Document:

Exhibit 4.10

 

TRANZYME, INC.

AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

SECTION 1.  GENERAL PURPOSE OF THE PLAN; DEFINITIONS

 

The name of the plan is the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan (the “Plan”).  The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including Consultants and prospective employees) of Tranzyme, Inc. (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company.  It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

 

The following terms shall be defined as set forth below:

 

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee and which is comprised of not less than two Non-Employee Directors who are independent.

 

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.

 

“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan.  Each Award Certificate is subject to the terms and conditions of the Plan.

 

“Board” means the Board of Directors of the Company.

 

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

 

“Consultant” means any natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

 

“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.

 

 

“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.

 

“Effective Date” means the date on which the Plan is approved by stockholders as set forth in Section 21.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to market quotations.  If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations; provided further, however, that if the date for which Fair Market Value is determined is the first day when trading prices for the Stock are reported on a national securities exchange, the Fair Market Value shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final prospectus relating to the Company’s Initial Public Offering.

 

“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

 

“Initial Public Offering” means the consummation of the first fully underwritten, firm commitment public offering pursuant to an effective registration statement under the Act covering the offer and sale by the Company of its equity securities, or such other event as a result of or following which the Stock shall be publicly held.

 

“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.

 

“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

 

“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.

 

“Performance-Based Award” means any Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award granted to a Covered Employee that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code and the regulations promulgated thereunder.

 

“Performance Criteria” means the criteria that the Administrator selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle.  The Performance Criteria (which shall be applicable to the organizational level specified by the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiary of the Company) that will be used to establish Performance Goals are limited to the following:  revenues, expense levels, cash flow, clinical, regulatory, business development and financing

 

 

milestones and developments, earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or after interest, taxes, depreciation and/or amortization), changes in the market price of the Stock, economic value-added, funds from operations or similar measure, sales or revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including, but not limited to, operating cash flow and free cash flow), return on capital, assets, equity, or investment, stockholder returns, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per share of Stock, sales or market shares and number of customers, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.

 

“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award.  Each such period shall not be less than 12 months.

 

“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Administrator for a Performance Cycle based upon the Performance Criteria.

 

“Performance Share Award” means an Award entitling the recipient to acquire shares of Stock upon the attainment of specified Performance Goals.

 

“Restricted Stock Award” means an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time of grant.

 

“Restricted Stock Units” means an Award of phantom stock units to a grantee.

 

“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person or entity, or (iv) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.

 

“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.

 

“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.

 

“Stock” means the Common Stock, par value $0.00001 per share, of the Company, subject to adjustments pursuant to Section 3.

 

 

“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.

 

“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.

 

“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.

 

“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.

 

SECTION 2.  ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

 

(a)                                 Administration of Plan.  The Plan shall be administered by the Administrator.

 

(b)                                 Powers of Administrator.  The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:

 

(i)                                     to select the individuals to whom Awards may from time to time be granted;

 

(ii)                                  to determine the time or times of grant, and the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;

 

(iii)                               to determine the number of shares of Stock to be covered by any Award;

 

(iv)                              to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates;

 

(v)                                 to accelerate at any time the exercisability or vesting of all or any portion of any Award;

 

(vi)                              subject to the provisions of Section 5(b), to extend at any time the period in which Stock Options may be exercised; and

 

(vii)                           at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.

 

 

All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.

 

(c)                                  Delegation of Authority to Grant Options.  Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Options to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not Covered Employees.  Any such delegation by the Administrator shall include a limitation as to the amount of Options that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria.  The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.

 

(d)                                 Award Certificate.  Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.

 

(e)                                  Indemnification.  Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.

 

(f)                                   Foreign Award Recipients.  Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to:  (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after  an Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals.  Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.

 

 

SECTION 3.  STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

(a)                                 Stock Issuable.  The maximum number of shares of Stock reserved and available for issuance under the Plan shall be the sum of (i) 2,875,414 shares and (ii) the number of shares under Company’s 2001 Employee Stock Option Plan, 2001 Non-Employee Stock Option Plan, Amended and Restated 2003 Stock Option Plan and the Amended and Restated 2004 Stock Option Plan of Tranzyme Pharma Inc. which are not needed to fulfill the Company’s obligations for awards issued under the Prior Plans as a result of forfeiture, expiration, cancellation, termination or net issuances of awards thereunder, subject to adjustment as provided in this Section 3.  For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan.  In the event the Company repurchases shares of Stock on the open market, such shares shall not be added to the shares of Stock available for issuance under the Plan.  Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than 3,627,945 shares of Stock may be granted to any one individual grantee during any one calendar year period and no more than 3,627,945 shares of the Stock may be issued in the form of Incentive Stock Options.  The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.

 

(b)                                 Changes in Stock.  Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee and the maximum number of shares that may be granted under a Performance-Based Award, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (v) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable.  The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event.  The adjustment by the Administrator shall be final, binding and conclusive.  No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.

 

 

(c)                                  Mergers and Other Transactions.  Except as the Administrator may otherwise specify with respect to particular Awards in the relevant Award Certificate, in the case of and subject to the consummation of a Sale Event, all Options and Stock Appreciation Rights that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective time of the Sale Event, all other Awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the Sale Event and all Awards with conditions and restrictions relating to the attainment of performance goals may become vested and nonforfeitable in connection with a Sale Event in the Administrator’s discretion.  Upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree (after taking into account any acceleration hereunder).  In the event of such termination, (i) the Company shall have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable (after taking into account any acceleration hereunder) at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights held by such grantee.

 

(d)                                 Substitute Awards.  The Administrator may grant Awards under the Plan in substitution for stock and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the employing corporation.  The Administrator may direct that the substitute awards be granted on such terms and conditions as the Administrator considers appropriate in the circumstances.  Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a).

 

SECTION 4.  ELIGIBILITY

 

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key persons (including Consultants and prospective employees) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

 

SECTION 5.  STOCK OPTIONS

 

Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.

 

Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options.  Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f)

 

 

of the Code.  To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.

 

Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable.  If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.

 

(a)                                 Exercise Price.  The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant.  In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date.

 

(b)                                 Option Term.  The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted.  In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant.

 

(c)                                  Exercisability; Rights of a Stockholder.  Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date.  The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option.  An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.

 

(d)                                 Method of Exercise.  Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased.  Payment of the purchase price may be made by one or more of the following methods to the extent provided in the Option Award Certificate:

 

(i)                                     In cash, by certified or bank check or other instrument acceptable to the Administrator;

 

(ii)                                  Through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the optionee on the open market or that have been beneficially owned by the optionee for at least six months and that are not then subject to restrictions under any Company plan.  Such surrendered shares shall be valued at Fair Market Value on the exercise date;

 

(iii)                               By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or

 

(iv)                              With respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock

 

 

issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.

 

Payment instruments will be received subject to collection.  The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee).  In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares.  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an Internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.

 

(e)                                  Annual Limit on Incentive Stock Options.  To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000.  To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.

 

SECTION 6.  STOCK APPRECIATION RIGHTS

 

(a)                                 Exercise Price of Stock Appreciation Rights.  The exercise price of a Stock Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant.

 

(b)                                 Grant and Exercise of Stock Appreciation Rights.  Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.

 

(c)                                  Terms and Conditions of Stock Appreciation Rights.  Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator.  The term of a Stock Appreciation Right may not exceed ten years.

 

SECTION 7.  RESTRICTED STOCK AWARDS

 

(a)                                 Nature of Restricted Stock Awards.  The Administrator shall determine the restrictions and conditions applicable to each Restricted Stock Award at the time of grant.  Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.  The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.

 

(b)                                 Rights as a Stockholder.  Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the

 

 

voting of the Restricted Stock, subject to such conditions contained in the Restricted Stock Award Certificate.  Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock are vested as provided in Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the Company until such Restricted Stock is vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.

 

(c)                                  Restrictions.  Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder.  Following such deemed reacquisition of unvested Restricted Stock that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.

 

(d)                                 Vesting of Restricted Stock.  The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Stock and the Company’s right of repurchase or forfeiture shall lapse.  Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed “vested.”  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in any shares of Restricted Stock that have not vested shall automatically terminate upon the grantee’s termination of employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.

 

SECTION 8.  RESTRICTED STOCK UNITS

 

(a)                                 Nature of Restricted Stock Units.   The Administrator shall determine the restrictions and conditions applicable to each Restricted Stock Unit at the time of grant.  Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.  The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.  At the end of the deferral period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock.  To the extent that an award of Restricted Stock Units is subject to Section 409A, it may contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order for such Award to comply with the requirements of Section 409A.

 

 

(b)           Election to Receive Restricted Stock Units in Lieu of Compensation.  The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units.  Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator.  Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein.  The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate.  Any Restricted Stock Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate.

 

(c)           Rights as a Stockholder.  A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the phantom stock units underlying his Restricted Stock Units, subject to such terms and conditions as the Administrator may determine.

 

(d)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 9.  UNRESTRICTED STOCK AWARDS

 

Grant or Sale of Unrestricted Stock.  The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan.  Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.

 

SECTION 10.  CASH-BASED AWARDS

 

Grant of Cash-Based Awards.  The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant.  The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine.  Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator.  Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in shares of Stock, as the Administrator determines.

 

 

SECTION 11.  PERFORMANCE SHARE AWARDS

 

(a)           Nature of Performance Share Awards.  The Administrator may, in its sole discretion, grant Performance Share Awards independent of, or in connection with, the granting of any other Award under the Plan.  The Administrator shall determine whether and to whom Performance Share Awards shall be granted, the Performance Goals, the periods during which performance is to be measured, and such other limitations and conditions as the Administrator shall determine.

 

(b)           Rights as a Stockholder.  A grantee receiving a Performance Share Award shall have the rights of a stockholder only as to shares actually received by the grantee under the Plan and not with respect to shares subject to the Award but not actually received by the grantee.  A grantee shall be entitled to receive shares of Stock under a Performance Share Award only upon satisfaction of all conditions specified in the Performance Share Award Certificate (or in a performance plan adopted by the Administrator).

 

(c)           Termination.  Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Performance Share Awards shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 12.  PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

 

(a)           Performance-Based Awards.  Any employee or other key person providing services to the Company and who is selected by the Administrator may be granted one or more Performance-Based Awards in the form of a Restricted Stock Award, Restricted Stock Units, Performance Share Awards or Cash-Based Award payable upon the attainment of Performance Goals that are established by the Administrator and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Administrator.  The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle.  Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual.  The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (iii) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions provided however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee.  Each Performance-Based Award shall comply with the provisions set forth below.

 

(b)           Grant of Performance-Based Awards.  With respect to each Performance-Based Award granted to a Covered Employee, the Administrator shall select, within the first 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award).  Each Performance-Based Award will specify the

 

 

amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets.  The Performance Criteria established by the Administrator may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Covered Employees.

 

(c)           Payment of Performance-Based Awards.  Following the completion of a Performance Cycle, the Administrator shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle.  The Administrator shall then determine the actual size of each Covered Employee’s Performance-Based Award, and, in doing so, may reduce or eliminate the amount of the Performance-Based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.

 

(d)           Maximum Award Payable.  The maximum Performance-Based Award payable to any one Covered Employee under the Plan for a Performance Cycle is 3,627,945 shares of Stock (subject to adjustment as provided in Section 3(b) hereof) or $2,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.

 

SECTION 13.  DIVIDEND EQUIVALENT RIGHTS

 

(a)           Dividend Equivalent Rights.  A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award or as a freestanding award.  The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate.  Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents.  Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any.  Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments.  A Dividend Equivalent Right granted as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award may provide that such Dividend Equivalent Right shall be settled upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.  A Dividend Equivalent Right granted as a component of a Restricted Stock Units, Restricted Stock Award or Performance Share Award may also contain terms and conditions different from such other Award.

 

(b)           Interest Equivalents.  Any Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide in the grant for interest equivalents to be credited with respect to such cash payment.  Interest equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.

 

(c)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award that has not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

 

SECTION 14.  TRANSFERABILITY OF AWARDS

 

(a)           Transferability.  Except as provided in Section 14(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity.  No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order.  No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.

