Document:

tricida-herculesloanands

Exhibit 10.1  LOAN AND SECURITY AGREEMENT  THIS LOAN AND SECURITY AGREEMENT is made and dated as of October 19,  2022 (as amended, modified or supplemented from time to time, this “Agreement”) and is  entered into by and among Tricida, Inc., a Delaware corporation, and each of its Qualified  Subsidiaries from time to time party hereto (hereinafter collectively referred to as the  “Borrower”), the several banks and other financial institutions or entities from time to time  parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL,  INC., a Maryland corporation, in its capacity as administrative agent and collateral agent for  itself and the Lender (in such capacity, the “Agent”).    RECITALS  A. Borrower has requested Lender to make available to Borrower a loan in an aggregate principal amount of up to One Hundred Twenty-Five Million Dollars ($125,000,000)  (the “Term Loan”); and  B. Lender is willing to make the Term Loan on the terms and conditions set forth in this Agreement.  AGREEMENT  NOW, THEREFORE, Borrower, Agent and Lender agree as follows:  SECTION 1.  DEFINITIONS AND RULES OF  CONSTRUCTION  1.1 Unless otherwise defined herein, the following capitalized terms shall have  the following meanings:  “2020 Convertible Notes” means those certain 3.50% Convertible Senior Notes  Due 2027, issued by Borrower and governed by the terms of an indenture, dated as of May 22,  2020, between Borrower and U.S. Bank National Association, as trustee.  “Account Control Agreement(s)” means any agreement entered into by and  among the Agent, Borrower and a third party bank or other institution (including a Securities  Intermediary) in which Borrower maintains a Deposit Account or an account holding Investment  Property and which perfects Agent’s first priority security interest in the subject account or  accounts.  “ACH Authorization” means the ACH Debit Authorization Agreement in  substantially the form of Exhibit H, which account numbers shall be redacted for security  purposes if and when filed publicly by the Borrower.  “Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity  Interests are acquired by Borrower or any of its Subsidiaries in a Permitted Acquisition; provided,     

 

2    that such Indebtedness (a) was in existence prior to the date of such Permitted Acquisition and (b)  was not incurred in connection with, or in contemplation of, such Permitted Acquisition.  “Acquisition” means any transaction or series of related transactions for the  purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the  assets of a Person, or of any business, line of business or division or other unit of operation of a  Person, (b) the acquisition of fifty percent (50%) or more of the Equity Interests of any Person,  whether or not involving a merger,  consolidation or similar transaction with such other Person, or  otherwise causing any Person to become a Subsidiary of Borrower, or (c) the acquisition of, or the  right to use, develop or sell (in each case, including through licensing), any product, product line  or Intellectual Property of or from any other Person.   “Advance(s)” means a Term Loan Advance.  “Advance Date” means the funding date of any Advance.  “Advance Request” means a request for an Advance submitted by Borrower to  Agent in substantially the form of Exhibit A, which account numbers shall be redacted for  security purposes if and when filed publicly by the Borrower.  “Affiliate” means (a) any Person that directly or indirectly controls, is controlled  by, or is under common control with the Person in question, (b) any Person directly or indirectly  owning, controlling or holding with power to vote ten percent (10%) or more of the outstanding  voting securities of another Person, (c) any Person ten percent (10%) or more of whose  outstanding voting securities are directly or indirectly owned, controlled or held by another  Person with power to vote such securities, or (d) any Person related by blood or marriage to any  Person described in subsection (a), (b) or (c) of this paragraph.  As used in the definition of  “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct  or cause the direction of the management and policies of a Person, whether through ownership of  voting securities, by contract or otherwise.  “Agent” has the meaning given to it in the preamble to this Agreement.  “Amortization Date” means August 1, 2024 or, if the Interest Only Extension  Conditions are satisfied, November 1, 2026.   “Anti-Corruption Laws” shall mean all laws, rules, and regulations of any  jurisdiction applicable to Borrower or any of its Affiliates from time to time concerning or  relating to bribery or corruption, including without limitation the United States Foreign Corrupt  Practices Act of 1977, as amended, the UK Bribery Act 2010 and other similar legislation in any  other jurisdictions.  “Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to  terrorism or money laundering, including without limitation Executive Order No. 13224  (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing  the Bank Secrecy Act, and the laws administered by OFAC.  

 

3  “Approval Milestone” means Borrower shall have obtained approval of the NDA  for TRC101 (a/k/a veverimer) from the FDA, with approved labeling that is generally consistent  with the labeling sought in the NDA resubmission, subject to verification by Agent (including  supporting documentation requested by Agent, to the extent such documentation is available to  Borrower).  “Assignee” has the meaning given to it in Section 11.13.  “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 Products” means all products, software, service offerings, technical  data or technology currently being designed, manufactured or sold by Borrower or which  Borrower intends to sell, license, or distribute in the future including any products or service  offerings under development, collectively, together with all products, software, service offerings,  technical data or technology that have been sold, licensed or distributed by Borrower since its  incorporation.  “Borrower’s Market Capitalization” means, for any given date of determination,  an amount equal to (a) the average of the daily volume weighted average price of Common Stock  as reported for each the five (5) trading days preceding such date of determination (it being  understood that a “trading day” shall mean a day on which shares of Common Stock trade on the  NASDAQ in an ordinary trading session) multiplied by (b) the sum of (i) the total number of  issued and outstanding shares of Common Stock that are issued and outstanding on the date of  the determination and listed on the NASDAQ (or, if the primary listing of such Common Stock  is on another exchange, on such other exchange) and (ii) the number of warrants that are pre- funded and are convertible to Common Stock on the date of the determination (including, but not  limited to, the 2,333,333 pre-funded warrants that are outstanding as of the Closing Date).  Such  determination shall be appropriately adjusted for any stock dividend, stock split, stock  combination, reclassification or other similar transaction during the applicable calculation period.  “Business Day” means any day other than Saturday, Sunday and any other day on  which banking institutions in the State of California are closed for business.  “Cash” means all cash, cash equivalents and liquid funds.  “Change in Control” means any event, transaction, or occurrence as a result of  which (a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange  Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of  Borrower, is or becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under  the Exchange Act), directly or indirectly, of securities of Borrower, representing thirty-five  

 

4    percent (35%) or more of the combined voting power of Borrower’s then outstanding securities;  or (b) during any period of twelve consecutive calendar months, individuals who at the  beginning of such period constituted the board of directors of Borrower (together with any new  directors whose election by the board of directors of Borrower was approved by a vote of not  less than two-thirds of the directors then still in office who either were directors at the beginning  of such period or whose election or nomination for election was previously so approved) cease  for any reason other than death or disability to constitute a majority of the directors then in  office.   “Claims” has the meaning given to it in Section 11.10.  “Closing Date” means October 19, 2022.  “Closing Date Facility Charge” means One Hundred Twenty-Five Thousand  ($125,000).  “Collateral” means the property described in Section 3.  “Common Stock” means the common stock, par value $0.001 per share, of the  Borrower.  “Confidential Information” has the meaning given to it in Section 11.12.  “Contingent Obligation” means, as applied to any Person, any direct or indirect  liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease,  dividend, letter of credit or other obligation of another, including any such obligation directly or  indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in  respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with  respect to undrawn letters of credit, corporate credit cards or merchant services issued for the  account of that Person; and (iii) all obligations arising under any interest rate, currency or  commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other  agreement or arrangement designated to protect a Person against fluctuation in interest rates,  currency exchange rates or commodity prices; provided, however, that the term “Contingent  Obligation” shall not include endorsements for collection or deposit in the ordinary course of  business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the  stated or determined amount of the primary obligation in respect of which such Contingent  Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability  in respect thereof as determined by such Person in good faith; provided, however, that such  amount shall not in any event exceed the maximum amount of the obligations under the guarantee  or other support arrangement.  “Copyright License” means any written agreement granting any right to use any  Copyright or Copyright registration, now owned or hereafter acquired by Borrower or in which  Borrower now holds or hereafter acquires any interest.  “Copyrights” means all copyrights, whether registered or unregistered, held  pursuant to the laws of the United States of America, any State thereof, or of any other country.  

 

5    “Deposit Accounts” means any “deposit accounts,” as such term is defined in the  UCC, and includes any checking account, savings account, or certificate of deposit.  “Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.  “Due Diligence Fee” means $25,000, which fee has been paid to the Lenders prior  to the Closing Date, and shall be deemed fully earned on such date regardless of the early  termination of this Agreement.  “Eligible Foreign Subsidiary” means any Foreign Subsidiary whose execution of a  Joinder Agreement could not result in a material adverse tax consequence to Borrower.  “End of Term Charge” means any end of term charge payable pursuant to Section  2.6.  “Equity Interests” means, with respect to any Person, the capital stock,  partnership or limited liability company interest, or other equity securities or equity ownership  interests of such Person.  “ERISA” means the Employee Retirement Income Security Act of 1974, as  amended, and the regulations promulgated thereunder.  “Event of Default” has the meaning given to it in Section 9.  “Excluded Accounts” means any Deposit Account that is used solely as a payroll  account for the employees of Borrower or any of its Subsidiaries or the funds in which consist  solely of funds held in trust for any director, officer or employee of Borrower or such Subsidiary  or any employee benefit plan maintained by Borrower or such Subsidiary or funds representing  deferred compensation for the directors and employees of Borrower or such Subsidiary,  collectively not to exceed the amount to be paid in the ordinary course of business in the then-next  payroll cycle.  “FDA” means the United States Food and Drug Administration, or any successor  thereto.  “FDCA”  means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et  seq., as amended from time to time, and the rules and regulations promulgated thereunder.  “Financial Statements” has the meaning given to it in Section 7.1.  “Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized  under the laws of any state within the United States of America.  “GAAP” means generally accepted accounting principles in the United States of  America, as in effect from time to time.  “Healthcare Laws” means all health care laws applicable to Borrower or any  Subsidiary and to the ownership, testing, development, sale, marketing, manufacture, packaging,  

 

6    processing, use, distribution, storage, import, export or disposal of Borrower’s or any Subsidiary’s  products or product candidates, including but not limited to, the FDCA, the Anti-Kickback Statute  (42 U.S.C. Section 1320a-7b(b)), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the  Physician Payment Sunshine Act (42 U.S.C. § 1320a-7h), the Civil False Claims Act (31 U.S.C.  Section 3729 et seq.), the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws  relating to health care fraud and abuse, including but not limited to 18 U.S.C. Sections 286 and  287, and the health care fraud criminal provisions under HIPAA (42 U.S.C. Section 1320d et  seq.), the exclusion laws (42 U.S.C. § 1320a-7), HIPAA and similar state and foreign privacy and  data security laws such as the European Union General Data Protection Regulation, Medicare  (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), and any  and all other comparable state, local, federal or foreign health care laws and the regulations  promulgated pursuant to such laws, each as amended from time to time.  “HIPAA” means the U.S. Health Insurance Portability and Accountability Act of  1996 (42 U.S.C. § 1320d et seq.) as amended by the Health Information Technology for  Economic and Clinical Health Act (42 U.S.C. § 17921 et seq.), and all regulations promulgated  thereunder.  “Indebtedness” means indebtedness of any kind, including (a) all indebtedness for  borrowed money or the deferred purchase price of property or services (excluding trade credit  entered into in the ordinary course of business due within ninety (90) days), including  reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all  obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease  obligations, and (d) all Contingent Obligations.  “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 similar relief.  “Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents;  Licenses; trade secrets and inventions; mask works; Borrower’s applications therefor and reissues,  extensions, or renewals thereof; and Borrower’s goodwill associated with any of the foregoing,  together with Borrower’s rights to sue for past, present and future infringement of Intellectual  Property and the goodwill associated therewith.  “Interest Only Extension Conditions” shall mean the satisfaction of each of the  following events: (a) no Event of Default shall have occurred and is continuing and (b)  Borrower’s achievement of the Approval Milestone on or prior to the then-effective  Amortization Date.  “Investment” means any beneficial ownership (including stock, partnership or  limited liability company interests) of or in any Person, or any loan, advance or capital  contribution to any Person or any Acquisition.  “Joinder Agreements” means for each Qualified Subsidiary, a completed and  executed Joinder Agreement in substantially the form attached hereto as Exhibit G.  

 

7    “Lender” has the meaning given to it in the preamble to this Agreement.  “License” means any Copyright License, Patent License, Trademark License or  other license of Intellectual Property rights or interests.  “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for  security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily  incurred or arising by operation of law or otherwise, against any property, any conditional sale or  other title retention agreement, and any lease in the nature of a security interest.  “Loan” means the Advances made under this Agreement.  “Loan Documents” means this Agreement, the Notes (if any), the ACH  Authorization, the Account Control Agreements, the Joinder Agreements, all UCC financing  statements, and any other documents executed in connection with the Secured Obligations or the  transactions contemplated hereby, as the same may from time to time be amended, modified,  supplemented or restated.  “Material Adverse Effect” means a material adverse effect upon: (i) the business,  operations, properties, assets or financial condition of Borrower and its Subsidiaries taken as a  whole; (ii) the ability of Borrower to perform or pay the Secured Obligations in accordance with  the terms of the Loan Documents, or the ability of Agent or Lender to enforce any of its rights or  remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the  Collateral or the priority of such Liens.  “Maximum Rate” shall have the meaning assigned to such term in Section 2.3.  “Maximum Term Loan Amount” means One Hundred Twenty-Five Million and  No/100 Dollars ($125,000,000).  “Merger Event” means any Change in Control or any sale, lease, exclusive license  or other transfer of all or substantially all assets or Common Stock of the Borrower or any  consolidation, merger, recapitalization or reorganization involving the Borrower in which the  Borrower is not the surviving entity, or in which the outstanding shares of the Borrower’s capital  stock are otherwise converted into or exchanged for shares of common stock, preferred stock,  other securities or property of another entity; other than any such consolidation, merger,  recapitalization or reorganization in which the shares of capital stock of the Borrower  immediately prior to such consolidation, merger or reorganization, continue to represent a  majority of the voting power of the surviving entity (or, if the surviving entity is a wholly owned  subsidiary, its parent) immediately after such consolidation, merger, recapitalization or  reorganization (it being understood that for purposes of any such determination, all shares of  Common Stock issuable upon exercise of options or warrants outstanding immediately prior to  any such consolidation, merger, recapitalization or reorganization or upon conversion of  convertible securities outstanding immediately prior to such consolidation, merger,  recapitalization or reorganization shall be deemed to be outstanding immediately prior to such  consolidation, merger, recapitalization or reorganization and, if applicable, converted or  exchanged in such consolidation, merger, recapitalization or reorganization on the same terms as  the actual outstanding shares of capital stock are converted or exchanged).  

 

8    “NDA” means a new drug application submitted to the FDA pursuant to Section  505(b) of the Federal Food, Drug, and Cosmetic Act seeking authorization to market a new drug  in the United States, and all supplements and amendments that may be submitted thereto.   “NDA Milestone” means FDA has accepted Borrower’s NDA for TRC101 (a/k/a  veverimer) for filing, subject to verification by Agent (including supporting documentation  requested by Agent, to the extent such documentation is available to Borrower).   “Net TRC101 Product Revenue” means Borrower’s product revenue from  TRC101 (including licensing, royalty and other payments, including from collaboration  arrangements, derived from or related to TRC101) that is invoiced and/or recognized as net  revenue (as determined in accordance with GAAP as applied by Borrower), calculated in a  manner consistent with how such amount is (or is to be) reported in Borrower’s audited Financial  Statements.  “Non-Disclosure Agreement” means that certain Mutual Confidential Disclosure  Agreement by and between Borrower and Hercules Capital, Inc. effective August 1, 2022.  “Note(s)” means a Term Note.  “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.  “Patent License” means any written agreement granting any right with respect to  any invention on which a Patent is in existence or a Patent application is pending, in which  agreement Borrower now holds or hereafter acquires any interest.  “Patents” means all letters patent of, or rights corresponding thereto, in the United  States of America or in any other country, all registrations and recordings thereof, and all  applications for letters patent of, or rights corresponding thereto, in the United States of America  or any other country.  “Permits” means all certifications, registrations, licenses, permits, franchises,  approvals, clearances, exemptions, authorizations or consents of any governmental entity,  necessary for or used in the conduct or operation Borrower’s or any Subsidiary’s business.  “Permitted Acquisition” shall mean any Acquisition (including by way of merger),  which is conducted in accordance with the following requirements:  (a) such Acquisition is of a business or Person engaged in a line of business related to that of the Borrower or its Subsidiaries;  (b) if such Acquisition is structured as a stock Acquisition, then the Person so acquired shall either (i) become a wholly-owned Subsidiary of Borrower or of a Subsidiary and  

 

