Ninety Three and
50/100 Dollars ($1,681,093.50), and (y) the Secured Promissory Note issued by Borrower to Oxford in
the original principal face amount of Two Million Dollars ($2,000,000.00) shall be replaced with an
amended and restated Secured Promissory Note in the principal face amount of One Million One
Hundred Twenty Thousand Seven Hundred Twenty Nine Dollars ($1,120,729.00); and



(3) the Lenders shall make term loans to Borrower in a single advance in an aggregate amount
equal to Four Million Three Hundred Ninety Six Thousand Three Hundred Fifty Five Dollars
($4,396,355.00) according to each Lender’s Term A Loan Commitment as set forth on Schedule
1.1 hereto (such term loans are hereinafter referred to singly as a “Term A Loan”, and
collectively as the “Term A Loans”).  After repayment, no Term A Loan may be re-borrowed.



(iii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and
not jointly, during the Second Draw Period, to make term loans to Borrower in a single advance in
an aggregate amount equal to Five Million Dollars ($5,000,000.00) according to each Lender’s Term B
Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”). After repayment,
no Term B Loan may be re-borrowed.



(iv) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and
not jointly, during the Third Draw Period, to make term loans to Borrower in a single advance in an
aggregate amount equal to Ten Million Dollars ($10,000,000.00) according to each Lender’s Term C
Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term C Loan”, and collectively as the “Term C Loans”; each Term A Loan,
Term B Loan, Term C Loan, the Original Oxford Term Loan and the SVB Pay Off Term Loan is
hereinafter referred to singly as a “Term Loan” and collectively as the “Term Loans”). After
repayment, no Term C Loan may be re-borrowed.



(b) Repayment. Borrower shall make monthly payments of interest only commencing on
the first (1st) Payment Date following the Funding Date of each Term Loan, and
continuing on the Payment Date of each successive month thereafter through and including the
Payment Date immediately preceding the Amortization Date. Borrower agrees to prepay, on the
Funding Date of each Term Loan, any initial partial monthly interest payment otherwise due for the
period between the Funding Date of such Term Loan and the first Payment Date thereof. Commencing
on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower
shall make consecutive equal monthly payments of principal and interest, in arrears, to each
Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent
manifest error) based upon: (i) the amount of such Lender’s Term Loan, (ii) the effective rate of
interest, as determined in Section 2.3(a), and (iii) a repayment schedule consisting of thirty (30)
months. All unpaid principal and accrued and unpaid interest with respect to the Term Loans is due
and payable in full on the Maturity Date. Each Term Loan may only be prepaid in accordance with
Sections 2.2(c) and 2.2(d). Notwithstanding the foregoing, if the Funding Date of the Term C Loans
is after the Amortization Date, the Term C Loans shall amortize on the first Payment Date after the
Funding Date of the Term C Loans on a repayment schedule based on the number of months remaining
between such Payment Date and the Maturity Date.



(c) Mandatory Prepayments. If the Term Loans are accelerated following the occurrence
and during the continuance of an Event of Default, Borrower shall immediately pay to Lenders,
payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum
of: (i) all outstanding principal of the Term Loans plus accrued but unpaid interest thereon
through the prepayment date, (ii) the Final Payment, (iii) the Unaccrued Final Payment, plus (iv)
all other sums, that shall have become due and payable hereunder, including Lenders’ Expenses and
interest at the Default Rate with respect to any past due amounts. Notwithstanding (but without
duplication with) the foregoing, on the Maturity Date, if the Final Payment had not previously been
paid in full in connection with the prepayment of the Term Loans in full, Borrower shall pay to
Collateral Agent, for payment to each Lender in accordance with its respective Pro Rata Share, the
Final Payment in respect of the Term Loan(s).



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(d) Permitted Prepayment of Term Loans. Borrower shall have the option to prepay all,
but not less than all, of the Term Loans advanced by the Lenders under this Agreement, provided
Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans
at least ten (10) days prior to such prepayment, and (ii) pays to the Lenders on the date of such
prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount
equal to the sum of (A) all outstanding principal of the Term Loans plus accrued but unpaid
interest thereon through the prepayment date, (B) the Final Payment, (C) the Unaccrued Final
Payment, plus (D) all other sums, that shall have become due and payable hereunder but have not
been paid, including Lenders’ Expenses, if any, and interest at the Default Rate with respect to
any past due amounts.



2.3 Payment of Interest on the Credit Extensions.



(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under
the Term Loans shall accrue interest at a fixed per annum rate (which rate shall be fixed on the
Funding Date of and for the duration of the applicable Term Loan) equal to the Basic Rate,
determined by Collateral Agent on the Funding Date of the applicable Term Loan, which interest
shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Interest shall
accrue on each Term Loan commencing on, and including, the day on which the Term Loan is made, and
shall accrue on a Term Loan, or any portion thereof, for the day on which the Term Loan or such
portion is paid.



(b) Default Rate. Immediately upon the occurrence and during the continuance of an
Event of Default, Obligations shall bear interest at a rate per annum which is five percentage
points (5.00%) above the rate that is otherwise applicable thereto (the “Default Rate”). Payment
or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Collateral Agent.



(c) 360-Day Year. Interest shall be computed on the basis of a three hundred sixty
(360) day year consisting of twelve (12) months of thirty (30) days.



(d) Debit of Accounts. Collateral Agent and each Lender may debit (or ACH) any
deposit accounts, maintained by Borrower, including the Designated Deposit Account, for principal
and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when
due. These debits (or ACH activity) shall not constitute a set-off.



(e) Payments. Except as otherwise expressly provided herein, all loan payments by
Borrower hereunder shall be made to the respective Lender to which such payments are owed, at such
Lender’s office in immediately available funds on the date specified herein. Unless otherwise
provided, interest is payable monthly on the Payment Date of each month. Payments of principal
and/or interest received after 12:00 noon Eastern time are considered received at the opening of
business on the next Business Day. When a payment is due on a day that is not a Business Day, the
payment is due the next Business Day and additional fees or interest, as applicable, shall continue
to accrue until paid. All payments to be made by Borrower hereunder or under any other Loan
Document, including payments of principal and interest made hereunder and pursuant to any other
Loan Document, and all fees, expenses, indemnities and reimbursements, shall be made without
set-off, recoupment or counterclaim, in lawful money of the United States and in immediately
available funds.



2.4 Secured Promissory Notes. The Term Loans shall be evidenced by a Secured Promissory Note
or Notes in the form attached as Exhibit D hereto (each a “Secured Promissory Note”), and
shall be repayable as set forth herein. Borrower irrevocably authorizes each Lender to make or
cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any
payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such
Lender’s Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may
be) the receipt of such payment. The outstanding amount of each Term Loan set forth on such
Lender’s Secured Promissory Note Record shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect
the obligations of Borrower hereunder or under any Secured Promissory Note to make payments of
principal of or interest on any Secured Promissory Note when due. Upon receipt of an affidavit of
an officer of a Lender as to the loss, theft, destruction, or



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mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement
Secured Promissory Note in the same principal amount thereof and of like tenor.



2.5 Fees. Borrower shall pay to Collateral Agent:



(a) Facility Fee. A fully earned, non-refundable facility fee of Seventy-Five
Thousand Dollars ($75,000.00) to be shared between the Lenders pursuant to their respective
aggregate Commitment Percentages, which Facility Fee, to the extent not previously paid, shall be
deducted from the initial Credit Extension on the Effective Date;



(b) Final Payment. The Final Payment, when due hereunder, to be shared between the
Lenders in accordance with their respective Pro Rata Shares;



(c) Accrued Final Payment. The accrued portion of the Final Payment (as defined in
the Original Agreement) in an amount equal to One Hundred Twenty Four Thousand Six Hundred Eighty
Eight and 15/100 Dollars ($124,688.15) to Oxford, in its capacity as a Lender, and One Hundred
Thirty Five Thousand Eight Hundred Fifty Six and 05/100 Dollars ($135,856.05) to SVB (the “Accrued
Final Payment”) on the Effective Date;



(d) The Unaccrued Final Payment. The unaccrued portion of the Final Payment (as
defined in the Original Agreement) in an amount equal to Forty One Thousand Eight Hundred Eleven
and 85/100 Dollars ($41,811.85) to Oxford, in its capacity as a Lender, and Thirty Thousand Six
Hundred Forty Three and 95/100 Dollars ($30,643.95) to SVB (the “Unaccrued Final Payment”), due on
the earliest to occur of (a) the Maturity Date, or (b) the acceleration of the Term Loans in
accordance with Section 9.1, or (c) the prepayment in full of the Term Loans pursuant to Section
2.2(c) or 2.2(d);



(e) Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees
and expenses for documentation and negotiation of this Agreement) incurred through and after the
Effective Date, when due.



The payment of the Accrued Final Payment pursuant to clause (c) and the payment of the
Unaccrued Final Payment pursuant to clause (d) shall constitute the payment in full of the Final
Payment (solely for the purposes of this sentence, the term “Final Payment” as used in this
sentence shall mean and refer to the “Final Payment” as such term is defined in the Original
Agreement).



2.6 Withholding. Payments received by the Lenders from Borrower hereunder will be made free
and clear of and without deduction for any and all present or future taxes, levies, imposts,
duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental
authority (including any interest, additions to tax or penalties applicable thereto).
Specifically, however, if at any time any Governmental Authority, applicable law, regulation or
international agreement requires Borrower to make any withholding or deduction from any such
payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that
the amount due from Borrower with respect to such payment or other sum payable hereunder will be
increased to the extent necessary to ensure that, after the making of such required withholding or
deduction, each Lender receives a net sum equal to the sum which it would have received had no
withholding or deduction been required and Borrower shall pay the full amount withheld or deducted
to the relevant Governmental Authority. Borrower will, upon request, furnish the Lenders with
proof reasonably satisfactory to the Lenders indicating that Borrower has made such withholding
payment; provided, however, that Borrower need not make any withholding payment if the amount or
validity of such withholding payment is contested in good faith by appropriate and timely
proceedings and as to which payment in full is bonded or reserved against by Borrower. The
agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination
of this Agreement.




	3.	 	CONDITIONS OF LOANS





3.1 Conditions Precedent to Initial Credit Extension. Each Lender’s obligation to make a Term
A Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to
or shall have received, in form and substance satisfactory to Collateral Agent and each Lender,
such documents, and completion



4.





4






of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or
appropriate, including, without limitation:



(a) duly executed original Loan Documents to which Borrower or any of its Subsidiaries is a
party;



(b) to the extent required under Section 6.6, duly executed original Control Agreements with
respect to any Collateral Accounts maintained by Borrower;



(c) duly executed original Secured Promissory Note in favor of Oxford according to its Term A
Loan Commitment Percentage and in favor of SVB according to its Original Term Loan Commitment
Percentage and its Term A Loan Commitment Percentage and duly executed original Amended and
Restated Secured Promissory Notes in favor of Oxford according to its Original Term Loan Commitment
Percentage;



(d) the certificate(s) for the Shares, together with Assignment(s) Separate from Certificate,
duly executed in blank;



(e) the Operating Documents of Borrower and good standing certificates of Borrower certified
by the Secretary of State of Borrower’s state of organization and each state in which Borrower is
qualified to conduct business, each good standing certificate to be dated no earlier than thirty
(30) days prior to the Effective Date;



(f) the Perfection Certificate for Borrower;



(g) the Annual Projections, in form and substance reasonably satisfactory to the Lenders;



(h) duly executed original officer’s certificate for Borrower, in a form reasonably acceptable
to Collateral Agent and Lenders;



(i) Collateral Agent shall have received certified copies, dated as of a recent date, of
financing statement searches, as Collateral Agent shall request, accompanied by such written
evidence (including any UCC termination statements) as Collateral Agent requests that the Liens
indicated in any such financing statements either constitute Permitted Liens or have been or, in
connection with the initial Credit Extension, will be terminated or released;



(j) a duly executed legal opinion of counsel to Borrower dated as of the Effective Date;



(k) evidence satisfactory to Collateral Agent and the Lenders that the insurance policies
required by Section 6.5 hereof are in full force and effect, together with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements in favor of Collateral
Agent, for the ratable benefit of the Lenders; and



(l) payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.



3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender to make each
Credit Extension, including the initial Credit Extension, is subject to the following conditions
precedent:



(a) (i) receipt by the Lenders of an executed Disbursement Letter in the form of Exhibit
B-1 attached hereto; and (ii) an executed Loan Payment/Advance Request Form in the form of
Exhibit B-2 attached hereto;



(b) the representations and warranties in Section 5 hereof shall be true, accurate and
complete in all material respects on the date of the Disbursement Letter and the Loan
Payment/Advance Request Form and on the Funding Date of such Credit Extension; provided, however,
that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text



5.