 

(b)           Administrator Action.  Notwithstanding Section 14(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or her Awards (other than any Incentive Stock Options or Restricted Stock Units) to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award.  In no event may an Award be transferred by a grantee for value.

 

(c)           Family Member.  For purposes of Section 14(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests.

 

(d)           Designation of Beneficiary.  Each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death.  Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator.  If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

 

SECTION 15.  TAX WITHHOLDING

 

(a)           Payment by Grantee.  Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income.  The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee.  The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.

 

(b)           Payment in Stock.  Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding obligation satisfied, in whole or in part, by

 

 

authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

 

SECTION 16.  SECTION 409A AWARDS

 

To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A.  In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.  Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

 

SECTION 17.  TRANSFER, LEAVE OF ABSENCE, ETC.

 

For purposes of the Plan, the following events shall not be deemed a termination of employment:

 

(a)           a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or

 

(b)           an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.

 

SECTION 18.  AMENDMENTS AND TERMINATION

 

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent.  Except as provided in Section 3(b) or 3(c), without prior stockholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash.  To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders.  Nothing in this Section 18 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(b) or 3(c).

 

 

SECTION 19.  STATUS OF PLAN

 

With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards.  In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.

 

SECTION 20.  GENERAL PROVISIONS

 

(a)           No Distribution.  The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.

 

(b)           Delivery of Stock Certificates.  Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company.  Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records).  Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded.  All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded.  The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock.  In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations or requirements.  The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.

 

(c)           Stockholder Rights.  Until Stock is deemed delivered in accordance with Section 20(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.

 

(d)           Other Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in

 

 

specific cases.  The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.

 

(e)           Trading Policy Restrictions.  Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time.

 

(f)            Forfeiture of Awards under Sarbanes-Oxley Act.  If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any grantee who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such individual under the Plan during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission, as the case may be, of the financial document embodying such financial reporting requirement.

 

SECTION 21.  EFFECTIVE DATE OF PLAN

 

This Plan shall become effective upon stockholder approval in accordance with applicable state law, the Company’s bylaws and articles of incorporation, and applicable stock exchange rules or pursuant to written consent.  No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Stock Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.

 

SECTION 22.  GOVERNING LAW

 

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.

 

 

INCENTIVE STOCK OPTION AGREEMENT
 UNDER THE TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of   Option Shares:
    	
 
    
	
 
    	
 
    
	
Option   Exercise Price per Share:
    	
$
    
	
 
    	
[FMV on Grant Date (110% of FMV if a 10% owner)]
    
	
 
    	
 
    
	
Grant   Date:
    	
 
    
	
 
    	
 
    
	
Expiration   Date:
    	
 
    
	
 
    	
[up to 10 years (5 if a 10% owner)]
    

 

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc. (the “Company”) hereby grants to the Optionee named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.00001 per share (the “Stock”), of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.

 

1.             Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as the Optionee remains an employee of the Company or a Subsidiary on such dates:

 

	
Incremental Number of
    Option Shares Exercisable*
    	
 
    	
Exercisability Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    

 

* Max. of $100,000 per yr.

 

Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

 

2.             Manner of Exercise.

 

(a)           The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank check or other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; or (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and (iii) above.  Payment instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares attested to.

 

(b)           The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

 

2

 

(c)           The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.

 

(d)           Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.             Termination of Employment.  If the Optionee’s employment by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of twelve (12) months from the date of death or until the Expiration Date, if earlier. Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)           Termination Due to Disability.  If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of such disability, may thereafter be exercised by the Optionee for a period of twelve (12) months from the date of disability or until the Expiration Date, if earlier. Any portion of this Stock Option that is not exercisable on the date of disability shall terminate immediately and be of no further force or effect.

 

(c)           Termination for Cause.  If the Optionee’s employment terminates for Cause, any portion of this Stock Option outstanding on such date shall terminate immediately and be of no further force and effect. For purposes hereof, “Cause” shall mean, unless otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Administrator  that the Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the Optionee of the Optionee’s duties to the Company.

 

(d)           Other Termination.  If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability, or Cause, and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three (3) months from the date of termination or until the Expiration Date, if earlier. Any portion of this Stock Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect.

 

3

 

The Administrator’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.

 

4.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.             Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.             Status of the Stock Option.  This Stock Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), but the Company does not represent or warrant that this Stock Option qualifies as such. The Optionee should consult with his or her own tax advisors regarding the tax effects of this Stock Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. To the extent any portion of this Stock Option does not so qualify as an “incentive stock option,” such portion shall be deemed to be a non-qualified stock option. If the Optionee intends to dispose or does dispose (whether by sale, gift, transfer or otherwise) of any Option Shares within the one-year period beginning on the date after the transfer of such shares to him or her, or within the two-year period beginning on the day after the grant of this Stock Option, he or she will so notify the Company within 30 days after such disposition.

 

7.             Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

8.             No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.

 

9.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

4

 

10.          Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Optionee’s   name and address:
    

 

5

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 FOR COMPANY EMPLOYEES
 UNDER TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of   Option Shares:
    	
 
    
	
 
    	
 
    
	
Option   Exercise Price per Share:
    	
$
    
	
 
    	
[FMV on Grant Date]
    
	
 
    	
 
    
	
Grant   Date:
    	
 
    
	
 
    	
 
    
	
Expiration   Date:
    	
 
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc. (the “Company”) hereby grants to the Optionee named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.00001 per share (the “Stock”) of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan. This Stock Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.             Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable. Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as Optionee remains an employee of the Company or a Subsidiary on such dates:

 

	
Incremental Number of
    Option Shares Exercisable
    	
 
    	
Exercisability Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    	
 
    

 

Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

 

2.             Manner of Exercise.

 

(a)           The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank check or other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above.  Payment instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares attested to.

 

(b)           The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been

 

2

 

entered as the stockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

 

(c)           The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.

 

(d)           Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.             Termination of Employment.  If the Optionee’s employment by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of twelve (12) months from the date of death or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)           Termination Due to Disability.  If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of such disability, may thereafter be exercised by the Optionee for a period of twelve (12) months from the date of disability or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of disability shall terminate immediately and be of no further force or effect.

 

(c)           Termination for Cause.  If the Optionee’s employment terminates for Cause, any portion of this Stock Option outstanding on such date shall terminate immediately and be of no further force and effect.  For purposes hereof, “Cause” shall mean, unless otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Administrator that the Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the Optionee of the Optionee’s duties to the Company.

 

(d)           Other Termination.  If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability or Cause, and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three (3) months from the date of termination or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect.

 

3

 

The Administrator’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.

 

4.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.             Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.             Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

7.             No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.

 

8.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

4

 

9.             Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Optionee’s   name and address:
    

 

5

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 FOR NON-EMPLOYEE DIRECTORS
 UNDER TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of   Option Shares:
    	
 
    
	
 
    	
 
    
	
Option   Exercise Price per Share:
    	
$
    
	
 
    	
[FMV on Grant Date]
    
	
 
    	
 
    
	
Grant   Date:
    	
 
    
	
 
    	
 
    
	
Expiration   Date:
    	
 
    
	
 
    	
[No more than 10 years]
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc. (the “Company”) hereby grants to the Optionee named above, who is a Director of the Company but is not an employee of the Company, an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.00001 per share (the “Stock”), of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.  This Stock Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.             Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as the Optionee remains in service as a member of the Board on such dates:

 

	
Incremental Number of
   Option Shares Exercisable
    	
 
    	
Exercisability Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(     
    	
)%
    	
 
    	
 
    
	
(     
    	
)%
    	
 
    	
 
    
	
(     
    	
)%
    	
 
    	
 
    
	
(     
    	
)%
    	
 
    	
 
    
	
(     
    	
)%
    	
 
    	
 
    

 

 

Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

2.             Manner of Exercise.

 

(a)           The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank check or other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above.  Payment instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares attested to.

 

(b)           The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a

 

2

 

holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

 

(c)           The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.

 

(d)           Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.             Termination as Director.  If the Optionee ceases to be a Director of the Company, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s service as a Director terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of twelve (12) months from the date of death or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)           Other Termination.  If the Optionee ceases to be a Director for any reason other than the Optionee’s death, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date the Optionee ceased to be a Director, for a period of three (3) months from the date the Optionee ceased to be a Director or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date the Optionee ceases to be a Director shall terminate immediately and be of no further force or effect.

 

4.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.             Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.             No Obligation to Continue as a Director.  Neither the Plan nor this Stock Option confers upon the Optionee any rights with respect to continuance as a Director.

 

3

 

7.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

8.             Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. 

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Optionee’s   name and address:
    

 

4

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 FOR COMPANY CONSULTANTS
 UNDER TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of   Option Shares:
    	
 
    
	
 
    	
 
    
	
Option   Exercise Price per Share:
    	
$
    
	
 
    	
[FMV on Grant Date]
    
	
 
    	
 
    
	
Grant   Date:
    	
 
    
	
 
    	
 
    
	
Expiration   Date:
    	
 
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc. (the “Company”) hereby grants to the Optionee named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.00001 per share (the “Stock”) of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.  This Stock Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.             Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as Optionee maintains a service relationship with the Company or a Subsidiary on such dates:

 

	
Incremental Number of
   Option Shares Exercisable
    	
 
    	
Exercisability Date
    
	
 
    	
 
    	
 
    
	
(       
    	
)%
    	
 
    
	
(       
    	
)%
    	
 
    
	
(       
    	
)%
    	
 
    
	
(       
    	
)%
    	
 
    
	
(       
    	
)%
    	
 
    

 

Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

 

2.             Manner of Exercise.

 

(a)           The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank check or other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above.  Payment instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares attested to.

 

(b)           The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been

 

2

 

entered as the stockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

 

(c)           The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.

 

(d)           Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.             Termination of Service Relationship.  If the Optionee’s service relationship with the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s service relationship terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of twelve (12) months from the date of death or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)           Termination Due to Disability.  If the Optionee’s service relationship terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of such disability, may thereafter be exercised by the Optionee for a period of twelve (12) months from the date of disability or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of disability shall terminate immediately and be of no further force or effect.

 

(c)           Termination for Cause.  If the Optionee’s service relationship terminates for Cause, any portion of this Stock Option outstanding on such date shall terminate immediately and be of no further force and effect.  For purposes hereof, “Cause” shall mean, unless otherwise provided in a service relationship agreement between the Company and the Optionee, a determination by the Administrator that the Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the Optionee of the Optionee’s duties to the Company.

 

(d)           Other Termination.  If the Optionee’s service relationship terminates for any reason other than the Optionee’s death, the Optionee’s disability or Cause, and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three (3) months from the date of termination or until the Expiration Date, if earlier.  Any portion of

 

3

 

this Stock Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect.

 

The Administrator’s determination of the reason for termination of the Optionee’s service relationship shall be conclusive and binding on the Optionee and his or her representatives or legatees.

 

4.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.             Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.             Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the minimum required tax withholding obligation, if any, to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

7.             No Obligation to Continue Service Relationship.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in a service relationship and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the service relationship of the Optionee at any time.

 

8.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

4

 

9.             Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Optionee’s   name and address:
    

 

5

 

RESTRICTED STOCK UNIT AWARD AGREEMENT
 FOR COMPANY EMPLOYEES
 UNDER TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Grantee:
    	
 
    
	
 
    	
 
    
	
No. of   Restricted Stock Units:
    	
 
    
	
 
    	
 
    
	
Grant   Date:
    	
 
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc. (the “Company”) hereby grants an award of the number of Restricted Stock Units listed above (an “Award”) to the Grantee named above.  Each Restricted Stock Unit shall relate to one share of Common Stock, par value $0.00001 per share (the “Stock”) of the Company.

 

1.             Restrictions on Transfer of Award.  This Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Grantee, and any shares of Stock issuable with respect to the Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of until (i) the Restricted Stock Units have vested as provided in Paragraph 2 of this Agreement and (ii) shares of Stock have been issued to the Grantee in accordance with the terms of the Plan and this Agreement.

 

2.             Vesting of Restricted Stock Units.  The restrictions and conditions of Paragraph 1 of this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule so long as the Grantee remains an employee of the Company or a Subsidiary on such Dates.  If a series of Vesting Dates is specified, then the restrictions and conditions in Paragraph 1 shall lapse only with respect to the number of Restricted Stock Units specified as vested on such date.

