Exhibit 10.1

Execution Version

First AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This First Amendment to Amended and Restated Loan and Security Agreement (this
“Amendment”) is dated as of August 7, 2020 and is entered into by and among (a)
AVEO PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), (b) the several
banks and other financial institutions or entities from time to time parties to
the Loan Agreement (collectively, referred to as “Lender”) and (c) HERCULES
CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent
and collateral agent for itself and Lender (in such capacity,
“Agent”).  Capitalized terms used herein without definition shall have the same
meanings given them in the Loan Agreement (as defined below).

 

Recitals

A.Borrower, Agent and Lender have entered into that certain Amended and Restated
Loan and Security Agreement dated as of December 28, 2017, among Borrower, Agent
and Lender (as amended, and as may be further amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”), pursuant to which Lender has agreed to extend and make available to
Borrower certain advances of money.

B.Immediately prior to the effectiveness of this Amendment, the aggregate
outstanding principal amount of the Loans under the Loan Agreement is Nine
Million, Six Hundred Seventy One Thousand and Thirteen Dollars and 48/100
($9,671,013.48) (the “Existing Term Loan Advances”).

C.In accordance with Section 11.3 of the Loan Agreement, Borrower has requested
that Agent and Lender agree to amend the Loan Agreement to provide for, among
other things, Lender making available to Borrower new loan tranches in an
aggregate principal amount of up to Thirty Five Million Dollars ($35,000,000),
of which the proceeds of the initial tranche thereof shall be used in part to
refinance the Existing Term Loan Advances in full (the loans advances pursuant
to such initial tranche, the “2020 Term A Loan Advances”)

D.Agent and Lender have agreed to so amend the Loan Agreement upon the terms and
conditions more fully set forth herein.

Agreement

NOW, THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1.Amendments.

1.1The Loan Agreement is hereby amended to reflect the changes which are
attached as Exhibit A hereto, such that on the First Amendment Closing Date the
terms set forth in Exhibit A hereto which appear in bold and double underlined
text (inserted text) shall be added to the Loan Agreement and the terms
appearing as text which is stricken (deleted text) shall be deleted from the
Loan Agreement.

 

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1.2(a) Exhibit A to the Loan Agreement (Advance Request) is hereby amended and
restated in its entirety as set forth as set forth on the exhibit attached as
Exhibit B hereto, (b) Exhibit B to the Loan Agreement (Secured Term Promissory
Note) is hereby amended and restated in its entirety as set forth as set forth
on the exhibit attached as Exhibit C hereto, (c) Exhibit F to the Loan Agreement
(Compliance Certificate) is hereby amended and restated in its entirety as set
forth as set forth on the exhibit attached as Exhibit D hereto, (d) Exhibit G to
the Loan Agreement (Form of Joinder Agreement) is hereby amended and restated in
its entirety as set forth as set forth on the exhibit attached as Exhibit E
hereto, (e) Exhibit H to the Loan Agreement (ACH Debit Authorization Agreement)
is hereby amended and restated in its entirety as set forth as set forth on the
exhibit attached as Exhibit F hereto and (f) Schedule 1.1 to the Loan Agreement
(Commitments) is hereby amended and restated in its entirety as set forth as set
forth on the exhibit attached as Exhibit G hereto.

1.3Each reference in the Loan Agreement to “this Agreement” and the words
“hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a
reference to the Loan Agreement as amended by this Amendment.

2.Borrower’s Representations And Warranties.  Borrower represents and warrants
that:

2.1Immediately upon giving effect to this Amendment (i) the representations and
warranties contained in the Loan Documents are true and correct in all material
respects except to the extent such representations and warranties relate to an
earlier date, in which case they are true and correct in all material respects
as of such date and (ii) no Event of Default has occurred and is continuing with
respect to which Borrower has not been notified in writing by Agent or Lender.

2.2Borrower has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment.

2.3The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized by all necessary corporate action on the
part of Borrower.

2.4This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’ rights.

2.5As of the date hereof, it has no defenses against the obligations to pay any
amounts under the Obligations.  Borrower acknowledges that each of Agent and
Lender has, as of the date hereof, acted in good faith and has conducted in a
commercially reasonable manner its relationships with Borrower in connection
with this Amendment and in connection with the Loan Documents.

Borrower understands and acknowledges that each of Agent and Lender is entering
into this Amendment in reliance upon, and in partial consideration for, the
above representations and warranties, and agrees that such reliance is
reasonable and appropriate.

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3.Limitation.  The amendments set forth in this Amendment shall be limited
precisely as written and shall not be deemed (a) to be a waiver or modification
of any other term or condition of the Loan Agreement or of any other instrument
or agreement referred to therein or to prejudice any right or remedy which Agent
and/or Lender may now have or may have in the future under or in connection with
the Loan Agreement (as amended hereby) or any instrument or agreement referred
to therein; or (b) to be a consent to any future amendment or modification or
waiver to any instrument or agreement the execution and delivery of which is
consented to hereby.  Except as expressly amended hereby, the Loan Agreement
shall continue in full force and effect.

4.Effectiveness.  This Amendment shall become effective upon the satisfaction of
all the following conditions precedent (such date of satisfaction of all such
conditions precedent, the “First Amendment Closing Date”):

4.1Amendment.  Borrower, Agent and Lender shall have duly executed and delivered
this Amendment to Lender.

4.2Existing Term Loan Advances.  Concurrently with the closing of this
Amendment, Agent shall have received evidence in form and substance satisfactory
to it that the Existing Term Loan Advances have been refinanced in full as
contemplated in Exhibit A.

4.32020 Facility Charge. Agent shall have received a nonrefundable, fully earned
facility charge in the amount of Two Hundred Fifty Five Thousand Dollars
($255,000.00) in good and collected funds.

4.4Corporate Documents.  Agent shall have received:

(a)a certified copy of resolutions of the Board evidencing approval of this
Amendment and other transactions evidenced by the Loan Documents;

(b)certified copies of the Certificate of Incorporation and the Bylaws, as
amended through the Closing Date, of Borrower; and

(c)a certificate of good standing for Borrower from its state of incorporation.

4.5Payment of Lender Expenses.  Borrower shall have paid all reasonable Lender
expenses (including all reasonable attorneys' fees and reasonable expenses)
incurred through the date of this Amendment for the documentation and
negotiation of this Amendment, in each case, to the extent invoiced on or prior
to the First Amendment Closing Date.

4.6Legal Opinion.  Agent shall have received, in form and substance satisfactory
to it, the executed legal opinion of Wilmer Cutler Pickering Hale and Dorr LLP,
counsel to Borrower, covering such matters incident to the transactions
contemplated by this Amendment as Agent may require.  

4.7Advance Request. Agent shall have received an Advance Request with respect to
the 2020 Term Loan A Advances described in Section 2.1(a)(i) of the Loan
Agreement (as amended in accordance herewith) satisfying the requirements of
Sections 2.1(b) and 4.2(d)(i) of the Loan Agreement (as amended in accordance
herewith).

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5.Release.  In consideration of the agreements of Agent and each Lender
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and
its successors, assigns, and other legal representatives, hereby to the extent
possible under applicable law fully, absolutely, unconditionally and irrevocably
releases, remises and forever discharges Agent and each Lender, and its
successors and assigns, and its present and former shareholders, affiliates,
subsidiaries, divisions, predecessors, directors, officers, attorneys,
employees, agents and other representatives (Agent, Lender and all such other
persons being hereinafter referred to collectively as the “Releasees” and
individually as a “Releasee”), of and from all demands, actions, causes of
action, suits, covenants, contracts, controversies, agreements, promises, sums
of money, accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities whatsoever
of every name and nature, known or unknown, suspected or unsuspected, both at
law and in equity, which Borrower, or any of its successors, assigns, or other
legal representatives may now or hereafter own, hold, have or claim to have
against the Releasees or any of them for, upon, or by reason of any
circumstance, action, cause or thing whatsoever which arises at any time prior
to the execution of this Amendment, for or on account of, or in relation to, or
in any way in connection with the Loan Agreement, or any of the other Loan
Documents or transactions thereunder or related thereto.  Borrower understands,
acknowledges and agrees that the release set forth above may be pleaded as a
full and complete defense and may be used as a basis for an injunction against
any action, suit or other proceeding which may be instituted, prosecuted or
attempted in breach of the provisions of such release.  Borrower agrees that no
fact, event, circumstance, evidence or transaction existing prior to the
execution of this Amendment which could now be asserted or which may hereafter
be discovered shall affect in any manner the final, absolute and unconditional
nature of the release set forth above.  Borrower waives the provisions of
California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

 

6.Counterparts.  This Amendment may be signed in any number of counterparts, and
by different parties hereto in separate counterparts, with the same effect as if
the signatures to each such counterpart were upon a single instrument.  All
counterparts shall be deemed an original of this Amendment.  This Amendment may
be executed by facsimile, portable document format (.pdf) or similar technology
signature, and such signature shall constitute an original for all purposes.

7.Incorporation By Reference.  The provisions of Section 11 of the Loan
Agreement shall be deemed incorporated herein by reference, mutatis mutandis.

8.Reaffirmation. By executing and delivering a counterpart hereof, (i) Borrower
hereby agrees that all Advances incurred by Borrower (including, without
limitation, the 2020 Additional Term Loan Advances) shall be secured by the
Collateral pursuant to the applicable Loan Documents in accordance with the
terms and provisions thereof and (ii) Borrower hereby (A) agrees that,
notwithstanding the effectiveness of this Amendment, after giving effect to this
Amendment, the Loan Documents continue to be in full force and effect, (B)
agrees that all of the Liens and security interests created and arising under
the Loan Documents remain in full force and effect on a continuous basis, and
the perfected status and priority of each such Lien and security interest
continues in full force and effect on a continuous basis, unimpaired,
uninterrupted and undischarged, as collateral security for its obligations,
liabilities and indebtedness under the Loan Agreement to the extent provided in,
and subject

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to the limitations and qualifications set forth in, such Loan Documents (as
amended by this Amendment) and (C) affirms and confirms all of its obligations,
liabilities and indebtedness under the Loan Agreement and each other Loan
Document, in each case after giving effect to this Amendment, including the
pledge of and/or grant of a security interest in its assets as Collateral
pursuant to the Loan Documents to secure such Secured Obligations, all as
provided in the Loan Documents, and acknowledges and agrees that such
obligations, liabilities, guarantee, pledge and grant continue in full force and
effect in respect of, and to secure, such Secured Obligations under the Loan
Agreement and the other Loan Documents, in each case, to the extent provided in,
and subject to the limitations and qualifications set forth in, such Loan
Documents (as amended by this Amendment).

[Signature Page Follows]

 

 

 

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In Witness Whereof, the parties have duly authorized and caused this Amendment
to be executed as of the date first written above.

 

BORROWER:

AVEO PHARMACEUTICALS, INC.

Signature:/s/ Erick Lucara

Print Name:Erick Lucera

Title:Chief Financial Officer

 

AGENT:

HERCULES CAPITAL, INC.

 

Signature:/s/ Jennifer Choe

Print Name:Jennifer Choe

Title:Associate General Counsel

 

LENDER:

 

HERCULES CAPITAL, INC.

Signature:/s/ Jennifer Choe

Print Name:Jennifer Choe

Title:Associate General Counsel

 

HERCULES CAPITAL FUNDING TRUST 2018-1

 

Signature:/s/ Jennifer Choe

Print Name:Jennifer Choe

Title:Associate General Counsel

 

HERCULES CAPITAL FUNDING TRUST 2019-1

 

Signature:/s/ Jennifer Choe

Print Name:Jennifer Choe

Title:Associate General Counsel

 

 

 

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Exhibit A

Amended Loan Agreement

(see attached)

 

 

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as amended by that
certain First Amendment to Amended and Restated Loan and Security Agreement
dated as of August 7, 2020 (the “First Amendment”) is made and dated as of
December 28, 2017 and is entered into by and between AVEO PHARMACEUTICALS, INC.,
a Delaware corporation, and each of its Qualified Subsidiaries (hereinafter
collectively referred to as the “Borrower”), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
itself and the Lender (in such capacity, the “Agent”).

RECITALS

A.Borrower and the Lenders party thereto entered into that certain Loan and
Security Agreement dated as of May 28, 2010 (as amended by that certain
Amendment No.1 to Loan and Security Agreement dated as of December 21, 2011,
that certain Amendment No.2 to Loan and Security Agreement dated as of March 31,
2012, that certain Amendment No. 3 to Loan and Security Agreement dated as of
September 24, 2014, and that certain Amendment No.4 to Loan and Security
Agreement dated as of May 13, 2016, and as further amended, restated,
supplemented, or otherwise modified from time to time prior to the effectiveness
hereof, the “Original Loan and Security Agreement”);

B.         The parties to the Original Loan and Security Agreement have agreed
to amend and restate the Original Loan and Security Agreement as set forth in
this Agreement, without constituting a novation;

A.Immediately prior to the effectiveness of the First Amendment, the aggregate
outstanding principal amount of the Advances hereunder is Nine Million, Six
Hundred Seventy One Thousand and Thirteen Dollars and 48/100 ($9,671,013.48)
(the “Existing Term Loan Advances”);

B. Borrower has requested that Lender make available to Borrower 2020 Term Loan
Advances (as defined below) in an aggregate principal amount of up to Thirty
Five Million Dollars ($35,000,000) in order to, among other things, refinance
the Existing Term Loan Advances; and

C.Borrower has requested Lender to make available to Borrower a loan in an
aggregate principal amount of Twenty Million Dollars ($20,000,000.00) (the “Term
Loan Advance”); and

D. Lender is willing to make the 2020 Term Loan AdvanceAdvances on the terms and
conditions set forth in this Agreement.

AGREEMENT

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

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Section 1.  DEFINITIONS AND RULES OF CONSTRUCTION

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

“20142020 End of Term Charge” has the meaning givenassigned to itsuch term in
Section 2.5 hereof.

 

“2016 End of Term Charge2020 Term A Commitment” means as to any Lender, the
obligation of such Lender, if any, to make 2020 Term A Loan Advances to Borrower
in a principal amount not to exceed the amount set forth under the heading “2020
Term A Commitment” opposite such Lender’s name on Schedule 1.1.

“2020 Term A Loan Advance” has the meaning givenassigned to itsuch term in
Section 2.5 hereof2.1(a)(i).

“2020 Term B Commitment” means as to any Lender, the obligation of such Lender,
if any, to make 2020 Term B Loan Advances to Borrower in a principal amount not
to exceed the amount set forth under the heading “2020 Term B Commitment”
opposite such Lender’s name on Schedule 1.1.

“2020 Term B Loan Advance” has the meaning assigned to such term in Section
2.1(a)(ii).