5






thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date, and no
Event of Default shall have occurred and be continuing or result from such Credit Extension. Each
Credit Extension is Borrower’s representation and warranty on that date that the representations
and warranties in Section 5 hereof are true, accurate and complete in all material respects;
provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date;



(c) in such Lender’s sole but reasonable discretion, there has not been any Material Adverse
Change or any material adverse deviation by Borrower from the Annual Projections of Borrower
presented to and accepted by Collateral Agent and each Lender;



(d) payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof;



(e) duly executed original Secured Promissory Notes in favor of each Lender; and



(f) duly executed original Warrant in favor of each Lender, except with respect to the
Original Oxford Term Loan and the SVB Pay Off Term Loan.



3.3 Covenant to Deliver. Borrower agrees to deliver to Collateral Agent each item required to
be delivered to Collateral Agent under this Agreement as a condition precedent to any Credit
Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by
Collateral Agent of any such item shall not constitute a waiver by the Lenders of Borrower’s
obligation to deliver such item, and any such Credit Extension in the absence of a required item
shall be made in each Lender’s sole discretion.



3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable
conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan,
Borrower shall notify Lenders (which notice shall be irrevocable) by facsimile, or telephone by
12:00 noon Eastern time three (3) Business Days prior to the date the Term Loan is to be made.
Together with any such facsimile notification, Borrower shall deliver to Lenders by facsimile a
completed Disbursement Letter and Loan Payment/Advance Request Form, with respect to SVB executed
by a Responsible Officer or his or her designee. Lenders may rely on any telephone notice given by
a person whom a Lender reasonably believes is a Responsible Officer or designee. On the Funding
Date, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account,
an amount equal to its Commitment Percentage of such requested Term Loan.




	4.	 	CREATION OF SECURITY INTEREST





4.1 Grant of Security Interest. Borrower hereby grants Collateral Agent, for the ratable
benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a
continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the
Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof. Borrower represents, warrants, and covenants that the security
interest granted herein is and shall at all times continue to be a first priority perfected
security interest in the Collateral, subject only to Permitted Liens that are permitted by the
terms of this Agreement to have priority to Collateral Agent’s Lien. If Borrower shall acquire a
commercial tort claim (as defined in the Code), Borrower, shall promptly notify Collateral Agent in
a writing signed by Borrower, as the case may be, of the general details thereof (and further
details as may be required by Collateral Agent) and grant to Collateral Agent, for the ratable
benefit of the Lenders, in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and substance reasonably
satisfactory to Collateral Agent.



Borrower acknowledges that it previously has entered, and/or may in the future enter, into
Bank Services Agreements with SVB. Regardless of the terms of any Bank Services Agreement,
Borrower agrees that any amounts Borrower owes SVB thereunder shall be deemed to be Obligations
hereunder and that it is the intent of Borrower and SVB to have all such Obligations secured by a
continuing security interest in the Collateral granted



6.





6






herein (subject only to Permitted Liens that expressly have superior priority to Collateral Agent’s
Lien in this Agreement).



If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue
until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon
payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such
time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral Agent shall,
at Borrower’s sole cost and expense, terminate its security interest in the Collateral and all
rights therein shall revert to Borrower. In the event (a) all Obligations (other than inchoate
indemnity obligations), except for obligations in respect of Bank Services, are repaid in full in
cash and (b) this Agreement and the Lenders’ obligation to make Credit Extensions is terminated,
Collateral Agent shall terminate the security interest granted herein upon Borrower providing cash
collateral acceptable to SVB in its good faith business judgment to secure obligations in respect
of Bank Services, if any. In the event such Bank Services consist of outstanding Letters of
Credit, Borrower shall provide to SVB cash collateral in an amount equal to (i) one hundred percent
(100.0%) of the face amount of all such Letters of Credit denominated in Dollars and (ii) one
hundred ten percent (110.0%) of the Dollar Equivalent of the face amount of all such Letters of
Credit denominated in a Foreign Currency plus, in each case, all interest, fees, and costs due or
to become due in connection therewith (as estimated by SVB in its good faith business judgment), to
secure all of the Obligations relating to such Letters of Credit.



4.2 Authorization to File Financing Statements. Borrower hereby authorizes Collateral Agent
to file financing statements or take any other action required to perfect Collateral Agent’s
security interests in the Collateral, without notice to Borrower, with all appropriate
jurisdictions to perfect or protect Collateral Agent’s interest or rights hereunder, including a
notice that any disposition of the Collateral, except to the extent permitted by the terms of this
Agreement, by Borrower, or any other Person, shall be deemed to violate the rights of Collateral
Agent under the Code.



4.3 Pledge of Collateral. Borrower hereby pledges, assigns and grants to Collateral Agent,
for the ratable benefit of the Lenders, a security interest in all the Shares, together with all
proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all
rights to subscribe for securities declared or granted in connection therewith, and all other cash
and noncash proceeds of the foregoing, as security for the performance of the Obligations. On the
Effective Date, or, to the extent not certificated as of the Effective Date, within ten (10) days
of the certification of any Shares, the certificate or certificates for the Shares will be
delivered to Collateral Agent, accompanied by an instrument of assignment duly executed in blank by
Borrower. To the extent required by the terms and conditions governing the Shares, Borrower shall
cause the books of each entity whose Shares are part of the Collateral and any transfer agent to
reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of
Default hereunder, Collateral Agent may effect the transfer of any securities included in the
Collateral (including but not limited to the Shares) into the name of Collateral Agent and cause
new (as applicable) certificates representing such securities to be issued in the name of
Collateral Agent or its transferee. Borrower will execute and deliver such documents, and take or
cause to be taken such actions, as Collateral Agent may reasonably request to perfect or continue
the perfection of Collateral Agent’s security interest in the Shares. Unless an Event of Default
shall have occurred and be continuing, Borrower shall be entitled to exercise any voting rights
with respect to the Shares and to give consents, waivers and ratifications in respect thereof,
provided that no vote shall be cast or consent, waiver or ratification given or action taken which
would be inconsistent with any of the terms of this Agreement or which would constitute or create
any violation of any of such terms. All such rights to vote and give consents, waivers and
ratifications shall terminate upon the occurrence and during the continuance of an Event of
Default.




	5.	 	REPRESENTATIONS AND WARRANTIES





Borrower represents and warrants to Collateral Agent and the Lenders as follows at all times:



5.1 Due Organization, Authorization: Power and Authority. Borrower, and each of its
Subsidiaries (other than ISIS), is duly existing and Borrower is in good standing as Registered
Organizations in its jurisdiction of organization and Borrower, and each of its Subsidiaries, is
qualified and licensed to do business and is in good standing in any jurisdiction in which the
conduct of its business or its ownership of property requires that it be qualified except where the
failure to do so could not reasonably be expected to have a Material Adverse



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Change. In connection with this Agreement, Borrower has delivered to Collateral Agent a completed
perfection certificate signed by an officer of Borrower (each a “Perfection Certificate” and
collectively, the “Perfection Certificates”). Borrower represents and warrants that (a) Borrower’s
exact legal name is that which is indicated on its respective Perfection Certificate and on the
signature page hereof; (b) Borrower is an organization of the type and is organized in the
jurisdiction set forth on its respective Perfection Certificate; (c) each Perfection Certificate
accurately sets forth Borrower’s organizational identification number or accurately states that
Borrower has none; (d) each Perfection Certificate accurately sets forth Borrower’s place of
business, or, if more than one, its chief executive office as well as Borrower’s mailing address
(if different than its chief executive office); (e) except as disclosed in the Perfection
Certificate, Borrower (and each of its respective predecessors) has not, in the past five (5)
years, changed its jurisdiction of organization, organizational structure or type, or any
organizational number assigned by its jurisdiction; and (f) all other information set forth on the
Perfection Certificates pertaining to Borrower, and each of Borrower’s Subsidiaries, is accurate
and complete in all material respects (it being understood and agreed that Borrower may from time
to time update certain information in the Perfection Certificates (including the information set
forth in clause (d) above) after the Effective Date to the extent permitted by one or more specific
provisions in this Agreement) so long as such updates are approved in writing by Collateral Agent
and Lenders. If Borrower or any of Borrower’s Subsidiaries is not now a Registered Organization
but later becomes one, Borrower shall notify Collateral Agent of such occurrence and provide
Collateral Agent with such Person’s organizational identification number within five (5) Business
Days of receiving such organizational identification number.



The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, including its Operating Documents, (ii) contravene, conflict with, constitute a default
under or violate any material Requirement of Law, (iii) contravene, conflict or violate any
applicable order, writ, judgment, injunction, decree, determination or award of any Governmental
Authority by which Borrower, or any of Borrower’s Subsidiaries, or any of their property or assets
may be bound or affected, (iv) require any action by, filing, registration, or qualification with,
or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which
have already been obtained and are in full force and effect or are being obtained pursuant to
Section 6.1(b)), or (v) constitute an event of default under any material agreement by which
Borrower, or any of Borrower’s Subsidiaries, or their respective properties is bound. Borrower is
not in default under any agreement to which it is a party or by which it or any of its assets is
bound in which such default could reasonably be expected to have a Material Adverse Change.



5.2 Collateral.



(a) Borrower has good title to, has rights in, and the power to transfer each item of the
Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any
and all Liens except Permitted Liens, and Borrower does not have any Deposit Accounts, Securities
Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the
other investment accounts, if any, described in the Perfection Certificate delivered to Collateral
Agent in connection herewith with respect of which Borrower has given Collateral Agent notice and
taken such actions requested by Collateral Agent as are necessary to give Collateral Agent a
perfected security interest therein. To Borrower’s knowledge, the Accounts are bona fide, existing
obligations of the Account Debtors.



(b) On the Effective Date, the Collateral is not in the possession of any third party bailee
(such as a warehouse) except as disclosed in the Perfection Certificate, and, as of the Effective
Date, except for third party bailees for which a bailee waiver will be provided pursuant to Section
6.11 and the Post Closing Letter, no such third party bailee possesses components of the Collateral
in excess of Two Hundred Fifty Thousand Dollars ($250,000.00). None of the components of the
Collateral shall be maintained at locations other than as disclosed in the Perfection Certificate
on the Effective Date or as permitted pursuant to Section 6.11.



(c) All Inventory is in all material respects of good and marketable quality, free from
material defects.



(d) Borrower is the sole owner of the Intellectual Property it purports to own, except for
non-exclusive licenses granted to its customers in the ordinary course of business. Except as
noted on the Perfection



8.





8






Certificate (or as disclosed to Collateral Agent and each Lender after the Effective Date as
provided below), Borrower is not a party to, nor is bound by, any material license or other
material agreement with respect to which Borrower is the licensee that (i) prohibits or otherwise
restricts Borrower from granting a security interest in Borrower’s interest in such material
license or material agreement or any other property, or (ii) for which a default under or
termination of could interfere with Collateral Agent’s or any Lender’s right to sell any
Collateral. Borrower shall provide written notice to Collateral Agent and each Lender within ten
(10) days after entering into or becoming bound by any such license or agreement (other than
over-the-counter software that is commercially available to the public). Borrower shall take such
commercially reasonable steps as Collateral Agent and any Lender reasonably requests to obtain the
consent of, or waiver by, any Person whose consent or waiver is necessary for (i) all licenses or
agreements to be deemed “Collateral” and for Collateral Agent and each Lender to have a security
interest in it that might otherwise be restricted or prohibited by law or by the terms of any such
license or agreement, whether now existing or entered into in the future, and (ii) Collateral Agent
and each Lender shall have the ability in the event of a liquidation of any Collateral to dispose
of such Collateral in accordance with Collateral Agent’s and such Lender’s rights and remedies
under this Agreement and the other Loan Documents.



5.3 Litigation. Except as disclosed on the Perfection Certificate or as disclosed to
Collateral Agent and each Lender pursuant to the terms of Section 6.9, there are no actions, suits,
investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened
in writing by or against Borrower, or any of Borrower’s Subsidiaries, involving more than One
Hundred Fifty Thousand Dollars ($150,000.00).



5.4 No Material Deterioration in Financial Condition; Financial Statements. All consolidated
financial statements for Borrower, or any of Borrower’s Subsidiaries, delivered to Collateral Agent
fairly present, in all material respects the consolidated financial condition of Borrower and
Borrower’s Subsidiaries, and the consolidated results of operations of Borrower and Borrower’s
Subsidiaries as of the dates and for the periods presented (subject, in the case of unaudited
financial statements, to normal year-end adjustments and the absence of footnotes). There has not
been any material deterioration in the consolidated financial condition of Borrower and Borrower’s
Subsidiaries, since the date of the most recent financial statements submitted to any Lender.



5.5 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.



5.6 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled”
by an “investment company” subject to regulation under the Investment Company Act of 1940, as
amended. Borrower is not engaged as one of its important activities in extending credit for margin
stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower has
complied in all material respects with the Federal Fair Labor Standards Act. Borrower is not, nor
is any of Borrower’s Subsidiaries, a “holding company” or an “affiliate” of a “holding company” or
a “subsidiary company” of a “holding company” as each term is defined and used in the Public
Utility Holding Company Act of 2005. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to have a Material Adverse Change. None of
Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any such
Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing, producing, storing,
treating, or transporting any hazardous substance other than in material compliance with applicable
laws. Borrower and each of its Subsidiaries have obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices to, all
Governmental Authorities that are necessary to continue their respective businesses as currently
conducted.