9    the Borrower shall comply, or cause such Subsidiary to comply, with Section 7.13 hereof or (ii)  such Person shall be merged with and into Borrower (with the Borrower being the surviving  entity);  (c) if such Acquisition is structured as the Acquisition of assets, such assets shall be acquired by Borrower, and shall be free and clear of Liens other than Permitted Liens;  (d) both immediately before and after such Acquisition no Default or Event of Default shall have occurred and be continuing;   (e) the sum of the cash portion of the purchase price of such proposed new Acquisition, computed on the basis of total Acquisition consideration paid or incurred, or to be  paid or incurred, by Borrower with respect thereto, including the amount of Permitted  Indebtedness assumed or to which such assets, businesses or business or ownership interest or  shares, or any Person so acquired, is subject, shall not be greater than Five Million Dollars  ($5,000,000) for all such Acquisitions during the term of this Agreement; and  (f) the sum of any consideration for all such Acquisitions (other than any Acquisition in which the target of such Acquisition achieved EBITDA (as reasonably defined by  Agent) of at least $1 on a trailing twelve (12) month basis immediately prior to the  consummation of such Acquisition) paid in Equity Interests of Borrower shall not exceed One  Hundred Million Dollars ($100,000,000) for all such Acquisitions during the term of this  Agreement.    “Permitted Convertible Indebtedness” means outstanding Indebtedness in an  aggregate amount not to exceed $500,000,000 consisting of (a) the 2020 Convertible Notes and  (b) any other Indebtedness that is convertible into a fixed number (subject to customary anti- dilution adjustments, “make-whole” increases and other customary changes thereto) of shares of Common Stock of Borrower (and cash in lieu of fractional shares) (or other securities or property following a Merger Event or other change of the Common Stock of Borrower), cash or any combination thereof (with the amount of such cash or such combination determined by reference to the market price of such Common Stock or such other securities) issued by the Borrower after the Closing Date pursuant to an offering consummated in accordance with or registered under the Securities Act of 1933, provided that (1) such Indebtedness is unsecured, (2) such Indebtedness does not have a scheduled maturity date, any scheduled amortization payments or any mandatory cash prepayments or redemptions of principal earlier than one hundred eighty (180) days after the Term Loan Maturity Date (other than cash in lieu of fractional shares upon any conversion thereof) (it being understood that neither (i) any offer to purchase such Indebtedness as a result of “change of control”, “fundamental change” or any comparable term under and as defined in any indenture governing any Permitted Convertible Indebtedness, (ii) any early conversion of such Indebtedness in accordance with the terms thereof, nor (iii) any redemption of such Indebtedness upon satisfaction of a condition related to the stock price of the Borrower’s common stock, in each case, shall violate the restriction of this clause (2)), (3) such Indebtedness shall be on terms and conditions customary for Indebtedness of such type, as determined in good faith by the board of directors of Borrower, (4) such Indebtedness shall not be guaranteed by any entity unless such entity also guaranties the Secured Obligations pursuant to an executed Joinder Agreement in accordance with Section 7.13, (5) such Indebtedness shall be Indebtedness of 

 

10    Tricida, Inc., (6) on the date of issuance thereof, the Borrower’s Market Capitalization is not less  than $1,000,000,000 (except in the case of any replacement or refinancing of the 2020  Convertible Notes in a principal amount not to exceed $200,000,000) and (7) the definitive  documents governing such Indebtedness shall include a cure period of at least thirty (30)  calendar days (after written notice to the issuer of such Indebtedness by the trustee or to such  issuer and such trustee by holders of at least 25% in aggregate principal amount of such  Indebtedness then outstanding) for any cross-default or cross-acceleration event of default (each  howsoever defined) provision contained therein that relates to indebtedness or other payment  obligations of Borrower (or any Subsidiary).  “Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender  or Agent arising under this Agreement or any other Loan Document; (ii) Indebtedness existing on  the Closing Date which is disclosed in Schedule 1A; (iii) Indebtedness of up to $5,000,000  outstanding at any time secured by a Lien described in clause (vii) of the defined term “Permitted  Liens,” provided such Indebtedness does not exceed the cost of the Equipment financed with such  Indebtedness; (iv) Indebtedness to trade creditors incurred in the ordinary course of business,  including Indebtedness incurred in the ordinary course of business with corporate credit cards; (v)  Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated Indebtedness; (vii)  reimbursement obligations in connection with letters of credit that are secured by Cash and  issued on behalf of the Borrower or a Subsidiary thereof in an amount not to exceed $5,000,000  at any time outstanding; (viii) other Indebtedness in an amount not to exceed $2,000,000 at any  time outstanding; (ix) intercompany Indebtedness as long as each of the Subsidiary obligor and  the Subsidiary obligee under such Indebtedness is a Qualified Subsidiary that has executed a  Joinder Agreement; (x) Acquired Indebtedness in a principal amount not to exceed $5,000,000  outstanding at any one time;  (xi) Permitted Convertible Indebtedness and (xii) extensions,  refinancings and renewals of any items of Permitted Indebtedness, provided that the principal  amount is not increased or the terms modified to impose materially more burdensome terms upon  Borrower or its Subsidiary, as the case may be.  “Permitted Investment” means: (i) Investments existing on the Closing Date which  are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally  guaranteed by the United States of America or any agency or any State thereof maturing within  one year from the date of acquisition thereof currently having a rating of at least A-2 or P-2 from  either Standard & Poor’s Corporation or Moody’s Investors Services, (b) commercial paper  maturing no more than one year from the date of creation thereof and currently having a rating of  at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (c)  certificates of deposit issued by any bank with assets of at least $250,000,000 maturing no more  than one year from the date of investment therein, (d) money market accounts and (e) Investments  made in accordance with Borrower's investment policy, dated as of May 3, 2022, in the form  delivered to and approved in writing by Agent prior to the Closing Date (as amended or otherwise  modified from time to time as approved by the audit committee of the Borrower and approved in  writing by Agent); (iii) repurchases of stock from former employees, directors, or consultants of  Borrower under the terms of applicable repurchase agreements at the original issuance price of  such securities in an aggregate amount not to exceed $2,000,000 in any fiscal year, provided that  no Event of Default has occurred, is continuing or could exist after giving effect to the  repurchases; (iv) Investments accepted in connection with Permitted Transfers; (v) Investments  (including debt obligations) received in connection with the bankruptcy or reorganization of  

 

11    customers or suppliers and in settlement of delinquent obligations of, and other disputes with,  customers or suppliers arising in the ordinary course of Borrower’s business; (vi) Investments  consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers  and suppliers who are not Affiliates, in the ordinary course of business, provided that this  subparagraph (vi) shall not apply to Investments of Borrower in any Subsidiary; (vii) Investments  consisting of loans not involving the net transfer on a substantially contemporaneous basis of  cash proceeds to employees, officers or directors relating to the purchase of capital stock of  Borrower pursuant to employee stock purchase plans or other similar agreements approved by  Borrower’s board of directors; (viii) Investments consisting of travel advances in the ordinary  course of business; (ix) Investments in newly-formed Domestic Subsidiaries or Qualified  Subsidiaries acquired in connection with a Permitted Acquisition, provided that each such  Domestic Subsidiary enters into a Joinder Agreement promptly after its formation by Borrower  and execute such other documents as shall be reasonably requested by Agent; (x) Investments in  Foreign Subsidiaries approved in advance in writing by Agent; (xi) joint ventures or strategic  alliances in the ordinary course of Borrower’s business consisting of the nonexclusive licensing of  technology, the development of technology or the providing of technical support, provided that  any cash Investments by Borrower do not exceed $5,000,000 in the aggregate in any fiscal year;  (xii) Permitted Vendor Payments; (xiii) Permitted Acquisitions and (xiv) additional Investments that do not exceed $2,000,000 in the aggregate. “Permitted License” means (i) non-exclusive licenses and similar arrangements for  the use of Intellectual Property in the ordinary course of business that could not result in a legal  transfer of title of the licensed Intellectual Property, or (ii) licenses of Intellectual Property that  may be exclusive solely as to discrete geographic territory outside of the United States of America  so long as such licenses could not result in a legal transfer of title of any Intellectual Property.  “Permitted Liens” means any and all of the following: (i) Liens in favor of Agent  or Lender; (ii) Liens existing on the Closing Date which are disclosed in Schedule 1C; (iii) Liens  for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being  contested in good faith by appropriate proceedings; provided, that Borrower maintains adequate  reserves therefor in accordance with GAAP; (iv) Liens securing claims or demands of  materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons  arising in the ordinary course of Borrower’s business and imposed without action of such parties;  provided, that the payment thereof is not yet required; (v) Liens arising from judgments, decrees  or attachments in circumstances which do not constitute an Event of Default hereunder; (vi) the  following deposits, to the extent made in the ordinary course of business:  deposits under worker’s  compensation, unemployment insurance, social security and other similar laws, or to secure the  performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to  secure indemnity, performance or other similar bonds for the performance of bids, tenders or  contracts (other than for the repayment of borrowed money) or to secure statutory obligations  (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to  secure indemnity, performance or other similar bonds; (vii) Liens on Equipment or software or  other Intellectual Property constituting purchase money Liens and Liens in connection with  capital leases securing Indebtedness permitted in clause (iii) of “Permitted Indebtedness”; (viii)  Liens incurred in connection with Subordinated Indebtedness; (ix) leasehold interests in leases or  subleases and licenses granted in the ordinary course of business and not interfering in any  material respect with the business of the licensor; (x) Liens in favor of customs and revenue  

 

12    authorities arising as a matter of law to secure payment of custom duties that are promptly paid  on or before the date they become due; (xi) Liens on insurance proceeds securing the payment of  financed insurance premiums that are promptly paid on or before the date they become due  (provided that such Liens extend only to such insurance proceeds and not to any other property  or assets); (xii) statutory and common law rights of set-off and other similar rights as to deposits  of cash and securities in favor of banks, other depository institutions and brokerage firms; (xiii)  easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed  by law or arising in the ordinary course of business so long as they do not materially impair the  value or marketability of the related property; (xiv) (A) Liens on Cash securing obligations  permitted under clause (vii) of the definition of Permitted Indebtedness and (B) security deposits  in connection with real property leases, the combination of (A) and (B) in an aggregate amount  not to exceed $5,000,000 at any time; (xv) Liens securing obligations in an aggregate amount not  to exceed $2,000,000 at any time; (xvi) Liens assumed by Borrower or its Subsidiaries in  connection with a Permitted Acquisition that secure Acquired Indebtedness permitted under  clause (x) of Permitted Indebtedness; (xvii) Liens incurred in connection with the extension,  renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (i)  through (xvi) above; provided, that any extension, renewal or replacement Lien shall be limited to  the property encumbered by the existing Lien and the principal amount of the Indebtedness being  extended, renewed or refinanced (as may have been reduced by any payment thereon) does not  increase; and (xviii) Permitted Licenses.  “Permitted Transfers” means (i) sales of Inventory in the ordinary course of  business; (ii) Permitted Licenses; (iii) dispositions of worn-out, obsolete or surplus Equipment at  fair market value in the ordinary course of business; (iv) Permitted Investments; (v) payments on  arm’s length terms in connection with the production, marketing, manufacturing, testing,  distribution, packaging, development or sale of TRC101 in the ordinary course of business and  (vi) other transfers of assets having a fair market value of not more than $5,000,000 in the aggregate in any fiscal year. “Permitted Vendor Payments” means any expense reimbursement, advance,  investment or other form of payment or transfer of consideration to suppliers, manufacturers or  other contractual counterparties, in each case that are not Affiliates of Borrower, pursuant to  arm’s length contractual arrangements for the production, marketing, manufacturing, testing,  distribution, packaging, development or sale of products of the Borrower or any of its Subsidiaries  in the ordinary course.    “Person” means any individual, sole proprietorship, partnership, joint venture,  trust, unincorporated organization, association, corporation, limited liability company, institution,  other entity or government.  “Positive Data” means with respect to a clinical trial, that (i) such clinical trial has  achieved its protocol-specified primary efficacy endpoint with statistical significance; and (ii)  that the Borrower Product investigated in such clinical trial has demonstrated an acceptable  safety profile, in each case subject to verification by Agent (including supporting documentation  requested by Agent, to the extent such documentation is available to Borrower).  

 

13    “Prepayment Charge” shall have the meaning assigned to such term in Section  2.5.   “Public Offering” shall have the meaning assigned to such term in Section 8.1.  “Qualified Subsidiary” means any direct or indirect Domestic Subsidiary or  Eligible Foreign Subsidiary.  “Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents,  Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and  Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto.  “Redemption Conditions” means, with respect to any redemption by Borrower of  any Permitted Convertible Indebtedness, satisfaction of each of the following events: (a) at the  time of such redemption, no fact or condition exists or results therefrom that could (or could,  with the passage of time, the giving of notice, or both) constitute an Event of Default, and (b)  both immediately before and at all times after such redemption, Borrower’s Unrestricted Cash  shall be not less than 100% of the outstanding Secured Obligations.  “Required Lenders” means at any time, the holders of more than 50% of the sum  of the aggregate unpaid principal amount of the Term Loans then outstanding.  “Responsible Officer” is any of the Chief Executive Officer, President, Chief  Financial Officer, Chief Accounting Officer and General Counsel of Borrower.    “Sanctioned Country” shall mean, at any time, a country or territory which is the  subject or target of any Sanctions.  “Sanctioned Person” shall mean, at any time, (a) any Person listed in any  Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of  the U.S. Department of the Treasury or the U.S. Department of State, or by the United Nations  Security Council, the European Union or any EU member state, (b) any Person operating,  organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.  “Sanctions” shall mean economic or financial sanctions or trade embargoes  imposed, administered or enforced from time to time by (a) the U.S. government, including those  administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or  the U.S. Department of State, or (b) the United Nations Security Council, the European Union or  Her Majesty’s Treasury of the United Kingdom.  “Secured Obligations” means Borrower’s obligations under this Agreement and  any Loan Document, including any obligation to pay any amount now owing or later arising.  “Securities Act” means the Securities Act of 1933, as amended.  “Subordinated Indebtedness” means Indebtedness subordinated to the Secured  Obligations in amounts and on terms and conditions satisfactory to Agent in its sole discretion  

 

14    and subject to a subordination agreement in form and substance satisfactory to Agent in its sole  discretion.  “Subsidiary” means an entity, whether corporate, partnership, limited liability  company, joint venture or otherwise, in which Borrower owns or controls 50% or more of the  outstanding voting securities, including each entity listed on Schedule 1 hereto.  “Term Commitment” means as to any Lender, the obligation of such Lender, if  any, to make a Term Loan Advance to the Borrower in a principal amount not to exceed the  amount set forth under the heading “Term Commitment” opposite such Lender’s name on  Schedule 1.1.    “Term Loan Advance” means any Term Loan funds advanced under this  Agreement.   “Term Loan Cash Interest Rate” means for any day a per annum rate of interest  equal to the greater of either (i) the lesser of (x) 8.75% plus the prime rate as reported in The Wall  Street Journal minus 6.25% and (y) 10.25%, and (ii) 8.75%.   “Term Loan Maturity Date” means November 1, 2025; provided that if Borrower  achieves the Approval Milestone on or before November 1, 2025, the “Term Loan Maturity Date”  shall mean November 1, 2027; provided further that, if by May 15, 2026, (a) the 2020 Convertible  Notes have not converted or (b) the maturity date of the 2020 Convertible is not amended to a  date that is at least 180 days after the then-effective Term Loan Maturity Date, then the Term  Loan Maturity Date shall automatically become November 15, 2026.  “Term Note” means a Promissory Note in substantially the form of Exhibit B.  “Trademark License” means any written agreement granting any right to use any  Trademark or Trademark registration, now owned or hereafter acquired by Borrower or in which  Borrower now holds or hereafter acquires any interest.   “Trademarks” means all trademarks (registered, common law or otherwise) and  any applications in connection therewith, including registrations, recordings and applications in  the United States Patent and Trademark Office or in any similar office or agency of the United  States of America, any State thereof or any other country or any political subdivision thereof.  “Tranches” means, collectively, the Tranche 1 Advance, the Tranche 2 Advance,  the Tranche 3 Advance and the Tranche 4 Advance.  “Tranche 1 Advance” has the meaning set forth in Section 2.2(a)(i).  “Tranche 1 Draw Period” means the period beginning on the date of Borrower’s  achievement of the VALOR-CKD Milestone and continuing through December 31, 2022.  “Tranche 1 Facility Charge” means $62,500 which is payable to Lender in  accordance with Section 4.2(f), subject to funding of the Tranche 1 Advance.  