“2020 Term C Commitment” means as to any Lender, the obligation of such Lender,
if any, to make 2020 Term C Loan Advances to Borrower in a principal amount not
to exceed the amount set forth under the heading “2020 Term C Commitment”
opposite such Lender’s name on Schedule 1.1.

“2020 Term C Loan Advance” has the meaning assigned to such term in Section
2.1(a)(iii).

“2020 Term Commitment” means as to any Lender, collectively, its 2020 Term A
Commitment, 2020 Term B Commitment and 2020 Term C Commitment.

“2020 Term D Loan Advance” has the meaning assigned to such term in Section
2.1(a)(iv).

“2020 Term D Share” means as to any Lender, the principal amount set forth under
the heading “2020 Term D Share” opposite such Lender’s name on Schedule 1.1.

“2020 Term Loan Advance” and “2020 Term Loan Advances” has the meaning assigned
to such terms in Section 2.1(a)(v).

“Account Control Agreement(s)” means any agreement entered into by and among the
Agent, Borrower and a third-party Bank or other institution (including a
Securities Intermediary)

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in which Borrower maintains a Deposit Account or an account holding Investment
Property and which grants Agent a perfected first priority security interest in
the subject account or accounts.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially
the form of Exhibit H.

“Advance(s)” means aan Existing Term Loan Advance or a 2020 Term Loan Advance.

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

“Advance Request” means a request for an Advance submitted by Borrower to Agent
in substantially the form of Exhibit A.

“Affiliate” means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question, (b) any
Person directly or indirectly owning, controlling or holding with power to vote
twenty percent (20%) or more of the outstanding voting securities of another
Person, (c) any Person twenty percent (20%) or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held by another
Person with power to vote such securities, or (d) any Person related by blood or
marriage to any Person described in subsection (a), (b) or (c) of this
paragraph.  As used in the definition of “Affiliate,” the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

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

“Agreement” means this Amended and Restated Loan and Security Agreement, as
amended by the First Amendment and as may be further amended, modified,
supplemented or restated from time to time in accordance with the terms hereof.

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

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

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

“Blocked Person” means any Person:  (a) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person
that commits,

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threatens or conspires to commit or supports “terrorism” as defined in Executive
Order No. 13224, or (e) a Person that is named a “specially designated national”
or “blocked person” on the most current list published by OFAC or other similar
list.

“Borrower Products” means all products, drugs, drug compounds, software, service
offerings, technical data or technology currently being designed, manufactured
or sold by Borrower or which Borrower intends to sell, license, or distribute in
the future including any products or service offerings under development,
collectively, together with all products, software, service offerings, technical
data or technology that have been sold, licensed or distributed by Borrower
since its incorporation.

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

“Cash” means all cash and liquid funds.

“Cash Equivalents” shall mean (a) securities issued, or directly and fully
guaranteed or insured, by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than twenty four months from
the date of acquisition, (b) U.S. dollar denominated time deposits, certificates
of deposit and bankers' acceptances of (i) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000, or
(ii) any bank (or the parent company of such bank) whose short-term commercial
paper rating from Standard & Poor’s Ratings Services (“S&P”) is at least A-2 or
the equivalent thereof or from Moody’s Investors Service, Inc. (“Moody’s”) is at
least P-2 or the equivalent thereof in each case with maturities of not more
than twenty four months from the date of acquisition (any bank meeting the
qualifications specified in clauses (b)(i) or (ii), an “Approved Bank”), (c)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (a), above, entered into with any
Approved Bank, (d) commercial paper or corporate notes issued by any Approved
Bank or by the parent company of any Approved Bank and commercial paper or
corporate notes issued by, or guaranteed by, any industrial or financial company
with a short-term commercial paper rating of at least A-2 or the equivalent
thereof by S&P or at least P-2 or the equivalent thereof by Moody’s, or
guaranteed by any industrial company with a long term unsecured debt rating of
at least A or A2, or the equivalent of each thereof, from S&P or Moody’s, as the
case may be, and in each case maturing within twenty four months after the date
of acquisition, (e) debt issued by government-sponsored enterprises with
maturities of not more than twenty four months from the date of acquisition, (f)
municipal obligations having a long term rating of at least A2 or equivalent by
Moody’s and A or equivalent by S&P or short term ratings of P-1 or equivalent by
Moody’s and A-1 or equivalent by S&P, in each case with maturities or put dates
of not more than twenty four months from the date of acquisition and (g)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (a) through (f) above.

“Change in Control” means any reorganization, recapitalization, consolidation or
merger (or similar transaction or series of related transactions) of Borrower,
or sale or exchange of outstanding shares (or similar transaction or series of
related transactions) of Borrower, in each case in which the holders of
Borrower’s outstanding voting securities, or affiliates of such

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holders, immediately before consummation of such transaction or series of
related transactions do not, immediately after consummation of such transaction
or series of related transactions, hold voting securities representing more than
fifty percent (50%) of the voting power of the outstanding voting securities of
the surviving or resulting entity in such transaction or series of related
transactions (or of the parent of such surviving or resulting entity if such
surviving or resulting entity is wholly owned by such parent), in each case
without regard to whether Borrower or Subsidiary is the surviving or resulting
entity.

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

“Closing Date” means the date of this Agreement.

“Collateral” means the property described in Section 3.

“Compliance Certificate” means a certificate in the form attached hereto as
Exhibit F.

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

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards or
merchant services issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the Ordinary Course of Business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

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

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

“Default” means any fact or condition exists that would (or would, with the
passage of time, the giving of notice, or both) constitute an Event of Default.

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

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

“End of Term Charge” has the meaning given to it in Section 2.5 hereof.

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

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

“Excluded Agreements” means (i) any stock purchase agreement, options, or
warrants to acquire, or agreements governing the rights of, any capital stock or
other equity security, or any common stock, preferred stock, or equity security
issued to or purchased by Lender or its nominee or assignee; and (ii) any other
warrant agreement by and among Lender or Agent and Borrower.

“Facility Charge” means one-half of one percent (0.50%) of the Maximum Term Loan
Amount, which is One Hundred Thousand Dollars ($100,000.00).

 

“Existing Term Commitment” means as to any Lender, such obligation of such
Lender, if any, to make an Existing Term Loan Advance to Borrower under this
Agreement immediately prior to the effectiveness of the First Amendment and the
refinancing of the Existing Term Loan Advances as contemplated herein, but
excluding, for the avoidance of doubt, any such obligation  to make 2020 Term
Loan Advances.

“Existing Term Loan Advance” has the meaning assigned to such term in the
preamble to this Agreement.

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

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

“First Amendment Closing Date” means August 7, 2020.

“Forecast” means that certain LRP Forecast Model dated as of July 31, 2020
provided to Agent by Borrower, or a subsequent Forecast approved by Borrower’s
board of directors that is reasonably acceptable to Lender and provided (at
Borrower’s option) to Agent by Borrower and identified as a “Forecast” delivered
pursuant to this definition.

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

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

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services (excluding trade credit entered into in
the Ordinary Course of

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Business), including reimbursement and other obligations with respect to surety
bonds and letters of credit, (b) all obligations evidenced by notes, bonds,
debentures or similar instruments, (c) all capital lease obligations, and (d)
all Contingent Obligations.

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

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

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

“JV Restrictions” has the meaning given to it in Section 7.6.

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

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

“Liquidity” means, as of any date, Borrower’s Cash, and/or Cash Equivalents
maintained in Deposit Accounts and/or accounts holding Investment Property that
are subject to an Account Control Agreement.

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

“Loan” means the Advances made under this Agreement.

“Loan Documents” means this Agreement, the Notes, the ACH Authorization, the
Account Control Agreements, the Joinder Agreements, all UCC Financing
Statements, and any other documents executed in connection with the Secured
Obligations or the transactions contemplated hereby, as the same may from time
to time be amended, modified, supplemented or restated; provided, that the term
“Loan Document” shall not include any Excluded Agreements.

“Material Adverse Effect” means a material adverse effect upon: (i) the
business, operations, properties, assets or condition (financial or otherwise)
of Borrower, provided, however, the failure of an FDA clinical trial, in and of
itself, shall not constitute a Material Adverse Effect or (ii) the ability of
Borrower to perform the Secured Obligations in accordance with the terms of the
Loan Documents, or the ability of Agent or Lender to enforce any of their

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rights or remedies with respect to the Secured Obligations; or (iii) the
Collateral or Agent’s Liens on the Collateral or the priority of such Liens.

“Maximum Term Loan Amount” means Twentyan aggregate amount up to Thirty Million
and No/100 Dollars ($20,000,000.0030,000,000); provided, however, after giving
effect to the funding of the 2020 Term D Loan Advance, Maximum Term Loan Amount
shall mean Thirty Five Million Dollars ($35,000,000).

“Maximum Rate” shall have the meaning assigned to such term in Section 2.2.

“Milestone A Event” means the satisfaction of each of the following: (a) no
defaultDefault or Event of Default shall have occurred and is continuing; and
(b) on or prior to September 30, 2018, Borrower has received positive data with
respect to Borrower’s Phase 3 clinical trial ofthe approval by the Food and Drug
Administration of the new drug application for Tivozanib for theas a treatment
offor relapsed or refractory renal cell carcinoma, for patients in at least the
third-line and fourth-line setting which positive data supports the filing by
Borrower of a new drug application with the Food and Drug Administration,
subject to confirmation, no later than June 30, 2021 and with a label claim
generally consistent with that sought in Borrower’s new drug application filing,
as determined by Agent, in Agent’sits reasonable discretion.

“Milestone B Event” means the satisfaction of each of the following: (a) no
default or Event of Default shall have occurred and is continuing; and (b) on or
prior to June 28, 2019, Borrower has received approval from the Food and Drug
Administration for Borrower’s Tivozanib product for the treatment of renal cell
carcinoma for patients in the third-line setting, subject to confirmation by
Agent, in Agent’s reasonable discretion.

“Milestone B Event” means receipt by Agent of evidence in form and substance
reasonably satisfactory to it that Borrower has achieved $20,000,000 in Net
Product Revenue no later than December 31, 2021.

“MSC Subsidiary” means AVEO Securities Corporation, a Massachusetts corporation,
which is a Subsidiary of Borrower that has applied or is in the process of
applying to be classified as a “security corporation” under Massachusetts
General Laws Ch. 63, Section 38B(a), as amended, supplemented and/or modified.

“Net Product Revenue” means, as of any date of determination or applicable
period, net product revenue (as determined in accordance with GAAP) from the
sale of Tivozanib (which for the avoidance of doubt shall not include any
royalty, profit sharing, or milestone revenue) in the United States.  For the
further avoidance of doubt, when calculating “Net Products Revenue” the tiered
royalties Aveo would owe to KKC on annual net sales of Tivozanib, which are
classified as “cost of goods sold” in accordance with GAAP, shall not be
deducted.

“Note(s)” means a Term Note.

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

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25,

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2001) and/or any other list of terrorists or other restricted Persons maintained
pursuant to any of the rules and regulations of OFAC or pursuant to any other
applicable Executive Orders.

“Ordinary Course of Business” means the normal and customary operations of
Borrower and/or its Subsidiaries, as applicable, and their business, including
activities relating to the identification, acquisition through license or
otherwise, development or commercialization of a biologic or drug.

“Original Loan and Security AgreementEnd of Term Charge” has the meaning given
to it in Recital ASection 2.5 hereof.

 

“Original Term Loans” shall have the meaning assigned to such term in Section
2.1(a).Facility Charge” means one-half of one percent (0.50%) of the Maximum
Term Loan Amount as of the Closing Date, which was One Hundred Thousand Dollars
($100,000.00).

“Original Loan and Security Agreement” means that certain Loan and Security
Agreement dated as of May 28, 2010 (as amended by that certain Amendment No.1 to
Loan and Security Agreement dated as of December 21, 2011, that certain
Amendment No.2 to Loan and Security Agreement dated as of March 31, 2012, that
certain Amendment No. 3 to Loan and Security Agreement dated as of September 24,
2014, and that certain Amendment No.4 to Loan and Security Agreement dated as of
May 13, 2016, and as further amended, restated, supplemented, or otherwise
modified from time to time prior to December 28, 2017.

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

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

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender
or Agent arising under this Agreement or any other Loan Document; (ii)
Indebtedness existing on the Closing Date which is disclosed in Schedule 1A;
(iii) Indebtedness of up to $3,000,000, in the aggregate, outstanding at any
time secured by a lien described in clause (vii) of the defined term “Permitted
Liens”; (iv) Indebtedness to trade creditors incurred in the Ordinary Course of
Business, including Indebtedness incurred in the Ordinary Course of Business
with corporate credit cards; (v) Indebtedness that also constitutes a Permitted
Investment; (vi) Subordinated Indebtedness; (vii) other Indebtedness in a
principal amount not to exceed $1,000,000 at any time outstanding, (viii)
reimbursement obligations in connection with letters of credit in an amount not
to exceed $1,000,000 undrawn at any time, (ix) guarantees of any items of
Permitted Indebtedness in clauses (i) through (viii) above and (x) extensions,
refinancing and renewals of any items of Permitted Indebtedness, provided that
the principal amount is not increased or the terms modified to impose materially
more burdensome terms upon Borrower or its Subsidiary, as the case may be.

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“Permitted Investment” means: (i) Investments existing on the Closing Date which
are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within two years from the date of acquisition thereof,
(b) commercial paper maturing no more than two years from the date of creation
thereof and currently having a rating of at least A-2 or P-2 from either
Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of
deposit issued by any bank with assets of at least $500,000,000 maturing no more
than two years from the date of investment therein, (d) money market accounts,
and (e) Cash Equivalents; (iii) repurchases of stock from former employees,
directors, or consultants of Borrower under the terms of applicable repurchase
agreements at the original issuance price of such securities in an aggregate
amount not to exceed $250,000 in any fiscal year, provided that no Event of
Default has occurred, is continuing or would exist after giving effect to the
repurchases; (iv) Investments accepted in connection with Permitted Transfers;
(v) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the Ordinary Course of Business; (vi) Investments consisting of notes
receivable of, or prepaid royalties and other credit extensions, to customers
and suppliers who are not affiliates, in the Ordinary Course of Business,
provided that this subparagraph (vi) shall not apply to Investments of Borrower
in any Subsidiary; (vii) Investments consisting of loans not involving the net
transfer on a substantially contemporaneous basis of cash proceeds to employees,
officers or directors relating to the purchase of capital stock of Borrower
pursuant to employee stock purchase plans or other similar agreements approved
by Borrower’s Board of Directors; (viii) Investments consisting of travel
advances in the Ordinary Course of Business; (ix) Investments in newly-formed
Domestic Subsidiaries, provided that such Domestic Subsidiaries enter into a
Joinder Agreement promptly after their formation by Borrower and execute such
other documents as shall be reasonably requested by Agent; (x) Investments in
any Subsidiary which is not a Borrower which do not exceed $1,000,000 in cash in
the aggregate in any fiscal year; (xi) joint ventures or strategic alliances in
the Ordinary Course of Business; (xii) Investments consisting of in-licensing of
technology or products in the Ordinary Course of Business; (xiii) Permitted
Indebtedness that also constitute Investments; (xiv) additional Investments that
do not exceed $1,000,000 in cash in the aggregate in any fiscal year; (xv)
Investments constituting treasury management made in accordance with Borrower’s
investment policy, as approved by Borrower’s Board of Directors; (xvi)
Investments by Borrower in any other Borrower; (xvii) Investments utilizing
Borrower’s stock as consideration that do not result in a Change in Control; and
(xviii) Investments in the MSC Subsidiary in accordance with Section 7.18.