 

	
Incremental Number of
   Restricted Stock Units Vested
    	
 
    	
Vesting Date
    
	
 
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    

 

The Administrator may at any time accelerate the vesting schedule specified in this Paragraph 2.

 

3.             Termination of Employment.  If the Grantee’s employment with the Company and its Subsidiaries terminates for any reason (including death or disability) prior to the satisfaction of the vesting conditions set forth in Paragraph 2 above, any Restricted Stock Units that have not vested as of such date shall automatically and without notice terminate and be forfeited, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal

 

 

representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units.

 

4.             Issuance of Shares of Stock.  As soon as practicable following each Vesting Date (but in no event later than two and one-half months after the end of the year in which the Vesting Date occurs), the Company shall issue to the Grantee the number of shares of Stock equal to the aggregate number of Restricted Stock Units that have vested pursuant to Paragraph 2 of this Agreement on such date and the Grantee shall thereafter have all the rights of a stockholder of the Company with respect to such shares.

 

5.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

6.             Tax Withholding.  The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due.

 

7.             Section 409A of the Code.  This Agreement shall be interpreted in such a manner that all provisions relating to the settlement of the Award are exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code.

 

8.             No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time.

 

9.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

2

 

10.          Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Grantee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Grantee’s   name and address:
    

 

3

 

RESTRICTED STOCK UNIT AWARD AGREEMENT
 FOR NON-EMPLOYEE DIRECTORS
 UNDER TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Grantee:
    
	
 
    
	
No. of   Restricted Stock Units:
    
	
 
    
	
Grant   Date:
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Tranzyme, Inc.  (the “Company”) hereby grants an award of the number of Restricted Stock Units listed above (an “Award”) to the Grantee named above.  Each Restricted Stock Unit shall relate to one share of Common Stock, par value $0.00001 per share (the “Stock”) of the Company.

 

1.             Restrictions on Transfer of Award.  This Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Grantee, and any shares of Stock issuable with respect to the Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of until (i) the Restricted Stock Units have vested as provided in Paragraph 2 of this Agreement and (ii) shares of Stock have been issued to the Grantee in accordance with the terms of the Plan and this Agreement.

 

2.             Vesting of Restricted Stock Units.  The restrictions and conditions of Paragraph 1 of this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule so long as the Grantee remains in service as a member of the Board on such Dates.  If a series of Vesting Dates is specified, then the restrictions and conditions in Paragraph 1 shall lapse only with respect to the number of Restricted Stock Units specified as vested on such date.

 

	
Incremental Number of
   Restricted Stock Units Vested
    	
 
    	
Vesting Date
    
	
 
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    

 

The Administrator may at any time accelerate the vesting schedule specified in this Paragraph 2.

 

3.             Termination of Service.  If the Grantee’s service with the Company and its Subsidiaries terminates for any reason (including death or disability) prior to the satisfaction of the vesting conditions set forth in Paragraph 2 above, any Restricted Stock Units that have not vested as of such date shall automatically and without notice terminate and be forfeited, and

 

 

neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units.

 

4.             Issuance of Shares of Stock.  As soon as practicable following each Vesting Date (but in no event later than two and one-half months after the end of the year in which the Vesting Date occurs), the Company shall issue to the Grantee the number of shares of Stock equal to the aggregate number of Restricted Stock Units that have vested pursuant to Paragraph 2 of this Agreement on such date and the Grantee shall thereafter have all the rights of a stockholder of the Company with respect to such shares.

 

5.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

6.             Section 409A of the Code.  This Agreement shall be interpreted in such a manner that all provisions relating to the settlement of the Award are exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code.

 

7.             No Obligation to Continue as a Director.  Neither the Plan nor this Award confers upon the Grantee any rights with respect to continuance as a Director.

 

8.             Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

2

 

9.             Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Grantee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Grantee’s   name and address:
    

 

3

 

RESTRICTED STOCK AWARD AGREEMENT
 UNDER THE TRANZYME, INC.
 AMENDED AND RESTATED

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
Name   of Grantee:
    
	
 
    
	
No. of   Shares:
    
	
 
    
	
Grant   Date:
    

 

Pursuant to the Tranzyme, Inc. Amended and Restated 2011 Stock Option and Incentive Plan (the “Plan”) as amended through the date hereof, Tranzyme, Inc. (the “Company”) hereby grants a Restricted Stock Award (an “Award”) to the Grantee named above.  Upon acceptance of this Award, the Grantee shall receive the number of shares of Common Stock, par value $0.00001 per share (the “Stock”) of the Company specified above, subject to the restrictions and conditions set forth herein and in the Plan.  The Company acknowledges the receipt from the Grantee of consideration with respect to the par value of the Stock in the form of cash, past or future services rendered to the Company by the Grantee or such other form of consideration as is acceptable to the Administrator.

 

1.             Award.  The shares of Restricted Stock awarded hereunder shall be issued and held by the Company’s transfer agent in book entry form, and the Grantee’s name shall be entered as the stockholder of record on the books of the Company.  Thereupon, the Grantee shall have all the rights of a stockholder with respect to such shares, including voting and dividend rights, subject, however, to the restrictions and conditions specified in Paragraph 2 below.  The Grantee shall (i) sign and deliver to the Company a copy of this Award Agreement and (ii) deliver to the Company a stock power endorsed in blank.

 

2.             Restrictions and Conditions.

 

(a)           Any book entries for the shares of Restricted Stock granted herein shall bear an appropriate legend, as determined by the Administrator in its sole discretion, to the effect that such shares are subject to restrictions as set forth herein and in the Plan.

 

(b)           Shares of Restricted Stock granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting.

 

(c)           On the date of this Agreement, all of the shares of Restricted Stock are subject to a substantial risk of forfeiture and are Shares of Restricted Stock.  If the Grantee’s employment with the Company and its Subsidiaries is voluntarily or involuntarily terminated for any reason (including death) prior to vesting of any shares of Restricted Stock granted herein, all shares of Restricted Stock which have not vested shall immediately and automatically be forfeited and returned to the Company.

 

3.             Vesting of Restricted Stock.  The restrictions and conditions in Paragraph 2 of this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule so long

 

 

as the Grantee remains an employee of the Company or a Subsidiary on such Dates.  If a series of Vesting Dates is specified, then the restrictions and conditions in Paragraph 2 shall lapse only with respect to the number of shares of Restricted Stock specified as vested on such date.

 

	
Incremental Number
   of Shares Vested
    	
 
    	
Vesting Date
    
	
 
    	
 
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    
	
(      
    	
)%
    	
 
    

 

Subsequent to such Vesting Date or Dates, the shares of Stock on which all restrictions and conditions have lapsed shall no longer be deemed Restricted Stock.  The Administrator may at any time accelerate the vesting schedule specified in this Paragraph 3.

 

4.             Dividends.  Dividends on shares of Restricted Stock shall be paid currently to the Grantee.

 

5.             Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Award shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

6.             Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.

 

7.             Tax Withholding.  The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  Except in the case where an election is made pursuant to Paragraph 8 below, the Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued or released by the transfer agent a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

8.             Election Under Section 83(b).  The Grantee and the Company hereby agree that the Grantee may, within 30 days following the Grant Date of this Award, file with the Internal Revenue Service and the Company an election under Section 83(b) of the Internal Revenue Code.  In the event the Grantee makes such an election, he or she agrees to provide a copy of the election to the Company.  The Grantee acknowledges that he or she is responsible for obtaining the advice of his or her tax advisors with regard to the Section 83(b) election and that he or she is

 

2

 

relying solely on such advisors and not on any statements or representations of the Company or any of its agents with regard to such election.

 

9.             No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time.

 

10.          Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

11.          Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
TRANZYME, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Grantee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Grantee’s   name and address:
    

 

3Exhibit 10.50

 

FIRST AMENDMENT TO AMENDED AND RESTATED
 CREDIT AGREEMENT AND CONSENT

 

This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT (this “First Amendment”) is made and entered into as of the 27th day of April, 2012, by and among CASELLA WASTE SYSTEMS, INC., a Delaware corporation (the “Parent”), its Subsidiaries listed on Schedule 1 to the Amended and Restated Credit Agreement, dated as of March 18, 2011 (as the same may be amended and in effect from time to time, the “Credit Agreement”) (together with the Parent, collectively, the “Borrowers”), the Lenders party thereto, and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

 

WHEREAS, the Borrowers have requested that each of the Lenders agree, and Lenders constituting “Required Lenders” under the terms of the Credit Agreement are willing to agree, on the terms and subject to the conditions set forth herein, to make certain amendments to the Credit Agreement in connection with the Parent’s contemplated issuance of preferred stock, the potential sale or closure of MERC and certain other matters;

 

WHEREAS, the Borrowers have also requested that the Administrative Agent and the Required Lenders consent to the purchase by the Parent or one or more Subsidiaries of the Parent of a business, whether in the form of an asset acquisition or a stock acquisition, of one or more solid waste companies (collectively, the “Target”), as more particularly described in the transaction summary and overview and related materials (collectively, the “Transaction Summary”) provided to the Administrative Agent and the Lenders by the Parent (the “Target Acquisition”) on or about April 17, 2012, and Lenders constituting “Required Lenders” under the terms of the Credit Agreement are willing to consent, on the terms and subject to the conditions set forth herein, to the Target Acquisition;

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      Definitions; Loan Document.  Capitalized terms used herein without definition shall have the meaning assigned to such terms in the Credit Agreement.  This First Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

 

2.                                      Amendments to Section 1.01 (Defined Terms) of the Credit Agreement.  Section 1.01 of the Credit Agreement is hereby amended by:

 

(i)                                     Inserting the following definitions in the appropriate alphabetical order:

 

““Additional Debt Raise” means (i) in the event that the Parent has consummated an Additional Equity Raise on or prior to March 1, 2014: the

 

1

 

incurrence by the Parent and the other Borrowers on or before March 1, 2014 of Indebtedness (not including, for purposes of this calculation, Committed Loans) in the form of a term loan B issued pursuant to Section 2.14 or otherwise in the form of Indebtedness permitted by Section 7.03(j)(ii) or Section 7.03(k), in each case having a maturity date occurring at least 91 days after March 18, 2016, in an aggregate amount at least equal to $125,000,000 (less the amount by which the aggregate gross cash proceeds of all Equity Issuances consummated prior to or contemporaneously with such Additional Debt Raise exceeds $100,000,000); and (ii) in the event that the Parent has failed to consummate an Additional Equity Raise on or prior to March 1, 2014: the incurrence by the Parent and the other Borrowers on or before March 1, 2014 of Indebtedness (not including, for purposes of such calculation, Committed Loans) in the form of a term loan B issued pursuant to Section 2.14 or otherwise in the form of Indebtedness permitted by Section 7.03(j)(ii) or Section 7.03(k), in each case having a maturity date occurring at least 91 days after March 18, 2016, in an aggregate amount at least equal to $200,000,000 (less (x) in the event the Target Acquisition has not been consummated, the aggregate gross cash proceeds of all Equity Issuances consummated prior to or contemporaneously with such Additional Debt Raise and (y) in the event the Target Acquisition has been consummated, the aggregate gross cash proceeds of all Equity Issuances consummated prior to or contemporaneously with such Additional Debt Raise in excess of $25,000,000).”

 

““Additional Equity Raise” means one or more Equity Issuances pursuant to which the Parent has received at least $100,000,000 in aggregate gross cash proceeds.”

 

““Deemed Liquidation Event” means, with respect to any Preferred Stock of any Person, a merger, consolidation, share exchange, reorganization, sale, license or other disposition of assets, sale of Equity Interests or other transaction, event or series of transactions or events, in each case, that, by the terms of such Preferred Stock, is deemed to be a liquidation or dissolution of such Person or constitutes a “change of control” or comparable term.”

 

““Equity Issuance” means the issuance after the First Amendment Date by the Parent of Qualified Preferred Stock, common stock or a combination of the foregoing (whether in the form of shares, warrants or a combination of the foregoing) in one or more transactions.”