Borrower is not, nor is any of Borrower’s 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, (ii) engaged in or conspiring to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding or attempting to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.
Borrower is not, nor to the knowledge of Borrower, is any of Borrower’s Affiliates or agents,
acting or benefiting in any capacity in connection with the transactions contemplated by this
Agreement, (x) conducting any business or engaging in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or (y) dealing in, or
otherwise engaging 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.



9.





9






5.7 Subsidiaries; Investments. Borrower does not own any stock, shares, partnership interests
or other equity securities except for Permitted Investments.



5.8 Tax Returns and Payments; Pension Contributions. Borrower, and each of Borrower’s
Subsidiaries, has timely filed all required tax returns and reports, and Borrower, and each such
Subsidiary, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and
contributions owed by Borrower, and each such Subsidiary, in all jurisdictions in which Borrower,
or each such Subsidiary is subject to taxes, including the United States, except, in each case,
related to taxes as may be due or owing in an amount less than Twenty-Five Thousand Dollars
($25,000.00) in the aggregate, and unless such taxes are being contested in accordance with the
following sentence. Borrower or any such Subsidiary may defer payment of any contested taxes,
provided that Borrower, or each such Subsidiary, (a) in good faith contests its obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies
Collateral Agent in writing of the commencement of, and any material development in, the
proceedings, and (c) posts bonds or takes any other steps required to prevent the governmental
authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is
other than a “Permitted Lien”. Borrower is not aware of any claims or adjustments proposed for any
of Borrower’s, or any of Borrower’s Subsidiaries’, prior tax years which could result in additional
taxes becoming due and payable by Borrower, or any of Borrower’s Subsidiaries. Borrower, and each
of Borrower’s Subsidiaries, has paid all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with their terms, and Borrower has not, nor
has any of Borrower’s Subsidiaries, withdrawn from participation in, and has not permitted partial
or complete termination of, or permitted the occurrence of any other event with respect to, any
such plan which could reasonably be expected to result in any liability of Borrower or any such
Subsidiary, including any liability to the Pension Benefit Guaranty Corporation or its successors
or any other governmental agency.



5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as
working capital and to fund its general business requirements in accordance with the provisions of
this Agreement, and not for personal, family, household or agricultural purposes.



5.10 Shares. Borrower has full power and authority to create a first lien on the Shares and
no disability or contractual obligation exists that would prohibit Borrower from pledging the
Shares pursuant to this Agreement. To Borrower’s knowledge, there are no subscriptions, warrants,
rights of first refusal or other restrictions on transfer relative to, or options exercisable with
respect to the Shares. The Shares have been and will be duly authorized and validly issued, and
are fully paid and non-assessable. To Borrower’s knowledge, the Shares are not the subject of any
present or threatened suit, action, arbitration, administrative or other proceeding, and Borrower
knows of no reasonable grounds for the institution of any such proceedings.



5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Collateral Agent or any Lender, as of the date such
representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Collateral Agent or any Lender, contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements
contained in the certificates or statements not misleading (it being recognized that the
projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions
are not viewed as facts and that actual results during the period or periods covered by such
projections and forecasts may differ from the projected or forecasted results).



5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation
or warranty is made to Borrower’s knowledge or awareness, to the “best of Borrower’s knowledge, or
with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable
investigation, of the Responsible Officers.



10.





10







	6.	 	AFFIRMATIVE COVENANTS





	 	 	 	 	 
	Borrower shall, and shall cause each of Borrower’s Subsidiaries to, do all of the following:
	 	6.1	 	 	Government Compliance.







(a) Maintain its and all its Subsidiaries’ legal existence and good standing in their
respective jurisdictions of organization and maintain qualification in each jurisdiction in which
the failure to so qualify could reasonably be expected to have a Material Adverse Change. Borrower
shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which
it is subject, the noncompliance with which could reasonably be expected to have a Material Adverse
Change.



(b) Obtain and keep in full force and effect, all of the Governmental Approvals necessary for
the performance by Borrower of its obligations under the Loan Documents and the grant of a security
interest to Collateral Agent for the ratable benefit of the Lenders, and each Lender, in all of the
Collateral. Borrower shall promptly provide copies to Collateral Agent of any Governmental
Approvals obtained by Borrower, other than any Governmental Approvals the absence of which could
not reasonably be expected to result in a Material Adverse Change.



6.2 Financial Statements, Reports, Certificates, Inspections.



(a) Deliver to each Lender: (i) as soon as available, but no later than thirty (30) days after
the last day of each month, a company prepared consolidated balance sheet, income statement and
cash flow statement covering the consolidated operations of Borrower, and each of Borrower’s
Subsidiaries, for such month certified by a Responsible Officer and in a form reasonably acceptable
to Collateral Agent; (ii) as soon as available, but no later than one hundred eighty (180) days
after the last day of Borrower’s, or Borrower’s Subsidiaries’ fiscal year, audited consolidated
financial statements prepared under GAAP, consistently applied, together with an unqualified
opinion (other than with a “going concern” qualification relating to the need for future additional
equity or debt financing) on the financial statements from an independent certified public
accounting firm acceptable to Collateral Agent in its reasonable discretion; (iii) as soon as
available after approval thereof by Borrower’s Board of Directors, but no later than ten (10) days
after the last day of each of Borrower’s fiscal years, Borrower’s financial projections (A) if
Borrower delivers such projections on or prior to December 31, the projections shall cover the
following entire fiscal year, and (B) if Borrower delivers such projections on or after January 1,
the projections shall cover the current entire fiscal year, as approved by Borrower’s Board of
Directors, which such annual projections shall be set forth in a month-by-month format (such annual
financial projections as originally delivered to Collateral Agent and the Lenders are referred to
herein as the “Annual Projections”; provided that, any revisions of the Annual Projections approved
by Borrower’s Board of Directors shall be delivered to Collateral Agent and the Lenders no later
than seven (7) days after such approval, and, unless Collateral Agent notifies Borrower to the
contrary in writing within seven (7) days after receipt thereof, the term “Annual Projections”
shall include such revisions)); (iv) within five (5) days of delivery, copies of all statements,
reports and notices made available to Borrower’s security holders generally or holders of
Subordinated Debt; (v) in the event that Borrower becomes subject to the reporting requirements
under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports
on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission, (vi) as soon as
available, but no later than thirty (30) days after the last day of each month, a schedule of
Borrower’s registered Intellectual Property (including any applications of registered Intellectual
Property), which schedule shall note any changes in Borrower’s registered Intellectual Property
(including any applications of registered Intellectual Property) from the most recent schedule
provided to Collateral Agent, (vii) prompt notice of Borrower’s knowledge of any event that could
reasonably be expected to materially and adversely affect the value of the Intellectual Property;
(viii) as soon as available, but no later than thirty (30) days after the last day of each month,
copies of the month-end account statements for each deposit account or securities account
maintained by Borrower, or any of Borrower’s Subsidiaries, which statements may be provided to
Collateral Agent and each Lender by Borrower or directly from the applicable institution(s), (ix)
other financial information as reasonably requested by Collateral Agent or any Lender, and (x) as
soon as available, but no later than thirty (30) days after the last day of each month, a copy of
Borrower’s monthly rental check payable to the landlord of Borrower’s leased location at 627
Distribution Drive, Durham, North Carolina 27560. Notwithstanding the foregoing, documents
required to be delivered pursuant to the terms hereof (to the extent any such documents are
included in materials otherwise filed with the SEC) may be



11.





11






delivered electronically and if so delivered, shall be deemed to have been delivered on the date on
which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the
internet at Borrower’s website address.



(b) Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i)
above but no later than thirty (30) days after the last day of each month, deliver to each Lender,
a duly completed Compliance Certificate signed by a Responsible Officer.



(c) Keep proper books of record and account in accordance with GAAP in all material respects,
in which full, true and correct entries shall be made of all dealings and transactions in relation
to its business and activities. Borrower shall allow, at the sole cost of Borrower, Collateral
Agent or any Lender, during regular business hours upon reasonable prior notice (except while an
Event of Default has occurred and is continuing), to visit and inspect any of its properties, to
examine and make abstracts or copies from any of its books and records, and to conduct a collateral
audit and analysis of its operations and the Collateral. Such audits shall be conducted no more
often than twice every year unless (and more frequently if) an Event of Default has occurred and is
continuing.



6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from
material defects. Returns and allowances between Borrower and its Account Debtors shall follow
Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify
Collateral Agent of all returns, recoveries, disputes and claims that involve more than One Hundred
Thousand Dollars ($100,000.00) individually or in the aggregate in any fiscal year.



6.4 Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all
required tax returns and reports except related to taxes as may be due or owing in an amount less
than Twenty-Five Thousand Dollars ($25,000.00) in the aggregate and timely pay, and require each of
its Subsidiaries to timely file, all foreign, federal, state, and local taxes, assessments,
deposits and contributions owed by Borrower, and each of Borrower’s Subsidiaries, except for
deferred payment of any taxes contested pursuant to the terms of Section 5.8 hereof, and shall
deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all
amounts necessary to fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms.



6.5 Insurance. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrower’s industry and location and as Collateral Agent may reasonably request.
Insurance policies shall be in a form, with companies, and in amounts that are reasonably
satisfactory to Collateral Agent and Lenders. All property policies shall have a lender’s loss
payable endorsement showing Collateral Agent as lender loss payee and waive subrogation against
Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral
Agent, as additional insured. All policies (or the loss payable and additional insured
endorsements) shall provide that the insurer shall endeavor to give Collateral Agent at least
thirty (30) days notice before canceling, amending, or declining to renew its policy. At
Collateral Agent’s request, Borrower shall deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any policy shall, at Collateral Agent’s option, be
payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.
Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing,
Borrower shall have the option of applying the proceeds of any casualty policy up to One Hundred
Thousand Dollars ($100,000.00) (or such higher amount as to which Collateral Agent and Lender may
agree in writing) with respect to any loss, but not exceeding Two Hundred Fifty Thousand Dollars
($250,000.00) (or such higher amount as to which Collateral Agent and Lender may agree in writing),
in the aggregate for all losses under all casualty policies in any one year, toward the replacement
or repair of destroyed or damaged property; provided that any such replaced or repaired property
(i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed
Collateral in which Collateral Agent has been granted a first priority security interest (subject
to Permitted Liens that are permitted by the terms of this Agreement to have priority over
Collateral Agent’s Lien), and (b) after the occurrence and during the continuance of an Event of
Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent,
be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the
Obligations. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay
any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any
Lender may make all or part of such payment or obtain such insurance policies required in this
Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.



12.





12






6.6 Operating Accounts.



(a) Except as set forth in clause (b) below, maintain its and its Subsidiaries’, Collateral
Accounts with Silicon Valley Bank or its Affiliates in accounts which are subject to a Control
Agreement in favor of Collateral Agent for the ratable benefit of the Lenders (as necessary to
perfect such Collateral Agent’s Lien in such Collateral Account).



(b) Borrower, and each of Borrower’s Subsidiaries, if any, shall provide Collateral Agent and
each Lender five (5) days’ prior written notice, and obtain Collateral Agent’s and each Lender’s
consent, before establishing any Collateral Account at or with any Person other than Silicon Valley
Bank. In addition, for each such Collateral Account that Borrower, or any of Borrower’s
Subsidiaries, at any time maintains, Borrower, or any such Subsidiary, shall cause the applicable
bank or financial institution at or with which such Collateral Account is maintained to execute and
deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account
to perfect Collateral Agent’s Lien in such Collateral Account in accordance with the terms
hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be
terminated without prior written consent of Collateral Agent and each Lender. The provisions of
the previous sentence and Section 6.6(a) shall not apply to (a) deposit accounts exclusively used
for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of
Borrower’s, or any of Borrower’s Subsidiaries’, employees and identified to Collateral Agent by
Borrower as such and (b) the Letter of Credit Account.



(c) Borrower shall not, nor shall Borrower’s Subsidiaries, if any, maintain any Collateral
Accounts except Collateral Accounts located in the United States in accordance with Sections 6.6(a)
and (b).



6.7 Protection of Intellectual Property Rights. Borrower shall: (a) protect, defend and
maintain the validity and enforceability of its Intellectual Property that is material to
Borrower’s business; (b) promptly advise Collateral Agent in writing of material infringement by a
third party of its Intellectual Property; and (c) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public without Collateral
Agent’s written consent.



6.8 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Collateral Agent and Lenders, without expense to Collateral Agent
or Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to
the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or
defend any third-party suit or proceeding instituted by or against Collateral Agent or any Lender
with respect to any Collateral or relating to Borrower.