“Permitted Liens” means any and all of the following: (i) Liens in favor of
Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in
Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided, that Borrower maintains adequate reserves
therefor in accordance with GAAP; (iv) Liens securing claims or demands of
materialmen, artisans, mechanics, carriers, warehousemen, landlords and other
like Persons arising in the ordinary course of Borrower’s business and imposed
without action of such parties; provided, that the payment thereof is not yet
required; (v) Liens arising from judgments, decrees or attachments in
circumstances which do not constitute an Event of Default hereunder; (vi) the
following deposits, to the extent made in the Ordinary Course of Business:
deposits under worker’s compensation, unemployment insurance, social security
and other similar laws, or to

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secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or environmental liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds; (vii) Liens on
Equipment or software or other intellectual property constituting purchase money
liens and liens in connection with capital leases securing Indebtedness
permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in
connection with Subordinated Indebtedness; (ix) leasehold interests in leases or
subleases and licenses granted in the Ordinary Course of Business and not
interfering in any material respect with the business of the licensor; (x) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of custom duties that are promptly paid on or before the date they
become due; (xi) Liens on insurance proceeds securing the payment of financed
insurance premiums that are promptly paid on or before the date they become due
(provided that such Liens extend only to such insurance proceeds and not to any
other property or assets); (xii) statutory and common law rights of set-off and
other similar rights as to deposits of cash and securities in favor of banks,
other depository institutions and brokerage firms; (xiii) easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by
law or arising in the Ordinary Course of Business so long as they do not
materially impair the value or marketability of the related property; (xiv)
licenses that constitute Permitted Transfers; (xv) Liens on cash and cash
equivalents securing letters of credit permitted under clause (viii) of the
definition of “Permitted Indebtedness;” and (xvi) Liens incurred in connection
with the extension, renewal or refinancing of the indebtedness secured by Liens
of the type described in clauses (i) through (xi) above; provided, that any
extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness
being extended, renewed or refinanced (as may have been reduced by any payment
thereon) does not increase.

“Permitted Transfers” means :

(i)the conveyance, sale, lease, license, transfer or disposition of (i)
Inventory (whether as raw material, work in process, finished product or
otherwise) in the Ordinary Course of Business, (ii) exclusive and non-exclusive

(ii)licenses and similar arrangements for the use of propertyIntellectual
Property of Borrower or its Subsidiaries in the Ordinary Course of Business,
(iii that could not result in a legal transfer of title of the licensed property
that may be exclusive in respects other than territory or may be exclusive as to
territory but only as to discreet geographical areas outside of the United
States of America, in each case unless Agent has provided its consent to any
such transaction (such consent not to be unreasonably withheld, conditioned or
delayed),

(iii)the conveyance, sale, lease, license, transfer or disposition of worn-out,
obsolete or surplus Equipment at fair market value in the Ordinary Course of
Business, (iv)

(iv)the conveyance, sale, lease, license, transfer or disposition of other
assets having a fair market value of not more than $1,000,000 in the aggregate
in any fiscal year, (v)

(v)property between Borrower and another Borrower, (vi)

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(vi)Permitted Liens, and (vii)

(vii)Permitted Investments.

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

“Prepayment Charge” shall have the meaning assigned to such term in Section 2.4.

“Prime Rate” means the prime rate as reported in The Wall Street Journal, and if
not reported, then the prime rate most recently reported in The Wall Street
Journal.

“Qualified Subsidiary” means any direct or indirect Domestic Subsidiary.

“Receivables” means all of Borrower’s Accounts, Instruments, Documents, Chattel
Paper, Supporting Obligations, letters of credit, proceeds of any letter of
credit, and Letter of Credit Rights.

“Required Lenders” means at any time, the holders of more than fifty percent
(50%) of the aggregate unpaid principal amount of the 2020 Term Loan Advances
then outstanding.

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

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

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

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

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to Agent in its
sole discretion.

“Subsidiary” means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which Borrower owns or controls 50% or
more of the outstanding voting securities, including each entity listed on
Schedule 1D hereto; provided, however, that the definition of Subsidiary shall
not include the MSC Subsidiary with respect to the representations and
warranties provided for in Section 5 and the covenants provided for in Section 7
(other than

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Section 7.18); provided, further, that, for the avoidance of doubt, (i) the
financial statements, reports and other information to be delivered to Lender
pursuant to Section 7.1 shall include the MSC Subsidiary on a consolidated and
consolidating basis and (ii) the MSC Subsidiary shall not be required under
Section 7.14 to execute and deliver a Joinder Agreement.

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

“Term Loan Advance” shall have the meaning assigned to such term in the preamble
to this Agreement.

“Term Loan Amortization Date” means FebruaryOctober 1, 20192021; provided,
however, that (i) if the Milestone A Event occurs on or prior to September 30,
2018, at the request of Borrower, the Term Loan Amortization Date shall be
Augustmean October 1, 2019;2022 and provided further(ii) following the
effectiveness of the extension described in clause (i), that if the Milestone B
Event occurs on or prior to June 28Lender shall have advanced the 2020 Term C
Loan Advances and no Default or Event of Default shall have occurred and is
continuing, 2019,then at the request of Borrower, the Term Loan Amortization
Date shall be Februarymean April 1, 20202023.

“Term Loan Interest Rate” means for any day, a floating per annum rate equal to
the greater of (a) nine and fortysixty-five hundredths percent (9.459.65%) or
(b) the sum of (i) nine and fortysixty-five hundredths percent (9.459.65%), plus
(ii) the Prime Rate minus four and three-quarters and one-quarter percent
(4.753.25%); provided, however, that in no event shall the Term Loan Interest
Rate exceed 15.0% (provided such limit does not include any Default Rate which
may be imposed by Agent).

“Term Loan Maturity Date” means JulySeptember 1, 20212023; provided, however,
that if Lender shall have advanced the 2020 Term C Loan Advances and no Default
or Event of Default shall have occurred and is continuing, then at the request
of Borrower, the 2020 Term Loan Maturity Date shall mean September 1, 2024.

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

“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.

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

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of California; provided, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time

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to time, in effect in a jurisdiction other than the State of California, then
the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to
time, in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.

Unless otherwise specified, all references in this Agreement or any Annex or
Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”
shall refer to the corresponding Section, subsection, Exhibit, Annex, or
Schedule in or to this Agreement. Unless otherwise specifically provided herein,
any accounting term used in this Agreement or the other Loan Documents shall
have the meaning customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed in accordance with GAAP,
consistently applied. Unless otherwise defined herein or in the other Loan
Documents, terms that are used herein or in the other Loan Documents and defined
in the UCC shall have the meanings given to them in the UCC.

Section 2.  THE LOAN

2020 Term Loan Advances.

(a) Advances.

(a)Advance. Pursuant(i)Prior to the Original Loan and Security Agreement, the
Lenders party thereto extended the “2014 Term Loan Advance” and the “2016 Term
Loan Advances” (each under and as defined in the Original Loan and Security
Agreement) (the “Original Term Loans”) to Borrower in the original aggregate
principal amount of $20,000,000.  Borrower acknowledges and agrees that, as of
the Closing Date, $20,000,000 of the principal amount of the Original Term Loans
remainseffectiveness of the First Amendment and the refinancing of the Existing
Term Loan Advances as contemplated herein, Lender had extended certain term
loans to Borrower, of which the Existing Term Loan Advances remained
outstanding.  Agent, Lender and Borrower hereby agree that, from and after the
First Amendment Closing Date, such entire outstanding principal balance of the
Existing Term Loan Advances shall for all purposes hereunder be deemed to
constitute and be referred to, and hereby is converted into, the 2020 Term A
Loan AdvanceAdvances hereunder, without constituting a novation. Such conversion
of the OriginalExisting Term LoansLoan Advances into the 2020 Term A Loan
AdvanceAdvances hereunder shall be deemed an Advance on the First Amendment
Closing Date for purposes of this Agreement. The aggregate outstanding Advances
shall not exceed the Maximum Term Loan Amount. Subject to the terms and
conditions of this Agreement, and the First Amendment, in furtherance of the
foregoing, Borrower shall submit a written request in accordance with this
Agreement for, and each Lender will severally (and not jointly) make, a single
Advance on the First Amendment Closing Date in an amount not to exceed its
respective 2020 Term A Commitment, and Borrower agrees to draw, the Term Loan
Advance on the Closing Date (each a “2020 Term A Loan Advance”, and
collectively, the “2020 Term A Loan Advances”).  For the avoidance of doubt,
from and after the First Amendment Closing Date (and after

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giving effect to the transactions contemplated pursuant to this clause (i),
including the conversion of the Existing Term Loan Advances) the principal
amount of the Existing Term Loan Advances shall be deemed to be $0 and Lender’s
obligation to make any Advances under the Existing Term Commitment shall have
terminated.  Notwithstanding any other provision of this Agreement, it is
further agreed that Borrower shall not be required to pay any prepayment charge
in connection with the repayment of the Existing Term Loan Advances.

(ii)Subject to the terms and conditions of this Agreement (including Section
4.2(a)), on or prior to June 30, 2021, Borrower may submit a written request in
accordance with this Agreement for, and each Lender will severally (and not
jointly) make, a single 2020 Term B Loan Advance in an amount not to exceed its
respective 2020 Term B Commitment, (each a “2020 Term B Loan Advance”, and
collectively, the “2020 Term B Loan Advances”).

(iii)Subject to the terms and conditions of this Agreement (including Section
4.2(b)), on or after July 1, 2021 but on or prior to January 31, 2022, Borrower
may submit a written request in accordance with this Agreement for, and each
Lender will severally (and not jointly) make, a single 2020 Term C Loan Advance
in an amount not to exceed its respective 2020 Term C Commitment (each a “2020
Term C Loan Advance”, and collectively, the “2020 Term C Loan Advances”).

(iv)Subject to the terms and conditions of this Agreement (including Section
4.2(c)), on or prior to June 30, 2022, Borrower may submit a written request in
accordance with this Agreement for, and each Lender will severally (and not
jointly) make, a single 2020 Term D Loan Advance in an amount not to exceed its
respective 2020 Term D Share (each a “2020 Term D Loan Advance”, and
collectively, the “2020 Term D Loan Advances”).

(v)The 2020 Term A Loan Advances, the 2020 Term B Loan Advances, the 2020 Term C
Loan Advances, and the 2020 Term D Loan Advances are hereinafter referred to
each as a “2020 Term Loan Advance” and collectively as the “2020 Term Loan
Advances.” The aggregate outstanding principal amount of the Advances shall not
exceed the Maximum Term Loan Amount. Proceeds of any 2020 Term Loan Advance
shall be deposited into a Deposit Account that is subject to a first priority
perfected security interest in favor of Agent perfected by an Account Control
Agreement.

(b) (b)  Advance Request. To obtain the 2020 Term A Loan AdvanceAdvances,
Borrower shall complete, sign and deliver an Advance Request at least one (1)
Business Day before the First Amendment Closing Date and for any other 2020 Term
Loan Advance, Borrower shall complete, sign and deliver an Advance Request at
least five (5) Business Days before the applicable Advance Date to Agent. Lender
shall fund theeach applicable 2020 Term Loan Advance in the manner requested by
the applicable Advance Request; provided that each of the applicable conditions
precedent to thesuch 2020 Term Loan Advance is satisfied as of the
Closingrequested Advance Date.

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(c) (c) Interest. The outstanding principal balance of theeach 2020 Term Loan
Advance shall bear interest thereon from such Advance Date at the Term Loan
Interest Rate based on a year consisting of 360 days, with interest computed
daily based on the actual number of days elapsed. The Term Loan Interest Rate
will float and change on the day the Prime Rate changes from time to time.

(d) (d) Payment. Borrower will pay (I) all accrued and outstanding interest on
theowing in respect of the Existing Term Loan Advances shall be repaid on
September 1, 2020 and (II) all accrued and unpaid interest owing in respect of
each 2020 Term Loan Advance on the first (1st) Business Day of each month,
beginning the month after the applicable Advance Date thereof. Borrower shall
repay the aggregate 2020 Term Loan Advances principal balance of the Term Loan
Advance that is outstanding on the day immediately preceding the Term Loan
Amortization Date, in equal monthly installments of principal and interest
(mortgage style), beginning on the Term Loan Amortization Date and continuing on
the first (1st) Business Day of each month thereafter until the Secured
Obligations (other than inchoate indemnity obligations) are repaid.
TheNotwithstanding the foregoing, the entire 2020 Term Loan Advances principal
balance of the Term Loan Advance and all accrued but unpaid interest hereunder,
and all other Secured Obligations with respect to the Term Loan Advance, shall
be due and payable on the Term Loan Maturity Date. Borrower shall make all
payments under this Agreement without setoff, recoupment or deduction and
regardless of any counterclaim or defense. Lender will initiate debit entries to
Borrower’s account as authorized on the ACH Authorization (i) on each payment
date of all periodic obligations payable to Lender under theeach 2020 Term Loan
Advance and (ii) reasonable and invoiced out-of-pocket legal fees and costs
incurred by Agent or Lender in connection with Section 11.11 of this Agreement;
provided that, in the event that Lender or Agent informs Borrower that Lender
will not initiate a debit entry to Borrower’s account for a certain amount of
the periodic obligations due on a specific payment date, Borrower shall pay to
Lender such amount of periodic obligations in full in immediately available
funds on such payment date; provided, further, that, if Lender or Agent informs
Borrower that Lender will not initiate a debit entry as described above later
than the date that is three (3) Business Days prior to such payment date,
Borrower shall pay to Lender such amount of periodic obligations in full in
immediately available funds on the date that is three (3) Business Days after
the date on which Lender or Agent notifies Borrower of such, and such payment
shall be considered timely made and shall not constitute a default or an Event
of Default hereunder. Once repaid, a 2020 Term Loan Advance or any portion
thereof may not be reborrowed.