 

““Equity Related Purchase Obligation” means, with respect to any Person, every obligation of such Person to purchase, redeem, retire or otherwise acquire for value or make any other payment (other than a PIK Dividend) in respect of (a) any Equity Interests of any class issued by such Person or (b) any rights measured by the value of such Equity Interests.”

 

““First Amendment” means that certain First Amendment to Amended and Restated Credit Agreement and Consent, dated as of April 27th, 2012, among

 

 

the Borrowers, the Administrative Agent and Lenders constituting Required Lenders.”

 

““First Amendment Date” means April 27th, 2012.”

 

““Grandfathered Non-Qualified Preferred Stock” means any Preferred Stock of the Parent constituting Qualified Preferred Stock upon the earlier of the issuance of any shares thereof or the fixing of the terms thereof, that subsequently ceases to constitute Qualified Preferred Stock solely as a result of the extension of the Maturity Date.”

 

““MERC” means Maine Energy Recovery Company, Limited Partnership.”

 

““MERC Transaction” means the Disposition by the Borrowers of all or substantially all of the assets or all of the Equity Interests of MERC, and/or the closure and discontinuation of the operations of MERC.”

 

““Non-Qualified Preferred Stock” means (i) any Preferred Stock of the Parent (x) that by its terms or otherwise is mandatorily redeemable, redeemable at the option of the holder or holders thereof or subject to any other payment obligation (upon acceleration or otherwise, and including any obligation to pay dividends or other distributions) prior to the date that is six months following the Maturity Date, in each case, whether in cash, securities or other property, other than (1) Qualified PIK Dividends thereon or (2) subject to clause (y) below, payments or distributions thereon upon a liquidation or dissolution of the Parent or a Deemed Liquidation Event, or (y) the terms of which, as set forth in the Parent’s certificate of incorporation, fail to provide that (1) any redemption thereof, in whole or in part, whether such redemption is at the Parent’s option or at the option of the holder or holders thereof or upon the happening of a specified event, or (2) any payment or distribution thereon upon a liquidation or dissolution of the Parent or a Deemed Liquidation Event is, in each case, subject to the terms of the Parent’s senior credit facilities (including, unless otherwise provided in such senior credit facilities, the repayment in full in cash of the obligations thereunder prior to or simultaneous with, and as a condition precedent to, any such redemption, payment or distribution); (ii) any Preferred Stock of the Parent issued in contravention of Section 7.19; or (iii) any Preferred Stock of any Person other than the Parent.”

 

““PIK Dividend” means, with respect to any Preferred Stock of any Person, any dividend or other distribution accrued, declared or paid on or in respect of such Preferred Stock in accordance with its terms, which dividend or other distribution (i) consists entirely of Equity Interests of such Person or (ii) accrues but does not become payable unless and until the occurrence of (x) the liquidation or dissolution of such Person or a Deemed Liquidation Event or (y) a redemption of such Preferred Stock (such dividend or distribution described in this clause (ii) being an “Accruing Dividend”).”

 

 

““Preferred Stock” means, with respect to the Equity Interests of any Person, all of the shares of capital stock of any class of such Person other than common stock (i) that is denominated as “preferred stock” or the like, (ii) that otherwise is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Equity Interests of any other class of such Person, or (iii) that is subject to redemption by such Person at its option or at the option of the holder or holders thereof or is mandatorily redeemable upon the happening of a specified event.”

 

““Qualified PIK Dividend” means a PIK Dividend (x) consisting entirely of (i) Qualified Preferred Stock, Grandfathered Non-Qualified Preferred Stock or common stock of the Parent, (ii) warrants for any of the foregoing or (iii) any combination of any of the foregoing, or (y) in the form of an Accruing Dividend.”

 

““Qualified Preferred Stock” means any Preferred Stock issued by the Parent that is not Non-Qualified Preferred Stock.”

 

““Target Acquisition” has the meaning specified therefor in the First Amendment.”

 

““2005 Fame Bonds” means the $3,600,000 Finance Authority of Maine Solid Waste Disposal Revenue Bonds (Casella Waste Systems, Inc. Project) Series 2005R-1 and issued under the Indenture, dated as of December 1, 2005 (as modified from time to time) between the Finance Authority of Maine and U.S. Bank National Association, successor to LaSalle Bank National Association, as trustee.”

 

(ii)                                  Amending and restating the definition of “Applicable Control Percentage” in its entirety as follows:

 

““Applicable Control Percentage” means the lowest of (i) 49%, (ii) the percentage of voting power that gives rise to a “change of control” (or similar defined term) under any Senior Subordinated Debt or Second Lien Notes outstanding at any time (including any permitted refinancing or replacements of such Senior Subordinated Debt or Second Lien Notes), (iii) the percentage of voting power that gives rise to a Deemed Liquidation Event under the terms of any Preferred Stock of the Parent, and (iv) the percentage of voting power that gives rise to a “change of control” (or similar defined term) under any other Indebtedness of the Parent or any other Borrowers in excess of the Threshold Amount, provided that such “change of control” would permit the holder or holders of such Indebtedness to accelerate the maturity thereof.”

 

(iii)                               Amending and restating clause (d) contained in the definition of “Change of Control” in its entirety as follows:

 

“(d)                           (i) a “change of control” or any comparable term under, and as defined in, any Subordinated Debt, the Senior Subordinated Debt Documents or

 

 

the Second Lien Notes Documents (or any replacements or refinancing of any thereof) shall have occurred, or (ii) a Deemed Liquidation Event under the terms of any Preferred Stock of the Parent shall have occurred.”

 

(iv)                              Amending and restating the definition of “Consolidated Adjusted Net Income” in its entirety as follows:

 

““Consolidated Adjusted Net Income” means, for any period, Consolidated Net Income (or Loss) plus, (a) to the extent deducted in calculating Consolidated Net Income (or Loss) and without duplication, (i) the non-recurring, non-cash write-off of debt issuance expenses related to the refinancing of Indebtedness under the Existing Credit Agreement (including, without limitation, the repayment of the term loan B thereunder) and the 2003 Senior Subordinated Debt Refinancing in an aggregate amount not to exceed $10,000,000, (ii) non-recurring extraordinary charges related to the FCR Disposition in an aggregate amount not to exceed $5,000,000, (iii) transaction costs for acquisitions and development projects which are expensed rather than capitalized (as a result of applying FASB Rule 141 treatment to such transaction costs); (iv) non-cash losses in connection with asset sales, asset impairment charges and the abandonment of assets in an aggregate amount not to exceed $35,000,000 (calculated without giving effect to the aggregate amount of such non-cash losses incurred in connection with the MERC Transaction) from and after the Closing Date; (v) non-cash losses resulting from the sale or other Disposition of the assets or Equity Interests of MERC or the closure and discontinuation of the operations of MERC in an aggregate amount not to exceed $42,000,000 from and after the Closing Date; (vi) non-cash stock-based compensation expenses under the Borrowers’ employee share-based compensation plans; (vii) non-cash charges in connection with the declaration or payment of PIK Dividends; (viii) all other non-cash charges reasonably acceptable to the Administrative Agent; (ix) cash charges in connection with the MERC Transaction in an aggregate amount not to exceed $3,000,000 from and after the Closing Date; (xi) the non-recurring, non-cash write-off of debt issuance expenses related to the refinancing of the Second Lien Notes in an aggregate amount not to exceed $6,000,000; (xi) cash premium payments in connection with the early redemption and refinancing of the Second Lien Notes in an aggregate amount of up to $11,000,000; and minus (b) to the extent included in the calculation of Consolidated Net Income (or Loss) and without duplication: (i) non-cash extraordinary gains on the sale of assets including non-cash gains on the sale of assets outside the ordinary course of business, and (ii) non-cash extraordinary gains resulting from the application of FAS 133.”

 

(v)                                 Amending the definition of “Consolidated EBITDA” by restating the first sentence thereof in its entirety as follows:

 

““Consolidated EBITDA” means, for any period, Consolidated Adjusted Net Income plus, to the extent that such charge was deducted in determining Consolidated Adjusted Net Income in the relevant period and without duplication,

 

 

(a) interest expense (including accretion expense, original issue discount and costs in connection with the early extinguishment of debt) for such period; (b) income taxes for such period; (c) amortization expense for such period; and (d) depreciation expense and depletion expense for such period; provided that in the event that MERC is accounted for as a discontinued operation in accordance with GAAP, EBITDA for the operating assets that are the subject of the MERC Transaction and attributable to the 12-month period prior to the date of the MERC Transaction shall be included in the calculation of Consolidated EBITDA solely for the purposes of calculating the financial covenants set forth in Sections 7.11(b) and 7.11(c) and determining the Applicable Rate, in each case as at the end of the first fiscal quarter during which the Borrowers consummate such MERC Transaction or in which MERC is required to be treated as a discontinued operation (and for the three subsequent measurement dates), but for all other purposes hereunder shall be excluded from Consolidated EBITDA.”

 

(vi)                              Amending the definition of “Consolidated Total Funded Debt” by inserting the following language immediately after clause (a)(iv) thereof:

 

“and (v) (x) Equity Related Purchase Obligations in respect of Non-Qualified Preferred Stock (including, for avoidance of doubt, Grandfathered Non-Qualified Preferred Stock) and (y) commencing on the date that is twelve months prior to the maturity of such Equity Related Purchase Obligations (assuming for this purpose the demand or exercise, if applicable, by the requisite holder or holders on the earliest date provided therefor), Equity Related Purchase Obligations in respect of Qualified Preferred Stock,”

 

(vii)                           Amending the definition of “Consolidated Total Interest Expense” by restating clause (d) thereof in its entirety as follows: “(d) dividends (including PIK Dividends) on Preferred Stock (if any) paid by the Borrowers and, to the extent deducted in calculating Consolidated Net Income (or Loss), the costs and expenses incurred by the Borrowers in connection with the issuance of Preferred Stock, in each case that are required by GAAP to be treated as interest expense”.

 

(viii)                        Amending and restating the definition of “Distribution” in its entirety as follows:

 

““Distribution” means the declaration or payment of any dividend or other distribution (whether in cash, securities or other property) on or in respect of any Equity Interest of any Person, other than Qualified PIK Dividends and dividends payable solely in shares of common stock of such Person; the purchase, redemption, defeasance, retirement or other acquisition, cancellation or termination of any Equity Interests of such Person, directly or indirectly through a Subsidiary of such Person or otherwise and whether in the form of increases in the liquidation value of such Equity Interests (excluding increases in the liquidation value of Qualified Preferred Stock pursuant to the accrual of dividends thereon in accordance with its terms) or otherwise (including the setting apart of assets for a sinking or other analogous fund to be used for such purpose); or the return of

 

 

capital by any Person to its shareholders, partners or members (or the equivalent thereof) as such.”

 

(ix)                              Amending and restating the definition of “Excluded Asset Disposition” in its entirety as follows:

 

““Excluded Asset Disposition” means (i) the sale of inventory by any Borrower or Non-Borrower Subsidiary (with such inventory to include solid waste, recycleables and other byproducts of the wastestream collected by the Borrowers and the Non-Borrower Subsidiaries), (ii) the licensing of intellectual property, (iii) the disposition or replacement of equipment of the Borrowers or the Non-Borrower Subsidiaries that has become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Borrowers and the Non-Borrower Subsidiaries, (iv) Permitted Investments, (v) Permitted Liens, (vi) solely in connection with Equipment Financing Indebtedness permitted under Section 7.03(e), assignments to lessors or other counterparties under contracts evidencing such Equipment Financing Indebtedness of rights to alterations to the applicable leased equipment to the extent such alteration is deemed to be part of the leased property by the express terms of such contract and such alteration is required by applicable law or a governmental body or (vii) solely in connection with Equipment Financing Indebtedness permitted under Section 7.03(e), the sale, immediately upon (and in connection with) the purchase thereof by the Borrowers, to the third party lessor under a equipment lease, of the equipment that is the subject of the applicable permitted Equipment Financing Indebtedness, and, in each case (other than the foregoing clauses (iv) and (v)) in the ordinary course of business consistent with past practices.”