6.9 Notices of Litigation and Default. Borrower will give prompt written notice to Collateral
Agent and Lenders of any litigation or governmental proceedings pending or threatened (in writing)
against Borrower, or any of Borrower’s Subsidiaries, which could reasonably be expected to result
in damages or costs to Borrower, or any of Borrower’s Subsidiaries, of One Hundred Fifty Thousand
Dollars ($150,000.00) or more or which could reasonably be expected to have a Material Adverse
Change. Without limiting or contradicting any other more specific provision of this Agreement,
promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of the
existence of any Event of Default or event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default, Borrower shall give written notice to Collateral Agent
and Lenders of such occurrence, which such notice shall include a reasonably detailed description
of such Event of Default or event which, with the giving of notice or passage of time, or both,
would constitute an Event of Default.



6.10 Intentionally Omitted.



6.11 Landlord Waivers; Bailee Waivers.



(a) Pursuant to the Post Closing Letter, Borrower shall deliver to Collateral Agent on or
before December 31, 2014 (i) a landlord’s consent executed in favor of Collateral Agent, or an
acknowledgement of the change in Collateral Agent to any existing landlord’s consent, in respect of
all of Borrower’s leased locations where either (A) Borrower or such Subsidiary maintains
Collateral having a book value in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) or (B)
Borrower’s Books are located, and (ii) a bailee waiver executed in



13.





13






favor of Collateral Agent, or an acknowledgement of the change in Collateral Agent to any existing
bailee waiver, in respect of each third party bailee where Borrower or any Subsidiary maintains
Collateral having a book value in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).



(b) In the event that Borrower, after the Effective Date, intends to add any new offices or
business locations, including warehouses, or otherwise store any portion of the Collateral with, or
deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then
(unless such new offices or business locations or bailee locations contain less than Two Hundred
Fifty Thousand Dollars ($250,000.00) in assets or property of Borrower) Borrower will first receive
the written consent of Collateral Agent and, if requested by Collateral Agent, such bailee or
landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver, as
applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition
of any new offices or business locations, or any such storage with or delivery to any such bailee,
as the case may be.



6.12 Creation/Acquisition of Subsidiaries. In the event Borrower, or any of Borrower’s
Subsidiaries, creates or acquires any Subsidiary, Borrower, or such Subsidiary, shall promptly
notify Collateral Agent and each Lender of the creation or acquisition of such new Subsidiary and
take all such action as may be reasonably required by Collateral Agent or any Lender to cause each
such Subsidiary to become a co-Borrower hereunder or to guarantee the Obligations of Borrower under
the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the
assets of such Subsidiary (substantially as described on Exhibit A hereto); and Borrower,
or such Subsidiary, as applicable, shall grant and pledge to Collateral Agent, for the ratable
benefit of the Lenders, and each Lender, a perfected security interest in the stock, units or other
evidence of ownership of each Subsidiary.



6.13 Further Assurances.



(a) Execute any further instruments and take further action as Collateral Agent or any Lender
reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect
the purposes of this Agreement.



(b) Deliver to Collateral Agent and Lenders, within five (5) days after the same are sent or
received, copies of all material correspondence, reports, documents and other filings with any
Governmental Authority that could reasonably be expected to have a material adverse effect on any
of the Governmental Approvals material to Borrower’s business or otherwise on the operations of
Borrower or any of Borrower’s Subsidiaries.



6.14 ISIS Telecommunications. Throughout the term of this Agreement, ISIS TELECOMMUNICATIONS,
INC., a Delaware corporation and a Subsidiary of TransEnterix, Inc. (“ISIS”), will continue to be
an inactive Subsidiary (as determined by Lenders in their sole discretion) with assets, if any,
having a value not to exceed Five Thousand Dollars ($5,000.00) in the aggregate at any time. In
the event ISIS becomes an active Subsidiary during the term of this Agreement, upon Collateral
Agent and Lenders’ request, Borrower shall cause ISIS to become a co-borrower under this Agreement,
pursuant to documentation acceptable to the Collateral Agent and Lenders in their sole discretion.




	7.	 	NEGATIVE COVENANTS





Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following
without the prior written consent of the Required Lenders:



7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b)
of worn-out, surplus or obsolete Equipment; (c) in connection with Permitted Liens and Permitted
Investments or transactions permitted under Section 7.3; (d) Permitted Licenses; or (e) from one
Borrower to another Borrower.



7.2 Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or
permit any of its Subsidiaries to engage in any business other than the businesses engaged in by
Borrower as of the



14.





14






Effective Date or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) fail to provide
notice to Collateral Agent of any Key Person departing from or ceasing to be employed by Borrower
within five (5) days after such Key Person’s departure from Borrower, or (ii) consummate any
transaction or series of related transactions in which the stockholders of Borrower who were not
stockholders immediately prior to the first such transaction own more than forty nine percent (49%)
of the voting stock of Borrower immediately after giving effect to such transaction or related
series of such transactions (other than by the sale of Borrower’s equity securities in a public
offering, a private placement of public equity or to venture capital investors so long as Borrower
identifies to Collateral Agent the venture capital investors prior to the closing of the
transaction). Borrower shall not, without at least fifteen (15) days’ prior written notice to
Collateral Agent: (A) add any new offices or business locations, including warehouses (unless such
new offices or business locations contain less than One Hundred Fifty Thousand Dollars
($150,000.00) in assets or property of Borrower); (B) change its jurisdiction of organization, (C)
change its organizational type, (D) change its legal name, or (E) change any organizational number
(if any) assigned by its jurisdiction of organization.



7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock, shares or property of another Person, except that a
Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is
a “co-Borrower” hereunder or has provided a secured guaranty of Borrower’s Obligations hereunder in
accordance with Section 6.12) or into Borrower provided Borrower is the surviving legal entity, and
as long as no Event of Default is occurring prior thereto or arises as a result therefrom.



7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.



7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to
the first priority security interest granted herein (except for Permitted Liens that are permitted
by the terms of this Agreement to have priority over Collateral Agent’s Lien), or enter into any
agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent
or any Lender) with any Person which directly or indirectly prohibits or has the effect of
prohibiting Borrower, or any of Borrower’s Subsidiaries, from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower’s, or such Subsidiary’s,
Intellectual Property, except (i) as is otherwise permitted in Section 7.1 hereof and the
definition of “Permitted Liens” herein and (ii) customary covenants contained in purchase
agreements and acquisition agreements (including by way of merger, acquisition or consolidation)
restricting the granting of security interests on Borrower’s property pending the closing of such
transactions, provided that such covenants do not at any time prohibit the Borrower from granting a
security interest in Borrower’s property (including Intellectual Property) in favor of Collateral
Agent for the benefit of Lenders. For the avoidance of doubt, in no way shall the preceding
sentence be deemed to constitute a waiver of, or otherwise limit, Borrower’s obligations under
Section 7.2 or 7.3 of this Agreement.



7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.6 hereof.



7.7 Distributions; Investments. (a) Pay any dividends (other than dividends payable solely in
capital stock) or make any distribution or payment on account of or redeem, retire or purchase any
capital stock (other than (i) repurchases pursuant to the terms of employee stock purchase plans,
employee restricted stock agreements, stockholder rights plans, director or consultant stock option
plans, or similar plans, provided such repurchases do not exceed One Hundred Thousand Dollars
($100,000.00) in the aggregate per fiscal year, (ii) to the extent constituting a payment on
account of or redemption, retirement or purchase of capital stock, the conversion of Borrower’s
convertible securities into other securities pursuant to the terms of such convertible securities,
(iii) payments of cash in lieu of fractional shares in connection with such conversion, so long as
such payments do not exceed Ten Thousand Dollars ($10,000.00) in the aggregate) or (b) directly or
indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries
to do so, and (iv) Borrower may make dividends or distributions to another Borrower.



15.





15






7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for (a) transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (b)
equity investments by Borrower’s investors and (c) between or among Borrowers.



7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to the Lenders, except in each case to the extent permitted under the
terms of the subordination, intercreditor, or other similar agreement to which such Subordinated
Debt is subject.



7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company,” subject to regulation under the Investment Company Act of 1940, as amended, or undertake
as one of its important activities extending credit to purchase or carry margin stock (as defined
in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of
any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA,
permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply
with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation
could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries
to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or
complete termination of, or permit the occurrence of any other event with respect to, any present
pension, profit sharing and deferred compensation plan which could reasonably be expected to result
in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation
or its successors or any other governmental agency.



7.11 Compliance with Anti-Terrorism Laws. Collateral Agent hereby notifies Borrower that
pursuant to the requirements of Anti-Terrorism Laws, and Collateral Agent’s policies and practices,
Collateral Agent is required to obtain, verify and record certain information and documentation
that identifies Borrower and their principals, which information includes the name and address of
Borrower and their principals and such other information that will allow Collateral Agent to
identify such party in accordance with Anti-Terrorism Laws. Borrower shall not, nor shall Borrower
permit any Subsidiary or Affiliate to, directly or indirectly, knowingly enter into any documents,
instruments, agreements or contracts with any Person listed on the OFAC Lists. Borrower shall
immediately notify Collateral Agent if Borrower has knowledge that Borrower, or any Subsidiary or
Affiliate of Borrower, is listed on the OFAC Lists 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. Borrower shall not, nor shall Borrower permit
any Subsidiary or 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, any similar executive order or other
Anti-Terrorism Law, 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.




	8.	 	EVENTS OF DEFAULT





Any one of the following shall constitute an event of default (an “Event of Default”) under
this Agreement:



8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days
after such Obligations are due and payable (which three (3) Business Day grace period shall not
apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a)
hereof). During the cure period, the failure to cure the payment default is not an Event of
Default (but no Credit Extension will be made during the cure period);



16.





16






8.2 Covenant Default.



(a) Borrower fails or neglects to perform any obligation in Sections 6.2 (Financial
Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7
(Protection of Intellectual Property Rights), 6.9 (Notices of Litigation and Default), 6.11
(Landlord Waivers; Bailee Waivers), 6.12 (Creation/Acquisition of Subsidiaries), or 6.14 (ISIS
Telecommunications) or Borrower violates any covenant in Section 7; or



(b) Borrower, or any of Borrower’s Subsidiaries, fails or neglects to perform, keep, or
observe any other term, provision, condition, covenant or agreement contained in this Agreement or
any Loan Documents, and as to any default (other than those specified in this Section 8) under such
other term, provision, condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however, that if the default
cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by
Borrower be cured within such ten (10) day period, and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable time period the
failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall
be made during such cure period). Grace periods provided under this subsection shall not apply,
among other things, to the covenants set forth in subsection (a) above;



8.3 Material Adverse Change. A Material Adverse Change occurs;



8.4 Attachment; Levy; Restraint on Business.



(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under control of Borrower (including a Subsidiary) on deposit with any
Lender or any Lender’s Affiliate or any bank or other institution at which Borrower maintains a
Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against any of
Borrower’s assets by any government agency, and the same under subclauses (i) and (ii) hereof are
not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the
posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any
such ten (10) day cure period; and



(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents
Borrower from conducting any part of its business;



8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they
become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45)
days (but no Credit Extensions shall be made while any of the conditions described in clause (a)
exist and/or until any Insolvency Proceeding is dismissed);



8.6 Other Agreements. There is a default in any agreement to which Borrower is a party with a
third party or parties resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred
Fifty Thousand Dollars ($250,000.00) or that could reasonably be expected to have a Material
Adverse Change;



8.7 Judgments. One or more judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars
($250,000.00) (to the extent not covered by independent third-party insurance as to which liability
has been accepted by such insurance carrier) shall be rendered against Borrower and shall remain
unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided
that no Credit Extensions will be made prior to the satisfaction, vacation, or stay of such
judgment, order or decree);



8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to



17.





17






Collateral Agent and/or Lenders or to induce Collateral Agent and/or the Lenders to enter this
Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect
in any material respect when made;



8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower and
any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement
with Collateral Agent or the Lenders, or any creditor that has signed such an agreement with
Collateral Agent or the Lenders breaches any terms of such agreement;



8.10 Governmental Approvals. Any Governmental Approval shall have been revoked, rescinded,
suspended, modified in an adverse manner or not renewed in the ordinary course for a full term and
such revocation, rescission, suspension, modification or non-renewal has resulted in or could
reasonably be expected to result in a Material Adverse Change; or



8.11 Lien Priority. Any Lien created hereunder or by any other Loan Document shall at any
time fail to constitute a valid and perfected Lien on any of the Collateral purported to be secured
thereby, subject to no prior or equal Lien, other than Permitted Liens.




	9.	 	RIGHTS AND REMEDIES





9.1 Rights and Remedies.



(a) Upon the occurrence and during the continuance of an Event of Default, Collateral Agent
may, and at the written direction of Required Lenders shall, without notice or demand, do any or
all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to
Borrower declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by
Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the
obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under
this Agreement or under any other agreement between Borrower and Collateral Agent and/or the
Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any, of the
Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any
other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately
terminated without any action by Collateral Agent or the Lenders).