 

15    “Tranche 2 Advance” has the meaning set forth in Section 2.2(a)(ii).  “Tranche 2 Draw Period” means the period beginning on the date of Borrower’s  achievement of the NDA Milestone and continuing through the earlier of (a) ten (10) Business  Days following Borrower’s achievement of the NDA Milestone and (b) September 15, 2023.  “Tranche 2 Facility Charge” means $62,500 which is payable to Lender in  accordance with Section 4.2(g), subject to funding of the Tranche 2 Advance.  “Tranche 3 Advance” has the meaning set forth in Section 2.2(a)(iii).  “Tranche 3 Draw Period” means the period beginning on the date of Borrower’s  achievement of the Approval Milestone and continuing through the earlier of (a) ten (10)  Business Days following Borrower’s achievement of the Approval Milestone and (b) February  15, 2024.  “Tranche 3 Facility Charge” means $250,000 which is payable to Lender in  accordance with Section 4.2(h), subject to funding of the Tranche 3 Advance.  “Tranche 4 Advance” has the meaning set forth in Section 2.2(a)(iv).  “Tranche 4 Facility Charge” means $125,000 which is payable to Lender in  accordance with Section 4.2(i), subject to funding of the Tranche 4 Advance.  “UCC” means the Uniform Commercial Code as the same is, from time to time, in  effect in the State of California; provided, that in the event that, by reason of mandatory  provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect  to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is,  from time to time, in effect in a jurisdiction other than the State of California, then the term  “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other  jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,  priority or remedies and for purposes of definitions related to such provisions.    “Unrestricted Cash” means Cash held by Borrower subject to an Account Control  Agreement.  “VALOR-CKD Milestone” means Borrower’s VALOR-CKD trial,  clinicaltrials.gov identifier #NCT03710291, has demonstrated Positive Data where such Positive  Data would be expected to support Borrower’s resubmission and subsequent FDA filing of the  NDA for TRC101 (a/k/a veverimer) as the next immediate step in clinical development, subject to  verification by Agent (including supporting documentation requested by Agent, to the extent such  documentation is available to Borrower).   1.2 Unless otherwise specified, all references in this Agreement or any Annex  or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall  refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this  Agreement.  Unless otherwise specifically provided herein, any accounting term used in  this Agreement or the other Loan Documents shall have the meaning customarily given  

 

16    such term in accordance with GAAP, and all financial computations hereunder shall be  computed in accordance with GAAP, consistently applied. Unless otherwise defined  herein or in the other Loan Documents, terms that are used herein or in the other Loan  Documents and defined in the UCC shall have the meanings given to them in the UCC.   For purposes of the Loan Documents, (a) in connection with any division or plan of  division under Delaware law (or any comparable event under a different jurisdiction’s  laws): (x) if any asset, right, obligation or liability of any Person becomes the asset, right,  obligation or liability of a different Person, then it shall be deemed to have been  transferred from the original Person to the subsequent Person and (y) if any new Person  comes into existence, such new Person shall be deemed to have been organized on the first  date of its existence by the holders of its Equity Interests at such time, and (b) 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 any Responsible Officer.  SECTION 2.  THE LOAN  2.1 [Reserved].  2.2 Term Loan.  (a) Advances. (i) Tranche 1.  Subject to the terms and conditions of this Agreement, during the Tranche 1 Draw Period, Borrower may request, and if requested, Lenders  with a Term Commitment with respect to Tranche 1 shall severally (and not jointly)  make a Term Loan Advance, in an amount not to exceed its respective Term  Commitment with respect to the Term Loan Advance made pursuant to this clause  (i), in an aggregate principal amount of Twenty-Five Million Dollars ($25,000,000)  in minimum increments of Five Million Dollars ($5,000,000) (each, a “Tranche 1  Advance”).  (ii) Tranche 2.  Subject to the terms and conditions of this Agreement, during the Tranche 2 Draw Period, Borrower may request, and if requested, Lenders  with a Term Commitment with respect to Tranche 2 shall severally (and not jointly)  make a Term Loan Advance, in an amount not to exceed its respective Term  Commitment with respect to the Term Loan Advance made pursuant to this clause  (ii), in an aggregate principal amount of Twenty-Five Million Dollars  ($25,000,000) in minimum increments of Five Million Dollars ($5,000,000) (each,  a “Tranche 2 Advance”).   (iii) Tranche 3.  Subject to the terms and conditions of this Agreement, during the Tranche 3 Draw Period, Borrower may request, and if requested, Lenders  with a Term Commitment with respect to Tranche 3 shall severally (and not jointly)  make a Term Loan Advance, in an amount not to exceed its respective Term  Commitment with respect to the Term Loan Advance made pursuant to this clause  (iii), in an aggregate principal amount of Fifty Million Dollars ($50,000,000) in  

 

17    minimum increments of Five Million Dollars ($5,000,000) (each, a “Tranche 3  Advance”).   (iv) Tranche 4.  Subject to the terms and conditions of this Agreement and conditioned on approval by Lenders’ investment committee in its sole and  unfettered discretion, on or before December 15, 2024, Borrower may request Term  Loan Advances in an aggregate principal amount of Twenty-Five Million Dollars  ($25,000,000) in minimum increments of Five Million Dollars ($5,000,000) (each,  a “Tranche 4 Advance”).  The aggregate outstanding Term Loan Advances may be  up to the Maximum Term Loan Amount.  (b) The aggregate outstanding principal amount of Term Loan Advances shall not exceed the Maximum Term Loan Amount.  (c) Advance Request.  To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least five (5) Business Days before  the Advance Date other than the Closing Date, which shall be at least one (1) Business  Day) to Agent.  Lender shall fund the Term Loan Advance in the manner requested by  the Advance Request provided that each of the conditions precedent to such Term Loan  Advance is satisfied as of the requested Advance Date.  (d) Interest.  The outstanding principal balance of each Term Loan Advance shall bear interest thereon from the applicable Advance Date for such Term Loan  Advance at the Term Loan Cash Interest Rate (as may be adjusted from time to time in  accordance with the definition thereof) based on a year consisting of 360 days, with  interest computed daily based on the actual number of days elapsed.  The Term Loan  Cash Interest Rate will float and be determined as of each day in accordance with the  definition thereof.  (e) Payment.  Borrower will pay interest on each Term Loan Advance on the first (1st) day of each month, beginning the month after the applicable Advance Date for  such Term Loan Advance.  Commencing with the Amortization Date, and continuing on  the first Business Day of each month until the Term Loan Maturity Date, Borrower shall  repay the aggregate Term Loan Advances that is outstanding on the day immediately  preceding Amortization Date, in equal monthly installments of principal and interest  (mortgage style), and with such payment being in an amount sufficient to fully amortize  the outstanding Term Loan principal balance; provided that if the Term Loan Cash  Interest Rate is adjusted in accordance with its terms, or the Amortization Date or the  Term Loan Maturity Date is extended, the amount of each subsequent monthly  installment shall be recalculated so that the remaining payments shall be equal monthly  installments of principal and interest (mortgage style) and with such payment being in an  amount sufficient to fully amortize the outstanding Term Loan principal balance  beginning on the first Business Day of the month following such recalculation and  continuing on the first Business Day of each month thereafter until the Secured  Obligations (other than inchoate indemnity obligations) are repaid in full.  The entire  Term Loan principal balance and all accrued but unpaid interest hereunder, shall be due  and payable on Term Loan Maturity Date.  Borrower shall make all payments under this  

 

18    Agreement without setoff, recoupment or deduction and regardless of any counterclaim  or defense.  Lender will initiate debit entries to the Borrower’s account as authorized on  the ACH Authorization (i) on each payment date of all periodic principal and interest  obligations payable to Lender under each Term Loan Advance (but, prior to an Event of  Default that continues, not any fees or out-of-pocket legal fees and costs incurred by  Agent or Lender and payable by Borrower as provided in Section 11.11, which shall be  payable promptly upon receipt of invoices therefor) and (ii) following the occurrence of an  Event of Default that continues, all out-of-pocket legal fees and costs incurred by Agent or  Lender in connection with Section 11.11; provided that, with respect to clause (i) above, in  the event that Lender or Agent informs Borrower that Lender will not initiate a debit entry  to Borrower’s account for a certain amount of the periodic principal and interest  obligations due on a specific payment date, Borrower shall pay to Lender such amount of  periodic principal and interest obligations in full in immediately available funds on such  payment date; provided, further, that, with respect to clause (i) above, if Lender or Agent  informs Borrower that Lender will not initiate a debit entry as described above later than  the date that is three (3) Business Days prior to such payment date, Borrower shall pay to  Lender such amount of periodic principal and interest obligations in full in immediately  available funds on the date that is three (3) Business Days after the date on which Lender  or Agent notifies Borrower of such.  Prior to an Event of Default that continues, neither  Lender nor Agent will initiate any debit entry to Borrower’s account for any fees or out- of-pocket legal fees and costs incurred by Agent or Lender, each of which shall be payable  by Borrower promptly upon receipt of invoices therefor.  2.3 Maximum Interest.  Notwithstanding any provision in this Agreement or  any other Loan Document, it is the parties’ intent not to contract for, charge or receive  interest at a rate that is greater than the maximum rate permissible by law that a court of  competent jurisdiction shall deem applicable hereto (which under the laws of the State of  California shall be deemed to be the laws relating to permissible rates of interest on  commercial loans) (the “Maximum Rate”).  If a court of competent jurisdiction shall  finally determine that Borrower has actually paid to Lender an amount of interest in  excess of the amount that would have been payable if all of the Secured Obligations had at  all times borne interest at the Maximum Rate, then such excess interest actually paid by  Borrower shall be applied as follows:  first, to the payment of the Secured Obligations  consisting of the outstanding principal; second, after all principal is repaid, to the payment  of Lender’s accrued interest, costs, expenses, professional fees and any other Secured  Obligations; and third, after all Secured Obligations are repaid, the excess (if any) shall be  refunded to Borrower.    2.4 Default Interest.  Upon the occurrence and during the continuation of an  Event of Default hereunder, all Secured Obligations, including principal, interest,  compounded interest, and professional fees, shall bear interest at a rate per annum equal to  the rate set forth in Section 2.2(d), plus three percent (3%) per annum.  In the event any  interest is not paid when due hereunder, delinquent interest shall be added to principal and  shall bear interest on interest, compounded at the rate set forth in Section 2.2(d) or  Section 2.4, as applicable.  2.5  Prepayment.    

 

19    (a) At its option upon at least seven (7) Business Days prior written notice to Agent, Borrower may at any time prepay all or a portion of the outstanding Advances by  paying the entire principal balance (or such portion thereof), all accrued and unpaid  interest thereon, together with a prepayment charge equal to the following percentage of  the principal amount of such Advance so prepaid: if such Advance amounts are prepaid  in any of the first twelve (12) months following the Closing Date, 2.0%; after twelve (12)  months but prior to twenty-four (24) months following the Closing Date, 1.5%; after  twenty-four (24) months but prior to thirty-six (36) months following the Closing Date,  1.0%; and thereafter, 0.0% (each, a “Prepayment Charge”).  Borrower agrees that any  Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of the  difficulties and impracticality of determining actual damages resulting from an early  repayment of the Advances.  Borrower shall prepay the outstanding amount of all  principal and accrued interest through the prepayment date and any Prepayment Charge  upon the occurrence of a Change in Control.  Any amounts paid under this Section shall  be applied by Agent to the then unpaid amount of any Secured Obligations (including  principal and interest) in such order and priority as Agent may choose in its sole  discretion; provided that (x) Agent shall endeavor to promptly (within two (2) Business  Days of the date that the Borrower makes any such payment under this Section 2.5(a))  notify Borrower the manner in which any such payment has been applied and (y) if no  Event of Default has occurred and is continuing and Agent has agreed with Borrower to  any application of any such payment in advance of the making thereof, such agreed  application shall be binding for such payment.  (b) Notwithstanding the foregoing, no Prepayment Charge shall be payable (i) if Agent and Lender (in its sole and absolute discretion) agree in writing to refinance the  Advances prior to the Term Loan Maturity Date, or (ii) with respect to any prepayment  made in accordance with Section 2.5(a) above in connection with a Merger Event, so long  as (x) Borrower provides Agent with supporting documentation (which may be in  redacted form) reasonably requested by Agent and necessary to verify the occurrence of a  Merger Event and (y) such prepayment occurs within twenty-four (24) months following  the Closing Date.  2.6 End of Term Charge.  On the earliest to occur of (i) the Term Loan  Maturity Date, (ii) the date that Borrower prepays the outstanding Secured Obligations  (other than any inchoate indemnity obligations and any other obligations which, by their  terms, are to survive the termination of this Agreement) in full, or (iii) the date that all the  Secured Obligations become due and payable, by acceleration (including, but not limited  to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of  claims by operation of law) or otherwise), Borrower shall pay Lender a charge equal to  7.50% multiplied by the aggregate principal amount of Term Loans funded under this  Agreement.  Notwithstanding the required payment date of such charge, it shall be deemed  earned by Lender as of the Closing Date.  2.7 Notes.  If so requested by Lender by written notice to Borrower, then  Borrower shall execute and deliver to Lender (and/or, if applicable and if so specified in  such notice, to any Person who is an assignee of Lender pursuant to Section 11.13)  

 

20    (promptly after the Borrower’s receipt of such notice) a Note or Notes to evidence  Lender’s Loans.  2.8 Pro Rata Treatment.  Each payment (including prepayment) on account of  any fee and any reduction of the Term Loans shall be made pro rata according to the Term  Commitments of the relevant Lender.  2.9 Treatment of Prepayment Charge and End of Term Charge.  Borrower  agrees that any Prepayment Charge and any End of Term Charge payable shall be  presumed to be the liquidated damages sustained by each Lender as the result of the early  termination, and Borrower agrees that it is reasonable under the circumstances currently  existing, existing as of the Closing Date.  Any Prepayment Charge and any End of Term  Charge shall also be payable in the event the Secured Obligations (and/or this Agreement)  are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in  lieu of foreclosure, or by any other means.  Borrower expressly waives (to the fullest  extent it may lawfully do so) the provisions of any present or future statute or law that  prohibits or may prohibit the collection of the foregoing Prepayment Charge and End of  Term Charge in connection with any such acceleration.  Borrower agrees (to the fullest  extent that each may lawfully do so): (a) each Prepayment Charge and End of Term  Charge is reasonable and is the product of an arm’s length transaction between  sophisticated business people, ably represented by counsel; (b) each Prepayment Charge  and End of Term Charge shall be payable notwithstanding the then prevailing market rates  at the time payment is made; (c) there has been a course of conduct between the Lenders  and Borrower giving specific consideration in this transaction for such agreement to pay  any Prepayment Charge and any End of Term Charge as a charge (and not interest) in the  event of prepayment or acceleration; and (d) Borrower shall be estopped from claiming  differently than as agreed to in this paragraph.  Borrower expressly acknowledges that  their agreement to pay each of any Prepayment Charge and any End of Term Charge to the  Lenders as herein described was on the Closing Date and continues to be a material  inducement to the Lenders to provide the Term Loans.  SECTION 3.  SECURITY INTEREST  3.1 As security for the prompt and complete payment when due (whether on the  payment dates or otherwise) of all the Secured Obligations, Borrower grants to Agent a  security interest in all of Borrower’s right, title, and interest in, to and under all of  Borrower’s personal property and other assets including without limitation the following  (except as set forth herein) whether now existing or hereafter acquired (collectively, the  “Collateral”):  (a) Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles (other  than Intellectual Property); (e) Inventory; (f) Investment Property; (g) Deposit Accounts;  (h) Cash; (i) Goods; and all other tangible and intangible personal property of Borrower whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Borrower and wherever located, and any of Borrower’s property in the possession or under the control of Agent; and, to the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing; provided, however, that the Collateral shall include all Accounts and General Intangibles that consist of rights to payment and proceeds from the 

 

21    sale, licensing or disposition of all or any part, or rights in, the Intellectual Property (the  “Rights to Payment”).  Notwithstanding the foregoing, if a judicial authority (including a  U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual  Property is necessary to have a security interest in the Rights to Payment, then the  Collateral shall automatically, and effective as of the date of this Agreement, include the  Intellectual Property to the extent necessary to permit perfection of Agent’s security  interest in the Rights to Payment.  3.2 Notwithstanding the broad grant of the security interest set forth in Section  3.1, above, the Collateral shall not include (a) more than 65% of the presently existing and  hereafter arising issued and outstanding shares of capital stock owned by Borrower of any  Foreign Subsidiary (other than an Eligible Foreign Subsidiary) which shares entitle the  holder thereof to vote for directors or any other matter and (b) nonassignable licenses or  contracts, which by their terms require the consent of the licensor thereof or another party  (but only to the extent such prohibition on transfer is enforceable under applicable law,  including, without limitation, Sections 9406, 9407 and 9408 of the UCC).  SECTION 4.  CONDITIONS PRECEDENT TO LOAN  The obligations of Lender to make the Loan hereunder are subject to the satisfaction by  Borrower of the following conditions:  4.1 Closing Date.  On or prior to the Closing Date, subject to Section 7.23,  Borrower shall have delivered to Agent the following:  (a) executed copies of the Loan Documents, Account Control Agreements, a customary legal opinion of Borrower’s counsel, and all other documents and instruments  reasonably required by Agent to effectuate the transactions contemplated hereby or to  create and perfect the Liens of Agent with respect to all Collateral, in all cases in form  and substance reasonably acceptable to Agent;  (b) certified copy of resolutions of Borrower’s board of directors evidencing approval of the Loan and other transactions evidenced by the Loan Documents;  (c) certified copies of the Certificate of Incorporation and the Bylaws, as amended through the Closing Date, of Borrower;  (d) a certificate of good standing for Borrower from its state of incorporation and similar certificates from all other jurisdictions in which it does business and where  the failure to be qualified could have a Material Adverse Effect;  (e) payment of the Due Diligence Fee, the Closing Date Facility Charge and reimbursement of Agent’s and Lender’s current expenses earned and accrued prior to the  Closing Date and reimbursable the Agent and such Lender pursuant to this Agreement;   (f) all certificates of insurance and copies of each insurance policy required hereunder; and   

 

22    (g) such other documents as Agent may reasonably request. 4.2 All Advances.  On each Advance Date:  (a) Agent shall have received (i) an Advance Request for the relevant Advance as required by Section 2.2(c) each duly executed by Borrower’s Chief  Executive Officer, Chief Accounting Officer or Chief Financial Officer and (ii) any other  documents Agent may reasonably request;  (b) the representations and warranties set forth in this Agreement shall be true and correct in all material respects on and as of the Advance Date with the same effect as  though made on and as of such date, except to the extent such representations and  warranties expressly relate to an earlier date;  (c) Borrower shall be in compliance with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at  the time of and immediately after such Advance no Event of Default shall have occurred  and be continuing;  (d) each Advance Request shall be deemed to constitute a representation and warranty by Borrower on the relevant Advance Date as to the matters specified in  paragraphs (b) and (c) of this Section 4.2 and as to the matters set forth in the Advance  Request;   (e) (i) no fact or condition exists that could (or could, with the passage of time, the giving of notice, or both) constitute an Event of Default and (ii) no event that  has had or could reasonably be expected to have a Material Adverse Effect has occurred  and is continuing;   (f) With respect to any Tranche 1 Advance, Borrower shall have (x) achieved the VALOR-CKD Milestone and (y) paid the Tranche 1 Facility Charge (which may, at  the election of the Borrower, be netted from proceeds of the Tranche 1 Advance);   (g) With respect to any Tranche 2 Advance, Borrower shall have (x) achieved the NDA Milestone and (y) paid the Tranche 2 Facility Charge (which may, at the  election of the Borrower, be netted from proceeds of the Tranche 2 Advance);   (h) With respect to any Tranche 3 Advance, Borrower shall have (x) achieved the Approval Milestone and (y) paid the Tranche 3 Facility Charge (which may, at the  election of the Borrower, be netted from proceeds of the Tranche 3 Advance); and  (i) With respect to any Tranche 4 Advance, Borrower shall have paid the Tranche 4 Facility Charge (which may, at the election of the Borrower, be netted from  proceeds of the Tranche 4 Advance).   SECTION 5.  REPRESENTATIONS AND WARRANTIES  OF BORROWER  