 

(x)                                 Amending the definition of “Indebtedness” by (A) restating clause (h) thereof in its entirety as follows: “(h) every Equity Related Purchase Obligation of such Person,” and (B) restating clause (y) of the last paragraph thereof as follows: “any Equity Related Purchase Obligation shall be (i) in the case of any obligation to purchase, redeem, retire or otherwise acquire for value, the maximum fixed redemption or purchase price thereof that is payable upon a mandatory redemption or purchase of such equity, or a redemption or purchase of such equity at the option of the holder or holders, inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price, and (ii) in the case of any other payment obligation, the stated or determinable amount thereof or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith based upon the principles set forth in this paragraph”.

 

(xi)                              Amending and restating clause (b) contained in the definition of “Restricted Payment” in its entirety as follows:

 

“(b) payment by any Borrower or Non-Borrower Subsidiaries to (i) such Borrower’s or such Non-Borrower Subsidiary’s shareholders (or other equity holders), or (ii) any Affiliate of such Borrower or such Non-Borrower Subsidiary

 

 

or any Affiliate of such Borrower’s or such Non-Borrower Subsidiary’s shareholders (or other equity holders), in each case of this clause (b), other than to another Borrower and other than Qualified PIK Dividends and dividends payable solely in shares of common stock”.

 

3.                                      Amendment to Section 2.07 (Repayment of Loans) of the Credit Agreement.  Section 2.07(a) of the Credit Agreement is amended to read in its entirety as follows:

 

“(a)                           Committed Loans.  The Borrowers shall repay to the Revolving Lenders on the Maturity Date the aggregate principal amount of all Committed Loans outstanding on such date; provided, that if the Borrowers fail to consummate the Additional Debt Raise and refinance the Second Lien Notes in full (including principal, interest, premium and other amounts due thereunder and the fees, costs and expenses of such Additional Debt Raise) on or before March 1, 2014 (using, at the Borrower’s election, proceeds of (i) the Additional Debt Raise, (ii) any Additional Equity Raise, (iii) the proceeds of any other Equity Issuance, (iv) subject to Section 5.04, Loans under this Agreement (including, without limitation, under Section 2.14 hereof) and/or (v) other Indebtedness having a maturity date occurring at least 91 days after the Maturity Date and permitted under Section 7.03(j) or (k)), the Maturity Date shall automatically be deemed to be March 31, 2014 and all amounts outstanding under the Committed Loans, plus accrued and unpaid interest thereon, and all (if any) other amounts payable in connection therewith and with the Aggregate Commitments, shall be due and payable in full on March 31, 2014.

 

4.                                      Amendment to Section 2.14 (Accordion Advances) of the Credit Agreement.  Section 2.14(a) of the Credit Agreement is hereby amended by amending the two provisos contained therein to read in their entirety as follows:

 

“provided that the aggregate amounts so requested under clauses (i) and (ii) above after the date hereof (excluding any such amounts to the extent used to prepay term loans or replace Revolving Commitments) shall not exceed $182,500,000 (or in the event that the Parent fails to consummate an Additional Equity Raise, $200,000,000 solely in connection with the exercise of an Accordion Advance in the form of a new term loan B the proceeds of which are used to refinance the Second Lien Notes (including related premium, fees costs and expenses) in accordance with Section 2.07(a)); and provided, further, that, after giving effect to any such Accordion Advance, the sum of the Total Facility Amount shall not at any time exceed $410,000,000 (or, as applicable pursuant to the foregoing proviso, $427,500,000) in the aggregate (minus any and all permanent reductions of the Aggregate Commitments previously voluntarily effected by the Borrowers pursuant to Section 2.06 or prepayments of any term loan advanced hereunder from time to time and then outstanding (other than in connection with a replacement term loan or a replacement revolving credit facility under this Section 2.14))”

 

 

5.                                      Amendment to Section 2.14 (Accordion Advances) of the Credit Agreement.  Section 2.14(a) of the Credit Agreement is hereby further amended by deleting the last paragraph thereof and replacing it with the following:

 

“Any Accordion Advance will be subject to pricing (including original issue discount), interest, fees, and (if a term loan) amortization and optional and mandatory prepayment based on the then-current market for borrowers with similar credit profiles and ratings as mutually agreed to by the Borrowers, the Administrative Agent and the Lenders providing commitments for such Accordion Advance, as set forth in any applicable Conforming Amendment (defined below).”

 

6.                                      Amendment to Section 2.14 (Accordion Advances) of the Credit Agreement.  Section 2.14(f) of the Credit Agreement is hereby amended by adding the following at the end thereof:

 

“Further, for the avoidance of doubt, provisions relating to optional prepayment, mandatory prepayment, amortization (provided, that the final maturity of any term loans is not earlier than the Maturity Date) and pricing (including original issue discount) shall not be deemed to be new or amended covenants or events of default and accordingly, may be included in a Conforming Amendment as mutually agreed to by the Borrowers, the Administrative Agent and the Lenders providing commitments for such term loans, and the applicable Conforming Amendment may give effect to such terms without the consent of the Required Lenders.”

 

7.                                      Amendment to Section 5.04 (Use of Proceeds) of the Credit Agreement.  The first sentence of Section 5.04 of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“The proceeds of the Loans shall be used (a) to refinance the existing Indebtedness of the Borrowers under the Existing Credit Agreement, and (b) for working capital, Permitted Acquisitions and other general corporate purposes (including Sub Debt Repayments (to the extent permitted under Sections 7.14 and 7.16), Second Lien Repayments (subject to the following sentence) or payments of the Obligations).  For the avoidance of doubt, in no event shall the Borrower request or use any Committed Loans to effect any Second Lien Repayments unless and until the Parent has consummated an Additional Equity Raise.”

 

8.                                      Amendment to Section 6.15 (Notice of Default or Material Adverse Effect) of the Credit Agreement. Section 6.15 of the Credit Agreement is hereby amended by restating clause (c) in the first sentence thereof in its entirety as follows: “(c) any event which would give rise to an obligation of the Borrowers to prepay, redeem or repurchase any of the Second Lien Notes, the Senior Subordinated Debt or any Preferred Stock.”

 

9.                                      Amendment to Section 7.02 (Investments) of the Credit Agreement.  Section 7.02 of the Credit Agreement is hereby amended by restating clause (i) thereof in its entirety as

 

 

follows: “(i) Investments in the form of (x) Permitted Acquisitions permitted pursuant to Section 7.04(a), (y) Indebtedness permitted under Section 7.03 when incurred and solely to the extent that such Indebtedness continues to be permitted under Section 7.03 and (z) Excluded Asset Dispositions and other Dispositions permitted under Section 7.04(b)”.

 

10.                               Amendment to Section 7.02 (Investments) of the Credit Agreement.  Section 7.02 of the Credit Agreement is hereby amended by restating clause (y) in the first proviso of clause (j) thereof in its entirety as follows: “(y) to the extent that the Borrowers have received dividends or distributions in cash from any Excluded Subsidiary or Foreign Subsidiary in connection with any such Investment or have received Net Cash Proceeds in connection with the Disposition of any such Investment, the amount of such cash or Net Cash Proceeds shall, without duplication, reduce the amount of the outstanding Investments under this clause (y) by an amount not to exceed the original amount of such Investment”.

 

11.                               Amendment to Section 7.02 (Investments) of the Credit Agreement.  Section 7.02 of the Credit Agreement is hereby amended by inserting at the end of clause (j) thereof the following new parenthetical:

 

“(it being agreed, however, for purposes of this clause (j), that if, as of the date any Investment is made in an Excluded Subsidiary or Foreign Subsidiary (or, if earlier, the date of any commitment to make such Investment), the ratio of (a) Consolidated Total Funded Debt as of such date to (b) Consolidated EBITDA for the four consecutive fiscal quarters ended immediately prior to such date, in each case on a pro forma basis both before and after giving effect to such Investment, is less than 3.75 to 1.00, then the Investment Basket shall be deemed to be $60,000,000, provided, however, that if, after such date, such ratio is equal to or exceeds 3.75 to 1.00, then the Investment Basket shall revert to $50,000,000, it being acknowledged, however, that the Borrowers shall not be in breach of this provision due to any Investment that was made, or is the subject of a legally binding commitment made, under such higher basket)”

 

12.                               Amendment to Section 7.03 (Indebtedness) of the Credit Agreement.  Section 7.03 of the Credit Agreement is hereby amended by replacing the reference to “Schedule 7.03” in clause (e) thereof with a reference to “part B of Schedule 7.03”. Schedule 7.03B to the Credit Agreement, in the form delivered on the Closing Date, is attached hereto as Annex 1.

 

13.                               Amendment to Section 7.03 (Indebtedness) of the Credit Agreement.  Section 7.03 of the Credit Agreement is hereby further amended by restating clauses (n) and (o) thereof in their entirety as follows:

 

“(n) Equity Related Purchase Obligations of the Parent in respect of Qualified Preferred Stock or Grandfathered Non-Qualified Preferred Stock;

 

“(o) Indebtedness with respect to IRBs; provided, that IRBs are only permitted under this clause (o) to the extent that the Borrower is the recipient, directly or indirectly, of the proceeds of such IRB and owns or operates the project financed thereby (provided, however, that Indebtedness in an aggregate principal amount

 

 

not to exceed $3,600,000 with respect to the 2005 Fame Bonds may, to the extent (and for so long as) permitted by the applicable bond indenture, remain outstanding after the MERC Transaction notwithstanding the fact that none of the Borrowers will own or operate MERC); and provided, further, that, other than with respect to L/C Supported IRBs, such Indebtedness (including, without limitation, Indebtedness of such type listed on Schedule 7.03) shall not exceed $75,000,000 at any time outstanding;”.

 

14.                               Amendment to Section 7.03 (Indebtedness) of the Credit Agreement.  Section 7.03 of the Credit Agreement is hereby further amended by restating clause (q) thereof in its entirety as follows:

 

“(q) Guarantees of or similar arrangements with respect to Indebtedness of the Excluded Subsidiaries and Foreign Subsidiaries in an amount not to exceed $50,000,000 in the aggregate outstanding at any time (less, but without duplication, the aggregate amount of all outstanding Investments in Excluded Subsidiaries and Foreign Subsidiaries in accordance with Section 7.02(j)), it being agreed, however, for purposes of this clause (q), that if, as of the date any Guarantee or similar arrangement is made in an Excluded Subsidiary or Foreign Subsidiary (or, if earlier, the date of any commitment to make such Guarantee or similar arrangement), the ratio of (a) Consolidated Total Funded Debt as of such date to (b) Consolidated EBITDA for the four consecutive fiscal quarters ended immediately prior to such date, in each case on a pro forma basis both before and after giving effect to such Guarantee or similar arrangement, is less than 3.75 to 1.00, then the $50,000,000 basket referred to above shall be deemed to be $60,000,000, provided, however, that if, after such date, such ratio is equal to or exceeds 3.75 to 1.00, then such basket shall revert to $50,000,000 (it being acknowledged, however, that the Borrowers shall not be in breach of this provision due to any Guarantee or similar arrangement that was made, or is the subject of a legally binding commitment made, under such higher basket)”.

 

15.                               Amendment to Section 7.04(a) (Mergers and Acquisitions) of the Credit Agreement.  Clause (ix) of Section 7.04(a) of the Credit Agreement is hereby amended in its entirety as follows:

 

“(ix) total consideration to be paid by any one or more Borrowers in connection with any acquisition or series of related acquisitions (including cash, deferred payments, contingent or otherwise, and the aggregate amount of all Indebtedness assumed or, in the case of any acquisition of Equity Interests, including all Indebtedness of the target company) shall not exceed $20,000,000 without the consent of the Administrative Agent and the Required Lenders, provided that if, as of the date of any such acquisition, the ratio of (a) Consolidated Total Funded Debt as of such date (after giving pro forma effect to such acquisition and all Indebtedness assumed or incurred in connection therewith) to (b) Consolidated EBITDA for the four consecutive fiscal quarters ended immediately prior to such date is less than 3.75 to 1.00, then the $20,000,000 threshold referred to above shall be deemed to be a reference to $25,000,000 for purposes of such acquisition.