Maximum Interest. Notwithstanding any provision in this Agreement, the Notes, or
any other Loan Document, it is the parties' intent not to contract for, charge
or receive interest at a rate that is greater than the maximum rate permissible
by law that a court of competent jurisdiction shall deem applicable hereto
(which under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans) (the “Maximum
Rate”). If a court of competent jurisdiction shall finally determine that
Borrower has actually paid to Lender an amount of interest in excess of the
amount that would have been payable if all of the Secured Obligations had at all
times borne interest at the Maximum Rate, then such excess interest actually
paid by Borrower shall be applied as follows: first, to the

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payment of the Secured Obligations consisting of the outstanding principal;
second, after all principal is repaid, to the payment of Lender’s accrued
interest, costs, expenses, professional fees and any other Secured Obligations;
and third, after all Secured Obligations are repaid, the excess (if any) shall
be refunded to Borrower.

Default Interest. In the event any payment is not paid on the scheduled payment
date, subject to applicable grace periods, an amount equal to two percent (2%)
of the past due amount shall be payable on demand. In addition, upon the
occurrence and during the continuation of an Event of Default hereunder, all
Secured Obligations, including principal, interest, compounded interest, and
professional fees, shall bear interest at a rate per annum equal to the rate set
forth in Section 2.1(c), plus five percent (5%) per annum.  In the event any
interest is not paid when due hereunder, delinquent interest shall be added to
principal and shall bear interest on interest, compounded at the rate set forth
in Section 2.1(c) or Section 2.3, as applicable.  Notwithstanding the foregoing,
for the avoidance of doubt, nothing in this Section 2.3 shall apply to payments
timely made in accordance with Section 2.1(d).

Prepayment.  

At its option upon at least seven (7) business daysBusiness Days prior notice to
Lender, Borrower may prepay all, but not less than all, of the outstanding 2020
Term Loan Advance by paying the entire principal balance, all accrued and unpaid
interest, all unpaid Lender’s fees and expenses accrued to the date of the
prepayment (including the 2014 End of Term Charge, the 2016Original End of Term
Charge (each if then unpaid) and the 2020 End of Term Charge), together with a
prepayment charge equal to the following percentage of the principal 2020 Term
Loan Advance amount being prepaid: if such 2020 Term Loan Advance is prepaid in
any of the first twelve (12) months following the First Amendment Closing Date,
three percent (3.00%); after twelve (12) months following the First Amendment
Closing Date but on or prior to twenty-four (24) months following the First
Amendment Closing Date, two percent (2.00%); and thereafterafter twenty-four
(24) months following the First Amendment Closing Date but on or prior to the
Term Loan Maturitythirty-six (36) months following the First Amendment Closing
Date, one percent (1.00%); and at all times thereafter, zero percent (0.00%)
(each, a “Prepayment Charge”)

(b)Borrower agrees the Prepayment Charge is a reasonable calculation of Lender’s
lost profits in view of the difficulties and impracticality of determining
actual damages resulting from an early repayment of the Term Loan Advance.  Upon
the occurrence of a Change in Control, Borrower shall prepay the outstanding
amount of all principal and accrued interest through the prepayment date and all
unpaid Lender’s fees and out-of-pocket expenses under the Loan Documents accrued
to the date of the repayment (including the 2014 End of Term Charge, the 2016
End of Term Charge (each if then unpaid) and the End of Term Charge) together
with the applicable Prepayment Charge.  .

(a)Notwithstanding the foregoing, Agent and Lender agree to waive the Prepayment
Charge if Agent and Lender, or any Affiliate of Agent or Lender (in their

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sole and absolute discretion) agree in writing to refinance the Advances prior
to the Term Loan Maturity Date.

End of Term Charge.

(b)On the earliest to occur of (i) JanuaryJuly 1, 2018,2021 or (ii) the date
that Borrower prepays the outstanding Secured Obligations (other than the
OriginalExisting Term LoansLoan Advances, any inchoate indemnity obligations and
any other obligations which, by their terms, are to survive the termination of
this Agreement) in full, or (iii) the date that the Secured Obligations (other
than the Original Term Loans) become due and payable, Borrower shall pay Lender
a charge equal to Five Hundred Forty Thousand Three Hundred Sixty-Three Dollars
and Sixty Cents ($540,363.60) (the “2014 End of Term Charge”).  Notwithstanding
the required payment date of such charge, the 2014 End of Term Charge shall have
been deemed to have been earned by Lender as of the 2014 Closing Date (as
defined in the Original Loan Agreement).  On the earliest to occur of (i)
December 1, 2019, (ii) the date that Borrower prepays the outstanding Secured
Obligations (other than the Original Term Loans, any inchoate obligations and
any other obligations which, by their terms, are to survive the termination of
this Agreement) in full, or (iii) the date that the Secured Obligations (other
than the Original Term Loans) become due and payable, Borrower shall pay Lender
a charge equal to Three Hundred Thousand Dollars ($300,000.00) (the “2016 End of
Term Charge”).  Notwithstanding the required payment date of such charge, the
2016 End of Term Charge shall have been deemed to have been earned by Lender as
of the 2016 Closing Date (As defined in the Original Loan Agreement).  On the
earliest to occur of (i) the Term Loan Maturity Date, (ii) the date that
Borrower prepays the outstanding Secured Obligations (other than the Original
Term Loans, any inchoate indemnity obligations and any other obligations which,
by their terms, are to survive the termination of this Agreement) in full, or
(iii) the date that the Secured Obligations (other than the Original Term Loans)
become due and payable, Borrower shall pay Lender a charge of Seven Hundred
Ninety Thousand Dollars ($790,000.00) (the “Original End of Term
Charge”).  Notwithstanding the required payment date of such charge, the
Original End of Term Charge shall be deemed fully earned by Lender as of the
Closing Date.

(c)On the earliest to occur of (i) the Term Loan Maturity Date or (ii) the date
that Borrower prepays the outstanding Secured Obligations (other than the
Existing Term Loan Advances, any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination of this
Agreement) in full, Borrower shall pay Lender a charge equal to six and
ninety-five hundredths percent (6.95%) multiplied by the aggregate original
principal amount of all 2020 Term Loan Advances extended by Lender (the “2020
End of Term Charge” and together with the Original End of Term Charge, the “End
of Term Charge”).  Notwithstanding the required payment date of such charge, the
applicable pro rata portion of the 2020 End of Term Charge shall be deemed fully
earned by Lender as of each date a 2020 Term Loan Advance is made.

Original Loan and Security Agreement Prepayment Charges. Lender and Agent hereby
agree that the Prepayment Charge (as defined in the Original Loan and Security
Agreement) and

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the 2016 Prepayment Charge (as defined in the Original Loan and Security
Agreement) are hereby waived.

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

2.2Treatment of Prepayment Charge and End of Term Charge.  Borrower agrees that
any Prepayment Charge and any End of Term Charge payable shall be presumed to be
the liquidated damages sustained by each Lender as the result of the early
termination, and Borrower agrees that it is reasonable under the circumstances
currently existing and existing as of the Closing Date and First Amendment
Closing Date.  The Prepayment Charge and the End of Term Charge, together with
the outstanding amount of all principal and accrued interest through the
prepayment date and all unpaid Lender’s fees and out-of-pocket expenses under
the Loan Documents accrued to the date of the repayment shall also be payable in
the event of (i) a Change in Control or (ii) the Secured Obligations (and/or
this Agreement) become due and payable (whether by acceleration or otherwise) or
are satisfied or released by foreclosure (whether by power of judicial
proceeding), deed in lieu of foreclosure, or by any other means.  Borrower
expressly waives (to the fullest extent it may lawfully do so) the provisions of
any present or future statute or law that prohibits or may prohibit the
collection of the foregoing Prepayment Charge and End of Term Charge in
connection with any such acceleration.  Borrower agrees (to the fullest extent
that each may lawfully do so): (a) each of the Prepayment Charge and the End of
Term Charge is reasonable and is the product of an arm’s length transaction
between sophisticated business people, ably represented by counsel; (b) each of
the Prepayment Charge and the End of Term Charge shall be payable
notwithstanding the then prevailing market rates at the time payment is made;
(c) there has been a course of conduct between the Lenders and Borrower giving
specific consideration in this transaction for such agreement to pay the
Prepayment Charge and the End of Term Charge as a charge (and not interest) in
the event of prepayment or acceleration; (d) Borrower shall be estopped from
claiming differently than as agreed to in this paragraph.  Borrower expressly
acknowledges that their agreement to pay each of the Prepayment Charge and the
End of Term Charge to the Lenders as herein described was on the Closing Date
and First Amendment Closing Date and continues to be a material inducement to
the Lenders to provide the Term Loans.

Section 3.  SECURITY INTEREST

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

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accessions to, substitutions and replacements for, and rents, profits and
products of each of the foregoing; provided, however, that the Collateral shall
(i) include all Accounts and General Intangibles that consist of rights to
payment and proceeds from the sale, licensing or disposition of all or any part,
or rights in, the Intellectual Property (the “Rights to Payment”) and (ii) not
include (A) more than 65% of the issued and outstanding voting capital stock of
any Subsidiary that is incorporated or organized in a jurisdiction other than
the United States or any state or territory thereof or the District of Columbia;
(B) Intellectual Property (other than Rights to Payment); (C) any Equipment or
Proceeds thereof that is subject to a Lien that is otherwise permitted by clause
(vii) of the definition of “Permitted Lien” hereunder if inclusion of such
Equipment would constitute a breach by Borrower of its agreement with a
third-party equipment lessor or lender, provided, that upon the release of any
such Lien such Equipment shall be deemed to be Collateral hereunder and shall be
subject to the security interest granted herein; and (D) 100% of the issued and
outstanding capital stock of the MSC Subsidiary. Notwithstanding the foregoing,
if a judicial authority (including a U.S. Bankruptcy Court) holds that a
security interest in the underlying Intellectual Property is necessary to have a
security interest in the Rights to Payment, and the existence of such security
interest would not otherwise violate or breach any provision in any applicable
agreement or contract that is enforceable under the UCC with respect to the
applicable Intellectual Property, then the Collateral shall automatically, and
effective as of the Closing Date, include the Intellectual Property to the
extent necessary to permit perfection of Agent’s security interest in the Rights
to Payment. Lender hereby agrees to provide Borrower, at Borrower’s expense,
with any release, partial termination or other documents reasonably requested by
Borrower to reflect or confirm that the Collateral does not include any property
excluded from the definition thereof.

Section 4.  CONDITIONS PRECEDENT TO LOAN

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

Closing Date. On or prior to the Closing Date, Borrower shall have delivered to
Agent the following:

executed originals of the Loan Documents, Account Control Agreements, and all
other documents and instruments reasonably required by Agent to effectuate the
transactions contemplated hereby or to create and perfect the Liens of Agent
with respect to all Collateral, in all cases in form and substance reasonably
acceptable to Agent;

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

certified copies of the Certificate of Incorporation and the Bylaws, as amended
through the Closing Date, of Borrower;

a certificate of good standing for Borrower from its state of incorporation and
similar certificates from all other jurisdictions in which it does business and
where the failure to be qualified would have a Material Adverse Effect;

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

all certificates of insurance and copies of each insurance policy required
hereunder; and

such other documents as Agent may reasonably request.

Further Conditions.

(a)On or prior the requested Advance Date for the 2020 Term B Loan Advances,
Borrower shall have delivered to Agent evidence in form and substance reasonably
satisfactory to Agent that the Milestone A Event shall have occurred.

(b)On or prior the requested Advance Date for the 2020 Term C Loan Advances,
Borrower shall have delivered to Agent evidence in form and substance reasonably
satisfactory to Agent that the Milestone B Event shall have occurred.

(c)On or prior the requested Advance Date for the 2020 Term D Loan Advances, (i)
Agent shall have received a nonrefundable, fully earned facility charge in the
amount of Forty Two Thousand Five Hundred Dollars ($42,500.00) in good and
collected funds, (ii) Lender shall have received all necessary internal and
credit approvals for the 2020 Term D Loan Advances, (iii) Borrower shall have
delivered such financial and other information required by Agent in form and
substance reasonably satisfactory to it and (iv) Agent shall have delivered to
Borrower confirmation in writing that each Lender has agreed to provide its 2020
Term D Loan Advance; provided that for the avoidance of doubt, each Lender’s
determination of whether to provide any such 2020 Term D Loan Advance shall be
in its sole discretion.

(d)On each Advance Date:

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

(b) (ii) The representations and warranties set forth in this Agreement and in
Section 5 shall be true and correct in all material respects on and as of
thesuch Advance Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.

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

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(d) (iv) The Advance Request in respect of the applicable Advance shall be
deemed to constitute a representation and warranty by Borrower on thesuch
Advance Date as to the matters specified in paragraphs (bii) and (ciii) of this
Section 4.2(b) and as to the matters set forth in thesuch Advance Request.

For the avoidance of doubt, it is understood and agreed that the foregoing are
conditions to funding only, and failure to meet any of the foregoing
requirements will not, in and of itself, result in a Default or Event of Default
hereunder.

No Default.  As of the Closing Date and each Advance Date, no fact or condition
exists that would (or would, with the passage of time, the giving of notice, or
both) constitute an Event of Default.

Section 5.  REPRESENTATIONS AND WARRANTIES OF BORROWER

Borrower represents and warrants that:

Corporate Status. Borrower is a corporation duly organized, legally existing and
in good standing under the laws of the State of Delaware, and is duly qualified
as a foreign corporation in all jurisdictions in which the nature of its
business or location of its properties require such qualifications and where the
failure to be qualified would reasonably be expected to have a Material Adverse
Effect. Borrower’s present name, former names (if any), locations, place of
formation, tax identification number, organizational identification number and
other information are correctly set forth in Exhibit C.

Collateral. Borrower owns the Collateral and the Intellectual Property (except
for Permitted Transfers), free of all Liens, except for Permitted Liens and JV
Restrictions. Borrower has the power and authority to grant to Agent a Lien in
the Collateral as security for the Secured Obligations.

Consents. Borrower’s execution, delivery and performance this Agreement and all
other Loan Documents,

(i)have been duly authorized by all necessary corporate action of Borrower,

(ii)will not result in the creation or imposition of any Lien upon the
Collateral, other than Permitted Liens and the Liens created by this Agreement
and the other Loan Documents,

(iii)do not violate any provisions of Borrower’s Certificate of Incorporation,
bylaws, or any material law, regulation, order, injunction, judgment, decree or
writ to which Borrower is subject and (iv) do not violate any material contract
or agreement or require the consent or approval of any other Person that has not
been obtained. The individual or individuals executing the Loan Documents are
duly authorized to do so.

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Material Adverse Effect. No event that has had or could reasonably be expected
to have a Material Adverse Effect has occurred and is continuing. Borrower is
not aware of any event likely to occur that is reasonably expected to result in
a Material Adverse Effect.