 

23    Borrower represents and warrants that:  5.1 Corporate Status.  Borrower is a corporation duly organized, legally  existing and in good standing under the laws of the State of Delaware, and is duly  qualified as a foreign corporation in all jurisdictions in which the nature of its business or  location of its properties require such qualifications and where the failure to be qualified  could reasonably be expected to have a Material Adverse Effect.  Borrower’s present  name, former names (if any), locations, place of formation, tax identification number,  organizational identification number and other information are correctly set forth in  Exhibit C, as may be updated by Borrower in a written notice (including any Compliance  Certificate) provided to Agent after the Closing Date.   5.2 Collateral.  Borrower owns the Collateral, free of all Liens, except for  Permitted Liens.  Borrower has the power and authority to grant to Agent a Lien in the  Collateral as security for the Secured Obligations.    5.3 Consents.  Borrower’s execution, delivery and performance of this  Agreement and all other Loan Documents (i) have been duly authorized by all necessary  corporate action of Borrower, (ii) will not result in the creation or imposition of any Lien  upon the Collateral, other than Permitted Liens and the Liens created by this Agreement  and the other Loan Documents, (iii) do not violate any provisions of Borrower’s  Certificate of Incorporation, bylaws, or any, law, regulation, order, injunction, judgment,  decree or writ to which Borrower is subject and (iv) except as described on Schedule 5.3,  do not violate any contract or agreement or require the consent or approval of any other  Person which has not already been obtained.  The individual or individuals executing the  Loan Documents are duly authorized to do so.  5.4 Material Adverse Effect.  No event that has had or could reasonably be  expected to have a Material Adverse Effect has occurred and is continuing.   5.5 Actions Before Governmental Authorities. There are no actions, suits or  proceedings at law or in equity or by or before any governmental authority now pending  or, to the knowledge of Borrower, threatened against or affecting Borrower or its property,  that is reasonably expected to result in a Material Adverse Effect.   5.6 Laws.  Neither Borrower nor any of its Subsidiaries is in violation of any  law, rule or regulation, or in default with respect to any judgment, writ, injunction or  decree of any governmental authority, where such violation or default is reasonably  expected to result in a Material Adverse Effect.  Borrower is not in default in any manner  under any provision of any agreement or instrument evidencing material Indebtedness, or  any other material agreement to which it is a party or by which it is bound.    Neither Borrower nor any of its Subsidiaries is an “investment company” or a  company “controlled” by an “investment company” under the Investment Company Act of  1940, as amended.  Neither Borrower nor any of its Subsidiaries is engaged as one of its  important activities in extending credit for margin stock (under Regulations X, T and U of  the Federal Reserve Board of Governors).  Borrower and each of its Subsidiaries has  

 

24    complied in all material respects with the Federal Fair Labor Standards Act.  Neither  Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding  company” or a “subsidiary company” of a “holding company” as each term is defined and  used in the Public Utility Holding Company Act of 2005.  Neither Borrower’s nor any of  its Subsidiaries’ properties or assets has been used by Borrower or 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 has obtained all consents, approvals and  authorizations of, made all declarations or filings with, and given all notices to, all  governmental authorities that are necessary to continue their respective businesses as  currently conducted.  None of Borrower, any of its Subsidiaries, or any of Borrower’s or its  Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity  in connection with the transactions contemplated by this Agreement is (i) in violation of  any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that  evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of  the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.  None of  Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their  Affiliates or agents, acting or benefiting in any capacity in connection with the transactions  contemplated by this Agreement, (x) conducts any business or engages in making or  receiving any contribution of funds, goods or services to or for the benefit of any Blocked  Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or  interest in property blocked pursuant to Executive Order No. 13224, any similar executive  order or other Anti-Terrorism Law.  None of the funds to be provided under this  Agreement will be used, directly or indirectly, (a) for any activities in violation of any  applicable anti-money laundering, economic sanctions and anti-bribery laws and  regulations laws and regulations or (b) for any payment to any governmental official or  employee, political party, official of a political party, candidate for political office, or  anyone else acting in an official capacity, in order to obtain, retain or direct business or  obtain any improper advantage, in violation of the United States Foreign Corrupt Practices  Act of 1977, as amended.  5.7 Information Correct and Current.  No information, report, Advance  Request, financial statement, exhibit or schedule furnished, by or on behalf of Borrower to  Agent in connection with any Loan Document or included therein or delivered pursuant  thereto contained, or, when taken as a whole, contains or will contain any material  misstatement of fact or, when taken together with all other such information or documents,  omitted, omits or will omit to state any material fact necessary to make the statements  therein, in the light of the circumstances under which they were, are or will be made, not  materially misleading at the time such statement was made or deemed made. Additionally,  any and all financial or business projections provided by Borrower to Agent, whether prior  to or after the Closing Date, shall be (i) provided in good faith and based on the most  current data and information available to Borrower, and (ii) the most current of such  projections provided to Borrower’s board of directors.   

 

25    5.8 Tax Matters.  Except as described on Schedule 5.8 and except those being  contested in good faith with adequate reserves under GAAP, (a) Borrower has filed all  material federal, state and local tax returns that it is required to file, (b) Borrower has duly  paid or fully reserved for all taxes or installments thereof (including any interest or  penalties) as and when due, which have or may become due pursuant to such returns, and  (c) Borrower has paid or fully reserved for any tax assessment received by Borrower for the three (3) years preceding the Closing Date, if any (including any taxes being contested in good faith and by appropriate proceedings). 5.9 Intellectual Property Claims.  Borrower is the sole owner of, or otherwise  has the right to use, the Intellectual Property material to Borrower’s business.  Except as  described on Schedule 5.9, (i) to Borrower’s knowledge, each of the material Copyrights,  Trademarks and Patents is valid and enforceable, (ii) no material part of the Intellectual  Property has been judged invalid or unenforceable, in whole or in part, and (iii) no claim  has been made to Borrower that any material part of the Intellectual Property violates the  rights of any third party. Attached to the perfection certificate delivered to Agent on the  Closing Date is a true, correct and complete list of each of Borrower’s published Patents,  registered Trademarks, registered Copyrights, and material agreements under which  Borrower licenses Intellectual Property from third parties (other than shrink-wrap software  licenses), together with application or registration numbers, as applicable, owned by  Borrower or any Subsidiary, in each case as of the Closing Date. Borrower is not in  material breach of, nor has Borrower failed to perform any material obligations under, any  of the foregoing contracts, licenses or agreements and, to Borrower’s knowledge, no third  party to any such contract, license or agreement is in material breach thereof or has failed  to perform any material obligations thereunder.    5.10 Intellectual Property.  Except as described on Schedule 5.10, Borrower has  all material rights with respect to Intellectual Property necessary or material in the  operation or conduct of Borrower’s business as currently conducted and proposed to be  conducted by Borrower.  Without limiting the generality of the foregoing, and in the case  of Licenses, except for restrictions that are unenforceable under Division 9 of the UCC,  Borrower has the right, to the extent required to operate Borrower’s business, to freely  transfer, license or assign Intellectual Property necessary or material in the operation or  conduct of Borrower’s business as currently conducted and proposed to be conducted by  Borrower, without condition, restriction or payment of any kind (other than license  payments in the ordinary course of business) to any third party, and Borrower owns or has  the right to use, pursuant to valid licenses, all software development tools, library  functions, compilers and all other third-party software and other items that are material to  Borrower’s business and used in the design, development, promotion, sale, license,  manufacture, import, export, use or distribution of Borrower Products except customary  covenants in inbound license agreements and equipment leases where Borrower is the  licensee or lessee.    5.11 Borrower Products.  Except as described on Schedule 5.11, no Intellectual  Property owned by Borrower or Borrower Product has been or is subject to any actual or,  to the knowledge of Borrower, threatened litigation, proceeding (including any proceeding  in the United States Patent and Trademark Office or any corresponding foreign office or  

 

26    agency) or outstanding decree, order, judgment, settlement agreement or stipulation that  restricts in any manner Borrower’s use, transfer or licensing thereof or that may affect the  validity, use or enforceability thereof. There is no decree, order, judgment, agreement,  stipulation, arbitral award or other provision entered into in connection with any litigation  or proceeding that obligates Borrower to grant licenses or ownership interest in any future  Intellectual Property related to the operation or conduct of the business of Borrower or  Borrower Products.  Borrower has not received any written notice or claim, or, to the  knowledge of Borrower, oral notice or claim, challenging or questioning Borrower’s  ownership in any Intellectual Property (or written notice of any claim challenging or  questioning the ownership in any licensed Intellectual Property of the owner thereof) or  suggesting that any third party has any claim of legal or beneficial ownership with respect  thereto nor, to Borrower’s knowledge, is there a reasonable basis for any such claim.   Neither Borrower’s use of its Intellectual Property nor the production and sale of  Borrower Products infringes the Intellectual Property or other rights of others.   5.12 Financial Accounts.  Exhibit E, as may be updated by the Borrower in a  written notice provided to Agent after the Closing Date, is a true, correct and complete list  of (a) all banks and other financial institutions at which Borrower or any Subsidiary  maintains Deposit Accounts and (b) all institutions at which Borrower or any Subsidiary  maintains an account holding Investment Property, and such exhibit correctly identifies  the name, address and telephone number of each bank or other institution, the name in  which the account is held, a description of the purpose of the account, and the complete  account number therefor.  5.13 Employee Loans.  Borrower has no outstanding loans to any employee,  officer or director of the Borrower nor has Borrower guaranteed the payment of any loan  made to an employee, officer or director of the Borrower by a third party.  5.14 Capitalization and Subsidiaries.  Borrower does not own any stock,  partnership interest or other securities of any Person, except for Permitted Investments.   Attached as Schedule 5.14, as may be updated by Borrower in a written notice provided  after the Closing Date, is a true, correct and complete list of each Subsidiary.  5.15 Regulatory Matters.    (a) Borrower, each Subsidiary, and to the knowledge of Borrower, their respective directors, officers, employees, and agents are, and at all times within the last  three years have been, in compliance with all applicable Healthcare Laws, except where  failures to so comply would not, whether individually or in the aggregate, reasonably be  expected to have a Material Adverse Effect. Borrower has not received any written  notification, correspondence, or any other communication from any governmental  authority asserting non-compliance by, or liability of, Borrower or any Subsidiary under  any applicable Healthcare Laws, except where such non-compliance would not, whether  individually or in the aggregate, reasonably be expected to have a Material Adverse  Effect. Borrower is not a party to or has any ongoing reporting obligations pursuant to or  under any order by a governmental authority or corporate integrity agreements, deferred  prosecution agreements, monitoring agreements, consent decrees, settlement orders, plans  

 

27    of correction or similar agreements with or imposed by any governmental authority.  Neither Borrower or any Subsidiary, nor any officers, employees or, to the knowledge of  Borrower, agents of Borrower or any Subsidiary has been excluded, suspended or  debarred from any government healthcare program or convicted of any crime or engaged  in any conduct that would reasonably be expected to result in debarment under any  applicable Healthcare Law, and, to the knowledge of Borrower, no such Action is  currently contemplated, proposed or pending.   (b) Borrower and each Subsidiary has obtained and maintained all Permits, including any Permits required pursuant to any applicable Healthcare Laws, and all of  such Permits are in full force and effect, except where failures to possess or maintain the  same, would not, whether individually or in the aggregate, reasonably be expected to  have a Material Adverse Effect. Borrower and each Subsidiary has fulfilled and  performed all of its material obligations with respect to the Permits, and, to the  knowledge of Borrower, no event has occurred which allows, or after notice or lapse of  time would allow, revocation or termination thereof or result in any other impairment of  the rights of the holder of any Permit, except where such revocations, terminations or  impairments would not, whether individually or in the aggregate, reasonably be expected  to have a Material Adverse Effect.   (c) All clinical or preclinical studies, tests or trials that have been or are being conducted by or on behalf of, or sponsored by, Borrower or any Subsidiary, or in which  Borrower’s or any Subsidiary’s products or product candidates have participated, and  which have been or will be submitted to the FDA or other regulatory authorities in  connection with applications for Permits,  were and, if still pending, are being conducted  in compliance in all material respects with all applicable Healthcare Laws. No  investigational new drug application or other allowance to commence a clinical trial filed  with or submitted to the FDA or other governmental authority by or on behalf of  Borrower or any Subsidiary has been terminated or suspended, and neither the FDA nor  any applicable governmental authority has commenced, or to the knowledge of Borrower,  threatened to initiate, any action to place a clinical hold order on, or otherwise terminate,  delay or suspend, any proposed or ongoing clinical investigation conducted or proposed  to be conducted by or on behalf of Borrower or any Subsidiary.   SECTION 6.  INSURANCE; INDEMNIFICATION  6.1 Coverage.  Borrower shall cause to be carried and maintained commercial  general liability insurance, on an occurrence form, against risks customarily insured  against in Borrower’s line of business.  Such risks shall include the risks of bodily injury,  including death, property damage, personal injury, advertising injury, and contractual  liability per the terms of the indemnification agreement found in Section 6.3.  Borrower  must maintain a minimum of $2,000,000 of commercial general liability insurance for  each occurrence.  Borrower has and agrees to maintain a minimum of $2,000,000 of  directors’ and officers’ insurance for each occurrence and $5,000,000 in the aggregate.  So  long as there are any Secured Obligations outstanding, Borrower shall also cause to be  carried and maintained insurance upon the Collateral, insuring against all risks of physical  loss or damage howsoever caused, in an amount not less than the full replacement cost of  

 

28    the Collateral, provided that such insurance may be subject to standard exceptions and  deductibles.    6.2 Certificates.  Borrower shall deliver to Agent certificates of insurance that  evidence Borrower’s compliance with its insurance obligations in Section 6.1 and the  obligations contained in this Section 6.2.  Borrower’s insurance certificate shall state  Agent (shown as “Hercules Capital, Inc., as Agent”) is an additional insured for  commercial general liability, a loss payee for all risk property damage insurance, subject  to the insurer’s approval, and a loss payee for property insurance and additional insured  for liability insurance for any future insurance that Borrower may acquire from such  insurer.  Attached to the certificates of insurance will be additional insured endorsements  for liability and lender’s loss payable endorsements for all risk property damage insurance.   All certificates of insurance will, to the extent agreed by the applicable insurer after  Borrower’s use of commercially reasonable efforts to obtain such certificates, provide for  a minimum of thirty (30) days advance written notice to Agent of cancellation (other than  cancellation for non-payment of premiums, for which ten (10) days’ advance written  notice shall be sufficient) or any other change adverse to Agent’s interests (and in the  event such insurer shall not agree to provide such notice to Agent, Borrower shall in any  event provide notice to Agent promptly upon Borrower’s receipt of notice from such  insurer of any such cancellation or other adverse change).  Any failure of Agent to  scrutinize such insurance certificates for compliance is not a waiver of any of Agent’s  rights, all of which are reserved.  Borrower shall provide Agent with copies of each  insurance policy, and upon entering or amending any insurance policy required hereunder,  Borrower shall provide Agent with copies of such policies and shall promptly deliver to  Agent updated insurance certificates with respect to such policies.  6.3 Indemnity.  Borrower agrees to indemnify and hold Agent, Lender and  their officers, directors, employees, agents, in-house attorneys, representatives and  shareholders (each, an “Indemnified Person”) harmless from and against any and all  claims, costs, expenses, damages and liabilities (including such claims, costs, expenses,  damages and liabilities based on liability in tort, including strict liability in tort), including  reasonable attorneys’ fees and disbursements and other costs of investigation or defense  (including those incurred upon any appeal) (collectively, “Liabilities”), that may be  instituted or asserted against or incurred by such Indemnified Person as the result of credit  having been extended, suspended or terminated under this Agreement and the other Loan  Documents or the administration of such credit, or in connection with or arising out of the  transactions contemplated hereunder and thereunder, or any actions or failures to act in  connection therewith, or arising out of the disposition or utilization of the Collateral,  excluding in all cases Liabilities to the extent resulting from any Indemnified Person’s  gross negligence or willful misconduct. Borrower agrees to pay, and to save Agent and  Lender harmless from, any and all liabilities with respect to, or resulting from any delay in  paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or  measured by the net income of Agent or Lender) that may be payable or determined to be  payable with respect to any of the Collateral or this Agreement.  In no event shall any  Indemnified Person be liable on any theory of liability for any special, indirect,  consequential or punitive damages (including any loss of profits, business or anticipated  

 