(b) Without limiting the rights of the Collateral Agent and the Lenders set forth in Section
9.1(a) above, upon the occurrence and during the continuance of an Event of Default Collateral
Agent shall have the right, without notice or demand, to do any or all of the following:



(i) terminate any FX Forward Contracts;



(ii) foreclose upon and/or sell or otherwise liquidate, the Collateral;



(iii) apply to the Obligations any (a) balances and deposits of Borrower that Collateral Agent
or any Lender holds or controls, or (b) any amount held or controlled by Collateral Agent or any
Lender owing to or for the credit or the account of Borrower; and/or



(iv) commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any
Insolvency Proceeding.



(c) Without limiting the rights of the Collateral Agent and the Lenders set forth in Sections
9.1(a) and (b) above, upon the occurrence and during the continuance of an Event of Default
Collateral Agent shall have the right, without notice or demand, to do any or all of the following:



18.





18






(i) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money
of Collateral Agent’s security interest in such funds, and verify the amount of such account;



(ii) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral
if Collateral Agent requests and make it available in a location as Collateral Agent reasonably
designates. Collateral Agent may enter premises where the Collateral is located, take and maintain
possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which
appears to be prior or superior to its security interest and pay all expenses incurred. Borrower
grants Collateral Agent a license to enter and occupy any of its premises, without charge, to
exercise any of Collateral Agent’s rights or remedies;



(iii) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or
advertise for sale, the Collateral. Collateral Agent is hereby granted a non-exclusive,
royalty-free license or other right to use, without charge, Borrower’s labels, patents, copyrights,
mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in connection with Collateral
Agent’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all
franchise agreements inure to Collateral Agent, for the benefit of the Lenders;



(iv) place a “hold” on any account maintained with Collateral Agent or the Lenders and/or
deliver a notice of exclusive control, any entitlement order, or other directions or instructions
pursuant to any Control Agreement or similar agreements providing control of any Collateral;



(v) demand and receive possession of Borrower’s Books;



(vi) appoint a receiver to seize, manage and realize any of the Collateral, and such receiver
shall have any right and authority as any competent court will grant or authorize in accordance
with any applicable law, including any power or authority to manage the business of Borrower;



(vii) Subject to clauses 9.1(a), (b), and (c), exercise all rights and remedies available to
Collateral Agent and each Lender under the Loan Documents or at law or equity, including all
remedies provided under the Code (including disposal of the Collateral pursuant to the terms
thereof); and



(viii) for any Letters of Credit, demand that Borrower (i) deposit cash with Bank in an amount
equal to (x) if such Letters of Credit are denominated in Dollars, then one hundred five percent
(105%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then one hundred
ten percent (110%), of the Dollar Equivalent of the aggregate face amount of all Letters of Credit
remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith
(as estimated by Bank in its good faith business judgment)), to secure all of the Obligations
relating to such Letters of Credit, as collateral security for the repayment of any future drawings
under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and
(ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining
term of any Letters of Credit.



Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any
Event of Default, Collateral Agent shall have the right to exercise any and all remedies referenced
in this Section 9.1 without the written consent of Required Lenders following the occurrence of an
Exigent Circumstance. As used in the immediately preceding sentence, “Exigent Circumstance” means
any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently
threatens the ability of Collateral Agent to realize upon all or any material portion of the
Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof,
destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after
reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the
judgment of Collateral Agent, could reasonably be expected to result in a material diminution in
value of the Collateral.



19.





19






9.2 Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and
adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Collateral Agent or a third party as the Code or any applicable law
permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign
Borrower’s name on any documents necessary to perfect or continue the perfection of Collateral
Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred
until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and
Collateral Agent and the Lenders are under no further obligation to make Credit Extensions
hereunder. Collateral Agent’s foregoing appointment as Borrower’s attorney in fact, and all of
Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all
Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and
Collateral Agent’s and the Lenders’ obligation to provide Credit Extensions terminates.



9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or
make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and
immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral.
Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent
obtaining such insurance or making such payment at the time it is obtained or paid or within a
reasonable time thereafter. No such payments by Collateral Agent are deemed an agreement to make
similar payments in the future or Collateral Agent’s waiver of any Event of Default.



9.4 Application of Payments and Proceeds. Notwithstanding anything to the contrary contained
in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a)
Borrower irrevocably waives the right to direct the application of any and all payments at any time
or times thereafter received by Collateral Agent from or on behalf of Borrower of all or any part
of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on
the other, Collateral Agent shall have the continuing and exclusive right to apply and to reapply
any and all payments received against the Obligations in such manner as Collateral Agent may deem
advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any
sale of, or other realization upon all or any part of the Collateral shall be applied: first, to
the Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any
interest which, but for the provisions of the United States Bankruptcy Code, would have accrued on
such amounts); third, to the principal amount of the Obligations outstanding; and fourth, to any
other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the
Loan Documents. Any balance remaining shall be delivered to Borrower or to whoever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying
out the foregoing, (x) amounts received shall be applied in the numerical order provided until
exhausted prior to the application to the next succeeding category, and (y) each of the Persons
entitled to receive a payment in any particular category shall receive an amount equal to its pro
rata share of amounts available to be applied pursuant thereto for such category. Any reference in
this Agreement to an allocation between or sharing by the Lenders of any right, interest or
obligation “ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share unless
expressly provided otherwise. Collateral Agent, or if applicable, each Lender, shall promptly
remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each
Lender’s portion of any Term Loan and the ratable distribution of interest, fees and reimbursements
paid or made by Borrower. Notwithstanding the foregoing, a Lender receiving a scheduled payment
shall not be responsible for determining whether the other Lenders also received their scheduled
payment on such date; provided, however, if it is later determined that a Lender received more than
its ratable share of scheduled payments made on any date or dates, then such Lender shall remit to
Collateral Agent or other Lenders such sums as may be necessary to ensure the ratable payment of
such scheduled payments, as instructed by Collateral Agent. If any payment or distribution of any
kind or character, whether in cash, properties or securities, shall be received by a Lender in
excess of its ratable share, then the portion of such payment or distribution in excess of such
Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid
over to the other Lender for application to the payments of amounts due on the other Lenders’
claims. To the extent any payment for the account of Borrower is required to be returned



20.





20






as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to
ensure that such return of payment is on a pro rata basis. If any Lender shall obtain possession
of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral
Agent and other Lenders for purposes of perfecting Collateral Agent’s security interest therein.



9.5 Liability for Collateral. So long as Collateral Agent and the Lenders comply with
reasonable banking practices regarding the safekeeping of the Collateral in the possession or under
the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be
liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the
Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any
carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or
destruction of the Collateral.



9.6 No Waiver; Remedies Cumulative. Collateral Agent’s failure, at any time or times, to
require strict performance by Borrower of any provision of this Agreement or any other Loan
Document shall not waive, affect, or diminish any right of Collateral Agent thereafter to demand
strict performance and compliance herewith or therewith. No waiver hereunder shall be effective
unless signed by Collateral Agent and then is only effective for the specific instance and purpose
for which it is given. Collateral Agent’s rights and remedies under this Agreement and the other
Loan Documents are cumulative. Collateral Agent has all rights and remedies provided under the
Code, any applicable law, by law, or in equity. Collateral Agent’s exercise of one right or remedy
is not an election, and Collateral Agent’s waiver of any Event of Default is not a continuing
waiver. Collateral Agent’s delay in exercising any remedy is not a waiver, election, or
acquiescence.



9.7 Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand, notice of
default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Collateral Agent on which Borrower is liable.




	10.	 	NOTICES





All notices, consents, requests, approvals, demands, or other communication (collectively,
“Communication”) by any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when
sent by facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address, facsimile number, or
email address indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing
address or facsimile number by giving the other party written notice thereof in accordance with the
terms of this Section 10.




	 	 	 	If to Borrower: TransEnterix, Inc.





	 	 	 
	635 Davis Drive, Suite 300

	 	

	Morrisville, North Carolina 27560

	Attn: Janet Jamiolkowski

Fax: (919) 765-8459

	 	



	Email: jjamiolkowski@transenterix.com

	with a copy to:

	 	Ballard Spahr LLP







1735 Market Street, 51st Floor


Philadelphia, PA 19103-7599


Attn: Mary Mullany


Fax: (215) 864-8999


Email: mullany@ballardspahr.com



21.





21







	 	 	 	and to: TransEnterix, Inc.





	 	 	 
	4400 Biscayne Blvd

Miami, FL 33137

	 	



	Attn: Joshua Weingard — Chief Legal Officer

	Email: JWeingard@TransEnterix.com

	If to Collateral Agent:

	 	Oxford Finance LLC






	 	 	 
	133 North Fairfax Street

Alexandria, Virginia 22314

Attn: Legal Department

Fax: (703) 519-5225
	 	








	Email: LegalDepartment@oxfordfinance.com
	with a copy to:

If to SVB:
	 	Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121-1909

Attn: George Samuel

Fax: (858) 550 6420

Email: gsamuel@cooley.com

Silicon Valley Bank








3005 Carrington Mill Blvd, Suite 530


Morrisville, North Carolina 27560


Attn: Pat Scheper


Fax: (919) 461-3908


Email: pscheper@svb.com




	11.	 	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER





New York law governs the Loan Documents without regard to principles of conflicts of law.
Borrower, Lenders and Collateral Agent each submit to the exclusive jurisdiction of the State and
Federal courts in the City of New York, Borough of Manhattan. NOTWITHSTANDING THE FOREGOING,
COLLATERAL AGENT AND LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH COLLATERAL AGENT AND LENDERS
(IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9.1) DEEM NECESSARY OR APPROPRIATE TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE COLLATERAL AGENT’S AND LENDERS’ RIGHTS AGAINST BORROWER OR ITS
PROPERTY. Borrower expressly submits and consents in advance to such jurisdiction in any action or
suit commenced in any such court, and Borrower hereby waives any objection that it may have based
upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to
the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower
hereby waives personal service of the summons, complaints, and other process issued in such action
or suit and agrees that service of such summons, complaints, and other process may be made by
registered or certified mail addressed to Borrower at the address set forth in, or subsequently
provided by Borrower in accordance with, Section 10 of this Agreement and that service so made
shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three
(3) days after deposit in the U.S. mails, first class, registered or certified mail return receipt
requested, proper postage prepaid.



TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, COLLATERAL AGENT, AND LENDERS EACH
WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.



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	12.	 	GENERAL PROVISIONS





12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors
and permitted assigns of each party. Borrower may not transfer, pledge or assign this Agreement or
any rights or obligations under it without Collateral Agent’s and each Lender’s prior written
consent (which may be granted or withheld in Collateral Agent’s and each Lender’s discretion,
subject to Section 12.6). The Lenders have the right, without the consent of or notice to
Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale,
transfer, assignment, negotiation, or grant of a participation, a “Lender Transfer”) all or any
part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement
and the other Loan Documents; provided, however, that any such Lender Transfer (other than a
transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and
benefits under this Agreement and the other Loan Documents shall require the prior written consent
of the Required Lenders (such approved assignee, an “Approved Lender”). Borrower and Collateral
Agent shall be entitled to continue to deal solely and directly with such Lender in connection with
the interests so assigned until Collateral Agent shall have received and accepted an effective
assignment agreement in form satisfactory to Collateral Agent executed, delivered and fully
completed by the applicable parties thereto, and shall have received such other information
regarding such Eligible Assignee or Approved Lender as Collateral Agent reasonably shall require.



12.2 Indemnification. Borrower agrees to indemnify, defend and hold Collateral Agent and the
Lenders and their respective directors, officers, employees, agents, attorneys, or any other Person
affiliated with or representing Collateral Agent or the Lenders (each, an “Indemnified Person”)
harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”)
asserted by any other party in connection with; related to; following; or arising from, out of or
under, the transactions contemplated by the Loan Documents; and (b) all losses or Lenders’ Expenses
incurred, or paid by Indemnified Person in connection with; related to; following; or arising from,
out of or under, the transactions contemplated by the Loan Documents between Collateral Agent,
and/or the Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for
Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful
misconduct. Borrower hereby further indemnifies, defends and holds each Indemnified Person
harmless from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for such Indemnified Person)
in connection with any investigative, response, remedial, administrative or judicial matter or
proceeding arising out of or related to the transactions contemplated by the Loan Documents,
whether or not such Indemnified Person shall be designated a party thereto and including any such
proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by
engineers, environmental consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders)
asserting any right to payment for the transactions contemplated hereby which may be imposed on,
incurred by or asserted against such Indemnified Person as a result of or in connection with the
transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds
except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or
willful misconduct.



12.3 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.



12.4 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.



12.5 Correction of Loan Documents. Collateral Agent and the Lenders may correct patent errors
and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement
of the parties so long as Collateral Agent provides Borrower with written notice of such correction
and allows Borrower at least ten (10) days to object to such correction. In the event of such
objection, such correction shall not be made except by an amendment signed by Collateral Agent,
Lenders and Borrower.