Actions Before Governmental Authorities. Except as described on Schedule 5.5,
there are no actions, suits or proceedings at law or in equity or by or before
any governmental authority now pending or, to the knowledge of Borrower,
threatened in writing against or affecting Borrower or its property (i) which
involve any Loan Document or (ii) as to which there is a reasonable possibility
of an adverse determination and which, if adversely determined, would reasonably
be expected to result in a Material Adverse Effect.

Laws. Borrower is not in violation of any law, rule or regulation, or in default
with respect to any judgment, writ, injunction or decree of any governmental
authority, where such violation or default is reasonably expected to result in a
Material Adverse Effect. Borrower is not in default in any manner under any
provision of any agreement or instrument evidencing indebtedness, or any other
material agreement to which it is a party or by which it is bound and for which
such default would reasonably be expected to result in an Material Adverse
Effect.

Neither Borrower nor any of its Subsidiaries is an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act
of 1940, as amended.  Neither Borrower nor any of its Subsidiaries is engaged as
one of its important activities in extending credit for margin stock (under
Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower and
each of its Subsidiaries has complied in all material respects with the Federal
Fair Labor Standards Act.  Neither Borrower nor any of its Subsidiaries is a
“holding company” or an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company” as each term is defined and used in the Public
Utility Holding Company Act of 2005.  Neither Borrower’s nor any of its
Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary
or, to Borrower’s knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than in
material compliance with applicable laws.  Borrower and each of its Subsidiaries
has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Governmental
Authorities that are necessary to continue their respective businesses as
currently conducted, except to the extent that the failure to obtain, make or
give any of the foregoing would not reasonably be expected to cause a Material
Adverse Effect.

 

None of Borrower, any of its Subsidiaries, or, to Borrower’s knowledge, any of
Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents
acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engaging in or conspiring to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding or attempts to violate, any of
the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked
Person.  None of Borrower, any of its Subsidiaries, or, to the knowledge of
Borrower, any of their Affiliates or agents, acting or benefiting in any
capacity in connection with the transactions contemplated by this Agreement, (x)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or (y)
deals in, or otherwise engages in any transaction relating to, any property or
interest in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law.  None of

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the funds to be provided under this Agreement will be used, directly or
indirectly, (a) for any activities in violation of any applicable anti-money
laundering, economic sanctions and anti-bribery laws and regulations laws and
regulations or (b) for any payment to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

 

Information Correct and Current. No information, report, Advance Request,
financial statement, exhibit or schedule furnished, by or on behalf of Borrower
to Agent in connection with any Loan Document or included therein or delivered
pursuant thereto contained, contains or will contain any material misstatement
of fact or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were, are or will be made, not misleading in any material respect at the time
such statement was made or deemed made. Additionally, any and all financial or
business projections provided by Borrower to Agent shall be provided in good
faith based upon assumptions believed to be reasonable at the time.

Tax Matters. (a) Borrower has filed all federal, state and local tax returns
that it is required to file, (b) Borrower has duly paid or fully reserved in
accordance with GAAP for all taxes or installments thereof (including any
interest or penalties) as and when due, which have or may become due pursuant to
such returns, and (c) Borrower has paid or fully reserved in accordance with
GAAP for any tax assessment received by Borrower for the three (3) years
preceding the Closing Date, if any (including any taxes being contested in good
faith and by appropriate proceedings), in each case, other than with respect to
taxes that do not exceed $25,000 in the aggregate.

Intellectual Property Claims. Borrower is the sole owner of, or otherwise has
the right to use, the Intellectual Property. Except as described on Schedule
5.9, to the Borrower’s knowledge, (i) each of the material Copyrights,
Trademarks and Patents is valid and enforceable, (ii) no part of the
Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and (iii) no claim has been made to Borrower that any part of the
Intellectual Property violates the rights of any third party, except to the
extent that any of the foregoing would not reasonably be expected to cause a
Material Adverse Effect. Exhibit D is a true, correct and complete list of each
of Borrower’s Patents, registered Trademarks, registered Copyrights, and
material agreements under which Borrower licenses Intellectual Property from
third parties (other than shrink-wrap software licenses and other licenses which
if terminated could not reasonably be expected to result a Material Adverse
Effect), together with application or registration numbers, as applicable, owned
by Borrower or any Subsidiary, in each case as of the Closing Date and each
other date required by Section 7.15. Borrower is not in material breach of, nor
has Borrower failed to perform any material obligations under, any of the
foregoing contracts, licenses or agreements and, to Borrower’s knowledge, no
third party to any such contract, license or agreement is in material breach
thereof or has failed to perform any material obligations thereunder.

Intellectual Property. Except as described on Schedule 5.10, Borrower has, or in
the case of any proposed business, will have, all rights with respect to
Intellectual Property necessary in

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the operation or conduct of Borrower’s business as currently conducted and
proposed to be conducted by Borrower. Without limiting the generality of the
foregoing, and in the case of Licenses, except for restrictions that are
unenforceable under Division 9 of the UCC, Borrower has the right, to the extent
required to operate Borrower’s business, to freely transfer, license or assign
all material Intellectual Property without condition, restriction or payment of
any kind (other than license payments in the Ordinary Course of Business and JV
Restrictions) to any third party, and Borrower owns or has the right to use,
pursuant to valid licenses, all software development tools, library functions,
compilers and all other third-party software and other items that are material
to the Borrower’s business and used in the design, development, promotion, sale,
license, manufacture, import, export, use or distribution of Borrower Products.

Borrower Products. Except as described on Schedule 5.11, no Intellectual
Property owned by Borrower or Borrower Product has been or is subject to any
actual or, to the knowledge of Borrower, threatened litigation, proceeding
(including any proceeding in the United States Patent and Trademark Office or
any corresponding foreign office or agency) or outstanding decree, order,
judgment, settlement agreement or stipulation that restricts in any manner
Borrower’s use, transfer or licensing thereof or that may affect the validity,
use or enforceability thereof except to the extent any of the foregoing would
not reasonably be expected to cause a Material Adverse Effect. There is no
decree, order, judgment, agreement, stipulation, arbitral award or other
provision entered into in connection with any litigation or proceeding that
obligates Borrower to grant licenses or ownership interest in any future
Intellectual Property related to the operation or conduct of the business of
Borrower or Borrower Products. Borrower has not received any written notice or
claim, or, to the knowledge of Borrower, oral notice or claim, challenging or
questioning Borrower’s ownership in any Intellectual Property (or written notice
of any claim challenging or questioning the ownership in any licensed
Intellectual Property of the owner thereof) or suggesting that any third party
has any claim of legal or beneficial ownership with respect thereto nor, to
Borrower’s knowledge, is there a reasonable basis for any such claim except to
the extent any of the foregoing would not reasonably be expected to cause a
Material Adverse Effect. To the knowledge of Borrower, neither Borrower’s use of
its Intellectual Property nor the production and sale of Borrower Products
infringes the Intellectual Property or other rights of others in a manner as to
be reasonably expected to cause a Material Adverse Effect.

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

Employee Loans. Except as permitted by Section 7.8, Borrower has no outstanding
loans to any employee, officer or director of the Borrower nor has Borrower
guaranteed the payment of any loan made to an employee, officer or director of
the Borrower by a third party.

Subsidiaries. Borrower does not own any stock, partnership interest or other
equity securities of any Person, except for Permitted Investments and each
Subsidiary listed on

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Schedule 1D attached hereto. Attached as Schedule 1D, as may be updated by
Borrower in a written notice provided after the Closing Date, is a true, correct
and complete list of each Subsidiary.

Section 6.  INSURANCE; INDEMNIFICATION

Coverage.  Borrower shall cause to be carried and maintained commercial general
liability insurance, on an occurrence form, against risks customarily insured
against in Borrower’s line of business.  Such risks shall include the risks of
bodily injury, including death, property damage, personal injury, advertising
injury, and contractual liability per the terms of the indemnification agreement
found in Section 6.3.  Borrower must maintain a minimum of $2,000,000 of
commercial general liability insurance for each occurrence.  Borrower has and
agrees to maintain a minimum of $2,000,000 of directors’ and officers’ insurance
for each occurrence and $5,000,000 in the aggregate.  So long as there are any
Secured Obligations outstanding, Borrower shall also cause to be carried and
maintained insurance upon the Collateral to the extent a specific type of
Collateral is customarily insured against in Borrower’s business and industry,
insuring against all risks of physical loss or damage howsoever caused, in an
amount not less than the full replacement cost of the Collateral, provided that
such insurance may be subject to standard exceptions and deductibles.

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

Indemnity. Borrower agrees to indemnify and hold Agent, Lender and their
officers, directors, employees, agents, in-house attorneys, representatives and
shareholders (each, an “Indemnified Person”) harmless from and against any and
all claims, costs, expenses, damages and liabilities (including such claims,
costs, expenses, damages and liabilities based on liability in tort, including
strict liability in tort), including reasonable attorneys’ fees and
disbursements and other reasonable costs of investigation or defense (including
those incurred upon any appeal) (collectively, “Liabilities”), that may be
instituted or asserted against or incurred by such Indemnified Person as the
result of credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents or the administration of such credit, or
in

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connection with or arising out of the transactions contemplated hereunder and
thereunder, or any actions or failures to act in connection therewith, or
arising out of the disposition or utilization of the Collateral, excluding in
all cases Liabilities to the extent resulting solely from any Indemnified
Person’s gross negligence or willful misconduct. Borrower agrees to pay, and to
save Agent and Lender harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all excise, sales or other similar
taxes (excluding taxes imposed on or measured by the net income of Agent or
Lender) that may be payable or determined to be payable with respect to any of
the Collateral or this Agreement; provided, however, that (i) with respect to
such liabilities imposed originally and independently on Lender, Lender shall
notify Borrower of any such liabilities within one hundred and eighty (180) days
of the initial date Lender has actual knowledge, or should have had knowledge,
of its direct exposure to such liabilities, and (ii) with respect to all other
such liabilities not described in clause (i), Lender shall notify Borrower of
any such liabilities within one hundred and eighty (180) days of the initial
date Lender has actual knowledge of its direct exposure to such liabilities.  In
no event shall any Indemnified Person be liable on any theory of liability for
any special, indirect, consequential or punitive damages (including any loss of
profits, business or anticipated savings). This Section 6.3 shall survive the
repayment of indebtedness under, and otherwise shall survive the expiration or
other termination of, the Loan Agreement.

Section 7.  COVENANTS OF BORROWER

Borrower agrees as follows:

Financial Reports. Borrower shall furnish to Agent the Compliance Certificate in
the form of Exhibit F monthly within 30 days after the end of each month and the
financial statements and reports listed hereinafter (the “Financial
Statements”):

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

as soon as practicable (and in any event within 45 days) after the end of each
calendar quarter (not including the fourth quarter of each fiscal year),
unaudited interim financial statements as of the end of such calendar quarter
(prepared on a consolidated and consolidating basis, if applicable and customary
under accepted accounting practices), including balance sheet and related
statements of income and cash flows accompanied by a report detailing any
material contingencies (including the commencement of any material litigation by
or against Borrower) or any other

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occurrence that would reasonably be expected to have a Material Adverse Effect,
all certified by Borrower’s Chief Executive Officer, Chief Financial Officer or
Vice President of Finance to the effect that they have been prepared in
accordance with GAAP, except (i) for the absence of footnotes, and (ii) that
they are subject to normal year-end adjustments;

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

promptly after the sending or filing thereof, as the case may be, copies of any
proxy statements, financial statements or reports that Borrower has made
available to holders of its capital stock and copies of any regular, periodic
and special reports or registration statements that Borrower files with the
Securities and Exchange Commission or any governmental authority that may be
substituted therefor, or any national securities exchange;

within sixty (60) days of each fiscal year-end, board approved monthly income
statement and balance sheet projections for Borrower’s following fiscal year.
Any board approved changes to such projections shall be delivered to Lender
within thirty (30) days of such board approval; and

budgets, operating plans, updates on clinical trials, and other financial
information reasonably requested by Agent.

The executed Compliance Certificate may be sent via email to Agent at
legal@herculestech.com. Documents required to be delivered pursuant to this
Section 7.1 (to the extent any such documents are included in materials
otherwise filed with the Securities and Exchange Commission) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date on which Borrower posts such documents, or provides a link thereto on
Borrower’s website at the Borrower’s website address of
http://www.aveooncology.com/ (or such other website address as Borrower may
provide to Agent in writing from time to time); provided, that: (x) to the
extent Agent is otherwise unable to receive any such electronically delivered
documents, Borrower shall, upon request by Agent, deliver paper copies of such
documents to Borrower until a written request to cease delivering paper copies
is given by Borrower and (y) Borrower shall notify Agent by electronic mail of
the posting of any such documents or provide to Agent by electronic mail
electronic versions (i.e., soft copies) of such documents, in each case, to
financialstatements@herculestech.com with a copy to bjadot@herculestech.com.

Management Rights. Borrower shall permit any representative that Agent or Lender
authorizes, including its attorneys and accountants, to inspect the Collateral
and examine and

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make copies and abstracts of the books of account and records of Borrower at
reasonable times and upon reasonable notice during normal business hours (but in
any event no more than twice in any twelve (12) month period unless an Event of
Default has occurred and is continuing). In addition, any such representative
shall have the right to meet with management and officers of Borrower to discuss
such books of account and records. In addition, Agent or Lender shall be
entitled at reasonable times and intervals to consult with and advise the
management and officers of Borrower concerning significant business issues
affecting Borrower. Such consultations shall not unreasonably interfere with
Borrower’s business operations. The parties intend that the rights granted Agent
and Lender shall constitute “management rights” within the meaning of 29 C.F.R
Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or
participation by Agent or Lender with respect to any business issues shall not
be deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender
of, control over Borrower’s management or policies.

Further Assurances. Borrower shall from time to time execute, deliver and file,
alone or with Agent, any financing statements, security agreements, collateral
assignments, notices, control agreements, or other documents necessary to
perfect or give the highest priority to Agent’s Lien on the Collateral (subject
to Permitted Liens). Borrower shall from time to time procure any instruments or
documents as may be reasonably requested by Agent, and take all further action
that may be necessary or that Agent may reasonably request, to perfect and
protect the Liens granted hereby and thereby. In addition, and for such purposes
only, Borrower hereby authorizes Agent to execute and deliver on behalf of
Borrower and to file such financing statements, collateral assignments, notices,
control agreements, security agreements and other documents without the
signature of Borrower either in Agent’s name or in the name of Agent as agent
and attorney-in-fact for Borrower. Borrower shall, in its reasonable business
judgment, protect and defend Borrower’s title to the Collateral and Agent’s Lien
thereon against all Persons claiming any interest adverse to Borrower or Agent
other than Permitted Liens.