 

 

16.          Amendment to Section 7.04(b) (Disposition of Assets) of the Credit Agreement.  Section 7.04(b) of the Credit Agreement is hereby amended by restating the last sentence thereof in its entirety as follows:  “Following the consummation of any Disposition permitted under this Agreement, the Borrowers shall not Guarantee the Indebtedness of, or otherwise maintain any Investment in, the Persons or assets sold in connection therewith except as expressly permitted in (x) Sections 7.02(c) and 7.03(r) as to the FCR Disposition, (y) Section 7.03(o) as to Indebtedness with respect to certain IRBs which may remain outstanding after the MERC Transaction, and (z) Sections 7.02(n), 7.02(j), 7.03(q) and 7.03(s).”

 

17.          Amendment to Section 7.06 (Restricted Payments) of the Credit Agreement.  Section 7.06 of the Credit Agreement is hereby amended by restating the last sentence thereof in its entirety as follows:  “In addition the Borrowers shall not prepay, redeem, convert, retire, repurchase or otherwise acquire shares of any class of Equity Interests of the Borrowers or Non-Borrower Subsidiaries without the prior written consent of the Administrative Agent and the Required Lenders; provided, however, that Preferred Stock of the Parent may be converted in accordance with its terms into other classes of Qualified Preferred Stock and into common stock of the Parent without such consent.”

 

18.          Amendments to Section 7.11 of the Credit Agreement.  Section 7.11 of the Credit Agreement is hereby amended by deleting such Section in its entirety and substituting in lieu thereof the following:

 

“7.11  Financial Covenants.  For the avoidance of doubt, notwithstanding anything to the contrary in the Agreement, it is understood that the following financial covenants shall be calculated exclusive of the assets, liabilities (except for liabilities of the Excluded Subsidiaries that are recourse to the Borrowers), net worth and operations of the Excluded Subsidiaries.

 

(a)           Minimum Interest Coverage Ratio.

 

(1)           As at the end of any fiscal quarter ending before the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not permit the ratio of (a) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to (b) Consolidated Total Interest Expense for such period to be less than the ratio set forth below opposite such fiscal quarter:

 

	
Four Fiscal Quarters Ending
    	
 
    	
Minimum Interest Coverage Ratio
    
	
April 30, 2012 through July 31, 2012
    	
 
    	
2.15:1.00
    
	
October 31, 2012 through January 31, 2013
    	
 
    	
2.25:1.00
    
	
April 30, 2013 and thereafter
    	
 
    	
2.50:1.00
    

 

(2)           As at the end of any fiscal quarter ending on or after the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not

 

 

permit the ratio of (a) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to (b) Consolidated Total Interest Expense for such period to be less than the ratio set forth below opposite such fiscal quarter:

 

	
Four Fiscal Quarters Ending
    	
 
    	
Minimum Interest Coverage Ratio
    
	
April 30, 2012 through July 31, 2012
    	
 
    	
2.15:1.00
    
	
October 31, 2012
    	
 
    	
2.25:1.00
    
	
January 31, 2013
    	
 
    	
2.35:1.00
    
	
April 30, 2013 and thereafter
    	
 
    	
2.50:1.00
    

 

(b)           Maximum Consolidated Total Funded Debt to Consolidated EBITDA.

 

(1)           As at the end of any fiscal quarter ending before the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not permit the ratio of (a) Consolidated Total Funded Debt as of such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to exceed the ratio set forth below opposite such fiscal quarter, as such ratio is lowered in accordance with the following sentence.  In the event that the Borrowers receive gross cash proceeds as a result of one or more Equity Issuances in an aggregate amount less than the amount that would constitute an Additional Equity Raise, and (i) the Borrowers have consummated the Target Acquisition on or before the last day of the applicable fiscal quarter, the maximum ratios set forth in the table below shall be 0.25 lower (based on the table as in effect on the First Amendment Date) for each $25,000,000 of gross cash proceeds received from Equity Issuances on or before the last day of the applicable fiscal quarter in excess of the first $25,000,000 so received or (ii) the Borrowers have not consummated the Target Acquisition on or before the last day of the applicable fiscal quarter, the maximum ratios set forth in the table below shall be 0.25 lower for each $25,000,000 of gross cash proceeds received from Equity Issuances on or before the last day of the applicable fiscal quarter; provided that in no event shall any ratio for any quarter be lowered below the ratio that would be required under subparagraph (2) immediately below in this clause (b) for the same quarter assuming the Additional Equity Raise had been consummated.

 

	
Four Fiscal Quarters Ending
    	
 
    	
Maximum Consolidated Total
   Funded Debt to Consolidated
   EBITDA
    
	
April 30, 2012 through January 31, 2014
    	
 
    	
5:25:1.00
    
	
April 30, 2014 through January 31, 2015
    	
 
    	
5.00:1.00
    
	
April 30, 2015 through January 31, 2016
    	
 
    	
4.75:1.00
    

 

 

	
Four Fiscal Quarters Ending
    	
 
    	
Maximum Consolidated Total
   Funded Debt to Consolidated
   EBITDA
    
	
April 30, 2016 and thereafter
    	
 
    	
4.50:1.00
    

 

(2)           As at the end of any fiscal quarter ending on or after the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not permit the ratio of (a) Consolidated Total Funded Debt as of such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to exceed the ratio set forth below opposite such fiscal quarter:

 

	
Four Fiscal Quarters Ending
    	
 
    	
Maximum Consolidated Total
   Funded Debt to Consolidated
   EBITDA
    
	
April 30, 2012
    	
 
    	
5.25:1.00
    
	
July 31, 2012 through January 31, 2013
    	
 
    	
4.50:1.00
    
	
April 30, 2013 through January 31, 2014
    	
 
    	
4.25:1.00
    
	
April 30, 2014 and thereafter
    	
 
    	
4.00:1.00
    

 

Notwithstanding the foregoing, solely for the purposes of calculating Consolidated Total Funded Debt to Consolidated EBITDA pursuant to this Section 7.11(b), Excluded Interim Sub Debt shall not be included in Consolidated Total Funded Debt during any period in which (and for so long as) such Excluded Interim Sub Debt is properly designated as such under and in accordance with Section 7.03(k).

 

(c)           Maximum Consolidated Senior Funded Debt to Consolidated EBITDA.

 

(1)           As at the end of any fiscal quarter ending before the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not permit the ratio of (a) Consolidated Senior Funded Debt as of such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to exceed the ratio set forth below opposite such fiscal quarter, as such ratio is lowered in accordance with the following sentence.  In the event that the Borrowers receive gross cash proceeds as a result of one or more Equity Issuances in an aggregate amount less than the amount that would constitute an Additional Equity Raise, and (i) the Borrowers have consummated the Target Acquisition on or before the last day of the applicable fiscal quarter, the maximum ratios set forth in the table below shall be 0.25 lower (based on the table as in effect on the First Amendment Date) for each $25,000,000 of gross cash proceeds received from Equity Issuances on or before the last day of the applicable fiscal

 

 

quarter in excess of the first $25,000,000 so received or (ii) the Borrowers have not consummated the Target Acquisition on or before the last day of any applicable fiscal quarter, the maximum ratios set forth in the table below shall be 0.25 lower for each $25,000,000 of gross cash proceeds received from Equity Issuances on or before the last day of the applicable fiscal quarter; provided that in no event shall any ratio for any quarter be lowered below the ratio that would be required under subparagraph (2) immediately below in this clause (c) for the same quarter assuming the Additional Equity Raise had been consummated.

 

	
Four Fiscal Quarters Ending
    	
 
    	
Maximum Consolidated Senior
   Funded Debt to Consolidated
   EBITDA
    
	
April 30, 2012 through January 31, 2014
    	
 
    	
3.25:1.00
    
	
April 30, 2014 through January 31, 2016
    	
 
    	
3.00:1.00
    
	
April 30, 2016 and thereafter
    	
 
    	
2.75:1.00
    

 

(2)           As at the end of any fiscal quarter ending on or after the date on which the Borrowers have consummated the Additional Equity Raise, the Borrowers shall not permit the ratio of (a) Consolidated Senior Funded Debt as of such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters then ending to exceed the ratio set forth below opposite such fiscal quarter:

 

	
Four Fiscal Quarters Ending
    	
 
    	
Maximum Consolidated Senior
   Funded Debt to Consolidated
   EBITDA
    
	
April 30, 2012
    	
 
    	
3.25:1.00
    
	
July 31, 2012 through January 31, 2014
    	
 
    	
3.00:1.00
    
	
April 30, 2014 and thereafter
    	
 
    	
2.75:1.00
    

 

(d)           Maximum Capital Expenditures.  During any fiscal year and tested at the end of each fiscal year, the Borrowers and Non-Borrower Subsidiaries shall not make any Capital Expenditure (or become legally obligated to make such expenditures during such fiscal year) other than Capital Expenditures for properties and assets used in the operation of the Borrowers’ or Non-Borrowers’ business not exceeding 1.5 times the sum of the Borrowers’ and the Non-Borrower Subsidiaries’ consolidated depreciation expenses, depletion expenses and landfill amortization expenses in such fiscal year.”

 

19.          Amendment to Section 7.14 (Actions Otherwise Prohibited By Subordinated Debt or Second Lien Notes) of the Credit Agreement.  Section 7.14 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

 

“7.14  Actions Otherwise Prohibited By Subordinated Debt, Second Lien Notes or Preferred Stock.  Notwithstanding anything contained in this Article VII that permits the Borrowers or any of their Subsidiaries to enter into transactions or take certain actions, the Borrowers shall not enter into such transactions or take such actions if otherwise prohibited from so doing by the terms of (x) the Senior Subordinated Debt or the Second Lien Notes, after giving effect to any effective and irrevocable written amendment to or waiver of the terms thereof, a copy of which has been furnished to the Administrative Agent and which is in form satisfactory to the Administrative Agent or (y) any Preferred Stock outstanding from time to time, after giving effect to any effective written amendment to or waiver of the terms thereof, a copy of which has been furnished to the Administrative Agent.”

 

20.          Amendment to Section 7.17 (Upstream Limitations) of the Credit Agreement.  Section 7.17 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“7.17  Upstream Limitations.  None of the Borrowers shall enter into any agreement, contract or arrangement (excluding this Agreement, the other Loan Documents, the Senior Subordinated Debt Documents and the Second Lien Notes Documents) restricting the ability of (i) the Borrowers to amend or modify this Agreement or any other Loan Document, or (ii) any Borrower to pay or make dividends or distributions in cash or kind to any Borrower or to make loans, advances or other payments of whatsoever nature to any Borrower or to make transfers or distributions of all or any part of such Borrower’s assets to a Borrower; in each case other than (x) subject to the limitations in Section 7.01(a) and (f), restrictions on specific assets which assets are the subject of Equipment Financing Indebtedness to the extent permitted under Section 7.03(c) or (e), and (y) customary anti-assignment provisions contained in leases and licensing agreements entered into by such Borrower in the ordinary course of its business.”

 

21.          Amendment to Article VII (Negative Covenants) of the Credit Agreement.  Article VII of the Credit Agreement is hereby amended by appending to the end thereof the following new Section 7.19:

 

“7.19  Preferred Stock.  None of the Borrowers (i) shall authorize or designate any new class of Preferred Stock or (ii) shall, directly or indirectly (whether by merger, consolidation, share exchange or otherwise), amend, supplement or otherwise modify the terms of any Preferred Stock, in each case unless the Administrative Agent shall have been provided reasonable prior written notice thereof (including copies of the Organizational Documents and other documents evidencing the terms thereof).  None of the Borrowers, shall, in any event, make any amendment, supplement or modification to the Preferred Stock that would cause a Qualified Preferred Stock to become a Non-Qualified Preferred Stock.  In no event may the Parent issue any Preferred Stock at any time when a Default or Event of Default exists or could reasonably be expected to result therefrom or that would be prohibited by the terms of the Second Lien Notes or any Subordinated Debt (after giving effect to any effective and

 

 

irrevocable written amendment to or waiver of the terms thereof, a copy of which has been furnished to the Administrative Agent and which is in form satisfactory to the Administrative Agent).”