29    savings). This Section 6.3 shall survive the repayment of indebtedness under, and  otherwise shall survive the expiration or other termination of, the Loan Agreement.  SECTION 7.  COVENANTS OF BORROWER  Borrower agrees as follows:  7.1 Financial Reports.  Borrower shall furnish to Agent the financial statements  and reports listed hereinafter (the “Financial Statements”):  (a) If the Borrower’s Market Capitalization is less than Three Hundred Million Dollars ($300,000,000) as of the last day of any calendar month, as soon as  practicable (and in any event within 30 days) after the end of such month, unaudited  interim and year-to-date financial statements as of the end of such month (prepared on a  consolidated and consolidating basis, if applicable), including balance sheet and related  statements of income and cash flows accompanied by a report detailing any material  contingencies (including the commencement of any material litigation by or against  Borrower) or any other occurrence that could reasonably be expected to have a Material  Adverse Effect, all certified by Borrower’s Chief Executive Officer, Chief Accounting  Officer or Chief Financial Officer to the effect that they have been prepared in  accordance with GAAP, except (i) for the absence of footnotes, (ii) that they are subject  to normal year end adjustments, and (iii) they do not contain certain non-cash items that  are customarily included in quarterly and annual financial statements;   (b) as soon as practicable (and in any event within 45 days) after the end of each of the first three fiscal quarters, unaudited interim and year-to-date financial  statements as of the end of such fiscal quarter (prepared on a consolidated and  consolidating basis, if applicable), including balance sheet and related statements of  income and cash flows accompanied by a report detailing any material contingencies  (including the commencement of any material litigation by or against Borrower) or any  other occurrence that could reasonably be expected to have a Material Adverse Effect,  certified by Borrower’s Chief Executive Officer, Chief Accounting Officer or Chief  Financial Officer to the effect that they have been prepared in accordance with GAAP,  except (i) for the absence of footnotes, and (ii) that they are subject to normal year end  adjustments; as well as the most recent capitalization table for Borrower, including the  weighted average exercise price of employee stock options;  (c) as soon as practicable (and in any event within ninety (90) days) after the end of each fiscal year, unqualified audited financial statements as of the end of such year  (prepared on a consolidated and consolidating basis, if applicable), including balance  sheet and related statements of income and cash flows, and setting forth in comparative  form the corresponding figures for the preceding fiscal year, certified by a firm of  independent certified public accountants selected by Borrower and reasonably acceptable  to Agent, accompanied by any management report from such accountants;   

 

30    (d) concurrently with the delivery of each of the Financial Statements required to be delivered pursuant to clauses (b) and (c) of this Section 7.1, a Compliance  Certificate in the form of Exhibit F;  (e) as soon as practicable (and in any event within 15 days) after the end of each period for which Financial Statements are required to be delivered pursuant to  clause (a) or (b) of this Section 7.1, a report showing agings of accounts receivable and  accounts payable;  (f) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that Borrower has made available to  holders of its preferred stock and copies of any regular, periodic and special reports or  registration statements that Borrower files with the Securities and Exchange Commission  or any governmental authority that may be substituted therefor, or any national securities  exchange;  (g) [reserved]; (h) financial and business projections promptly following their approval by Borrower’s board of directors, and in any event, within 30 days after the end of  Borrower’s fiscal year, as well as budgets, operating plans and other financial  information reasonably requested by Agent; and  (i) immediate notice if Borrower or any Subsidiary 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 make any change in its (a) accounting policies or reporting practices, or  (b) fiscal years or fiscal quarters. The fiscal year of Borrower shall end on December 31. The executed Compliance Certificate, and all Financial Statements required to be delivered  pursuant to clauses (a), (b) and (c) shall be sent via e-mail to financialstatements@htgc.com  with a copy to legal@htgc.com, cbarnes@htgc.com and joleary@htgc.com, provided, that if  e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be faxed to Agent at: (650) 473-9194, attention Account Manager: Tricida, Inc. Notwithstanding the foregoing, documents required to be delivered under Sections 7.1(a),  (b), (c) or (f) (to the extent any such documents are included in materials otherwise filed  with the SEC) may be delivered electronically and if so delivered, shall be deemed to have  been delivered on the date on which Borrower emails a link thereto to Agent.  7.2 Management Rights.  Borrower shall permit any representative that Agent  or Lender authorizes, including its attorneys and accountants, to inspect the Collateral and  examine and make copies and abstracts of the books of account and records of Borrower  at reasonable times and upon reasonable notice during normal business hours; provided,  however, that so long as no Event of Default has occurred and is continuing, such  examinations shall be limited to no more often than twice per fiscal year.  In addition, any  

 

31    such representative shall have the right to meet with management and officers of Borrower  to discuss such books of account and records as a part of such examinations.  In addition,  Agent or Lender shall be entitled at reasonable times and intervals to consult with and  advise the management and officers of Borrower concerning significant business issues  affecting Borrower.  Such consultations shall not unreasonably interfere with Borrower’s  business operations.  The parties intend that the rights granted Agent and Lender shall  constitute “management rights” within the meaning of 29 C.F.R. Section 2510.3- 101(d)(3)(ii), but that any advice, recommendations or participation by Agent or Lender  with respect to any business issues shall not be deemed to give Agent or Lender, nor be  deemed an exercise by Agent or Lender of, control over Borrower’s management or  policies.   7.3 Further Assurances.  Borrower shall from time to time execute, deliver and  file, alone or with Agent, any financing statements, security agreements, collateral  assignments, notices, control agreements, or other documents to perfect or give the highest  priority to Agent’s Lien on the Collateral.  Borrower shall from time to time procure any  instruments or documents as may be reasonably requested by Agent, and take all further  action that may be necessary, or that Agent may reasonably request, to perfect and protect  the Liens granted hereby and thereby.  In addition, and for such purposes only, Borrower  hereby authorizes Agent to execute and deliver on behalf of Borrower and to file such  financing statements, collateral assignments, notices, control agreements, security  agreements and other documents without the signature of Borrower either in Agent’s  name or in the name of Agent as agent and attorney-in-fact for Borrower.  Borrower shall  protect and defend Borrower’s title to the Collateral and Agent’s Lien thereon against all  Persons claiming any interest adverse to Borrower or Agent other than Permitted Liens.    7.4 Indebtedness.  Borrower shall not create, incur, assume, guarantee or be or  remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other  than Permitted Indebtedness, or prepay any Indebtedness or take any actions which  impose on Borrower an obligation to prepay any Indebtedness, except for (a) the  conversion of Indebtedness into equity securities and the payment of cash in lieu of  fractional shares in connection with such conversion, (b) purchase money Indebtedness  pursuant to its then applicable payment schedule, (c) prepayment by any Subsidiary of (i)  inter-company Indebtedness owed by such Subsidiary to any Borrower, or (ii) if such  Subsidiary is not a Borrower, intercompany Indebtedness owed by such Subsidiary to  another Subsidiary that is not a Borrower or (d) as otherwise permitted hereunder or  approved in writing by Agent.  Notwithstanding anything to the contrary in the foregoing, the issuance of,  performance of obligations under (including any payments of interest), and conversion,  exercise, repurchase, redemption (including, for the avoidance of doubt, any required  repurchase in connection with the redemption of Permitted Convertible Indebtedness upon  satisfaction of any condition related to the stock price of Borrower’s Common Stock),  settlement or early termination or cancellation of (whether in whole or in part and  including by netting or set-off) (in each case, whether in cash, Common Stock of  Borrower or, following a Merger Event or other change of the Common Stock of  Borrower, other securities or property), or the satisfaction of any condition that would  

 

32    permit or require any of the foregoing with respect to, any Permitted Convertible  Indebtedness, shall not constitute a prepayment of Indebtedness by Borrower for the  purposes of this Section 7.4; provided that principal payments in cash (other than cash in  lieu of fractional shares) shall only be allowed with respect to any repurchase in  connection with the redemption of Permitted Convertible Indebtedness upon satisfaction  of any condition related to the stock price of Borrower’s Common Stock if the  Redemption Conditions are satisfied in respect of such redemption and at all times after  such redemption.  7.5 Collateral.  Borrower shall at all times keep the Collateral, the Intellectual  Property and all other property and assets used in Borrower’s business or in which  Borrower now or hereafter holds any interest free and clear from any legal process or Liens  whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any  legal process affecting the Collateral, the Intellectual Property, such other property and  assets, or any Liens thereon, provided however, that the Collateral and such other property  and assets may be subject to Permitted Liens except that there shall be no Liens whatsoever  on Intellectual Property (except in connection with Permitted Licenses).  Borrower shall  not agree with any Person other than Agent or Lender not to encumber its property.  Borrower shall not enter into or suffer to exist or become effective any agreement that  prohibits or limits the ability of any Borrower to create, incur, assume or suffer to exist  any Lien upon any of its Intellectual Property, whether now existing or hereafter acquired,  to secure its obligations under the Loan Documents to which it is a party other than (a) this  Agreement and the other Loan Documents, (b) any agreements governing any purchase  money Liens or capital lease obligations otherwise permitted hereby (in which case, any  prohibition or limitation shall only be effective against the assets financed thereby), (c)  any Permitted License, and (d) customary restrictions on the assignment of leases, licenses  and other agreements. Borrower shall cause its Subsidiaries to protect and defend such  Subsidiary’s title to its assets from and against all Persons claiming any interest adverse to  such Subsidiary, and Borrower shall cause its Subsidiaries at all times to keep such  Subsidiary’s property and assets free and clear from any legal process or Liens whatsoever  (except for Permitted Liens, provided however, that there shall be no Liens whatsoever on  Intellectual Property), and shall give Agent prompt written notice of any legal process  affecting such Subsidiary’s assets.   7.6 Investments.  Borrower shall not directly or indirectly acquire or own, or  make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other  than Permitted Investments.  Notwithstanding the foregoing, and for the avoidance of doubt, this Section  7.6 shall not prohibit the conversion by holders of (including any cash payment upon  conversion), or required payment of any principal or premium on (including, for the  avoidance of doubt, in respect of a required repurchase in connection with the redemption  of Permitted Convertible Indebtedness upon satisfaction of any condition related to the  stock price of Borrower’s Common Stock) or required payment of any interest with  respect to, any Permitted Convertible Indebtedness in each case, in accordance with the  terms of the indenture or other instrument governing such Permitted Convertible  Indebtedness; provided that principal payments in cash (other than cash in lieu of  

 

33    fractional shares) shall only be allowed with respect to any repurchase in connection with  the redemption of Permitted Convertible Indebtedness upon satisfaction of any condition  related to the stock price of Borrower’s Common Stock if the Redemption Conditions are  satisfied in respect of such redemption and at all times after such redemption.  7.7 Distributions.  Borrower shall not, and shall not allow any Subsidiary to,  (a) repurchase or redeem any class of stock or other Equity Interest other than pursuant to employee, director or consultant repurchase plans or other similar agreements, provided, however, in each case the repurchase or redemption price does not exceed the original consideration paid for such stock or Equity Interest, or (b) declare or pay any cash dividend or make a cash distribution on any class of stock or other Equity Interest, except that a Subsidiary may pay dividends or make distributions to Borrower, or (c) lend money to any employees, officers or directors or guarantee the payment of any such loans granted by a third party in excess of $2,000,000 in the aggregate or (d) waive, release or forgive any Indebtedness owed by any employees, officers or directors in excess of $2,000,000 in the aggregate. Notwithstanding the foregoing, and for the avoidance of doubt, this Section  7.7 shall not prohibit the conversion by holders of (including any cash payment upon  conversion), or required payment of any principal or premium on (including, for the  avoidance of doubt, in respect of a required repurchase in connection with the redemption  of Permitted Convertible Indebtedness upon satisfaction of any condition related to the  stock price of Borrower’s Common Stock) or required payment of any interest with  respect to, any Permitted Convertible Indebtedness, in each case in accordance with the  terms of the indenture or other instrument governing such Permitted Convertible  Indebtedness.  7.8 Transfers.  Except for Permitted Transfers, Borrower shall not, and shall  not allow any Subsidiary to, voluntarily or involuntarily transfer, sell, lease, license, lend  or in any other manner convey any equitable, beneficial or legal interest in any material  portion of its assets.  7.9 Mergers or Acquisitions.  Borrower shall not merge or consolidate, or  permit any of its Subsidiaries to merge or consolidate, with or into any other business  organization (other than mergers or consolidations of (a) a Subsidiary which is not a  Borrower into another Subsidiary or into Borrower or (b) a Borrower into another  Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all  of the capital stock or property of another Person, other than Permitted Acquisitions.  7.10 Taxes.  Borrower and its Subsidiaries shall pay when due all material taxes,  fees or other charges of any nature whatsoever (together with any related interest or  penalties) now or hereafter imposed or assessed against Borrower, Agent, Lender or the  Collateral or upon Borrower’s ownership, possession, use, operation or disposition thereof  or upon Borrower’s rents, receipts or earnings arising therefrom.  Borrower shall file on or  before the due date therefor all personal property tax returns in respect of the Collateral.   Notwithstanding the foregoing, Borrower may contest, in good faith and by appropriate  

 

34    proceedings, taxes for which Borrower maintains adequate reserves therefor in accordance  with GAAP.  7.11 Corporate Changes.  Neither Borrower nor any Subsidiary shall change its  corporate name, legal form or jurisdiction of formation without twenty (20) days’ prior  written notice to Agent.  Neither Borrower nor any Subsidiary shall suffer a Change in  Control (except a Change in Control in connection with which the Borrower prepays the  Secured Obligations (other than inchoate indemnity obligations) as of the prepayment date  are repaid in full, including without limitation any applicable Prepayment Charge in  accordance with Section 2.5(a)). Neither Borrower nor any Subsidiary shall relocate its  chief executive office or its principal place of business unless: (i) it has provided prior  written notice to Agent; and (ii) such relocation shall be within the continental United  States of America.  Neither Borrower nor any Qualified Subsidiary shall relocate any item  of Collateral (other than (w) relocation of Inventory and materials used in the production  of Inventory, in each case in connection with the production, marketing, manufacturing,  testing, distribution, packaging, development or sale of TRC101 in the ordinary course of  business, (x) sales of Inventory in the ordinary course of business, (y) relocations of  Collateral having an aggregate value of up to $2,500,000 in any fiscal year, and (z)  relocations of Collateral from a location described on Exhibit C to another location  described on Exhibit C) unless (i) it has provided prompt written notice to Agent, (ii) such  relocation is within the continental United States of America and, (iii) if such relocation is  to a third party bailee, it has delivered a bailee agreement in form and substance  reasonably acceptable to Agent.  7.12 Deposit Accounts.  Other than Excluded Accounts, neither Borrower nor  any Qualified Subsidiary shall maintain any Deposit Accounts, or accounts holding  Investment Property, except with respect to which Agent has an Account Control  Agreement.  7.13 Borrower shall notify Agent of each Domestic Subsidiary formed  subsequent to the Closing Date and, within 15 days of formation, shall cause any such  Qualified Subsidiary to execute and deliver to Agent a Joinder Agreement.  7.14 [Reserved].  7.15 Notification of Event of Default.  Borrower shall notify Agent immediately  of the occurrence of any Event of Default.  7.16 [Reserved.]  7.17 Use of Proceeds.  Borrower agrees that the proceeds of the Loans shall be  used solely to pay related fees and expenses in connection with this Agreement and for  working capital and general corporate purposes.  The proceeds of the Loans will not be  used in violation of Anti-Corruption Laws or applicable Sanctions.  7.18 Foreign Subsidiary Voting Rights. Borrower shall not, and shall not permit  any Subsidiary, to amend or modify any governing document of any Foreign Subsidiary of  Borrower (other than an Eligible Foreign Subsidiary) the effect of which is to require a  

 

35    vote of greater than 50.1% of the Equity Interests or voting rights of such entity for any  decision or action of such entity.  7.19 [Reserved].  7.20 Compliance with Laws.  Borrower shall maintain, and shall cause its Subsidiaries to maintain,  compliance in all material respect with all applicable laws, rules or regulations (including  any law, rule or regulation with respect to the making or brokering of loans or financial  accommodations and all applicable Healthcare Laws), and shall, or cause its Subsidiaries to,  obtain and maintain all required Permits or registrations reasonably necessary in connection  with the conduct of Borrower’s business.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or  any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into  any documents, instruments, agreements or contracts with any Person listed on the OFAC  Lists.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its  Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any business or  engage in any transaction or dealing with any Blocked Person, including, without  limitation, the making or receiving of any contribution of funds, goods or services to or for  the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction  relating to, any property or interests in property blocked pursuant to Executive Order No.  13224 or any similar executive order or other Anti-Terrorism Law, 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.  Borrower has implemented and maintains in effect policies and procedures  designed to ensure compliance by the Borrower, its Subsidiaries and their respective  directors, officers, employees and agents with Anti-Corruption Laws and applicable  Sanctions, and Borrower, its Subsidiaries and their respective officers and employees and  to the knowledge of Borrower its directors and agents, are in compliance with Anti- Corruption Laws and applicable Sanctions in all material respects.  None of Borrower, any of its Subsidiaries or any of their respective  directors, officers or employees, or to the knowledge of Borrower, any agent for Borrower  or its Subsidiaries that will act in any capacity in connection with or benefit from the credit  facility established hereby, is a Sanctioned Person.  No Loan, use of proceeds or other  transaction contemplated by this Agreement will violate Anti-Corruption Laws or  applicable Sanctions.  7.21 Financial Covenants.  (a) Minimum Cash. (i) Commencing on the earliest funding date of the initial Tranche 1 Advance or the initial Tranche 2 Advance, Borrower shall be required to maintain  

 