12.6 Amendments in Writing; Integration. (a) No amendment, modification, termination or
waiver of any provision of this Agreement or any other Loan Document, no approval or consent
thereunder, or any consent



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to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by Borrower, Collateral Agent and the Required Lenders provided that



(i) no such amendment, waiver or other modification that would have the effect of increasing
or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such
Lender without such Lender’s written consent;



(ii) no such amendment, waiver or modification that would affect the rights and duties of
Collateral Agent shall be effective without Collateral Agent’s written consent or signature;



(iii) no such amendment, waiver or other modification shall, unless signed by all the Lenders
directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with
respect to any Term Loan or forgive any principal, interest (other than default interest) or fees
(other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive,
any payment of principal of any Term Loan or of interest on any Term Loan (other than default
interest) or any fees provided for hereunder (other than late charges or for any termination of any
commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders
which shall be required for Lenders to take any action hereunder; (D) release all or substantially
all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of
all or substantially all or any material portion of the Collateral or release any guarantor of all
or any portion of the Obligations or its guaranty obligations with respect thereto, except, in each
case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement
or the other Loan Documents (including in connection with any disposition permitted hereunder); (E)
amend, waive or otherwise modify this Section 12.6 or the definitions of the terms used in this
Section 12.6 insofar as the definitions affect the substance of this Section 12.6; (F) consent to
the assignment, delegation or other transfer by Borrower of any of its rights and obligations under
any Loan Document or release Borrower of its payment obligations under any Loan Document, except,
in each case with respect to this clause (F), pursuant to a merger or consolidation permitted
pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the
definitions Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the
Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral
hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations;
or (I) amend any of the provisions of Section 12.10. It is hereby understood and agreed that all
Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type
described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the preceding sentence;



(iv) the provisions of the foregoing clauses (i), (ii) and (iii) are subject to the provisions
of any interlender or agency agreement among the Lenders and Collateral Agent pursuant to which any
Lender may agree to give its consent in connection with any amendment, waiver or modification of
the Loan Documents only in the event of the unanimous agreement of all Lenders.



(b) Other than as expressly provided for in Section 12.6(a)(i)-(iii), Collateral Agent may, if
requested by the Required Lenders, from time to time designate covenants in this Agreement less
restrictive by notification to a representative of Borrower.



(c) This Agreement and the Loan Documents represent the entire agreement about this subject
matter and supersede prior negotiations or agreements. All prior agreements, understandings,
representations, warranties, and negotiations between the parties about the subject matter of this
Agreement and the Loan Documents merge into this Agreement and the Loan Documents.



12.7 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, is an
original, and all taken together, constitute one Agreement.



12.8 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been satisfied. Without limiting the foregoing, except as
otherwise provided in Section 4.1, the grant of security interest by Borrower in Section 4.1 shall
survive until the termination of all Bank Services Agreements. The



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obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as
the confidentiality provisions in Section 12.9 below, shall survive until the statute of
limitations with respect to such claim or cause of action shall have run.



12.9 Confidentiality. In handling any confidential information of Borrower, the Lenders and
Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary
information, but disclosure of information may be made: (a) to the Lenders’ and Collateral Agent’s
Subsidiaries or Affiliates, or in connection with a Lender’s own financing or securitization
transactions and upon the occurrence of a default, event of default or similar occurrence with
respect to such financing or securitization transaction; (b) to prospective transferees (other than
those identified in (a) above) or purchasers of any interest in the Credit Extensions (provided,
however, the Lenders and Collateral Agent shall use commercially reasonable efforts to obtain such
prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required
by law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or
as otherwise required in connection with an examination or audit; (e) as Collateral Agent considers
appropriate in exercising remedies under the Loan Documents; and (f) to third party service
providers of the Lenders and/or Collateral Agent so long as such service providers have executed a
confidentiality agreement with the Lenders and Collateral Agent with terms no less restrictive than
those contained herein. Confidential information does not include information that either: (i) is
in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the
Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the
Lenders and/or Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a
third party, if the Lenders and/or Collateral Agent does not know that the third party is
prohibited from disclosing the information. Collateral Agent and the Lenders may use confidential
information for any purpose, including, without limitation, for the development of client
databases, reporting purposes, and market analysis, so long as Collateral Agent does not disclose
Borrower’s identity or the identity of any person associated with Borrower unless otherwise
expressly permitted by this Agreement. The provisions of the immediately preceding sentence shall
survive the termination of this Agreement. The agreements provided under this Section 12.9
supersede all prior agreements, understanding, representations, warranties, and negotiations
between the parties about the subject matter of this Section 12.9.



12.10 Right of Set Off. Borrower hereby grants to Collateral Agent for the benefit of each
Lender, a lien, security interest and right of set off as security for all Obligations to
Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and
against all deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control
of Collateral Agent or the Lenders (including a Collateral Agent affiliate) or in transit to any of
them. At any time after the occurrence and during the continuance of an Event of Default, without
demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and
apply the same to any liability or obligation of Borrower even though unmatured and regardless of
the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE
COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.



12.11 Silicon Valley Bank as Agent. Collateral Agent hereby appoints SVB as its agent (and
SVB hereby accepts such appointment) for the purpose of perfecting Collateral Agent’s Liens in
assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be
perfected by possession or control, including without limitation, all deposit accounts maintained
at SVB.



12.12 Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any documents
(including new Secured Promissory Notes) reasonably required to effectuate and acknowledge each
assignment of a Term Loan Commitment or Loan to an assignee in accordance with Section 12.1, (ii)
make Borrower’s management available to meet with Collateral Agent and prospective participants and
assignees of Term Loan Commitments or Credit Extensions (which meetings shall be conducted no more
often than twice every twelve months unless an Event of Default has occurred and is continuing),
and (iii) assist Collateral Agent or the Lenders in the preparation of information relating to the
financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment
or Term Loan reasonably may request. Subject to the provisions of Section 12.9, Borrower
authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan
Commitment, any and all



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25






information in such Lender’s possession concerning Borrower and its financial affairs which has
been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has
been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit
evaluation of Borrower prior to entering into this Agreement.



12.13 Borrower Liability. Either Borrower may, acting singly, request Credit Extensions
hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes
hereunder, including with respect to requesting Credit Extensions hereunder. Each Borrower
hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder,
regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder
directly received all Credit Extensions. Each Borrower waives (a) any suretyship defenses
available to it under the Code or any other applicable law and (b) any right to require Collateral
Agent or any Lender to: (i) proceed against any Borrower or any other person; (ii) proceed against
or exhaust any security; or (iii) pursue any other remedy. Collateral Agent and or any Lender may
exercise or not exercise any right or remedy it has against any Borrower or any security it holds
(including the right to foreclose by judicial or non-judicial sale) without affecting any
Borrower’s liability. Notwithstanding any other provision of this Agreement or other related
document, each Borrower irrevocably waives all rights that it may have at law or in equity
(including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and
the Lenders under this Agreement) to seek contribution, indemnification or any other form of
reimbursement from any other Borrower, or any other Person now or hereafter primarily or
secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the
Obligations in connection with this Agreement or otherwise and all rights that it might have to
benefit from, or to participate in, any security for the Obligations as a result of any payment
made by Borrower with respect to the Obligations in connection with this Agreement or otherwise.
Any agreement providing for indemnification, reimbursement or any other arrangement prohibited
under this Section shall be null and void. If any payment is made to a Borrower in contravention
of this Section, such Borrower shall hold such payment in trust for Collateral Agent and the
Lenders and such payment shall be promptly delivered to Collateral Agent for application to the
Obligations, whether matured or unmatured.



12.14 Effect of Amendment and Restatement. Except as otherwise set forth herein, this
Agreement is intended to and does completely amend and restate, without novation, the Original
Agreement. All security interests granted under the Original Agreement are hereby confirmed and
ratified and shall continue to secure all Obligations under this Agreement.




	13.	 	DEFINITIONS





13.1 Definitions. As used in this Agreement, the following terms have the following meanings:



“Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.



“Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.



“Accrued Final Payment” is defined in Section 2.5(c) hereof.



“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with the Person, and each
of that Person’s senior executive officers, directors, partners and, for any Person that is a
limited liability company, that Person’s managers and members.



“Agreement” is defined in the preamble hereof.



“Amortization Date” is November 1, 2015; provided however, if the Interest Only Extension
Event occurs prior to October 31, 2015, such date shall be extended until May 1, 2016.



“Annual Projections” is defined in Section 6.2(a).



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“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering, including
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.



“Approved Fund” means any (i) investment company, fund, trust, securitization vehicle or
conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its business or (ii)
any Person (other than a natural person) which temporarily warehouses loans for any Lender or any
entity described in the preceding clause (i) and that, with respect to each of the preceding
clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or
(c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural
person) that administers or manages a Lender.



“Approved Lender” has the meaning given it in Section 12.1.



“Bank Services” are any products, credit services, and/or financial accommodations previously,
now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate,
including, without limitation, any letters of credit, cash management services (including, without
limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing
services), interest rate swap arrangements, and foreign exchange services as any such products or
services may be identified in Bank’s various agreements related thereto (each, a “Bank Services
Agreement”); provided that the aggregate amount of such Bank Services shall not exceed Seven
Hundred Thousand Dollars ($700,000.00) in the aggregate.



“Bank Services Agreement” is defined in the definition of Bank Services.



“Basic Rate” means with respect to a Term Loan, the per annum rate of interest (based on a
year of three hundred sixty (360) days) equal to the greater of (i) seven and one half percent
(7.50%) and (ii) the sum of (a) the ninety (90) day U.S. LIBOR rate reported in The Wall Street
Journal three (3) Business Days prior to the Funding Date of such Term Loan, plus (b) six and
one quarter percent (6.25%).



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



“Borrower” is defined in the preamble hereof.



“Borrower’s Books” are Borrower’s books and records including ledgers, federal, and state tax
returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or
financial condition, and all computer programs or storage or any equipment containing such
information.



“Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is
closed.



“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed
by the United States or any agency or any State thereof having maturities of not more than one (1)
year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after
its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc.; (c) certificates of deposit maturing no more than one (1) year after issue
provided that the account in which any such certificate of deposit is maintained is subject to a
Control Agreement in favor of Collateral Agent. For the avoidance of doubt, the direct purchase by
Borrower, co-borrower, or any subsidiary of Borrower of any Auction Rate Securities, or purchasing
participations in, or entering into any type of swap or other derivative transaction, or otherwise
holding or engaging in any ownership interest in any type of Auction Rate Security by Borrower,
co-borrower, or any subsidiary of Borrower shall be conclusively determined by the Lenders as an
ineligible Cash Equivalent, and any such transaction shall



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expressly violate each other provision of this Agreement governing Permitted Investments; and (d)
money market funds at least 95% of which constitute Cash Equivalents of the kinds described in
clauses (a) through (c) of this definition. Notwithstanding the foregoing, Cash Equivalents does
not include and Borrower, and each of Borrower’s Subsidiaries, are prohibited from purchasing,
purchasing participations in, entering into any type of swap or other equivalent derivative
transaction involving, or otherwise holding or engaging in any ownership interest in any type of
debt instrument, or any corporate or municipal bonds with a long-term nominal maturity for which
the interest rate is reset through a dutch auction and more commonly referred to as an auction rate
security.



“Claims” are defined in Section 12.2.



“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of New York; provided, that, to the extent that the Code is used to define any
term herein or in any Loan Document and such term is defined differently in different Articles or
Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on
any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.



“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit
A.



“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.



“Collateral Agent” means, Oxford, not in its individual capacity, but solely in its capacity
as agent on behalf of and for the benefit of the Lenders.



“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.



“Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.



“Communication” is defined in Section 10.



“Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit C.



“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another in each case that is an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c)
all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business. The amount of a
Contingent Obligation is the stated or determined amount of the primary obligation for which the
Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.



“Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Collateral
Agent pursuant to which Collateral Agent obtains control (within the meaning of the Code) for the
benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account.



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“Credit Extension” is any Term Loan or any other extension of credit hereunder by Collateral
Agent or Lenders for Borrower’s benefit.



“Default Rate” is defined in Section 2.3(b).



“Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.



“Designated Deposit Account” is Borrower’s deposit account, account number XXXXXX2858
maintained with Silicon Valley Bank.



“Disbursement Letter” is that certain form attached hereto as Exhibit B-1.



“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent
amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to
the country issuing such Foreign Currency.



“Dollars,” “dollars” and “$” each mean lawful money of the United States.



“Effective Date” is defined in the preamble of this Agreement.