Compromise of Agreements. Without Lender’s prior written consent, Borrower shall
not, nor shall it allow any of its Subsidiaries to, (a) grant any material
extension of the time of payment of any of the Account receivable or General
Intangibles other than extensions in the Ordinary Course of Business which are
consistent with past practices, (b) to any material extent, compromise, compound
or settle the same for less than the full amount thereof other than in the
Ordinary Course of Business and consistent with past practices, (c) release,
wholly or partly, any Person liable for the payment thereof other than in the
Ordinary Course of Business and consistent with past practices, or (d) allow any
credit or discount whatsoever thereon other than trade discounts granted by
Borrower or such Subsidiary in the exercise of the Borrower’s or such
Subsidiary’s reasonable business judgment.

Indebtedness. Borrower shall not create, incur, assume, guarantee or be or
remain liable with respect to any Indebtedness, or permit any Subsidiary so to
do, other than Permitted Indebtedness, or prepay any Indebtedness or take any
actions which impose on Borrower an obligation to prepay any Indebtedness,
except Indebtedness to Lender in accordance herewith or for the conversion of
Indebtedness into equity securities and the payment of cash in lieu of
fractional shares in connection with such conversion.

Collateral. Borrower shall at all times keep the Collateral, all Intellectual
Property and all other property and assets used in Borrower’s business or in
which Borrower now or hereafter

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holds any interest free and clear from any legal process or Liens whatsoever
(except for Permitted Liens), and shall give Agent prompt written notice of any
legal process affecting the Collateral, such Intellectual Property, such other
property and assets, or any Liens thereon. Borrower shall cause its Subsidiaries
to protect and defend such Subsidiary’s title to its assets from and against all
Persons claiming any interest adverse to such Subsidiary, and Borrower shall
cause its Subsidiaries at all times to keep such Subsidiary’s property and
assets free and clear from any legal process or Liens whatsoever (except for
Permitted Liens), and shall give Agent prompt written notice of any legal
process affecting such Subsidiary’s assets. Borrower shall not permit the
inclusion in any contract to which it or a Subsidiary becomes a party of any
provisions that restrict or invalidate the granting of a security interest in
any of Borrower’s or such Subsidiary’s property and assets other than with
respect to contractual restrictions on Intellectual Property entered into with
third-party strategic collaborators that are not financial institutions in the
Ordinary Course of Business (“JV Restrictions”).

Investments. Borrower shall not directly or indirectly acquire or own, or make
any Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

Distributions. Without the prior written consent of the Lender, Borrower shall
not, and shall not allow any Subsidiary to, (a) repurchase or redeem any class
of stock or other equity interest other than pursuant to employee, director or
consultant repurchase plans or other similar agreements, provided, however, in
each case the repurchase or redemption price does not exceed the original
consideration paid for such stock or equity interest by more than $250,000 in
the aggregate in any fiscal year, or (b) declare or pay any cash dividend or
make a cash distribution on any class of stock or other equity interest, except
that a Subsidiary may pay dividends or make distributions to Borrower (or to any
other Subsidiary of Borrower), or (c) lend money to any employees, officers or
directors or guarantee the payment of any such loans granted by a third party in
excess of $250,000 in the aggregate in any fiscal year or (d) waive, release or
forgive any indebtedness owed by any employees, officers or directors in excess
of $100,000 in the aggregate in any fiscal year.

Transfers. Except for Permitted Transfers, Borrower shall not voluntarily or
involuntarily transfer, sell, lease, license, lend or in any other manner convey
any equitable, beneficial or legal interest in any material portion of its
assets.

Mergers or Acquisitions. Without Lender’s prior written consent, not to be
unreasonably withheld, Borrower shall not merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with or into any other business
organization (other than mergers or consolidations of (a) a Subsidiary which is
not a Borrower into another Subsidiary or into Borrower or (b) a Borrower into
another Borrower), or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person;
provided, that Borrower may make (i) acquisitions utilizing cash as
consideration that constitute Permitted Investments and (ii) acquisitions
utilizing Borrower’s stock as consideration that do not result in a Change in
Control.

Taxes. Borrower and its Subsidiaries shall pay when due all material taxes, fees
or other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Agent, Lender
or the Collateral or upon

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Borrower’s ownership, possession, use, operation or disposition thereof or upon
Borrower’s rents, receipts or earnings arising therefrom. Borrower shall file on
or before the due date therefor all material personal property tax returns in
respect of the Collateral. Notwithstanding the foregoing in this Section 7.11,
Borrower may contest, in good faith and by appropriate proceedings, taxes for
which Borrower maintains adequate reserves therefor in accordance with GAAP.

Corporate Changes. Neither Borrower nor any Subsidiary shall change its
corporate name, legal form or jurisdiction of formation without twenty (20)
days' prior written notice to Agent.  Borrower shall not suffer a Change in
Control.  Neither Borrower nor any Domestic Subsidiary shall relocate its chief
executive office or its principal place of business unless: (i) it has provided
prior written notice to Agent; and (ii) such relocation shall be within the
continental United States. Neither Borrower nor any Subsidiary shall relocate
any item of Collateral (other than (v) relocations of clinical trial supplies in
the Ordinary Course Business, (w) Permitted Transfers, (x) sales of Inventory
(whether as raw material, work in process, finished product or otherwise) in the
Ordinary Course of Business, (y) relocations of Equipment having an aggregate
value of up to $500,000 in any fiscal year, and (z) relocations of Collateral
from a location described on Exhibit C to another location described on Exhibit
C) unless (i) it has provided prompt written notice to Agent, (ii) such
relocation is within the continental United States and, (iii) if such relocation
is to a third-party bailee, it has used commercially reasonable efforts to
obtain a bailee agreement in form and substance reasonably acceptable to Agent,
provided, that it shall deliver such a bailee agreement for any such relocation
of assets in excess of $1,000,000.

Deposit Accounts. Neither Borrower nor any Qualified Subsidiary shall maintain
any Deposit Accounts, or accounts holding Investment Property, except (i) with
respect to which Agent has an Account Control Agreement, and (ii) a deposit
account maintained in the United Kingdom for funding payroll obligations with a
balance not to exceed $2,000,000 at any time).

Subsidiaries. Borrower shall notify Agent of each Subsidiary formed subsequent
to the Closing Date and, within 15 days of formation, shall cause any such
Qualified Subsidiary to execute and deliver to Agent a Joinder Agreement.

Notification of Event of Default.  Borrower shall notify Agent promptly (and in
any event within two (2) Business Days) of the occurrence of any Event of
Default.

Intellectual Property. Borrower shall update the Intellectual Property
information listed on Exhibit D within 30 days of each quarter end.

Use of Proceeds.  Borrower agrees that the proceeds of the Loans shall be used
for (a) the refinancing of the Existing Term Loan Advances in full, (b) the
payment of fees, costs and expenses incurred in connection with such refinancing
and (c) working capital and general corporate purposes.  The proceeds of the
2020 Term Loan Advance will not be used in violation of Anti-Corruption Laws or
applicable Sanctions.

MSC Subsidiary.  Borrower shall be permitted to make Investments in the MSC
Subsidiary so long as Borrower (i) maintains Liquidity of at least $40,000,000
minus the aggregate amount of principal payments paid by Borrower to Lender
through such date of

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determination (such resulting amount being referred to as the “Threshold Amount”
or (ii) if Borrower’s Liquidity is less than the Threshold Amount on any date (a
“Deficiency Date”), Borrower shall (a) promptly (and in any event within two (2)
Business Days), upon knowledge thereof, notify Lender of such deficiency in
writing and (b) procure Cash and/or Cash Equivalents maintained in Deposit
Accounts and/or accounts holding Investment Property that are subject to an
Account Control Agreement in an amount such that after procuring such amounts
the Borrower shall have Liquidity of at least the lesser of (1) Threshold Amount
or (2) the amount of Cash and/or Cash Equivalents and accounts holding
Investment Property of the Borrower and its Subsidiaries as determined on a
consolidated basis; provided that such procurement(s) shall occur as soon as
commercially practicable but in any event within five (5) business days of
Borrower’s knowledge of such Deficiency Date; provided, further, that Borrower
shall not make any Investments in the MSC Subsidiary following a Deficiency Date
without the prior written consent of Lender unless clause (b)(1) above has been
satisfied or the condition set forth in the next sentence has been
satisfied.  If at any time, the application for classification of the MSC
Subsidiary as a “security corporation” under Massachusetts General Laws Ch. 63,
Section 38B(a), as amended, supplemented and/or modified, is denied or such
classification is revoked (and such determination is not subject to appeal and
all appeal periods have run), Borrower shall take such actions, as soon as
commercially practicable, to dissolve the MSC Subsidiary or merge the MSC
Subsidiary with or into Borrower.

Compliance with Laws.

Borrower shall maintain, and shall cause its Subsidiaries to maintain,
compliance in all respects with all applicable laws, rules or regulations
(including any law, rule or regulation with respect to the making or brokering
of loans or financial accommodations), and shall, or cause its Subsidiaries to,
obtain and maintain all required governmental authorizations, approvals,
licenses, franchises, permits or registrations reasonably necessary in
connection with the conduct of Borrower’s business, except to the extent that
any of the foregoing would not reasonably be expected to cause a Material
Adverse Effect.

 

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

 

Borrower has implemented and maintains in effect policies and procedures
designed to ensure material compliance by the Borrower, its Subsidiaries and
their respective directors, officers, employees and agents with Anti-Corruption
Laws and applicable Sanctions, and Borrower, its Subsidiaries and their
respective officers and employees and, to the knowledge of

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Borrower, its directors are in compliance with Anti-Corruption Laws and
applicable Sanctions in all material respects.

 

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

 

Transactions with Affiliates.  Borrower shall not and shall not permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction of any kind with any Affiliate of Borrower or such Subsidiary on
terms that are less favorable to Borrower or such Subsidiary, as the case may
be, than those that might be obtained in an arm’s length transaction from a
Person who is not an Affiliate of Borrower or such Subsidiary; provided,
however, that the foregoing shall not apply to any transactions expressly
permitted by this Agreement.  

7.1Minimum Cash.  (a) Until such date that the 2020 Term C Loan Advances are
advanced by Lender to Borrower, Borrower shall maintain at all times
unrestricted Cash in Deposit Accounts that are subject to an Account Control
Agreement in an amount not less than the sum of (i) Ten Million Dollars
($10,000,000) plus (ii) the amount of Borrower’s accounts payable under GAAP not
paid after the 120th day following the invoice date for such account payable and
(b) thereafter, Borrower shall maintain at all times unrestricted Cash in
Deposit Accounts that are subject to an Account Control Agreement in an amount
not less than the sum of (i) Five Million Dollars ($5,000,000) plus (ii) the
amount of Borrower’s accounts payable under GAAP not paid after the 120th day
following the invoice date for such account payable.

7.2Net Product Revenue.  As of the last day of each month (commencing with the
month in which the 2020 Term C Loan Advances are advanced by Lender to
Borrower), Borrower shall not permit Net Product Revenue for the trailing
six-month period ended on such date to be an amount less than 75% of projected
Net Product Revenue for such period set forth in the Forecast. For the avoidance
of doubt, the foregoing covenant will not apply at any time the 2020 Term C Loan
Advance has not been made or such advance has been paid in full in cash.  

 

Section 8.  INTENTIONALLY DELETED.

Section 9.  EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an Event of
Default:

Payments. Borrower fails to pay any amount when due under this Agreement, the
Notes or any of the other Loan Documents and such default continues for more
than three business days after the due date thereof; or

Covenants. Borrower breaches or defaults in the performance of any covenant or
Secured Obligation under this Agreement or any of the other Loan Documents, and
(a) with respect to a default under any covenant under this Agreement (other
than under Sections 6, 7.5, 7.6, 7.7, 7.8,

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7.9, 7.10, 7.13, 7.15, 7.17, 7.18, or 7.19, 7.21 or 7.22) such default continues
for more than ten (10) business days after the earlier of the date on which (i)
Agent or Lender have given notice of such default to Borrower and (ii) Borrower
has actual knowledge of such default or (b) with respect to a default under any
of Sections 6, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10, 7.13, 7.15, 7.17, 7.18, or 7.19,
7.21 or 7.22, the occurrence of such default; or

Material Adverse Effect. A circumstance has occurred that would have a Material
Adverse Effect; or

Other Loan Documents. The occurrence of any default under any Loan Document not
otherwise specifically referenced in this Section 9 or any other agreement
between Borrower and Lender and such default continues for more than ten
business (10) days after the earlier of (a) Lender has given written notice of
such default to Borrower, or (b) Borrower has actual knowledge of such default;
or

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

Insolvency. Borrower (A) (i) shall make an assignment for the benefit of
creditors; or (ii) shall be unable to pay its debts as they become due, or be
unable to pay or perform under the Loan Documents; or (iii) shall file a
voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or
document seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation pertinent to such circumstances; or (v) shall
seek or consent to or acquiesce in the appointment of any trustee, receiver, or
liquidator of Borrower or of all or any substantial part (i.e., 33-1/3% or more)
of the assets or property of Borrower; or (vi) shall cease operations of its
business as its business has normally been conducted for a period of more than
five consecutive business days, or terminate substantially all of its employees;
or (vii) becomes insolvent; or (viii) Borrower or its directors or majority
shareholders shall take any action initiating any of the foregoing actions
described in clauses (i) through (vii); or (B) either (i) sixty (60) days shall
have expired after the commencement of an involuntary action against Borrower
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, without such action being dismissed or all orders or proceedings
thereunder affecting the operations or the business of Borrower being stayed; or
(ii) a stay of any such order or proceedings shall thereafter be set aside and
the action setting it aside shall not be timely appealed; or (iii) Borrower
shall file any answer admitting or not contesting the material allegations of a
petition filed against Borrower in any such proceedings; or (iv) the court in
which such proceedings are pending shall enter a decree or order granting the
relief sought in any such proceedings; or (v) sixty (60) days shall have expired
after the appointment, without the consent or acquiescence of Borrower, of any
trustee, receiver or liquidator of Borrower or of all or any substantial part of
the properties of Borrower without such appointment being vacated; or

Attachments; Judgments. Any material portion of Borrower’s assets is attached or
seized, or a levy is filed against any such assets, or a judgment or judgments
for the payment of money, individually or in the aggregate, of at least $500,000
shall be rendered against Borrower and shall remain unsatisfied, unvacated, or
unstayed for a period of twenty (20) days after the entry

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thereof (provided that no Advance will be made prior to the satisfaction,
vacation, or stay of such judgment, order, or decree), or Borrower is enjoined
or in any way prevented by court order from conducting any material part of its
business; or

Other Obligations. The occurrence of any default under (a) any agreement or
obligation of Borrower involving any Indebtedness in excess of $500,000, or (b)
the occurrence of any default under any agreement or obligation of Borrower that
could reasonably be expected to have a Material Adverse Effect.