36    at all times Unrestricted Cash in an amount equal to 40% of the aggregate amount  of the sum of (x) all Tranche 1 Advances and (y) all Tranche 2 Advances.   (ii) From and after any date on which Borrower takes any action that is permitted, pursuant to Section 7.4 or 7.6, only if the Redemption Conditions are  satisfied, the Borrower shall maintain Unrestricted Cash in an amount necessary  to cause clause (b) of the defined term “Redemption Conditions” to remain  satisfied.  (b) Conditional Performance.  Commencing on the date of achievement of the Approval Milestone, Borrower shall comply with any one of the following clause (i) or  (ii):  (i) at all times, Borrower shall maintain Unrestricted Cash in an amount equal to or greater than (x) if the Borrower’s Market Capitalization is  equal to or greater than $750,000,000, 35% of the outstanding principal amount of  the Term Loan Advances or (y) at all other times, 55% of the outstanding  principal amount of the Term Loan Advances; or  (ii) commencing on July 1, 2024, Borrower shall achieve Net TRC101 Product Revenue, measured monthly on a trailing sixth-month basis as of the last  day of the immediately preceding month, equal to or greater than 60% of  Borrower’s board-approved forecast acceptable to Agent and provided to Agent  prior to the initial funding of the Tranche 3 Advance.  Notwithstanding the foregoing, this Section 7.21(b) shall cease to apply during  any period in which the Borrower’s Market Capitalization is equal to or greater than  $1,000,000,000.   7.22 Transactions with Affiliates.  Borrower shall not and shall not permit any  Subsidiary to, directly or indirectly, enter into or permit to exist any transaction of any  kind with any Affiliate of Borrower or such Subsidiary on terms that are less favorable to  Borrower or such Subsidiary, as the case may be, than those that might be obtained in an  arm’s length transaction from a Person who is not an Affiliate of Borrower or such  Subsidiary.    7.23 Post-Closing Obligations.  Notwithstanding any provision herein or in any  other Loan Document to the contrary, to the extent not actually delivered on or prior to the  Closing Date:   (a) on or prior to a date that is the earlier of (i) thirty (30) days after the Closing Date (or such later date as Agent may agree to in its sole discretion) and (ii) one  (1) day prior to the initial Advance Date, Borrower shall deliver to Agent fully executed copy of the Account Control Agreements covering each of the Deposit Accounts and accounts holding Investment Property, in each case other than any Excluded Account, set forth on Exhibit E hereto; 

 

37  (b) within thirty (30) days of the Closing Date (or such later date as Agent may agree to in its sole discretion), Borrower shall deliver to Agent appropriate evidence  showing, as applicable, loss payable, waiver of subrogation, additional insured and notice  of cancellation clauses or endorsements, in each case in favor of Agent as required under  Section 6.2; and  (c) within thirty (30) days of the Closing Date (or such later date as Agent may agree to in its sole discretion), Borrower shall use commercially reasonable efforts to  deliver to Agent a fully executed copy of a landlord waiver, in form and substance  satisfactory to Agent, for Borrower’s leased location at 7000 Shoreline Court, South San  Francisco, California.  SECTION 8.  SUBSEQUENT FINANCINGS  8.1 If Borrower intends to consummate any public offering of its securities  pursuant to a registration statement filed with the Securities and Exchange Commission on  Form S-1 or Form S-3 after the Closing Date (each, a “Public Offering”), the Borrower  will, for each such Public Offering after the Closing Date, consider, in good faith, whether  to ask the managing underwriter(s) of such Public Offering to designate for offer to the  Agent (or an Affiliate designed by Agent and reasonably acceptable to Borrower) a  number of shares equal to $5,000,000 (under a “directed shares” program or otherwise) in  such Public Offering, on terms and conditions equivalent to those generally made  available to investors that are unaffiliated with Borrower.  This Section 8.1, and all rights  and obligations hereunder, shall survive the repayment of indebtedness under, and  otherwise shall survive the expiration or other termination of, the Loan Agreement for a  period of two (2) years.  SECTION 9.  EVENTS OF DEFAULT  The occurrence of any one or more of the following events shall be an Event of Default:  9.1 Payments.  Borrower fails to pay principal or interest on the due date  therefor, or any other amount due under this Agreement or any of the other Loan  Documents within three (3) Business Days of when due; provided, however, that an Event  of Default shall not occur on account of a failure to pay when due solely to an  administrative or operational error of Agent or Lender or Borrower’s bank if Borrower  had the funds to make the payment when due and makes the payment within three (3)  Business Days following Borrower’s knowledge of such failure to pay; or  9.2 Covenants.  Borrower breaches or defaults in the performance of any  covenant or Secured Obligation under this Agreement, or any of the other Loan  Documents or any other agreement among Borrower, Agent and Lender, and (a) with  respect to a default under any covenant under this Agreement (other than under Sections 6,  7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.17, 7.18, 7.20, 7.21, 7.22 and 7.23) any other Loan  Document or any other agreement among Borrower, Agent and Lender, such default  continues for more than fifteen (15) Business Days after the earlier of the date on which  (i) Agent or Lender has given notice of such default to Borrower and (ii) Borrower has 

 

38    actual knowledge of such default or (b) with respect to a default under any of Sections 6,  7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.17, 7.18, 7.20, 7.21, 7.22 and 7.23, the occurrence of  such default; or   9.3 Material Adverse Effect.  A circumstance has occurred that could  reasonably be expected to have a Material Adverse Effect; or  9.4 Representations.  Any representation or warranty made by Borrower in any  Loan Document shall have been false or misleading in any material respect when made or  when deemed made; or   9.5 Insolvency.  Borrower (A) (i) shall make an assignment for the benefit of  creditors; or (ii) shall be unable to pay its debts as they become due, or be unable to pay or  perform under the Loan Documents, or shall become insolvent; or (iii) shall file a  voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document  seeking for itself any reorganization, arrangement, composition, readjustment, liquidation,  dissolution or similar relief under any present or future statute, law or regulation pertinent  to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of  any trustee, receiver, or liquidator of Borrower or of all or any substantial part (i.e., 33- 1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its  business as its business has normally been conducted, or terminate substantially all of its  employees; or (vii) Borrower or its directors or majority shareholders shall take any action  initiating any of the foregoing actions described in clauses (i) through (vi); or (B) either  (i) forty-five (45) days shall have expired after the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against Borrower in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) forty-five (45) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or 9.6 Attachments; Judgments.  Any portion of Borrower’s assets is attached or  seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered  for the payment of money (not covered by independent third party insurance as to which  liability has not been rejected by such insurance carrier), individually or in the aggregate,  of at least $2,000,000, or Borrower is enjoined or in any way prevented by court order  from developing or commercializing TRC101, and such court order has not been vacated  or overturned within forty-five days of the effectiveness thereof; or    

 

39    9.7 Other Obligations.  The occurrence of any event of default under any  agreement or obligation of Borrower involving any Indebtedness in excess of $5,000,000;  or  9.8 Fundamental Change.  The occurrence of any “fundamental change”  (howsoever defined) under the indenture governing any Permitted Convertible  Indebtedness; or  9.9 Stop Trade.  At any time, an SEC stop trade order or NASDAQ market  trading suspension of the Common Stock shall be in effect for five (5) consecutive days or  five (5) days during a period of ten (10) consecutive days, excluding in all cases a  suspension of all trading on a public market, provided that Borrower shall not have been  able to cure such trading suspension within thirty (30) days of the notice thereof or list the  Common Stock on another public market within sixty (60) days of such notice.  SECTION 10.  REMEDIES  10.1 General.  Upon and during the continuance of any one or more Events of  Default, (i) Agent may, and at the direction of the Required Lenders shall, accelerate and  demand payment of all or any part of the Secured Obligations together with a Prepayment  Charge and declare them to be immediately due and payable (provided, that upon the  occurrence of an Event of Default of the type described in Section 9.5, all of the Secured  Obligations (including, without limitation, any Prepayment Charge and any End of Term  Charge) shall automatically be accelerated and made due and payable, in each case  without any further notice or act), (ii) Agent may, at its option, sign and file in Borrower’s  name any and all collateral assignments, notices, control agreements, security agreements  and other documents it deems necessary or appropriate to perfect or protect the repayment  of the Secured Obligations, and in furtherance thereof, Borrower hereby grants Agent an  irrevocable power of attorney coupled with an interest, and (iii) Agent may notify any of  Borrower’s account debtors to make payment directly to Agent, compromise the amount  of any such account on Borrower’s behalf and endorse Agent’s name without recourse on  any such payment for deposit directly to Agent’s account.  Agent may, and at the direction  of the Required Lenders shall, exercise all rights and remedies with respect to the  Collateral under the Loan Documents or otherwise available to it under the UCC and other  applicable law, including the right to release, hold, sell, lease, liquidate, collect, realize  upon, or otherwise dispose of all or any part of the Collateral and the right to occupy,  utilize, process and commingle the Collateral.  All Agent’s rights and remedies shall be  cumulative and not exclusive.  10.2 Collection; Foreclosure.  Upon the occurrence and during the continuance  of any Event of Default, Agent may, and at the direction of the Required Lenders shall, at  any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or  otherwise dispose of, any or all of the Collateral, in its then condition or following any  commercially reasonable preparation or processing, in such order as Agent may elect.   Any such sale may be made either at public or private sale at its place of business or  elsewhere.  Borrower agrees that any such public or private sale may occur upon ten (10)  calendar days’ prior written notice to Borrower.  Agent may require Borrower to assemble  

 

40    the Collateral and make it available to Agent at a place designated by Agent that is  reasonably convenient to Agent and Borrower.  The proceeds of any sale, disposition or  other realization upon all or any part of the Collateral shall be applied by Agent in the  following order of priorities:  First, to Agent and Lender in an amount sufficient to pay in full Agent’s and  Lender’s reasonable costs and professionals’ and advisors’ fees and expenses as  described in Section 11.11;  Second, to Lender in an amount equal to the then unpaid amount of the Secured  Obligations (including principal, interest, and interest at the default rate), in such  order and priority as Agent may choose in its sole discretion; and  Finally, after the full and final payment in Cash of all of the Secured Obligations  (other than inchoate obligations), to any creditor holding a junior Lien on the  Collateral, or to Borrower or its representatives or as a court of competent  jurisdiction may direct.  Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of  any of the Collateral if it complies with the obligations of a secured party under the UCC.  10.3 No Waiver.  Agent shall be under no obligation to marshal any of the  Collateral for the benefit of Borrower or any other Person, and Borrower expressly waives  all rights, if any, to require Agent to marshal any Collateral.    10.4 Cumulative Remedies.  The rights, powers and remedies of Agent  hereunder shall be in addition to all rights, powers and remedies given by statute or rule of  law and are cumulative.  The exercise of any one or more of the rights, powers and  remedies provided herein shall not be construed as a waiver of or election of remedies  with respect to any other rights, powers and remedies of Agent.  SECTION 11.  MISCELLANEOUS  11.1 Severability.  Whenever possible, each provision of this Agreement shall  be interpreted in such manner as to be effective and valid under applicable law, but if any  provision of this Agreement shall be prohibited by or invalid under such law, such  provision shall be ineffective only to the extent and duration of such prohibition or  invalidity, without invalidating the remainder of such provision or the remaining  provisions of this Agreement.  11.2 Notice.  Except as otherwise provided herein, any notice, demand, request,  consent, approval, declaration, service of process or other communication (including the  delivery of Financial Statements) that is required, contemplated, or permitted under the  Loan Documents or with respect to the subject matter hereof shall be in writing, and shall  be deemed to have been validly served, given, delivered, and received upon the earlier of:  (i) the day of transmission by electronic mail or hand delivery or delivery by an overnight express service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States of America mails, with proper first class postage prepaid, in each case addressed to the party to be notified as follows: 

 

41    (a) If to Agent: HERCULES CAPITAL, INC. Legal Department Attention:  Chief Legal Officer and Cristy Barnes 400 Hamilton Avenue, Suite 310 Palo Alto, CA  94301 email: legal@htgc.com; cbarnes@htgc.com; joleary@htgc.com Telephone: 650-289-3060 with a copy (which shall not constitute notice) to: LATHAM & WATKINS LLP Attention:  Haim Zaltzman 505 Montgomery Street, Suite 2000 San Francisco, CA  94111 email:  haim.zaltzman@lw.com Telephone: 415-395-8870 (b) If to Lender: HERCULES CAPITAL, INC. Legal Department Attention:  Chief Legal Officer and Cristy Barnes 400 Hamilton Avenue, Suite 310 Palo Alto, CA  94301 email: legal@htgc.com; cbarnes@htgc.com Telephone: 650-289-3060 with a copy (which shall not constitute notice) to: LATHAM & WATKINS LLP Attention:  Haim Zaltzman 505 Montgomery Street, Suite 2000 San Francisco, CA  94111 email:  haim.zaltzman@lw.com Telephone: 415-395-8870 (c) If to Borrower: TRICIDA, INC. Attention:  Legal Department 7000 Shoreline Court, Suite 201 South San Francisco, CA 94080 email: legal@tricida.com with a copy to ayoshiyama@tricida.com Telephone: (415) 988-2420 with a copy (which shall not constitute notice) to: 

 

42    SIDLEY AUSTIN LLP  Attention: Geoffrey W. Levin  787 Seventh Avenue  New York, NY 10019  Email: glevin@sidley.com  Telephone: 212-839-5776  or to such other address as each party may designate for itself by giving notice in  conformity with this section 11.2.  11.3 Entire Agreement; Amendments.    (a) This Agreement and the other Loan Documents constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof  and thereof, and supersede and replace in their entirety any prior proposals, term sheets,  non-disclosure or confidentiality agreements, letters, negotiations or other documents or  agreements, whether written or oral, with respect to the subject matter hereof or thereof  (including Agent’s proposal letter dated October 3, 2022 and the Non-Disclosure  Agreement).    (b) Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the  provisions of this Section 11.3(b).  The Required Lenders and Borrower party to the  relevant Loan Document may, or, with the written consent of the Required Lenders, the  Agent and the Borrower party to the relevant Loan Document may, from time to time, (i)  enter into written amendments, supplements or modifications hereto and to the other  Loan Documents for the purpose of adding any provisions to this Agreement or the other  Loan Documents or changing in any manner the rights of the Lenders or of the Borrower  hereunder or thereunder or (ii) waive, on such terms and conditions as the Required  Lenders or the Agent, as the case may be, may specify in such instrument, any of the  requirements of this Agreement or the other Loan Documents or any default or Event of  Default and its consequences; provided, however, that no such waiver and no such  amendment, supplement or modification shall (A) forgive the principal amount or extend  the final scheduled date of maturity of any Loan, extend the scheduled date of any  amortization payment in respect of any Term Loan, or reduce the stated rate of any  interest or fee payable hereunder, in each case without the written consent of each Lender  directly affected thereby; (B) eliminate or reduce the voting rights of any Lender under  this Section 11.3(b) without the written consent of such Lender; (C) reduce any  percentage specified in the definition of Required Lenders, consent to the assignment or  transfer by the Borrower of any of its rights and obligations under this Agreement and the  other Loan Documents, release all or substantially all of the Collateral or release a  Borrower from its obligations under the Loan Documents, in each case without the  written consent of all Lenders; or (D) amend, modify or waive any provision of Section  11.17 without the written consent of the Agent.  Any such waiver and any such  amendment, supplement or modification shall apply equally to each Lender and shall be  binding upon Borrower, the Lender, the Agent and all future holders of the Loans.  

 

43    11.4 No Strict Construction.  The parties hereto have participated jointly in the  negotiation and drafting of this Agreement.  In the event an ambiguity or question of  intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the  parties hereto and no presumption or burden of proof shall arise favoring or disfavoring  any party by virtue of the authorship of any provisions of this Agreement.  11.5 No Waiver.  The powers conferred upon Agent and Lender by this  Agreement are solely to protect its rights hereunder and under the other Loan Documents  and its interest in the Collateral and shall not impose any duty upon Agent or Lender to  exercise any such powers.  No omission or delay by Agent or Lender at any time to  enforce any right or remedy reserved to it, or to require performance of any of the terms,  covenants or provisions hereof by Borrower at any time designated, shall be a waiver of  any such right or remedy to which Agent or Lender is entitled, nor shall it in any way  affect the right of Agent or Lender to enforce such provisions thereafter.  11.6 Survival.  All agreements, representations and warranties contained in this  Agreement and the other Loan Documents or in any document delivered pursuant hereto  or thereto shall be for the benefit of Agent and Lender and shall survive the execution and  delivery of this Agreement. Sections 6.3 and 8.1 shall survive the termination of this  Agreement.  11.7 Successors and Assigns.  The provisions of this Agreement and the other  Loan Documents shall inure to the benefit of and be binding on Borrower and its  permitted assigns (if any).  Borrower shall not assign its obligations under this Agreement  or any of the other Loan Documents without Agent’s express prior written consent, and  any such attempted assignment shall be void and of no effect.  Agent and Lender may  assign, transfer, or endorse its rights hereunder and under the other Loan Documents with  the consent of Borrower (provided that, in the case of any assignment in connection with a  Lender’s own financing or securitization transactions, such consent shall not be  unreasonably withheld), and all of such rights shall inure to the benefit of Agent’s and  Lender’s successors and assigns; provided that if an Event of Default has occurred and is  continuing, Agent or any Lender may assign, transfer or endorse its rights hereunder or  under the Loan Documents to any party without the consent of Borrower; provided further  that (a) any such assignment, transfer or endorsement to an Affiliate of any Lender or  Agent shall be allowed at any time without prior written consent of Borrower, and (b) any  transfer in the form of an assignment of security interest in favor of Agent’s or any Lender  shall be allowed at any time without prior written consent of Borrower.    11.8 Governing Law.  This Agreement and the other Loan Documents have  been negotiated and delivered to Agent and Lender in the State of California, and shall  have been accepted by Agent and Lender in the State of California.  Payment to Agent and  Lender by Borrower of the Secured Obligations is due in the State of California.  This  Agreement and the other Loan Documents shall be governed by, and construed and  enforced in accordance with, the laws of the State of California, excluding conflict of laws  principles that would cause the application of laws of any other jurisdiction.  