“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund
and (iv) any commercial bank, savings and loan association or savings bank or any other entity
which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as
amended) and which extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance companies, in each case,
which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of
Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has
total assets in excess of Five Billion Dollars ($5,000,000,000.00), and in each case of clauses (i)
through (iv), which, through its applicable lending office, is capable of lending to Borrower
without the imposition of any withholding or similar taxes; provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include, unless an Event of Default has occurred and is
continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a direct
competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent.
Notwithstanding the foregoing, (x) in connection with assignments by a Lender due to a forced
divestiture at the request of any regulatory agency, the restrictions set forth herein shall not
apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s
own financing or securitization transactions, the restrictions set forth herein shall not apply and
Eligible Assignee shall mean any Person or party providing such financing or formed to undertake
such securitization transaction and any transferee of such Person or party upon the occurrence of a
default, event of default or similar occurrence with respect to such financing or securitization
transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall
release such Lender from any of its obligations hereunder or substitute any such Person or party
for such Lender as a party hereto until Collateral Agent shall have received and accepted an
effective assignment agreement from such Person or party in form satisfactory to Collateral Agent
executed, delivered and fully completed by the applicable parties thereto, and shall have received
such other information regarding such Eligible Assignee as Collateral Agent reasonably shall
require.



“Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.



“Equity Event” is the receipt by Borrower on or after the Effective Date of unrestricted net
cash proceeds of not less than Thirty Five Million Dollars ($35,000,000.00) from the issuance and
sale by Borrower of its equity securities in form and substance and on terms and conditions
reasonably satisfactory to Collateral Agent and Lenders.



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“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its
regulations.



“Event of Default” is defined in Section 8.



“Excluded Accounts” is defined in subsection (n) of the definition of Permitted Liens.



“Final Payment” is a payment (in addition to and not a substitution for the regular monthly
payments of principal plus accrued interest or any other fees or Obligations including but without
limitation the Accrued Final Payment and the Unaccrued Final Payment) due on the earliest to occur
of (a) the Maturity Date, or (b) the acceleration of the Term Loans in accordance with Section 9.1,
or (c) the prepayment in full of the Term Loans pursuant to Section 2.2(c) or 2.2(d), equal to the
original principal amount of the Term Loans (including without limitation the Original Oxford Term
Loans and the SVB Pay Off Term Loan) extended by the Lenders multiplied by the Final Payment
Percentage, payable to Lenders in accordance with their respective Pro Rata Shares.



“Final Payment Percentage” is (i) if the Interest Only Extension Event has not occurred, five
and forty five hundredths percent (5.45%) and (ii) if the Interest Only Extension Event has
occurred, six and three quarters percent (6.75%).



“Foreign Currency” means lawful money of a country other than the United States.



“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower
which shall be a Business Day.



“FX Forward Contract” is any foreign exchange contract by and between Borrower and SVB under
which Borrower commits to purchase from or sell to SVB a specific amount of Foreign Currency on a
specified date.



“GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession in the United States, which are applicable to the circumstances as of the
date of determination.



“General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work, whether published or unpublished, any
patents, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise
agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims,
income and other tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man, property damage, and
business interruption insurance), payments of insurance and rights to payment of any kind.



“Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.



“Governmental Authority” is any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.



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“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.



“Indemnified Person” is defined in Section 12.2.



“Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.



“Intellectual Property” is defined on Exhibit A.



“Interest Only Extension Event” means Collateral Agent’s and Lenders’ receipt of evidence, in
form and substance satisfactory to Collateral Agent and Lenders, of Borrower receiving 510(k)
clearance for its SurgiBot product.



“Inventory” of a Person is all “inventory” as defined in the Code in effect on the date hereof
with such additions to such term as may hereafter be made, and includes without limitation all
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products, including without limitation such inventory as is temporarily out of such
Person’s custody or possession or in transit and including any returned goods and any documents of
title representing any of the above.



“Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.



“ISIS” is defined in Section 6.14.



“Key Person” means TransEnterix’s (i) Chief Executive Officer, who is Todd Pope as of the
Effective Date, (ii) Chief Operating Officer, who is Richard Mueller as of the Effective Date and
(iii) Chief Financial Officer, who is Joseph Slattery as of the Effective Date.



“Lender” is any one of the Lenders.



“Lenders” shall mean the Persons identified on Schedule 1.1 hereto and each assignee
that becomes a party to this Agreement pursuant to Section 12.1.



“Lenders’ Expenses” are all documented out-of-pocket audit fees and expenses, costs, and
expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees
incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents (including, without
limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise
incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents.



“Letter of Credit” is a standby or commercial letter of credit issued by SVB upon request of
Borrower based upon an application, guarantee, indemnity or similar agreement.



“Letter of Credit Account” means that certain account numbered XXXXXX2606 maintained by
Borrower at Bank, provided that such account is used to secure a letter of credit by Bank for
Borrower’s benefit and so long as the amount in such account does not exceed one hundred percent
(100%) of the face amount of such letter of credit.



“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise
against any property.



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31






“Loan Documents” are, collectively, this Agreement, the Warrants, the Perfection Certificate,
any Bank Services Agreement, each Compliance Certificate, each Disbursement Letter, each Loan
Payment/Advance Request Form, the Post Closing Letter, any subordination agreements, any note, or
notes or guaranties executed by Borrower in connection with this Agreement, and any other present
or future agreement entered into by Borrower for the benefit of Lenders and Collateral Agent in
connection with this Agreement, all as amended, restated, or otherwise modified.



“Loan Payment/Advance Request Form” is that certain form attached hereto as Exhibit
B-2.



“Material Adverse Change” is (a) a material impairment in the perfection or priority of
Collateral Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material
adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or
(c) a material impairment of the prospect of repayment of any portion of the Obligations.



“Maturity Date” is April 1, 2018; provided however, if the Interest Only Extension Event
occurs prior to October 31, 2015, such date shall be extended October 1, 2018.



“Obligations” are Borrower’s obligation to pay when due any debts, principal, interest,
Lenders’ Expenses, the Accrued Final Payment, the Unaccrued Final Payment, the Final Payment, and
other amounts Borrower owes the Lenders now or later, in connection with; related to; following; or
arising from, out of or under, this Agreement or, the other Loan Documents (other than the
Warrants), or otherwise, including, without limitation, all obligations relating to letters of
credit (including reimbursement obligations for drawn and undrawn letters of credit), cash
management services, and foreign exchange contracts, if any, and including interest accruing after
Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of
Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties
under the Loan Documents (other than the Warrants). For the avoidance of doubt, “Obligations” does
not include Borrower’s obligations under the Warrants or any other equity securities issued to any
Lender.



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



“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.



“Operating Documents” are, for any Person, such Person’s formation documents, as certified by
the Secretary of State of such Person’s jurisdiction of organization on a date that is no earlier
than sixty (60) days prior to the Effective Date, and, (a) if such Person is a corporation, its
bylaws in current form, (b) if such Person is a limited liability company, its limited liability
company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.



“Original Term Loan” is defined in Section 2.2(a)(i) hereof.



“Payment Date” is the first (1st) calendar day of each calendar month.



“Perfection Certificate” is defined in Section 5.1.



“Permitted Indebtedness” is:



(a) Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the
other Loan Documents;



(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;



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32






(c) Subordinated Debt;



(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;



(e) Indebtedness secured by liens specified in clause (c) of the definition of “Permitted
Liens” provided such Indebtedness shall not exceed Two Hundred Fifty Thousand Dollars ($250,000.00)
in the aggregate principal amount outstanding at any one time;



(f) Indebtedness incurred as a result of endorsing negotiable instruments received in the
ordinary course of Borrower’s business;



(g) Contingent Obligations in respect of Permitted Indebtedness;



(h) other Indebtedness not otherwise permitted by Section 7.4 not to exceed Fifty Thousand
Dollars ($50,000.00) in the aggregate at any one time outstanding;



(i) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (f) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose materially more burdensome terms upon
Borrower, or its Subsidiary, as the case may be;



(j) cash secured Bank Services in an amount of Five Hundred Thousand Dollars ($500,000.00) in
the aggregate;



(k) non-cash secured Bank Services in an amount of Two Hundred Thousand Dollars ($200,000.00)
in the aggregate; and



(l) Indebtedness that constitutes a Permitted Investment, including Indebtedness of one
Borrower to another Borrower.



“Permitted Investments” are:



(a) Investments shown on the Perfection Certificate and existing on the Effective Date;



(b) Investments in cash and Cash Equivalents;



(c) Investments consisting of or held in Collateral Accounts, provided that if required
pursuant to Section 6.6, such Collateral Accounts are subject to a first perfected security
interest in favor of Collateral Agent, for the ratable benefit of the Lenders;



(d) 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 business;



(e) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (e) shall not apply to Investments of Borrower in any Subsidiary; and



(f) Investments by (i) a Borrower in another Borrower, (ii) by a Borrower in Subsidiaries not
a Borrower not to exceed Fifty Thousand Dollars ($50,000.00) in the aggregate in any fiscal year
and (ii) by Subsidiaries not a Borrower in a Borrower.



“Permitted Licenses” are (A) licenses of over-the-counter software that is commercially
available to the public, and (B) non-exclusive and exclusive licenses for the use of the
Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of
business, provided, that, with respect to each such license



33.





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described in clause (B), (i) no Event of Default has occurred or is continuing at the time of such
license; (ii) the license constitutes an arms-length transaction, the terms of which, on their
face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the
ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest
in or lien on, or assign or otherwise Transfer any Intellectual Property; (iii) in the case of any
exclusive license, (x) Borrower delivers ten (10) days’ prior written notice and a brief summary of
the terms of the proposed license to Collateral Agent and the Lenders and delivers to Collateral
Agent and the Lenders copies of the final executed licensing documents in connection with the
exclusive license promptly upon consummation thereof, and (y) any such license could not result in
a legal transfer of title of the licensed property but may be exclusive in respects other than
territory and may be exclusive as to territory only as to discrete geographical areas outside of
the United States; and (iv) all upfront payments, royalties, milestone payments or other proceeds
arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are
paid to a Deposit Account that is governed by a Control Agreement.



“Permitted Liens” are:



(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement and the other Loan Documents;



(b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on
its Books, provided that no notice of any such Lien has been filed or recorded under the Internal
Revenue Code of 1986, as amended , and the Treasury Regulations adopted thereunder;



(c) purchase money Liens (i) on Equipment or other assets subject to capital leases acquired
or held by Borrower incurred for financing the acquisition of the Equipment or such assets subject
to capital leases, or (ii) on existing Equipment or such assets subject to capital leases when
acquired, in each case if the Lien is confined to the property and improvements and the proceeds of
the Equipment or other assets subject to capital leases; provided that such Liens under this clause
(c) (A) may have priority over liens granted to Collateral Agent hereunder to the extent provided
under the Code at any time that the Indebtedness secured by the Liens remains outstanding and (B)
may secure Indebtedness of no more than the amount set forth in clause (e) and (g) of the
definition of Permitted Indebtedness;



(d) statutory Liens securing claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other Persons imposed without action of such parties, provided they
have no priority over any of Collateral Agent’s Lien and the aggregate amount of the obligations
secured by such Liens does not at any time exceed Fifty Thousand Dollars ($50,000.00) and such
obligations are not delinquent or are being contested in good faith by appropriate proceeds which
have the effect of preventing the forfeiture or sale of the property subject thereto;



(e) leases or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or
Intellectual Property) granted in the ordinary course of Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a
security interest;



(f) banker’s liens, rights of setoff and Liens in favor of financial institutions incurred
made in the ordinary course of business arising in connection with Borrower’s deposit accounts or
securities accounts held at such institutions to secure solely payment of fees and similar costs
and expenses and provided such accounts are maintained in compliance with Section 6.6(b) hereof;



(g) Liens to secure payment of workers’ compensation, employment insurance, social security
and other like obligations incurred in the ordinary course of business (other than Liens imposed by
ERISA);



(h) Liens arising from judgments, decrees or attachments in circumstances not constituting an
Event of Default under Section 8.4 or 8.7;



34.





34






(i) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) and (c) above, but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount of the
Indebtedness may not increase;



(j) Liens consisting of Permitted Licenses;



(k) Liens in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods provided that the obligations
secured by such Liens does not exceed Twenty Five Thousand Dollars ($25,000.00) in the aggregate;



(l) Liens on insurance proceeds in favor of insurance companies granted as security for
insurance premiums;



(m) (i) deposits in an amount not to exceed Twenty Five Thousand Dollars ($25,000.00) in the
aggregate, to secure the performance of bids, trade contracts (other than for borrowed money),
contracts for the purchase of property, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, and (ii) deposits for the purchase of
molds, fixtures and tooling, in each case, incurred in the ordinary course of business and not
representing an obligation for borrowed money;



(n) security deposits in favor of Florida Public Utilities Commission and Jain Investments not
to exceed Three Thousand Dollars ($3,000.00) in the aggregate at any time (the “Excluded
Accounts”); and



(o) Liens securing Indebtedness permitted under clause (j) of the definition of “Permitted
Indebtedness”;



“Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.



“Post Closing Letter” is that certain Post Closing Letter dated as of the Effective Date by
and between Collateral Agent and Borrower.



“Pro Rata Share” means, as of any date of determination, with respect to each Lender, a
percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the
outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding
principal amount of all Term Loans.



“Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made



“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the
Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests
in their Term Loan, Lenders holding one hundred percent (100%) of the aggregate outstanding
principal balance of the Term Loan, or (ii) at any time from and after any Original Lender has
assigned or transferred any interest in its Term Loan, Lenders holding at least sixty six percent
(66%) of the aggregate outstanding principal balance of the Term Loan and, in respect of this
clause (ii), (A) each Original Lender that has not assigned or transferred any portion of its Term
Loan, (B) each assignee or transferee of an Original Lender’s interest in the Term Loan, but only
to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original
Lender, and (C) any Person providing financing to any Person described in clauses (A) and (B)
above; provided, however, that this clause (C) shall only apply upon the occurrence of a default,
event of default or similar occurrence with respect to such financing.



“Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject.



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“Responsible Officer” is any of the Vice President of Finance, President, Chief Executive
Officer, or Chief Financial Officer of Borrower acting alone.



“Second Draw Period” means the period commencing on the later of (X) Collateral Agent’s and
Lenders’ receipt of evidence, in form and substance satisfactory to Collateral Agent and Lenders,
of Borrower’s filing for SurgiBot 510(k) clearance and (Y) the Equity Event and ending on the
earlier of (i) the date which is sixty (60) days after the later to occur of clause (X) and (Y)
above, (ii) September 26, 2015 and (iii) the occurrence and continuance of an Event of Default.



“Secured Promissory Note” is defined in Section 2.4.



“Secured Promissory Note Record” is a record maintained by each Lender with respect to the
outstanding Obligations owed by Borrower to Lender and credits made thereto.



“Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.



“Shares” is one hundred percent (100%) of the issued and outstanding capital stock, membership
units or other securities owned or held of record by Borrower or Borrower’s Subsidiary, in any
Subsidiary.



“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now
or hereafter indebtedness to the Lenders (pursuant to a subordination, intercreditor, or other
similar agreement in form and substance satisfactory to Collateral Agent and the Lenders entered
into between Collateral Agent, Borrower, and the other creditor), on terms acceptable to Collateral
Agent and the Lenders.



“Subsidiary” means, with respect to any Person, any Person of which more than fifty percent
(50%) of the voting stock or other equity interests (in the case of Persons other than
corporations) is owned or controlled, directly or indirectly, by such Person or one or more of
Affiliates of such Person; provided, however, Subsidiary shall not include any person in which
Borrower’s investors own any such equity interest, other than those subsidiaries of Borrower.



“SVB Pay Off Term Loan” is defined in Section 2.2(a)(ii) hereof.



“Term Loan” is defined in Section 2.2(a)(iv) hereof.



“Term A Loan” is defined in Section 2.2(a)(ii) hereof.



“Term B Loan” is defined in Section 2.2(a)(iii) hereof.



“Term C Loan” is defined in Section 2.2(a)(iv) hereof.



“Term Loan Commitment” means, for any Lender, the obligation of such Lender to make a Term
Loan, up to the applicable principal amount shown on Schedule 1.1. “Term Loan Commitments”
means the aggregate amount of such commitments of all Lenders.



“Third Draw Period” means the period commencing on the later of (X) the Lenders making the
Term B Loans to Borrower and (Y) Collateral Agent’s and Lenders’ receipt of evidence, in form and
substance satisfactory to Collateral Agent and Lenders, of Borrower’s achievement of at least Ten
Million Dollars ($10,000,000.00) in revenue, measured on a trailing six (6) month basis, from the
sale of Borrower’s Surgibot and Surgibot related products and ending on the earlier of (i) the date
which is sixty (60) days after the later to occur of clause (X) and (Y) above, (ii) September 26,
2016 and (iii) the occurrence and continuance of an Event of Default.



“Transfer” is defined in Section 7.1.



“Unaccrued Final Payment” is defined in Section 2.5(d) hereof.



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“Warrants” are those certain Warrants to Purchase Stock dated as of the Effective Date, or any
date thereafter, issued by Borrower in favor of each Lender and those certain Warrants (as defined
in the Original Agreement).



[Balance of Page Intentionally Left Blank]




37.




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the Effective Date.



	 
	BORROWER:

	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

	SAFESTITCH LLC

	By:   /s/ Todd M. Pope

	 

	Name: Todd M. Pope

	Title: President and Chief Executive Officer of

the Sole Member

	COLLATERAL AGENT AND LENDER:

	OXFORD FINANCE LLC

	By /s/ Mark Davis

	 

	Name: Mark Davis

	 

	Title: Vice President, Finance, Secretary & Treasurer

	 

	LENDER:

	SILICON VALLEY BANK

	By /s/ Patrick O. Schagel

	 

	Name: Patrick O. Schagel

	 

	Title: Vice President

	 







[Signature Page to Loan and Security Agreement]




SCHEDULE 1.1




LENDERS AND COMMITMENTS




	 	 	 	 	 	 	 	 	 
	 	 	Original Term Loans	 	 
	Lender	 	Term Loan Commitment	 	Commitment Percentage
	OXFORD FINANCE LLC

	 	$	2,801,822.50	 	 	 	50.00	%
	 

	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK

	 	$	2,801,822.50	 	 	 	50.00	%
	 

	 	 	 	 	 	 	 	 
	TOTAL

	 	$	5,603,645.00	 	 	 	100.00	%
	 

	 	 	 	 	 	 	 	 
	Term A Loans

	 

	Lender

	 	Term Loan Commitment
	 	Commitment Percentage

	 

	 	 	 	 	 	 	 	 
	OXFORD FINANCE LLC

	 	$	3,198,177.50	 	 	 	72.75	%
	 

	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK

	 	$	1,198,177.50	 	 	 	27.25	%
	 

	 	 	 	 	 	 	 	 
	TOTAL

	 	$	4,396,355.00	 	 	 	100.00	%
	 

	 	 	 	 	 	 	 	 
	Term B Loans

	 

	Lender

	 	Term Loan Commitment
	 	Commitment Percentage

	 

	 	 	 	 	 	 	 	 
	OXFORD FINANCE LLC

	 	$	3,000,000.00	 	 	 	60.00	%
	 

	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK

	 	$	2,000,000.00	 	 	 	40.00	%
	 

	 	 	 	 	 	 	 	 
	TOTAL

	 	$	5,000,000.00	 	 	 	100.00	%
	 

	 	 	 	 	 	 	 	 
	Term C Loans

	 

	Lender

	 	Term Loan Commitment
	 	Commitment Percentage

	 

	 	 	 	 	 	 	 	 
	OXFORD FINANCE LLC

	 	$	6,000,000.00	 	 	 	60.00	%
	 

	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK

	 	$	4,000,000.00	 	 	 	40.00	%
	 

	 	 	 	 	 	 	 	 
	TOTAL

	 	$	10,000,000.00	 	 	 	100.00	%
	 

	 	 	 	 	 	 	 	 
	Aggregate (all Term Loans)

	 

	Lender

	 	Term Loan Commitment
	 	Commitment Percentage

	 

	 	 	 	 	 	 	 	 
	OXFORD FINANCE LLC

	 	$	15,000,000.00	 	 	 	60.00	%
	 

	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK

	 	$	10,000,000.00	 	 	 	40.00	%
	 

	 	 	 	 	 	 	 	 
	TOTAL

	 	$	25,000,000.00	 	 	 	100.00	%
	 

	 	 	 	 	 	 	 	 






EXHIBIT A




Description of Collateral




The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:



All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as set forth below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, all
certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and



All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.



Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired: (i) any copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative work, in each case
whether published or unpublished or registered or unregistered; any patents, patent applications
and like protections, including improvements, divisions, continuations, renewals, reissues,
extensions, and continuations-in-part of the same; trademarks, trade names, service marks, mask
works, rights of use of any name, domain names, trade dress, any applications therefor, in each
case whether registered or not; and the goodwill of the business of Borrower connected with and
symbolized thereby; know-how, operating and production manuals, trade secret rights, clinical and
non-clinical data, rights to unpatented inventions, source code, software, processes, techniques,
research, studies, algorithms, formulae, databases, quality control procedures, technical
specifications and data, sales literature, drawings, blueprints and inventions; and any claims for
damage by way of any past, present, or future infringement of any of the foregoing (collectively,
the “Intellectual Property”); provided, however, the Collateral shall include all Accounts, license
and royalty fees and other revenues, proceeds, or income arising out of or relating to any of the
foregoing; provided that if a judicial authority (including a U.S. Bankruptcy Court) would hold
that a security interest in the underlying Intellectual Property is necessary to have a security
interest in such Accounts, license and royalty fees and other revenues, proceeds, or income of
Intellectual Property, then the Collateral shall automatically, and effective as of the Effective
Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral
Agent’s security interest in such Accounts, license and royalty fees and other revenues, proceeds,
or income of the Intellectual Property (ii) any United States intent-to-use trademark or service
mark application to the extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such intent-to-use trademark or
service mark application under applicable law, and (iii) the Excluded Accounts.



Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and
Lenders, Borrower has agreed not to encumber any of its Intellectual Property.



EXHIBIT B-1




DISBURSEMENT LETTER





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EXHIBIT B-2




Loan Payment / Advance Request Form

Deadline for same day processing is 12:00 E.S.T.





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EXHIBIT C




Compliance Certificate





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EXHIBIT D

Secured Promissory Note

[AMENDED AND RESTATED] SECURED PROMISSORY NOTE

(Term [A][B][C] Loan)




$      Dated:       



FOR VALUE RECEIVED, the undersigned, TRANSENTERIX, INC., a Delaware corporation, TRANSENTERIX
SURGICAL, INC., a Delaware corporation, and SAFESTITCH LLC, a Virginia limited liability company,
each with offices located at 635 Davis Drive, Suite 300, Morrisville, North Carolina 27560
(individually and collectively, jointly and severally, “Borrower”) HEREBY PROMISES TO PAY to the
order of OXFORD FINANCE LLC/SILICON VALLEY BANK (“Lender”) the principal amount of      
Dollars ($     ) or such lesser amount as shall equal the outstanding principal balance of the
Term [A][B][C] Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal
amount of such Term [A][B][C] Loan, at the rates and in accordance with the terms of the Amended
and Restated Loan and Security Agreement by and among Borrower, OXFORD FINANCE LLC, as Collateral
Agent, and the Lenders from time to time party thereto (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire
principal amount and all accrued and unpaid interest hereunder shall be due and payable on the
Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise defined herein
shall have the meaning attributed to such term in the Loan Agreement.



Borrower agrees to prepay any initial partial monthly interest payment from the date the Term
[A][B][C] Loan is made to Borrower under this Secured Promissory Note (this “Note”) to the first
Payment Date (“Interim Interest”) on the first Payment Date.



Principal, interest and all other amounts due with respect to the Term [A][B][C] Loan made to
Borrower by Lender are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement and this Note. The principal amount of this Note and the interest rate
applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and,
prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.



The Loan Agreement, among other things, (a) provides for the making of a secured Term [A][B][C]
Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.



This Note may not be prepaid except as set forth in Section 2.2(c) and Section 2.2(d) of the Loan
Agreement.



This Note and the obligation of Borrower to repay the unpaid principal amount of the Term [A][B][C]
Loan, interest on the Term [A][B][C] Loan and all other amounts due Lender under the Loan Agreement
is secured under the Loan Agreement.



Presentment for payment, demand, notice of protest and all other demands and notices of any kind in
connection with the execution, delivery, performance and enforcement of this Note are hereby
waived.



Borrower shall pay all reasonable Lenders’ Expenses, including, without limitation, reasonable
attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of
Borrower’s obligations hereunder not performed when due.



This Note shall be governed by, and construed and interpreted in accordance with, the internal laws
of the State of New York.



The ownership of an interest in this Note shall be registered on a record of ownership maintained
by Lender or its agent. Notwithstanding anything else in this Note to the contrary, the right to
the principal of, and stated interest on, this Note may be transferred only if the transfer is
registered on such record of ownership and the transferee is identified as the owner of an interest
in the obligation. Borrower shall be entitled to treat the registered holder of this Note (as
recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not
be bound to recognize any equitable or other claim to or interest in this Note on the part of any
other person or entity.



[Except as otherwise set forth herein, this Amended and Restated Secured Promissory Note is
intended to and does completely amend and restate, without novation, that certain Secured
Promissory Note issued [January 17, 2012 by TRANSENTERIX, INC.][September 3, 2013 by TRANSENTERIX,
INC., SAFESTITCH MEDICAL, INC. and SAFESTITCH LLC] in favor of Lender.]



[Balance of Page Intentionally Left Blank]





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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers
thereunto duly authorized on the date hereof.




BORROWER:




TRANSENTERIX, INC.




By


Name:


Title:




TRANSENTERIX SURGICAL, INC.




By


Name:


Title:




SAFESTITCH LLC




By


Name:


Title:



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LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	Principal Amount	 	Interest Rate	 	Scheduled Payment Amount	 	Notation By







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