Section 10.  REMEDIES

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

Collection; Foreclosure. Upon the occurrence and during the continuance of any
Event of Default, Agent may, and at the direction of the Required Lenders shall,
at any time or from time to time, apply, collect, liquidate, sell in one or more
sales, lease or otherwise dispose of, any or all of the Collateral, in its then
condition or following any commercially reasonable preparation or processing, in
such order as Agent may elect.  Any such sale may be made either at public or
private sale at its place of business or elsewhere.  Borrower agrees that any
such public or private sale may occur upon ten (10) calendar days’ prior written
notice to Borrower.  Agent may require Borrower to assemble the Collateral and
make it available to Agent at a place designated by Agent that is reasonably
convenient to Agent and Borrower.  The proceeds of any sale, disposition or
other realization upon all or any part of the Collateral shall be applied by
Agent in the following order of priorities:

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

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

Finally, after the full and final payment in Cash of all of the Secured
Obligations, to any creditor holding a junior Lien on the Collateral, or to
Borrower or its representatives or as a court of competent jurisdiction may
direct.

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

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

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

Section 11.  MISCELLANEOUS

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

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

If to Agent:

HERCULES CAPITAL, INC.
Legal Department
Attention:  Chief Legal Officer and Mr. Bryan Jadot
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
email: legal@herculestech.com
Telephone:  650-289-3060

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If to Lender:

HERCULES CAPITAL, INC.

HERCULES CAPITAL FUNDING III, LLCTRUST 2018-1

HERCULES CAPITAL FUNDING TRUST 2019-1
Legal Department
Attention:  Chief Legal Officer and Mr. Bryan Jadot
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
email: legal@herculestech.com
Telephone:  650-289-3060

If to Borrower:

AVEO PHARMACEUTICALS, INC.
Attention: Chief Financial Officer
One Broadway, 14th Floor

Cambridge, MA 02142
Facsimile: 617-649-2394
Telephone: 617-588-1960

With copies (which shall not constitute notice) to:

AVEO PHARMACEUTICALS, INC.
Attention: Vice President, Legal Affairs
One Broadway, 14th Floor

Cambridge,30 Winter Street

Boston, MA 0214202108
Facsimile: 617-649-2394
Telephone: 617-588-1960

 

WILMER CUTLER PICKERING HALE AND DORR LLP

Attention: John DGeorge W. SigelShuster Jr., Esq.
60 State Street

Boston, MA 02109

Facsimile: 617-526-5000

Telephone: 617-526-6728617-526-6572

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

Entire Agreement; Amendments.

This Agreement and the other Loan Documents constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and
thereof, and supersede and replace in their entirety any prior proposals, term
sheets, letters, negotiations or other documents or agreements, whether written
or oral, with respect to the subject matter hereof or thereof (including Agent’s
revised proposal letter dated December 6, 2017). None of the terms of this
Agreement or any of the other Loan Documents may be amended except by an
instrument executed by each of the parties hereto.

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None of this Agreement, any other Loan Document, or any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.3(b).  The Required Lenders and Borrower party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Agent and the Borrower party to the relevant Loan Document may,
from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the LendersLender or of the Borrower hereunder or
thereunder or (ii) waive, on such terms and conditions as the Required Lenders
or the Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (A) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of any amortization payment in respect of the 2020
Term Loan AdvanceAdvances, reduce the stated rate of any interest or fee payable
hereunder) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender’s respective portion of the
applicable 2020 Term CommitmentCommitments, in each case without the written
consent of each Lender directly affected thereby; (B) eliminate or reduce the
voting rights of any Lender under this Section 11.3(b) without the written
consent of such Lender; (C) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release a Borrower from
its obligations under the Loan Documents (except with respect to a transfer or
transaction expressly permitted under this Agreement), in each case without the
written consent of all Lenders; or (D) amend, modify or waive any provision of
Section 11.19 without the written consent of the Agent.  Any such waiver and any
such amendment, supplement or modification shall apply equally to each Lender
and shall be binding upon Borrower, the Lender, the Agent and all future holders
of the Loans.

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

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

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

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and the expiration or other termination of this Agreement. Section 6.3, 11.13,
11.14 and 11.19 shall survive the termination of this Agreement.

Successors and Assigns. The provisions of this Agreement and the other Loan
Documents shall inure to the benefit of and be binding on Borrower and its
permitted assigns (if any). Borrower shall not assign its obligations under this
Agreement or any of the other Loan Documents without Agent’s express prior
written consent, and any such attempted assignment shall be void and of no
effect. Except as set forth in Section 11.13, Agent and Lender may assign,
transfer, or endorse their rights hereunder and under the other Loan Documents
without prior notice to Borrower, and all of such rights shall inure to the
benefit of Agent’s and Lender’s successors and assigns.

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

Consent to Jurisdiction and Venue. All judicial proceedings (to the extent that
the reference requirement of Section 11.10 is not applicable) arising in or
under or related to this Agreement or any of the other Loan Documents may be
brought in any state or federal court located in the State of California. By
execution and delivery of this Agreement, each party hereto generally and
unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa
Clara County, State of California; (b) waives any objection as to jurisdiction
or venue in Santa Clara County, State of California; (c) agrees not to assert
any defense based on lack of jurisdiction or venue in the aforesaid courts; and
(d) irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement or the other Loan Documents. Service of process
on any party hereto in any action arising out of or relating to this Agreement
shall be effective if given in accordance with the requirements for notice set
forth in Section 11.2, and shall be deemed effective and received as set forth
in Section 11.2. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of either party to bring
proceedings in the courts of any other jurisdiction.

Mutual Waiver of Jury Trial / Judicial Reference.

Because disputes arising in connection with complex financial transactions are
most quickly and economically resolved by an experienced and expert Person and
the parties wish applicable state and federal laws to apply (rather than
arbitration rules), the parties desire that their disputes be resolved by a
judge applying such applicable laws. EACH OF BORROWER, AGENT AND LENDER
SPECIFICALLY WAIVE ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF
ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD-PARTY CLAIM OR ANY OTHER CLAIM
(COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDER OR THEIR
ASSIGNEES OR BY AGENT, LENDER OR ITS ASSIGNEE AGAINST BORROWER. This waiver
extends to all such Claims,

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including Claims that involve Persons other than Agent, Borrower and Lender;
Claims that arise out of or are in any way connected to the relationship among
Borrower, Agent and Lender; and any Claims for damages, breach of contract;
tort, specific performance, or any equitable or legal relief of any kind,
arising out of this Agreement, any other Loan Document.

If the waiver of jury trial set forth in Section 11.10(a) is ineffective or
unenforceable, the parties agree that all Claims shall be resolved by reference
to a private judge sitting without a jury, pursuant to Code of Civil Procedure
Section 638, before a mutually acceptable referee or, if the parties cannot
agree, a referee selected by the Presiding Judge of the Santa Clara County,
California. Such proceeding shall be conducted in Santa Clara County,
California, with California rules of evidence and discovery applicable to such
proceeding.

In the event Claims are to be resolved by judicial reference, either party may
seek from a court identified in Section 11.9, any prejudgment order, writ or
other  relief and have such prejudgment order, writ or other relief enforced to
the fullest extent permitted by law notwithstanding that all Claims are
otherwise subject to resolution by judicial reference.

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

Confidentiality. Agent and Lender acknowledge that certain items of Collateral
and information provided to Agent and Lender by Borrower (including, without
limitation, under Sections 7.1 and 7.2 of this Agreement) are confidential and
proprietary information of Borrower (the “Confidential Information”) and agrees
to exercise the same degree of care that Lender exercises with respect to its
own proprietary information of the same types to maintain the confidentially of
any such Confidential Information received in connection with this Agreement.
Lender agrees that any Confidential Information it may obtain shall not be
disclosed to any other person or entity in any manner whatsoever, in whole or in
part, without the prior written consent of Borrower, except that Agent and
Lender may disclose any such information: (a) to its own directors, officers,
employees, accountants, counsel and other professional advisors and to its
affiliates if Agent or Lender in its sole discretion determines that any such
party should have

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access to such information in connection with such party’s responsibilities in
connection with the Loan or this Agreement and, provided that such recipient of
such Confidential Information either (i) agrees to be bound by the
confidentiality provisions of this paragraph or (ii) is otherwise subject to
confidentiality restrictions that reasonably protect against the disclosure of
Confidential Information; (b) if such information is generally available to the
public; (c) if required in any report, statement or testimony submitted to any
governmental authority having jurisdiction over Agent or Lender; (d) if required
in response to any summons or subpoena or in connection with any litigation, to
the extent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to
comply with any legal requirement or law applicable to Agent or Lender; (f) to
the extent reasonably necessary in connection with the exercise of any right or
remedy under any Loan Document, including Agent ’s sale, lease, or other
disposition of Collateral after default; (g) to any participant or Assignee of
Agent or Lender or any prospective participant or Assignee; provided, that such
participant or Assignee or prospective participant or Assignee agrees in writing
to be bound by this Section prior to disclosure; or (h) otherwise with the prior
consent of Borrower; provided, that any disclosure made in violation of this
Agreement shall not affect the obligations of Borrower or any of its affiliates
or any guarantor under this Agreement or the other Loan Documents. Lender hereby
acknowledges that Borrower is a publicly traded company and the trading in
securities of Borrower is subject to applicable securities legislation. Lender
hereby further acknowledges that as a result of the disclosure that may be made
to it of any Confidential Information, it may possess material, non-public
information of Borrower. Accordingly, Lender hereby acknowledges that any
trading by its employees, officers, agents or representatives in the securities
of Borrower may entail the violation by Lender, its employees, officers, agents
or representatives of applicable securities and other legislation and
regulations.

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

Revival of Secured Obligations. This Agreement and the Loan Documents shall
remain in full force and effect and continue to be effective if any petition is
filed by or against Borrower for liquidation or reorganization, if Borrower
becomes insolvent or makes an assignment for the benefit of creditors, if a
receiver or trustee is appointed for all or any significant part of Borrower’s
assets, or if any payment or transfer of Collateral is recovered from Agent or
Lender. The Loan Documents and the Secured Obligations and Collateral security
shall continue to be effective, or shall be revived or reinstated, as the case
may be, if at any time payment and performance of the Secured Obligations or any
transfer of Collateral to Agent, or any part thereof is rescinded, avoided or
avoidable, reduced in amount, or must otherwise be restored or returned

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by, or is recovered from, Agent, Lender or by any obligee of the Secured
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment, performance, or transfer of Collateral
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the
Loan Documents and the Secured Obligations shall be deemed, without any further
action or documentation, to have been revived and reinstated except to the
extent of the full, final, and indefeasible payment to Agent or Lender in Cash.

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

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

Specific Performance. The parties hereto hereby declare that it is impossible to
measure in money the damages which will accrue to Lender by reason of Borrower’s
failure to perform any of the obligations under this Agreement and agree that
the terms of this Agreement shall be specifically enforceable by Lender. If
Lender institutes any action or proceeding to specifically enforce the
provisions hereof, any Person against whom such action or proceeding is brought
hereby waives the claim or defense therein that Lender has an adequate remedy at
law, and such Person shall not offer in any such action or proceeding the claim
or defense that such remedy at law exists.

Termination of Right to Invest / Right to Convert.  Notwithstanding anything to
the contrary in this Agreement, the parties hereto hereby affirm and acknowledge
that any participation rights, rights of first refusal, rights to invest,
conversion rights, notice rights, and similar rights contained in the Original
Loan and Security Agreement but omitted from this Agreement have permanently and
irrevocably expired, are terminated, and are of no further force and
effect.  Without limiting the generality of the foregoing, the parties hereto
affirm and acknowledge the termination of the participation rights, rights of
first refusal, rights to invest, and conversion rights contained in Section 8.1
of the Original Loan and Security Agreement and of the notice provisions
contained in Section 8.2 of the Original Loan and Security Agreement
(collectively, the “Former Rights”).  Further, each party hereto permanently and
irrevocably waives, and is retroactively deemed to have waived, (i) any
obligation or requirement of the other parties hereto or thereto to perform
under, or failure to perform any of such parties’ obligations under, the Former
Rights; (ii) any breach of any covenant in connection with the Former Rights;
and (iii) any rights, causes of action, or remedies arising from or accruing to
such waiving party as a result of the such obligations, requirements, breaches
or other deficiencies described in clauses (i) and (ii) of this Section 11.18.

Agency.

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

Lender  agrees to indemnify the Agent in its capacity as such (to the extent not
reimbursed by Borrower and without limiting the obligation of Borrower to do
so), according to its respective 2020 Term Commitment percentage (based upon the
total outstanding 2020 Term Loan AdvanceAdvances) in effect on the date on which
indemnification is sought under this Section 11.19, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

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

Exculpatory Provisions.  The Agent shall have no duties or obligations to any
Lender except those expressly set forth herein and in the other Loan
Documents.  Without limiting the generality of the foregoing, the Agent shall
not:

 

(i)

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

 

(ii)

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

 

(iii)

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

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

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

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

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

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provides prior notice to the other party hereto to the extent reasonably
practicable) and (ii) to comply with Section 11.12.

11.21 Amendment and Restatement. This Agreement amends and restates in its
entirety the Original Loan and Security Agreement effective as of the date
hereof.  Anything contained herein to the contrary notwithstanding, this
Agreement is not intended to and shall not serve to effect a novation of the
“Secured Obligations” (as defined in the Original Loan and Security
Agreement).  Instead, it is the express intention of the parties hereto to
reaffirm the indebtedness, obligations and liabilities created under the
Original Loan and Security Agreement which is secured by the Collateral pursuant
to the terms of the applicable Loan Documents, except as modified hereby.  Each
Borrower acknowledges and confirms that the liens and security interests granted
pursuant to the applicable Loan Documents secure the applicable indebtedness,
liabilities and obligations of Borrower to the Lenders under the Original Loan
and Security Agreement, as amended and restated by this Agreement, the Loan
Documents shall continue in full force and effect in accordance with their terms
unless otherwise amended by the parties thereto, and that the term “Secured
Obligations” as used in the Loan Documents (or any other term used therein to
describe or refer to the indebtedness, liabilities and obligations of Borrower
to Agent and the Lenders) includes, without limitation, the indebtedness,
liabilities and obligations of Borrower under this Agreement, and under the
Original Loan and Security Agreement, as amended and restated hereby, as the
same further may be amended, modified, supplemented and/or restated from time to
time.  The Loan Documents and all agreements, instruments and documents executed
or delivered in connection with any of the foregoing shall each be deemed to be
amended to the extent necessary to give effect to the provisions of this
Agreement.  Each reference to the “Loan and Security Agreement” in any Loan
Document shall mean and be a reference to this Agreement (as further amended,
restated, supplemented or otherwise modified from time to time).