 

44    11.9 Consent to Jurisdiction and Venue.  All judicial proceedings (to the extent  that the reference requirement of Section 11.10 is not applicable) arising in or under or  related to this Agreement or any of the other Loan Documents may be brought in any state  or federal court located in the State of California.  By execution and delivery of this  Agreement, each party hereto generally and unconditionally: (a) consents to nonexclusive  personal jurisdiction in Santa Clara County, State of California; (b) waives any objection  as to jurisdiction or venue in Santa Clara County, State of California; (c) agrees not to  assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and  (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other Loan Documents.  Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective and received as set forth in Section 11.2.  Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction. 11.10 Mutual Waiver of Jury Trial / Judicial Reference.    (a) Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert Person and the  parties wish applicable state and federal laws to apply (rather than arbitration rules), the  parties desire that their disputes be resolved by a judge applying such applicable laws.   EACH OF BORROWER, AGENT AND LENDER SPECIFICALLY WAIVES ANY  RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION,  CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY  OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER  AGAINST AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT,  LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST BORROWER.  This  waiver extends to all such Claims, including Claims that involve Persons other than  Agent, Borrower and Lender; Claims that arise out of or are in any way connected to the  relationship among Borrower, Agent and Lender; and any Claims for damages, breach of  contract, tort, specific performance, or any equitable or legal relief of any kind, arising  out of this Agreement, any other Loan Document.    (b) If the waiver of jury trial set forth in Section 11.10(a) is ineffective or unenforceable, the parties agree that all Claims shall be resolved by reference to a private  judge sitting without a jury, pursuant to Code of Civil Procedure Section 638, before a  mutually acceptable referee or, if the parties cannot agree, a referee selected by the  Presiding Judge of the San Mateo County, California.  Such proceeding shall be  conducted in San Mateo County, California, with California rules of evidence and  discovery applicable to such proceeding.  (c) In the event Claims are to be resolved by judicial reference, either party may seek from a court identified in Section 11.9, any prejudgment order, writ or other  relief and have such prejudgment order, writ or other relief enforced to the fullest extent  permitted by law notwithstanding that all Claims are otherwise subject to resolution by  judicial reference.  

 

45    11.11 Professional Fees.  Borrower promises to pay Agent’s and Lender’s  documented, reasonable, out-of-pocket fees and expenses necessary to finalize the loan  documentation, including but not limited to reasonable attorneys’ fees, UCC searches,  filing costs, and other miscellaneous expenses. In addition, Borrower promises to pay any  and all documented, reasonable, out-of-pocket attorneys’ and other professionals’ fees and  expenses incurred by Agent and Lender after the Closing Date in connection with or  related to:  (a) the Loan; (b) the administration, collection, or enforcement of the Loan;  (c) the amendment or modification of the Loan Documents; (d) any waiver, consent, release, or termination under the Loan Documents; (e) the protection, preservation, audit, field exam, sale, lease, liquidation, or disposition of Collateral or the exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative, arbitration, or out of court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof; and (g) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout, foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, including representing Agent or Lender in any adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s estate, and any appeal or review thereof. 11.12 Confidentiality.  Agent and Lender acknowledge that certain items of  Collateral and information provided to Agent and Lender by Borrower are confidential  and proprietary information of Borrower, if and to the extent such information either (x) is  marked as confidential by Borrower at the time of disclosure, or (y) should reasonably be  understood to be confidential (the “Confidential Information”).  Accordingly, Agent and  Lender agree that any Confidential Information it may obtain in the course of acquiring,  administering, or perfecting Agent’s security interest in the Collateral or otherwise  pursuant to the terms of this Agreement shall not be disclosed to any other Person or entity  in any manner whatsoever, in whole or in part, without the prior written consent of  Borrower, except that Agent and any Lender may disclose any such information:  (a) to its  own directors, officers, employees, accountants, counsel and other professional advisors  (collectively, “Representatives”) and to its Affiliates if Agent or Lender in their sole  discretion determines that any such party should have access to such information in  connection with such party’s responsibilities in connection with the Loan or this  Agreement and, provided that such recipient of such Confidential Information either (i)  agrees to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise  subject to confidentiality restrictions that reasonably protect against the disclosure of  Confidential Information; (b) if such information is generally available to the public; (c) if  required or appropriate in any report, statement or testimony submitted to any  governmental authority having or claiming to have jurisdiction over Agent or Lender;  (d) if required or appropriate in response to any summons or subpoena or in connection with any litigation, to the extent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to comply with any legal requirement or law applicable to Agent or Lender; (f) to the extent reasonably necessary in connection with the exercise of any right or remedy under any Loan Document, including Agent’s sale, lease, or other disposition of Collateral after default; (g) to any participant or assignee of Agent or Lender or any prospective participant or assignee; provided, that such participant or assignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or (h) otherwise with the prior consent of Borrower; provided, that any 

 

46    disclosure made in violation of this Agreement shall not affect the obligations of Borrower  or any of its Affiliates or any guarantor under this Agreement or the other Loan  Documents.  Agent’s and Lender’s obligations under this Section 11.12 shall supersede all  of their respective obligations under the Non-Disclosure Agreement and Agent and Lender  shall be responsible for any breach of the terms of this paragraph by any of their  respective Representatives or Affiliates.  11.13  Assignment of Rights.  Borrower acknowledges and understands that  Agent or Lender may, subject to Section 11.7, sell and assign all or part of its interest  hereunder and under the Loan Documents to any Person or entity (an “Assignee”).  After  such assignment the term “Agent” or “Lender” as used in the Loan Documents shall mean  and include such Assignee, and such Assignee shall be vested with all rights, powers and  remedies of Agent and Lender hereunder with respect to the interest so assigned; but with  respect to any such interest not so transferred, Agent and Lender shall retain all rights,  powers and remedies hereby given.  No such assignment by Agent or Lender shall relieve  Borrower of any of its obligations hereunder.  Lender agrees that in the event of any  transfer by it of the Note(s)(if any), it will endorse thereon a notation as to the portion of  the principal of the Note(s), which shall have been paid at the time of such transfer and as  to the date to which interest shall have been last paid thereon.  Agent, acting solely for this  purpose as an agent of Borrower, shall maintain at one of its offices a copy of any  assignment and a register for the recordation of the names and addresses of Lenders and  the principal and interest amounts owing to each Lender pursuant to the terms hereof from  time to time (the “Register”).  The entries in the Register shall be conclusive absent  manifest error, and Borrower, Agent and Lenders shall treat each Person whose name is  recorded in the Register pursuant to the terms hereof as a Lender hereunder for all  purposes of this Agreement.  The Register shall be available for inspection by Borrower  and any Lender, at any reasonable time and from time to time upon reasonable prior  notice.  11.14 Revival of Secured Obligations.  This Agreement and the Loan Documents  shall remain in full force and effect and continue to be effective if any petition is filed by  or against Borrower for liquidation or reorganization, if Borrower becomes insolvent or  makes an assignment for the benefit of creditors, if a receiver or trustee is appointed for all  or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is  recovered from Agent or Lender.  The Loan Documents and the Secured Obligations and  Collateral security shall continue to be effective, or shall be revived or reinstated, as the  case may be, if at any time payment and performance of the Secured Obligations or any  transfer of Collateral to Agent, or any part thereof is rescinded, avoided or avoidable,  reduced in amount, or must otherwise be restored or returned by, or is recovered from,  Agent, Lender or by any obligee of the Secured Obligations, whether as a “voidable  preference,” “fraudulent conveyance,” or otherwise, all as though such payment,  performance, or transfer of Collateral had not been made.  In the event that any payment,  or any part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or  recovered, the Loan Documents and the Secured Obligations shall be deemed, without any  further action or documentation, to have been revived and reinstated except to the extent  of the full, final, and indefeasible payment to Agent or Lender in Cash.  

 

47    11.15 Counterparts.  This Agreement and any amendments, waivers, consents or  supplements hereto may be executed in any number of counterparts, and by different  parties hereto in separate counterparts, each of which when so delivered shall be deemed  an original, but all of which counterparts shall constitute but one and the same instrument.  11.16 No Third Party Beneficiaries.  No provisions of the Loan Documents are  intended, nor will be interpreted, to provide or create any third-party beneficiary rights or  any other rights of any kind in any Person other than Agent, Lender and Borrower unless  specifically provided otherwise herein, and, except as otherwise so provided, all  provisions of the Loan Documents will be personal and solely among Agent, the Lender  and the Borrower.   11.17 Agency.    (a) Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its behalf as the Agent hereunder and under the other Loan Documents and authorizes the  Agent to take such actions on its behalf and to exercise such powers as are delegated to  the Agent by the terms hereof or thereof, together with such actions and powers as are  reasonably incidental thereto.  (b) Lender agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so),  according to its respective Term Commitment percentages (based upon the total  outstanding Term Commitments) in effect on the date on which indemnification is sought  under this Section 11.17, from and against any and all liabilities, obligations, losses,  damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any  kind whatsoever that may at any time be imposed on, incurred by or asserted against the  Agent in any way relating to or arising out of, this Agreement, any of the other Loan  Documents or any documents contemplated by or referred to herein or therein or the  transactions contemplated hereby or thereby or any action taken or omitted by the Agent  under or in connection with any of the foregoing; The agreements in this Section shall  survive the payment of the Loans and all other amounts payable hereunder.  (c) Agent in Its Individual Capacity.  The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other  Lender and may exercise the same as though it were not the Agent and the term “Lender”  shall, unless otherwise expressly indicated or unless the context otherwise requires,  include each such Person serving as Agent hereunder in its individual capacity.   (d) Exculpatory Provisions.  The Agent shall have no duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without  limiting the generality of the foregoing, the Agent shall not:  (i) be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing; 

 

48    (ii) have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and (iii)except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as the Agent or any of its Affiliates in any capacity. (e) The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Lender or as the Agent shall believe in good faith  shall be necessary, under the circumstances or (ii) in the absence of its own gross  negligence or willful misconduct.  (f) The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with  this Agreement or any other Loan Document, (ii) the contents of any certificate, report or  other document delivered hereunder or thereunder or in connection herewith or therewith,  (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent. (g) Reliance by Agent.  Agent may rely, and shall be fully protected in acting, or refraining to act, upon, any resolution, statement, certificate, instrument, opinion,  report, notice, request, consent, order, bond or other paper or document that it has no  reason to believe to be other than genuine and to have been signed or presented by the  proper party or parties or, in the case of cables, telecopies and telexes, to have been sent  by the proper party or parties.  In the absence of its gross negligence or willful  misconduct, Agent may conclusively rely, as to the truth of the statements and the  correctness of the opinions expressed therein, upon any certificates or opinions furnished  to Agent and conforming to the requirements of the Loan Agreement or any of the other  Loan Documents.  Agent may consult with counsel, and any opinion or legal advice of  such counsel shall be full and complete authorization and protection in respect of any  action taken, not taken or suffered by Agent hereunder or under any Loan Documents in  accordance therewith.  Agent shall have the right at any time to seek instructions  concerning the administration of the Collateral from any court of competent jurisdiction.   Agent shall not be under any obligation to exercise any of the rights or powers granted to  Agent by this Agreement, the Loan Agreement and the other Loan Documents at the  request or direction of Lenders unless Agent shall have been provided by Lender with  

 

49    adequate security and indemnity against the costs, expenses and liabilities that may be  incurred by it in compliance with such request or direction.  11.18 Publicity.  None of the parties hereto nor any of its respective member  businesses and Affiliates shall, without the other parties’ prior written consent (which  shall not be unreasonably withheld or delayed), publicize or use (a) the other party’s name  (including a brief description of the relationship among the parties hereto), logo or  hyperlink to such other parties’ web site, separately or together, in written and oral  presentations, advertising, promotional and marketing materials, client lists, public  relations materials or on its web site (together, the “Publicity Materials”); (b) the names of  officers of such other parties in the Publicity Materials; and (c) such other parties’ name,  Trademarks, servicemarks in any news or press release concerning such party; provided  however, notwithstanding anything to the contrary herein, no such consent shall be  required (i) to the extent necessary to comply with the requests of any regulators, legal  requirements or laws applicable to such party, pursuant to any listing agreement with any  national securities exchange (so long as such party provides prior notice to the other party  hereto to the extent reasonably practicable) and (ii) to comply with Section 11.12.  11.19 Electronic Execution of Certain Other Documents.  The words “execution,”  “execute”, “signed,” “signature,” and words of like import in or related to any document  to be signed in connection with this Agreement and the transactions contemplated hereby  (including without limitation assignments, assumptions, amendments, waivers and  consents) shall be deemed to include electronic signatures, the electronic matching of  assignment terms and contract formations on electronic platforms approved by the Agent,  or the keeping of records in electronic form, each of which shall be of the same legal  effect, validity or enforceability as a manually executed signature or the use of a paper- based recordkeeping system, as the case may be, to the extent and as provided for in any  applicable law, including the Federal Electronic Signatures in Global and National  Commerce Act, the California Uniform Electronic Transaction Act, or any other similar  state laws based on the Uniform Electronic Transactions Act.   (SIGNATURE PAGES FOLLOW)  

 

[Signature Page to Loan and Security Agreement]  IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and  delivered this Loan and Security Agreement as of the day and year first above written.   BORROWER:   TRICIDA, INC.  Signature: /s/ Geoffrey Parker  Print Name: Geoffrey Parker  Title: Chief Operating Officer,  Chief Financial Officer, and  Executive Vice President  [Signatures Continue on the Next Page.]  

 

[Signature Page to Loan and Security Agreement]  Accepted in Palo Alto, California:  AGENT and LENDER:  HERCULES CAPITAL, INC.  Signature: Print Name: Seth Meyer  Title:  /s/ Seth Meyer  Chief Financial Officer  

 

51    Table of Addenda, Exhibits and Schedules  Exhibit A: Advance Request   Attachment to Advance Request  Exhibit B: Term Note  Exhibit C: Name, Locations, and Other Information for Borrower  Exhibit D:  [Reserved]  Exhibit E: Borrower’s Deposit Accounts and Investment Accounts  Exhibit F: Compliance Certificate  Exhibit G: Joinder Agreement  Exhibit H:  ACH Debit Authorization Agreement  Schedule 1 Subsidiaries  Schedule 1.1 Commitments  Schedule 1A Existing Permitted Indebtedness  Schedule 1B Existing Permitted Investments  Schedule 1C Existing Permitted Liens  Schedule 5.3 Consents, Etc.  Schedule 5.8 Tax Matters  Schedule 5.9 Intellectual Property Claims  Schedule 5.10 Intellectual Property  Schedule 5.11 Borrower Products  

 

52    EXHIBIT A  ADVANCE REQUEST  To:  Agent: Date: __________, 20[__]  Hercules Capital, Inc. (the “Agent”)  400 Hamilton Avenue, Suite 310  Palo Alto, CA 94301   email: legal@htgc.com   Attn:  Tricida, Inc. (“Borrower”) hereby requests from Hercules Capital, Inc. and [___] (each, a  “Lender”) an Advance in the amount of _____________________ Dollars ($________________)  on ______________, _____ (the “Advance Date”) pursuant to the Loan and Security Agreement  dated as of October 19, 2022 (as amended, restated, supplemented or modified from time to time,  the “Agreement”) among Borrower, Agent and lenders party thereto. Capitalized words and other  terms used but not otherwise defined herein are used with the same meanings as defined in the  Agreement.  Please:  (a) Issue a check payable to Borrower ________  or  (b) Wire Funds to Borrower’s account ________ [IF FILED PUBLICLY,  ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]  Bank:                        _____________________________  Address:                    _____________________________    _____________________________  ABA Number:          _____________________________  Account Number:     _____________________________  Account Name:        _____________________________  Contact Person:        _____________________________  Phone Number          To Verify Wire Info: _____________________________  Email address:           _____________________________  Borrower represents that the conditions precedent to the Advance set forth in Section 4.2  of the Agreement are satisfied and shall be satisfied upon the making of such Advance, including  but not limited to:  (i) that no event that has had or could reasonably be expected to have a  Material Adverse Effect has occurred and is continuing; (ii) that the representations and  warranties set forth in Section 5 of the Agreement are and shall be true and correct in all material  respects on and as of the Advance Date with the same effect as though made on and as of such  

 

53    date, except to the extent such representations and warranties expressly relate to an earlier date;  (iii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as of the Advance Date, no fact or condition exists that could (or could, with the passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents. Borrower hereby represents that Borrower’s corporate status and locations have not  changed since the date of the Agreement or, if the Attachment to this Advance Request is  completed, are as set forth in the Attachment to this Advance Request.  Borrower agrees to notify Agent promptly before the funding of the Loan if any of the  matters which have been represented above shall not be true and correct on the Advance Date  and if Agent has received no such notice before the Advance Date then the statements set forth  above shall be deemed to have been made and shall be deemed to be true and correct as of the  Advance Date.  Executed as of [              ], 20[   ].  BORROWER: Tricida, Inc.   SIGNATURE:________________________  TITLE:_____________________________  PRINT NAME:______________________  

 

54    ATTACHMENT TO ADVANCE REQUEST  Dated: _______________________  Borrower hereby represents and warrants to Agent that Borrower’s current name and  organizational status is as follows:  Name: [ ]  Type of organization: Corporation  State of organization: [              ]  Organization file number:  Borrower hereby represents and warrants to Agent that the street addresses, cities, states and  postal codes of its current locations are as follows:  

 

EXHIBIT B  SECURED TERM PROMISSORY NOTE  $[  ],000,000 Advance Date:  ___ __, 20[  ]  Maturity Date:  _____ ___, 20[ ]  FOR VALUE RECEIVED, Tricida, Inc., a Delaware corporation (the “Borrower”),  hereby promises to pay to [Hercules Capital, Inc., a Maryland corporation][insert applicable  Hercules lending entity] or the registered holder of this Note (the “Lender”) at 400 Hamilton  Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this  Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in  writing, in lawful money of the United States of America, the principal amount of [  ] Million  Dollars ($[  ],000,000) or such other principal amount as Lender has advanced to Borrower,  together with interest at a rate as set forth in Section 2.2(d) of the Loan Agreement based upon a  year consisting of 360 days, with interest computed daily based on the actual number of days in  each month.    THIS PROMISSORY NOTE MAY BE ISSUED WITH ORIGINAL ISSUE  DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL  REVENUE CODE OF 1986, AS AMENDED.  A HOLDER MAY OBTAIN THE ISSUE  PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO  MATURITY FOR SUCH NOTES BY SUBMITTING A REQUEST FOR SUCH  INFORMATION TO THE ISSUER AT THE ADDRESS SET FORTH IN SECTION 11.2  OF THE LOAN AGREEMENT.  This Promissory Note is the Note referred to in, and is executed and delivered in  connection with, that certain Loan and Security Agreement dated as of October 19, 2022, by and  among Borrower, Hercules Capital, Inc., a Maryland corporation (the “Agent”) and the several  banks and other financial institutions or entities from time to time party thereto as lender (as the  same may from time to time be amended, modified or supplemented in accordance with its terms,  the “Loan Agreement”), and is entitled to the benefit and security of the Loan Agreement and the  other Loan Documents (as defined in the Loan Agreement), to which reference is made for a  statement of all of the terms and conditions thereof.  All payments shall be made in accordance  with the Loan Agreement.  All terms defined in the Loan Agreement shall have the same  definitions when used herein, unless otherwise defined herein.  An Event of Default under the  Loan Agreement shall constitute a default under this Promissory Note.    Borrower waives presentment and demand for payment, notice of dishonor, protest and  notice of protest under the UCC or any applicable law.  Borrower agrees to make all payments  under this Promissory Note without setoff, recoupment or deduction and regardless of any  counterclaim or defense.  This Promissory Note has been negotiated and delivered to Lender and  is payable in the State of California.  This Promissory Note shall be governed by and construed  and enforced in accordance with, the laws of the State of California, excluding any conflicts of  law rules or principles that would cause the application of the laws of any other jurisdiction.  