 

22.          Amendment to Section 8.01 (Events of Default) of the Credit Agreement.  Section 8.01 of the Credit Agreement is hereby amended by restating clause (n) thereof in its entirety as follows:  “(n)  if any event or condition occurs that enables or permits (with all applicable grace periods having expired) (i) any holder or the holders of the Second Lien Notes or any trustee or agent on their behalf to cause the Second Lien Notes to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to their scheduled maturity date or (ii) any holder or the holders of any Preferred Stock of the Borrowers to cause any liquidating payment or distribution on such Preferred Stock to become due in cash, securities or other property of any Borrower other than Equity Interests of Parent, or to require the prepayment, redemption or repurchase thereof, in whole or in part, in cash, securities or other property of any Borrower other than Equity Interests of Parent prior to its scheduled maturity date, if any”.

 

23.          Amendment to Section 9.10 (Collateral Matters) of the Credit Agreement.  Section 9.10 of the Credit Agreement is hereby amended by restating clause (a)(ii) thereof in its entirety as follows:  “(ii) that is sold or to be sold as part of or in connection with any sale (other than to a Borrower) permitted hereunder or under any other Loan Document or that is transferred or to be transferred as part of or in connection with any Investment (other than an Investment in a Borrower) permitted hereunder or upon any Borrower being released from its Obligations hereunder”.

 

24.          Amendment to Form of Compliance Certificate.  Exhibit D to the Credit Agreement (Form of Compliance Certificate) is hereby amended and restated in its entirety by the Exhibit D attached hereto as Annex 2.

 

25.          Consent to the Target Acquisition.  As more particularly described in the Transaction Summary, the Borrower intends to consummate the Target Acquisition for aggregate total consideration not to exceed $25,100,000, with $22,600,000 anticipated to be paid in cash at closing and $2,500,000 of contingent holdbacks under the Asset Purchase Agreement entered into in connection therewith.  In reference to Section 7.04(a)(ix) of the Credit Agreement, the Borrowers hereby request the written consent of the Administrative Agent and the Lenders to the Target Acquisition, and each of the Administrative Agent and the Lenders party hereto hereby consents to the Target Acquisition on the terms, in all material respects, and for the aggregate consideration, described in the Transaction Summary, subject to the satisfaction of the conditions set forth in Annex 3 hereto, including that no Default or Event of Default has occurred and is continuing or would result from the consummation of the Target Acquisition.

 

26.          Consent to EBITDA Credits in connection with the Target Acquisition.  The Borrowers hereby request the written consent of the Administrative Agent to a pro forma credit to “Consolidated EBITDA” of $3,800,000 (the “EBITDA Credit”) relating to the earnings of the Target for the twelve months preceding the Target Acquisition, in each case for purposes of the financial covenant calculations under Section 7.11 of the Credit Agreement (other than for purposes of the covenant set forth in Section 7.11(a)), all as more particularly set forth in the

 

 

definition of Consolidated EBITDA.  Based on the information contained in the Transaction Summary and the Borrowers’ representations and warranties made hereby that the EBITDA Credit and all corresponding calculations are in conformity with the Credit Agreement, and subject to the conditions set forth on Annex 3 having been met, the Administrative Agent hereby approves the EBITDA Credit.

 

27.          No Waiver.  Nothing contained herein shall be deemed to (i) constitute a waiver of any Default or Event of Default that may heretofore or hereafter occur or have occurred and be continuing or to otherwise modify any provision of the Credit Agreement or any other Loan Document, or (ii) give raise to any defenses or counterclaims to the Administrative Agent’s or any of the Lenders’ right to compel payment of the Obligations when due or to otherwise enforce their respective rights and remedies under the Credit Agreement and the other Loan Documents.

 

28.          Amendment Fee.  The Borrowers hereby jointly and severally promise to pay to each existing Lender which consents to this First Amendment, in consideration of each such Lender entering into this First Amendment, a fee in an amount equal to 25 basis points of such Lender’s Revolving Commitment as of the date hereof (the “Amendment Fees”).  The Amendment Fees shall be fully-earned as of the date hereof and shall be non-refundable.

 

29.          Conditions to Effectiveness.  This First Amendment (other than Paragraphs 25 and 26 hereof) shall become effective as of the date when each of the following conditions is satisfied (with Paragraphs 25 and 26 hereof becoming effective upon the satisfaction of the additional conditions set forth on Annex 3 hereto relating to the Target Acquisition):

 

(a)           The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each dated as of the date hereof and each in form and substance satisfactory to the Administrative Agent unless otherwise specified:

 

(i)            counterparts of this First Amendment, properly executed by a Responsible Officer of each of the Borrowers, and sufficient in number for distribution to each party hereto;

 

(ii)           such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Borrower as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this First Amendment;

 

(iii)          a favorable opinion of Wilmer, Cutler, Pickering, Hale and Dorr, LLP, counsel to the Parent and the other Borrowers organized in New York, Delaware, Virginia and Massachusetts, addressed to the Administrative Agent and the Lenders, in form and substance satisfactory to the Administrative Agent;

 

(iv)          a certificate signed by a Responsible Officer of each Borrower certifying (A) that the conditions specified in this Paragraph 29 and Section 4.02(a) and (b) of the Credit Agreement have been satisfied and (B) that there has been no event or condition since the date of the audited financial statements of the Parent and its Subsidiaries for the

 

 

fiscal year ended April 30, 2011, that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and

 

(v)           such other assurances, certificates, documents, consents or opinions as the Administrative Agent reasonably may require.

 

(b)           The Borrowers shall have paid to the Administrative Agent, for the accounts of the applicable Lenders, the Amendment Fee.

 

(c)           The Borrowers shall have paid all fees, charges and disbursements of counsel (including any local counsel) to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the date hereof.

 

30.          Representations and Warranties.  The Borrowers represent and warrant to the Administrative Agent and the Lenders as follows:

 

(a)           The execution, delivery and performance of this First Amendment and the transactions contemplated hereby (i) are within the corporate (or the equivalent company or partnership) authority of each of the Borrowers, (ii) have been duly authorized by all necessary corporate (or other) proceedings, (iii) do not conflict with or result in any material breach or contravention of any provision of law, statute, rule or regulation to which any of the Borrowers is subject or any judgment, order, writ, injunction, license or permit applicable to any of the Borrowers so as to materially adversely affect the assets, business or any activity of the Borrowers, and (iv) do not conflict with any provision of the corporate charter, articles or bylaws (or equivalent other company or partnership documents) of the Borrowers or any agreement or other instrument binding upon the Borrowers, including, without limitation, the Senior Subordinated Notes Indenture, the Second Lien Notes Indenture and the Indenture governing the 2005 Fame Bonds.

 

(b)           The execution, delivery and performance of this First Amendment will result in valid and legally binding obligations of the Borrowers enforceable against each in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other Applicable Laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief or other equitable remedy is subject to the discretion of the court before which any proceeding therefor may be brought.

 

(c)           The execution, delivery and performance by the Borrowers of this First Amendment and the transactions contemplated hereby do not require any approval or consent of, or filing with, any governmental agency or authority other than those already obtained (copies of which have been delivered to the Administrative Agent), if any.

 

(d)           The representations and warranties contained in Article V of the Credit Agreement are true and correct in all material respects as of the date hereof as though made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date and except to the extent of changes resulting from transactions contemplated or permitted by this Agreement (as amended by the First Amendment) and changes occurring in the ordinary

 

 

course of business which singly or in the aggregate do not have a Material Adverse Effect.  For purposes of this Paragraph 30(d), the representations and warranties contained in Section 5.05(a) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Section 6.04(a) of the Credit Agreement.

 

(e)           Both before and after giving effect to this First Amendment, no Default or Event of Default under the Credit Agreement has occurred and is continuing.

 

31.          Ratification, etc.  Except as expressly amended hereby, the Credit Agreement, the other Loan Documents and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect.  This First Amendment and the Credit Agreement shall hereafter be read and construed together as a single document, and all references in the Credit Agreement, any other Loan Document or any agreement or instrument related to the Credit Agreement shall hereafter refer to the Credit Agreement as amended by this First Amendment.

 

32.          GOVERNING LAW.  THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

33.          Counterparts.  This First Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this First Amendment by telecopy shall be as effective as delivery of an original executed counterpart of this First Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, each of the undersigned has duly executed this First Amendment to Amended and Restated Credit Agreement and Consent as a sealed instrument as of the date first set forth above.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
CASELLA   WASTE SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Edwin Johnson
    
	
 
    	
 
    	
Name:
    	
Edwin   Johnson
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ALL   CYCLE WASTE, INC.
    
	
 
    	
ATLANTIC   COAST FIBERS, INC.
    
	
 
    	
B.   AND C. SANITATION CORPORATION
    
	
 
    	
BRISTOL   WASTE MANAGEMENT, INC.
    
	
 
    	
C.V.   LANDFILL, INC.
    
	
 
    	
CASELLA   ALBANY RENEWABLES, LLC
    
	
 
    	
CASELLA   MAJOR ACCOUNT SERVICES, LLC
    
	
 
    	
CASELLA   RECYCLING, LLC
    
	
 
    	
CASELLA   RENEWABLE SYSTEMS, LLC
    
	
 
    	
CASELLA   TRANSPORTATION, INC.
    
	
 
    	
CASELLA   WASTE MANAGEMENT OF MASSACHUSETTS, INC.
    
	
 
    	
CASELLA   WASTE MANAGEMENT OF N.Y., INC.
    
	
 
    	
CASELLA   WASTE MANAGEMENT OF PENNSYLVANIA, INC.
    
	
 
    	
CASELLA   WASTE MANAGEMENT, INC.
    
	
 
    	
CASELLA   WASTE SERVICES OF ONTARIO LLC
    
	
 
    	
CHEMUNG   LANDFILL LLC
    
	
 
    	
COLEBROOK   LANDFILL LLC
    
	
 
    	
CWM   ALL WASTE LLC
    
	
 
    	
FOREST   ACQUISITIONS, INC.
    
	
 
    	
GRASSLANDS   INC.
    
	
 
    	
GROUNDCO   LLC
    
	
 
    	
HAKES   C&D DISPOSAL, INC.
    
	
 
    	
HARDWICK   LANDFILL, INC.
    
	
 
    	
HIRAM   HOLLOW REGENERATION CORP.
    
	
 
    	
KTI   BIO FUELS, INC.
    
	
 
    	
KTI   ENVIRONMENTAL GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Edwin Johnson
    
	
 
    	
 
    	
Name:
    	
Edwin   Johnson
    
	
 
    	
 
    	
Title:
    	
Vice   President and Treasurer
    

 

 

	
 
    	
KTI   NEW JERSEY FIBERS, INC.
    
	
 
    	
KTI   OPERATIONS, INC.
    
	
 
    	
KTI   SPECIALTY WASTE SERVICES, INC.
    
	
 
    	
KTI, INC.
    
	
 
    	
MAINE   ENERGY RECOVERY COMPANY, LIMITED PARTNERSHIP
    
	
 
    	
NEW   ENGLAND WASTE SERVICES OF MASSACHUSETTS, INC.
    
	
 
    	
NEW   ENGLAND WASTE SERVICES OF ME, INC.
    
	
 
    	
NEW   ENGLAND WASTE SERVICES OF N.Y., INC.
    
	
 
    	
NEW   ENGLAND WASTE SERVICES OF VERMONT, INC.
    
	
 
    	
NEW   ENGLAND WASTE SERVICES, INC.
    
	
 
    	
NEWBURY   WASTE MANAGEMENT, INC.
    
	
 
    	
NEWSME   LANDFILL OPERATIONS LLC
    
	
 
    	
NEWS   OF WORCESTER LLC
    
	
 
    	
NORTH   COUNTRY ENVIRONMENTAL SERVICES, INC.
    
	
 
    	
NORTHERN   PROPERTIES CORPORATION OF PLATTSBURGH
    
	
 
    	
PINE   TREE WASTE, INC.
    
	
 
    	
RESOURCE   WASTE SYSTEMS, INC.
    
	
 
    	
SCHULTZ   LANDFILL, INC.
    
	
 
    	
SOUTHBRIDGE   RECYCLING & DISPOSAL PARK, INC.
    
	
 
    	
SUNDERLAND   WASTE MANAGEMENT, INC.
    
	
 
    	
THE   HYLAND FACILITY ASSOCIATES
    
	
 
    	
U.S.   FIBER, LLC
    
	
 
    	
WASTE-STREAM   INC.
    