(SIGNATURES TO FOLLOW)

 

 

 

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

BORROWER:

AVEO PHARMACEUTICALS, INC.

Signature:________________________
Name:Matthew DallasErick Lucera
Title:Chief Financial Officer

Accepted in Palo Alto, California:

AGENT:

HERCULES CAPITAL, INC.

Signature:_______________________

Print Name:_______________________Jennifer Choe

Title:_______________________Associate General Counsel

LENDER:

HERCULES FUNDING IIICAPITAL, LLCINC.

Signature:_______________________

Print Name:_______________________Jennifer Choe

Title:_______________________Associate General Counsel

 

[EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED. ON FILE WITH AGENT.]

 

 

 

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Exhibit B

Amended and Restated Form of Advance Request

(see attached)

 

 

 

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

 

ADVANCE REQUEST

To: Agent:Date:__________, 20[__]

Hercules Capital, Inc. (“Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
email: legal@herculestech.com
Attn:

AVEO Pharmaceuticals, Inc. (“Borrower”) hereby requests from Hercules Capital,
Inc., Hercules Capital Funding Trust 2018-1, and Hercules Capital Funding Trust
2019-1 (collectively, referred to as “Lender”) a 2020 Term [A][B][C][D] Loan
Advance in the amount of _____________________ Dollars ($________________) on
______________, _____ (the “Advance Date”) pursuant to the Amended and Restated
Loan and Security Agreement among Borrower, Agent and Lender (as amended by that
certain First Amendment to Amended and Restated Loan and Security Agreement
dated as of August 7, 2020 and as may be further amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”). Capitalized words and
other terms used but not otherwise defined herein are used with the same
meanings as defined in the Agreement.

 

Please wire funds to Borrower’s account________

Bank:                        _____________________________
Address:                    _____________________________
                                  _____________________________
ABA Number:          _____________________________
Account Number:     _____________________________
Account Name:        _____________________________

Contact Person:        _____________________________
Phone Number        

To Verify Wire Info: _____________________________

Email address:           _____________________________

 

Borrower represents that the conditions precedent to the 2020 Term [A][B][C][D]
Loan Advance set forth in the Agreement are satisfied and shall be satisfied
upon the making of such 2020 Term [A][B][C][D] Loan Advance, including but not
limited to:  (i) that no event that has had or could reasonably be expected to
have a Material Adverse Effect has occurred and is continuing; (ii) that the
representations and warranties set forth in the Agreement are and shall be true
and correct in all material respects on and as of the Advance Date with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date; (iii) that
Borrower is in compliance in all material respects with all the terms and
provisions set forth in each Loan Document on its part to be observed or
performed; and (iv) that as of the Advance Date, no Default or Event of Default
shall have occurred and be continuing.  Borrower understands and acknowledges
that Agent has the right to review the financial information supporting this
representation and, based upon such review in its sole discretion, Lender may
decline to fund the requested 2020 Term [A][B][C][D] Loan Advance.

 

 

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

 

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

Borrower agrees to notify Agent promptly before the funding of the 2020 Term
[A][B][C][D] Loan Advance if any of the matters which have been represented
above shall not be true and correct on the Borrowing Date and if Agent has
received no such notice before the Advance Date then the statements set forth
above shall be deemed to have been made and shall be deemed to be true and
correct as of the Advance Date.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

3

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[SIGNATURE PAGE TO ADVANCE REQUEST]

 

Executed as of _________, 20[ ].

BORROWER:

AVEO PHARMACEUTICALS, INC.

SIGNATURE:________________________
TITLE:Chief Financial Officer
PRINT NAME: Erick Lucera

 

 

 

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ATTACHMENT TO ADVANCE REQUEST

Dated: _______________________

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

 

Name:

AVEO Pharmaceuticals, Inc.

 

 

Type of organization:

Corporation

 

 

State of organization:

Delaware                    

                  

 

Organization file number:

3444819

 

 

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

 

AVEO PHARMACEUTICALS, INC.

30 Winter Street
Boston,  MA 02108

2

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Exhibit C

Amended and Restated Form of Secured Term Promissory Note

(see attached)

 

 

 

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

 

SECURED TERM PROMISSORY NOTE

$[  ],000,000

Advance Date:  ___ __, 20[  ]

 

Maturity Date:  _____ ___, 20[ ]

FOR VALUE RECEIVED, AVEO Pharmaceutical, Inc., a Delaware corporation, for
itself and each of its Qualified Subsidiaries (“Borrower”) hereby promises to
pay to the order of [_____________], or the holder of this Note (“Lender”) at
400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of
payment as the holder of this Secured Term Promissory Note (this “Promissory
Note”) may specify from time to time in writing, in lawful money of the United
States of America, the principal amount of [  ] Million Dollars ($[  ],000,000)
or such other principal amount as Lender has advanced to Borrower, together with
interest at a rate as set forth in Section 2.1(c) of the Loan Agreement based
upon a year consisting of 360 days, with interest computed daily based on the
actual number of days in each month.  

This Promissory Note is the Note referred to in, and is executed and delivered
in connection with, that certain Amended and Restated Loan and Security
Agreement dated December 28, 2017, by and among Borrower, Hercules Capital,
Inc., a Maryland corporation (“Agent”) and the several banks and other financial
institutions or entities from time to time party thereto as lender, as amended
by that certain Amendment No. 1 dated as of August 7, 2020 (as the same may from
time to time be amended, modified or supplemented in accordance with its terms,
the “Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof.  All payments shall be made in accordance with the Loan Agreement.  All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.  An Event of Default under the Loan
Agreement shall constitute a default under this Promissory Note.  

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

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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[SIGNATURE PAGE TO SECURED TERM PROMISSORY NOTE]

 

BORROWER FOR ITSELF AND

ON BEHALF OF ITS QUALIFIED SUBSIDIARIES

 

AVEO PHARMACEUTICALS, INC.  

        

                      By: ________________________________

Name: Erick Lucera

                  Title: Chief Financial Officer

 

 

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

 

Exhibit D

Amended and Restated Form of Compliance Certificate

(see attached)

 

 

 

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

 

COMPLIANCE CERTIFICATE

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

 

 

Reference is made to that certain Amended and Restated Loan and Security
Agreement dated December 28, 2017, as amended by that certain Amendment No. 1
dated as of August 7, 2020, and the Loan Documents (as defined therein) entered
into in connection with such Amended and Restated Loan and Security Agreement
all as may be amended, modified, supplemented or restated from time to time
(hereinafter referred to collectively as the “Loan Agreement”) by and among the
several banks and other financial institutions or entities from time to time
party thereto (collectively, “Lender”) and Hercules Capital, Inc., as agent for
Lender (“Agent”) and AVEO Pharmaceuticals, Inc. (the “Company”) as Borrower. All
capitalized terms not defined herein shall have the same meaning as defined in
the Loan Agreement.

The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provide certification of information
regarding the Company; hereby certifies, in such capacity, that in accordance
with the terms and conditions of the Loan Agreement, the Company is in
compliance for the period ending ___________ of all covenants, conditions and
terms and hereby reaffirms that all representations and warranties contained
therein are true and correct on and as of the date of this Compliance
Certificate with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date, after giving effect in all cases to any standard(s) of materiality
contained in the Loan Agreement as to such representations and warranties, or
except as otherwise disclosed below; provided, that any such disclosures cannot
be used to cure any earlier breaches of the representations and warranties
contained in the Loan Agreement.  Attached are the required documents supporting
the above certification.  The undersigned further certifies that these are
prepared in accordance with GAAP (except for the absence of footnotes with
respect to unaudited financial statement and subject to normal year-end
adjustments) and are consistent from one period to the next except as explained
below.

REPORTING REQUIREMENT

REQUIRED

CHECK IF ATTACHED

Interim Financial Statements

 

Monthly within 30 days

 

Interim Financial Statements

 

Quarterly within 30 days

 

Audited Financial Statements

 

FYE within 90 days

 

 

Intellectual Property on Exhibit D

Quarterly within 30 days

 

 

 

 

 

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

 

Disclosures regarding representations and warranties:

_____________________________________________________________________________

_____________________________________________________________________________

The undersigned hereby also confirms the below disclosed accounts represent all
depository accounts and securities accounts presently open in the name of each
Borrower or Borrower Subsidiary/Affiliate, as applicable.

 

Have any depository or securities accounts been opened since the last Compliance
Certificate?

 

YES/NO

 

 

 

Depository AC #

Financial Institution

Account Type (Depository / Securities)

Last Month Ending Account Balance

Purpose of Account

BORROWER Name/Address:

 

 

1

 

 

 

 

 

2

 

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

 

5

 

 

 

 

 

6

 

 

 

 

 

7

 

 

 

 

 

 

BORROWER SUSIDIARY / AFFILIATE COMPANY Name/Address

 

 

1

 

 

 

 

 

2

 

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

 

5

 

 

 

 

 

6

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

2

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

 

Financial Covenants

Financial Covenant

Required

Actual

In Compliance?

Minimum Cash

Section 7.21 of the Loan Agreement

Greater than or equal to the sum of $10,000,0001 plus the amount of Borrower’s
accounts payable under GAAP not paid after the 120th day following the invoice
date for such account payable

[ ● ]

Yes

 

No

 

 

[Net Product Revenue

Section 7.22 of the Loan Agreement

As of the last day of each month (commencing with the month in which the 2020
Term C Loan Advances are advanced), trailing six-month Net Product Revenue of
not less than 75% of projected Net Product Revenue in Forecast

[ ● ]

Yes

 

No]2

 

 

 

The undersigned hereby also confirms that attached hereto are true, correct and
reasonably detailed calculations demonstrating compliance with such financial
covenants.

AVEO PHARMACEUTICALS, INC.

By:____________________________

Name:   Erick Lucera

Its:Chief Financial Officer

 

1 

Decreased to $5,000,000 upon Lender advancing the 2020 Term C Loan Advances.

2 

To be completed only after the 2020 Term C Loan Advance has been advanced.

3

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

 

Exhibit E

Amended and Restated Form of Joinder Agreement

(see attached)

 

4

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

 

FORM OF JOINDER AGREEMENT

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

RECITALS

A.  Subsidiary’s Affiliate, AVEO Pharmaceuticals, Inc. (“Company”) has entered
into that certain Amended and Restated Loan and Security Agreement dated
December 28, 2017, with the several banks and other financial institutions or
entities from time to time party thereto as lender (collectively, “Lender”) and
Agent (as amended by that certain First Amendment to Amended and Restated Loan
and Security Agreement dated as of August 7, 2020 and as may be further amended,
restated, supplemented or otherwise modified from time to time the “Loan
Agreement”), together with the other agreements executed and delivered in
connection therewith;

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

AGREEMENT

NOW THEREFORE, Subsidiary and Agent agree as follows:

1.

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

2.

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

3.

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

 

 

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

 

4.

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

5.

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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[SIGNATURE PAGE TO JOINDER AGREEMENT]

SUBSIDIARY:

_________________________________.

 

 

 

By:

 

Name:

 

Title:

 

Address:

 

 

 

 

 

Telephone: ___________

 

email: ____________

AGENT:

HERCULES CAPITAL, INC.

By:____________________________________
Name:__________________________________
Title: ___________________________________

Address:
400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
email: legal@herculestech.com
Telephone:  650-289-3060

 

 

 

 

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

 

Exhibit F

Amended and Restated Form of ACH Debit Authorization Agreement

(see attached)

 

 

 

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

 

ACH DEBIT AUTHORIZATION AGREEMENT

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

Re:  Amended and Restated Loan and Security Agreement dated December 28, 2017
(as amended by that certain First Amendment to Amended and Restated Loan and
Security Agreement dated as of August 7, 2020 and as may be further amended,
restated, supplemented or otherwise modified from time to time, the “Agreement”)
by and among AVEO Pharmaceuticals, Inc. (“Borrower”) and Hercules Capital, Inc.,
as agent (“Agent”) and the lenders party thereto (collectively, “Lender”)

In connection with the above referenced Agreement, Borrower hereby authorizes
the Agent to initiate debit entries for (i) the periodic payments due under the
Agreement and (ii) upon prior notice to Borrower, out-of-pocket legal fees and
costs incurred by Agent or Lender pursuant to Section 11.11 of the Agreement to
Borrower’s account indicated below.  Borrower authorizes the depository
institution named below to debit to such account.

 

[IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

Depository Name

Branch

City

State and Zip Code

Transit/ABA Number

Account Number

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

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

[SIGNATURE PAGE TO ACH DEBIT AUTHORIZATION AGREEMENT]

 

AVEO PHARMACEUTICALS, INC.

(Borrower)(Please Print)

By: _________________________________________

Name: Erick Lucera

Title: Chief Financial Officer

Date: ________________________________________

 

 

 

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

 

Acknowledged and agreed to:

 

AGENT:

HERCULES CAPITAL, INC.

By:_____________________________
Name:__________________________
Title:___________________________

 

 

LENDER:

HERCULES CAPITAL, INC.

By:_____________________________
Name:__________________________
Title:___________________________

 

Address:

400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
Facsimile: (650) 473-9194
Telephone: (650) 289-3060

 

 

HERCULES CAPITAL FUNDING TRUST 2018-1

By:_____________________________
Name:__________________________
Title:___________________________

 

Address:

400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
Facsimile: (650) 473-9194
Telephone: (650) 289-3060

 

 

 

 

 

 

 

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

 

HERCULES CAPITAL FUNDING TRUST 2019-1

By:_____________________________
Name:__________________________
Title:___________________________

 

Address:

400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
Facsimile: (650) 473-9194
Telephone: (650) 289-3060

 

 

 

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

 

Exhibit G

Amended and Restated Commitment Schedule

(see attached)

 

 

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

 

2020 Term Commitments and 2020 Term D Share

 

2020 Term A Commitments

 

LENDER

2020 TERM A COMMITMENT

HERCULES CAPITAL, INC.

$5,328,986.54

Hercules Capital Funding Trust 2018-1

$4,835,506.75

Hercules Capital Funding Trust 2019-1

$4,835,506.71

TOTAL COMMITMENTS

 

$15,000,000.00

 

2020 Term B Commitments

 

LENDER

2020 TERM B COMMITMENT

HERCULES CAPITAL, INC.

$10,000,000.00

TOTAL COMMITMENTS

 

$10,000,000.00

 

2020 Term C Commitments

 

LENDER

2020 TERM C COMMITMENT

HERCULES CAPITAL, INC.

$5,000,000.00

TOTAL COMMITMENTS

 

$5,000,000.00

 

2020 Term D Shares

 

LENDER

2020 TERM D SHARE

HERCULES CAPITAL, INC.

$5,000,000.00

TOTAL

$5,000,000.00