 

  BORROWER: Tricida, Inc.  By:  Title:  

 

EXHIBIT C  NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER  1. Borrower represents and warrants to Agent that Borrower’s current name and organizational status as of the Closing Date is as follows:  Name: Tricida, Inc. Type of organization: Corporation  State of organization: Delaware  Organization file number: 5338864  2. Borrower represents and warrants to Agent that for five (5) years prior to the Closing Date, Borrower did not do business under any other name or organization or form except the following:  None.  3. Borrower’s fiscal year ends on December 31. 4. Borrower’s federal employer tax identification number is: 46-3372526 5. Borrower represents and warrants to Agent that its chief executive office is located at 7000 Shoreline Court, Suite 201, South San Francisco, CA 94080. 

 

  EXHIBIT D  [RESERVED]  

 

  EXHIBIT E  BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS  Deposit Account:  Bank Name Account  Number  Branch Address Company/  Subsidiary  Purpose of  Account  Silicon Valley  Bank  xxxxxxxxxx 3003 Tasman  Drive  Tricida, Inc. Operational  Checking  Account  Silicon Valley  Bank  xxxxxxxxxx 3003 Tasman  Drive  Tricida, Inc. Payroll  Silicon Valley  Bank  xxxxxxxxxx 3003 Tasman  Drive  Tricida, Inc. Receivables  Securities Account:   Bank or  Brokerage Name  Account  Number  Branch Address Company/  Subsidiary  Purpose of  Account  Capital Advisors  Group / U.S.  Bank   xxxxxxx 330 Passaic  Avenue, Suite  200 Fairfield, NJ  07004  Tricida, Inc. Corporate Cash  Management  

 

  EXHIBIT F  COMPLIANCE CERTIFICATE  Hercules Capital, Inc. (as “Agent”)  400 Hamilton Avenue, Suite 310  Palo Alto, CA 94301  Reference is made to that certain Loan and Security Agreement dated as of October 19,  2022 and the Loan Documents (as defined therein) entered into in connection with such Loan  and Security Agreement all as may be amended from time to time (hereinafter referred to  collectively as the “Loan Agreement”) by and among Hercules Capital, Inc. (the “Agent”), the  several banks and other financial institutions or entities from time to time party thereto  (collectively, the “Lender”) and Hercules Capital, Inc., as agent for the Lender (the “Agent”) and  Tricida, Inc. (the “Company”) as Borrower. All capitalized terms not defined herein shall have  the same meaning as defined in the Loan Agreement.  The undersigned is a Responsible Officer of the Company, knowledgeable of all  Company financial matters, and is authorized to provide certification of information regarding  the Company; hereby certifies, in such capacity, that in accordance with the terms and conditions  of the Loan Agreement, the Company is in compliance for the period ending [___________] of  all covenants, conditions and terms and hereby reaffirms that all representations and warranties  contained therein are true and correct on and as of the date of this Compliance Certificate with  the same effect as though made on and as of such date, except to the extent such representations  and warranties expressly relate to an earlier date, after giving effect in all cases to any  standard(s) of materiality contained in the Loan Agreement as to such representations and  warranties.  Attached are the required documents supporting the above certification.  The  undersigned further certifies that these are prepared in accordance with GAAP (except for the  absence of footnotes with respect to unaudited financial statement and subject to normal year end  adjustments) and are consistent from one period to the next except as explained below.  REPORTING REQUIREMENT REQUIRED  CHECK IF  ATTACHED  Interim Financial Statements   If Borrower’s Market  Capitalization is less  than $300,000,000 -  Monthly within 30 days  Interim Financial Statements   Quarterly within 45  days of first three fiscal  quarters Audited Financial Statements  FYE within 90 days  

 

  FINANCIAL COVENANTS – please attached supporting documentation.  7.21(a)(i) – Minimum Cash (required from the earliest funding date of the initial Tranche 1  Advance or the initial Tranche 2 Advance)  (I) Unrestricted Cash: $___________ Is item (I) above greater than or equal to 40% of the aggregate amount of the sum of (x)  all Tranche 1 Advances and (y) all Tranche 2 Advances?   ___ Yes:  In compliance with Section 7.21(a)(i)  ___ No:  Not in compliance with Section 7.21(a)(i)  7.21(a)(ii) – Minimum Cash (required from the date of redemption of Permitted Convertible  Indebtedness subject to satisfaction of Redemption Conditions and at all times after such  redemption).  (I) Unrestricted Cash: $___________ (II) Is item (I) above greater than or equal to 100% of the outstanding Secured Obligations? ___ Yes:  In compliance with Section 7.21(a)(ii)   ___ No:  Not in compliance with Section 7.21(a)(ii)  7.21(b) – Conditional Performance (required from date of achievement of the Approval  Milestone so long as Borrower’s Market Capitalization is less than $1,000,000,000). Complete  either of the following clauses (i) and (ii).  (i) If the Borrower’s Market Capitalization is equal to or greater than $750,000,000, then go to (II)(2) below; otherwise go to (II)(1) below: (I) Unrestricted Cash: $___________ (II)(1) Is item (I) above greater than or equal to 55% of the outstanding principal  amount of the Term Loan Advances?   ___ Yes:  In compliance with Section 7.21(b)   ___ No:  Prior to July 1, 2024, not in compliance with Section 7.21(b); otherwise,  go to (ii) below  (II)(2)  Is item (I) above greater than or equal to 35% of the outstanding principal  amount of the Term Loan Advances?   

 

  ___ Yes:  In compliance with Section 7.21(b)   ___ No:  Prior to July 1, 2024, not in compliance with Section 7.21(b);  otherwise, go to (ii) below  (ii) T6M Net TRC101 Product Revenue (applicable starting July 1, 2024): (I) Net TRC101 Product Revenue, measured monthly on a trailing sixth-month basis, as of _____1: $________. (II) Is item (I) equal to or greater than 60% of Borrower’s board-approved forecast acceptable to Agent and provided to Agent prior to the initial funding of the Tranche 3 Advance? ___ Yes:  In compliance with Section 7.21(b)  ___ No:  Not in compliance with Section 7.21(b)  REDEMPTION OR REPURCHASE OF PERMITTED CONVERTIBLE INDEBTEDNESS   Description of  Permitted Convertible  Indebtedness  (including the principal  amount and the  maturity date) Period  Total Amount of  Redemption or  Repurchase made  during the period  Cumulative  Amount of  Redemption or  Repurchase made  since the initial  period  1 The last day of the immediately preceding month.  

 

  DEPOSIT AND SECURITIES ACCOUNTS  The undersigned hereby also confirms the below disclosed accounts represent all depository  accounts and securities accounts presently open in the name of each Borrower or  Subsidiary/Affiliate of Borrower, as applicable.  Depository  AC #  Financial  Institution  Account  Type  (Depository  / Securities)  Last  Month  Ending  Account  Balance  Purpose  of  Account  BORROWER  Name/Address:  1 2   3   4   5   6   7   BORROWER /  SUBSIDIARY /  AFFILIATE  COMPANY  Name/Address  1 2   3   4   5   

 

  6   7   [Signature page to follow]  

 

  Very Truly Yours,  Tricida, Inc.   By: ____________________________  Name:   _____________________________  Its: ____________________________  

 

  EXHIBIT G  FORM OF JOINDER AGREEMENT  This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [          ], 20[   ], and is entered into by and between__________________., a ___________ corporation  (“Subsidiary”), and HERCULES CAPITAL, INC., a Maryland corporation (as “Agent”).    RECITALS  A. Subsidiary’s Affiliate, Tricida, Inc.  (“Company”) has entered into that certain Loan and Security Agreement dated as of October 19, 2022, with the several banks and other financial  institutions or entities from time to time party thereto as lender (collectively, the “Lender”) and  the Agent, as such agreement may be amended (the “Loan Agreement”), together with the other  agreements executed and delivered in connection therewith;   B. Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from Company’s execution of the Loan Agreement and the other agreements executed and  delivered in connection therewith;  AGREEMENT  NOW THEREFORE, Subsidiary and Agent agree as follows:  1. The recitals set forth above are incorporated into and made part of this Joinder Agreement. Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement. 2. By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the Loan Agreement the same as if it were the Borrower (as defined in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided however, that (a) with respect to (i) Section 5.1 of the Loan Agreement, Subsidiary represents that it is an entity duly organized, legally existing and in good standing under the laws of [        ], (b) other than pursuant to the terms of the Loan Agreement, neither Agent nor Lender shall have any duties, responsibilities or obligations to Subsidiary arising under or related to the Loan Agreement or the other Loan Documents, (c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not be required to maintain separate insurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Company satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separate Financial Statements.  To the extent that Agent or Lender has any duties, responsibilities or obligations arising under or related to the Loan Agreement or the other Loan Documents, those duties, responsibilities or obligations shall flow only to Company and not to Subsidiary or any other Person or entity.  By way of example (and not an exclusive list): (i) Agent’s providing notice to Company in accordance with the Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be deemed providing notice to Subsidiary; (ii) a Lender’s providing an Advance to Company shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or make any other demand on Lender. 

 

  3. If Subsidiary has not issued certificates for its equity as of the date hereof, Subsidiary agrees not to certificate its equity securities without Agent’s prior written consent, which consent may be conditioned on the delivery of such equity securities to Agent in order to perfect Agent’s security interest in such equity securities. 4. Subsidiary acknowledges that it benefits, both directly and indirectly, from the Loan Agreement and the transactions contemplated thereby, and hereby waives, for itself and on behalf on any and all successors in interest (including without limitation any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder Agreement are avoidable as a fraudulent conveyance. 5. As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Subsidiary grants to Agent a security interest in all of Subsidiary’s right, title, and interest in and to the Collateral. SUBSIDIARY:  _________________________________.  By: Name: Title: Address: Telephone: ___________ email: ____________ AGENT:  HERCULES CAPITAL, INC.  By:____________________________________  Name:__________________________________  Title: ___________________________________  Address:  400 Hamilton Ave., Suite 310  Palo Alto, CA 94301  email: legal@htgc.com  Telephone:  650-289-3060  

 

EXHIBIT H  ACH DEBIT AUTHORIZATION AGREEMENT  Hercules Capital, Inc.   400 Hamilton Avenue, Suite 310  Palo Alto, CA  94301  Re:  Loan and Security Agreement dated as of October 19, 2022 (as the same may from  time to time be amended, modified or supplemented in accordance with its terms, the  “Agreement”) by and among Tricida, Inc. (“Borrower”) and Hercules Capital, Inc., as  agent (“Company”) and the lenders party thereto (collectively, the “Lender”)  In connection with the above referenced Agreement, the Borrower hereby authorizes the Company  to initiate debit entries for (i) the periodic payments due under the Agreement and (ii) following  the occurrence of an Event of Default that continues, out-of-pocket legal fees and costs incurred  by Agent or Lender pursuant to Section 11.11 of the Agreement to the Borrower’s account  indicated below.  The Borrower authorizes the depository institution named below to debit to such  account.  [IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]  DEPOSITORY NAME BRANCH  CITY STATE AND ZIP CODE  TRANSIT/ABA NUMBER ACCOUNT NUMBER  This authority will remain in full force and effect so long as any amounts are due under the  Agreement.   ____________________________________________  (Borrower)(Please Print)  By: _________________________________________  Date: ________________________________________  

 

  SCHEDULE 1  SUBSIDIARIES  None.  

 

  SCHEDULE 1.1  COMMITMENTS  LENDER  TERM COMMITMENT  TOTAL  COMMITMENTS TRANCHE 1 TRANCHE 2 TRANCHE 3 TRANCHE 4  Hercules Capital, Inc. $25,000,000 $25,000,000 $50,000,000 $25,000,000 $125,000,000  TOTAL  COMMITMENTS  $25,000,000 $25,000,000 $50,000,000 $25,000,000 $125,000,000  

 

  SCHEDULE 1A  EXISTING PERMITTED INDEBTEDNESS  None.  

 

  SCHEDULE 1B  EXISTING PERMITTED INVESTMENTS  None.  

 

  SCHEDULE 1C  EXISTING PERMITTED LIENS  None.  

 

  SCHEDULE 5.3  CONSENTS, ETC.  None.  

 

  SCHEDULE 5.8  TAX MATTERS  None.  

 

  SCHEDULE 5.9  INTELLECTUAL PROPERTY CLAIMS  None.  

 

  SCHEDULE 5.10  INTELLECTUAL PROPERTY  None.  

 

  SCHEDULE 5.11  BORROWER PRODUCTS  None.  

 

  SCHEDULE 5.14  CAPITALIZATION AND SUBSIDIARIES  None.ex_434220.htm

 

Exhibit 4.1

 

PRE-FUNDED COMMON STOCK PURCHASE WARRANT

 

RICEBRAN TECHNOLOGIES

 

 

	Warrant Shares: _______	Initial Exercise Date: October 20, 2022

                                    

 

THIS PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from RiceBran Technologies, a California corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.     Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated October 18, 2022, among the Company and the purchasers signatory thereto.

 

Section 2.       Exercise.

 

a)    Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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b)    Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder (the “Exercise Price”).

 

c)    Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance or resale of the Warrant Shares to or by the Holder, this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

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(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this Section 2(c).

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

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d) Mechanics of Exercise.

 

i.    Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) following any sale of the Warrant Shares pursuant to Rule 144, or (C) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, in each case, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such date (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.

 

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ii.    Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.    Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise by delivering written notice to the Company at any time prior to the delivery of such Warrant Shares.

 

iv.    Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, subject to receipt of the aggregate Exercise Price for the applicable exercise (other than in the case of a cashless exercise) and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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v.    No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi.    Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.    Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

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			e)

				
			Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are in non-compliance with the Beneficial Ownership Limitation other than liability for non-compliance with the Beneficial Ownership Limitation that result from inaccurate information about the number of outstanding shares of Common Stock provided by the Company or the Transfer Agent to the Holder or provided as described in clauses (A)-(C) in the second sentence following this sentence. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [9.99/4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

			

 

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Section 3.      Certain Adjustments.

 

a)    Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

 

b)    Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time that this Warrant is outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation); provided, however, that the Holder’s right to receive such Purchase Right shall terminate on, and shall not be held in abeyance for any period subject to, the Termination Date.

 

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c)    Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation); provided, however, that the Holder’s right to receive such Distribution shall terminate on, and shall not be held in abeyance for any period subject to, the Termination Date.

 

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d)    Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.

 

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e)    Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)    Notice to Holder.

 

i.    Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.    Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights (excluding any granting or issuance of rights to all of the Company’s stockholders pursuant to a stockholder rights plan), (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least five (5) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

11

 

 

Section 4.      Transfer of Warrant.

 

a)    Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

12

 

 

b)    New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)    Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.      Miscellaneous.

 

a)    No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

 

b)    Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)    Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

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d)    Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)    Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

f)    Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

14

 

 

g)    Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)    Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i)    Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)    Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)    Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)    Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

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

 

15

 

 

n)    Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

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

 

(Signature Page Follows)

 

16

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	
			 

				
			RICEBRAN TECHNOLOGIES

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				
			Name:

				
			 

			
	
			 

				
			 

				
			Title:

				
			 

			

 

17

 

 

 

NOTICE OF EXERCISE

 

TO:         RICEBRAN TECHNOLOGIES

 

(1)    The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)    Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[  ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)    Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

	 	 	 

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

[SIGNATURE OF HOLDER]

 

	Name of Investing Entity:	 

	Signature of Authorized Signatory of Investing Entity:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

 

 

 

EXHIBIT B

 

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
			Name:

				 
	 	
			(Please Print)

			
	 	 
	
			Address:

				 
	
			 

				
			(Please Print)

			
	 	 
	
			Phone Number:

				 
	 	 
	Email Address:	 
	 	 
	
			Dated: _______________ __, ______

				 
	 	 
	
			Holder’s Signature:                                        

				 
	 	 
	
			Holder’s Address:

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