	
 
    	
WINTERS   BROTHERS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Edwin Johnson
    
	
 
    	
 
    	
Name:
    	
Edwin   Johnson
    
	
 
    	
 
    	
Title:
    	
Vice   President and Treasurer
    

 

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/S/   Maria F. Maia
    
	
 
    	
 
    	
Name:
    	
Maria   F. Maia
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

 

	
 
    	
Bank   of America, N.A., as a Revolving Lender, L/C
    
	
 
    	
Issuer   and Swing Line Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Maria F. Maia
    
	
 
    	
 
    	
Name:
    	
Maria   F. Maia
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

 

	
 
    	
COMERICA   BANK,
    
	
 
    	
As   a Revolving Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Tony G. Rice
    
	
 
    	
 
    	
Name:
    	
Tony   G. Rice
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

	
 
    	
Credit   Agricole Corporate & Investment Bank,
    
	
 
    	
As   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   Michael Madnick
    
	
 
    	
 
    	
Name:
    	
Michael   Madnick
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/S/   Yuri Muzichenko
    
	
 
    	
 
    	
Name:
    	
Yuri   Muzichenko
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    

 

 

	
 
    	
JP   Morgan Chase Bank, N.A.
    
	
 
    	
As   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/S/   Sonia E. Young
    
	
 
    	
 
    	
Name:
    	
Sonia   E. Young
    
	
 
    	
 
    	
Title:
    	
Underwriter   I
    

 

 

	
 
    	
TD   Bank, N. A.
    
	
 
    	
As   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/S/   E. Kirke Harte
    
	
 
    	
 
    	
Name:
    	
E.   Kirke Hart
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President
    

 

 

	
 
    	
KEYBANK   NATIONAL ASSOCIATION,
    
	
 
    	
As   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/S/   Frank J. Jancar
    
	
 
    	
 
    	
Name:
    	
Frank   J. Jancar
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

	
 
    	
Union   Bank N.A.
    
	
 
    	
As   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/S/   Peter Thompson
    
	
 
    	
 
    	
Name:
    	
Peter   Thompson
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

ANNEX 1

 

(Schedule 7.03B)

 

[See Attached]

 

 

Annex 1

 

Casella Waste Systems, Inc.

SCHEDULE 7.03 - PART B

Existing Indebtedness

Capital Lease Obligations / Financing Lease Obligations

February 28, 2011

 

	
Borrower
    	
 
    	
Lender
    	
 
    	
Description
    	
 
    	
Interest
   Rate
    	
 
    	
Maturity
   Date
    	
 
    	
Total Note
   Amount
    	
 
    	
Periodic
   Payment
   Amount
    	
 
    	
1/31/2011
    	
 
    	
Principal
   Payments
    	
 
    	
Balance 2/28/11
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1. Casella Waste Systems, Inc.
    	
 
    	
Deere   Credit, Inc.
    	
 
    	
Machinery   and Equipment
    	
 
    	
4.72
    	
%
    	
Jan-15
    	
 
    	
403,864
    	
 
    	
6,418
    	
 
    	
339,585
    	
 
    	
5,082
    	
 
    	
334,503
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
403,864
    	
 
    	
 
    	
 
    	
339,585
    	
 
    	
5,082
    	
 
    	
334,503
    	
 
    
	
2. Now England Waste Services of N.Y., Inc.
    	
 
    	
Caterpillar   Financial Services Corp.
    	
 
    	
Clinton   County LFGTE Engine Financing Lease Oblig.
    	
 
    	
6.70
    	
%
    	
Sep-15
    	
 
    	
3,196,600
    	
 
    	
39,352
    	
 
    	
2,547,355
    	
 
    	
25,114
    	
 
    	
2,522,241
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
3,196,600
    	
 
    	
 
    	
 
    	
2,547,355
    	
 
    	
25,114
    	
 
    	
2,522,241
    	
 
    
	
3. Casella Waste   Management, Inc.
    	
 
    	
Casella   Associates
    	
 
    	
Rutland   Building Lease
    	
 
    	
4.50
    	
%
    	
Apr-13
    	
 
    	
474,903
    	
 
    	
10,789
    	
 
    	
305,031
    	
 
    	
10,384
    	
 
    	
294,647
    	
 
    
	
4. Casella Waste   Management, Inc.
    	
 
    	
Casella   Associates
    	
 
    	
Montpeller   Building Lease
    	
 
    	
4.50
    	
%
    	
Apr-13
    	
 
    	
485,037
    	
 
    	
11,019
    	
 
    	
311,566
    	
 
    	
10,606
    	
 
    	
300,960
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
959,940
    	
 
    	
 
    	
 
    	
616,597
    	
 
    	
20,990
    	
 
    	
595,607
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Grand Totals
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
3,503,537
    	
 
    	
51,185
    	
 
    	
3,452,352
    	
 
    

 

 

ANNEX 2

 

(Revised Form of Compliance Certificate)

 

[See Attached]

 

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                  ,      

 

To:                             Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement, dated as of March 18, 2011 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among Casella Waste Systems, Inc., a Delaware corporation (the “Parent”) and each of its direct and indirect Subsidiaries (other than Excluded Subsidiaries and Non-Borrower Subsidiaries) identified therein (collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer, and Swing Line Lender.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                                of the Parent, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on behalf of the Borrowers, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.                                      The Borrowers have delivered the year-end audited financial statements required by Section 6.04(a) of the Credit Agreement for the fiscal year of the Borrowers ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.                                      The Borrowers have delivered the unaudited financial statements required by Section 6.04(b) of the Credit Agreement for the fiscal quarter of the Parent and its Subsidiaries ended as of the above date.  Such consolidated financial statements were prepared in accordance with GAAP and fairly present the consolidated financial condition of the Parent and its Subsidiaries as at the close of business on the date thereof and the results of operations for the period then ended, subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.                                      The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Parent and its Subsidiaries during the accounting period covered by such financial statements.

 

3.                                      A review of the activities of the Parent and its Subsidiaries during such fiscal period has been made under the supervision of the undersigned with a view to determining

 

 

whether during such fiscal period the Parent and its Subsidiaries performed and observed all its Obligations under the Loan Documents, and

 

[select one:]

 

[to the best knowledge of the undersigned, no Default or Event of Default has occurred and is continuing.]

 

—or—

 

[to the best knowledge of the undersigned, the following covenants contained in Article VI and Article VII of the Credit Agreement as of the end of such fiscal period have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and period of existence and a summary of what actions the Borrowers propose to take with respect thereto and attaching, in the event that such Default or Event of Default relates to environmental matters, an Environmental Compliance Certificate:] and

 

4.                                      [Except to the extent described below, the] [The] representations and warranties of the Borrowers contained in Article V of the Credit Agreement or any other Loan Document are true and correct on the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date and except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement and changes occurring in the ordinary course of business which singly or in the aggregate do not have a Material Adverse Effect.  For purposes of this Compliance Certificate, the representations and warranties contained in Section 5.05(a) of the Credit Agreement shall be deemed to refer to [the most recent audited financial statements furnished pursuant to Section 4.01(a)(ix) or Section 6.04(a) of the Credit Agreement, as applicable][the statements in connection with which this Compliance Certificate is delivered].

 

[Describe any exceptions.] [For the avoidance of doubt, none of the foregoing disclosures shall constitute an amendment or supplement to the disclosure schedules attached to the Credit Agreement or any other Loan Document.]

 

5.                                      The financial covenant analyses and information set forth on Schedule 1 attached hereto are true and accurate on and as of the Financial Statement Date.

 

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of                            ,                 .

 

	
 
    	
CASELLA WASTE SYSTEMS, INC., for
    
	
 
    	
itself   and each of the Borrowers referred to herein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

ANNEX 3

 

(Conditions to Effectiveness of Target Acquisition)

 

[See Attached]

 

 

Annex 3

 

Conditions to Effectiveness of Target Acquisition

 

The effectiveness of the consents provided pursuant to Paragraphs 25 and 26 of the First Amendment to which this Annex 3 is attached is subject to the following (capitalized terms used herein shall have the meanings set forth in the Credit Agreement, as amended by this First Amendment):

 

1.                                      Receipt by the Administrative Agent of counterparts of this First Amendment, properly executed by a Responsible Officer of the Borrowers, the Administrative Agent and the Required Lenders;

 

2.                                      Evidence satisfactory to the Administrative Agent that the Parent has received at least $25,000,000 in gross cash proceeds as a result of an Equity Issuance and has used (or will use pursuant to any holdback payments made after the initial closing) the proceeds thereof to pay the purchase consideration for the Target Acquisition (including holdbacks as described in the Transaction Summary).

 

3.                                      Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Parent and each other Borrower party to the Target Acquisition certifying that: (a) the Borrowers are in current compliance with and, giving effect to the Target Acquisition (including any borrowings made or to be made in connection therewith), will continue to be in compliance with all of their covenants and agreements contained in the Credit Agreement, including the financial covenants contained in Section 7.11 of the Credit Agreement on a pro forma historical combined basis as if the transaction occurred on the first day of the period of measurement, (b) no Default or Event of Default has occurred and is continuing, and the Target Acquisition will not otherwise create a Default or Event of Default under the Credit Agreement (including by way of a cross-default to any other Indebtedness that would constitute an Event of Default thereunder), (c) the Target is predominantly in the same lines of business as the Borrowers, or businesses reasonably related or incidental thereto, and (d) the business to be acquired operates predominantly in the United States or Canada;

 

4.                                      After giving effect to the Target Acquisition, all representations and warranties contained in the Loan Documents shall continue to be true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, with any necessary updates to the schedules thereto approved by the Administrative Agent;

 

5.                                      Evidence that the Security Documents shall be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a first-priority, legal, valid and enforceable first security interest and Lien upon the assets of the Target consistent with the requirements of Section 7.04(a) of the Credit Agreement, including, without limitation, (a) UCC searches in the jurisdiction of organization or formation of the Target and in each other jurisdiction, if any, requested by the Administrative Agent, (b) copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Liens permitted under the Credit Agreement (together with satisfactory payoff and/or release letters and related lien

 

 

terminations in connection with any Indebtedness being paid off pursuant to the Target Acquisition or otherwise securing any of the assets being acquired), and (c) tax, litigation, judgment, bankruptcy and/or intellectual property searches requested by the Administrative Agent with respect to the Target, and (d) duly filed UCC-1 financing statements for the Target (as deemed necessary by the Administrative Agent) in each appropriate jurisdiction and office under the Uniform Commercial Code and evidence of the completion of all other actions, recordings and filings of or with respect to the Security Documents that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby, and payment of all filing and recording fees and taxes related thereto;

 

6.                                      Not later than seven (7) days prior to the proposed acquisition date, delivery of: (a) a copy of the purchase agreement, (b) the audited (if available, or otherwise unaudited) financial statements for the preceding two (2) fiscal years (or such shorter period of time as such entity has been in existence), (c) a summary of the Borrowers’ due diligence review, (d) a Compliance Certificate demonstrating compliance with Section 7.11 of the Credit Agreement on a pro forma historical combined basis as if the transaction occurred on the first day of the period of measurement, (e) written evidence that the board of directors and (if required by Applicable Law) the shareholders, or equivalent thereof, of the Target have approved the Target Acquisition and (f) such other information as the Administrative Agent may reasonably request, which in each case shall be in form and substance acceptable to the Administrative Agent;

 

7.                                      Written evidence of the receipt of all applicable third party consents to the transfer of any acquired permits, licenses and contracts (subject to waiver of the parties pursuant to the purchase agreement, any such waiver to be approved by the Administrative Agent); and

 

8.                                      Written evidence that the board of directors, or equivalent thereof, of each of the applicable Borrowers have approved the Target Acquisition.

 

If practicable, the Borrowers shall also deliver to the Administrative Agent a duly executed Joinder Agreement (and related deliverables) executed by any new direct or indirect Subsidiary (other than any Excluded Subsidiary or Non-Borrower Subsidiary) of the Parent formed or acquired in connection with the Target Acquisition (it being agreed that the Borrowers shall have up to 10 Business Days after the acquisition to provide the Joinder Agreement and related deliverables in accordance with Section 6.19 of the Credit Agreement).

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