Exhibit 10.26

ADICET BIO, INC.

LOAN AND SECURITY AGREEMENT

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This LOAN AND SECURITY AGREEMENT (the “Agreement”) is entered into as of
April 28, 2020, by and between PACIFIC WESTERN BANK, a California state
chartered bank (“Bank”) and ADICET BIO, INC., a Delaware corporation
(“Borrower”).

RECITALS

Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower. This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.

AGREEMENT

The parties agree as follows:

1.    DEFINITIONS AND CONSTRUCTION.

1.1    Definitions. As used in this Agreement, all capitalized terms shall have
the definitions set forth on Exhibit A. Any term used in the Code and not
defined herein shall have the meaning given to the term in the Code.

1.2    Accounting Terms. Any accounting term not specifically defined on Exhibit
A shall be construed in accordance with GAAP and all calculations shall be made
in accordance with GAAP (except for non-compliance with FAS 123R in monthly
reporting). The term “financial statements” shall include the accompanying notes
and schedules.

2.    LOAN AND TERMS OF PAYMENT.

2.1    Credit Extensions.

(a)    Promise to Pay. Borrower promises to pay to Bank, in lawful money of the
United States of America, the aggregate unpaid principal amount of all Credit
Extensions made by Bank to Borrower, together with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.

(b)    Term Loan.

(i)    Subject to and upon the terms and conditions of this Agreement, Bank
agrees to make one (1) or more term loans to Borrower in an aggregate principal
amount not to exceed Twelve Million Dollars ($12,000,000) (each a “Term Loan”
and collectively the “Term Loans”). Borrower may request Term Loans at any time
from the date hereof through the Availability End Date. The proceeds of the Term
Loans shall be used for general working capital purposes and for capital
expenditures.

(ii)    Interest shall accrue from the date of each Term Loan at the rate
specified in Section 2.2(a), and prior to the Interest Only End Date for the
applicable Term Loan shall be payable monthly beginning on the first (1st) day
of the month next following such Term Loan, and continuing on the same day of
each month thereafter. Any Term Loans that are

 

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outstanding on the Interest Only End Date shall be payable in, (i) if Borrower
achieves the IND Milestone, twenty-four (24) or (ii) if Borrower does not
achieve the IND Milestone, thirty (30), equal monthly installments of principal,
plus all accrued interest, beginning on the Amortization Start Date, and
continuing on the same day of each month thereafter through the Maturity Date,
at which time all amounts due in connection with the Term Loans and any other
amounts due under this Agreement shall be immediately due and payable. Term
Loans, once repaid, may not be reborrowed. Borrower may prepay any Term Loan
without penalty or premium.

(iii)    When Borrower desires to obtain a Term Loan, Borrower shall notify Bank
(which notice shall be irrevocable) by email to be received no later than 12:30
Pacific time (3:30 p.m. Eastern time) on the day on which the Term Loan is to be
made. Such notice shall be given by a Loan Advance/Paydown Request Form in
substantially the form of Exhibit C. The notice shall be signed by an Authorized
Officer. Bank shall be entitled to rely on any notice given by a person whom
Bank reasonably believes to be an Authorized Officer, and Borrower shall
indemnify and hold Bank harmless for any damages, loss, costs and expenses
suffered by Bank as a result of such reliance.

2.2    Interest Rates, Payments, and Calculations.

(a)    Interest Rate. Except as set forth in Section 2.2(b), the Term Loans
shall bear interest, on the outstanding daily balance thereof, at a variable
annual rate equal to the greater of: (A) 0.25% above the Prime Rate then in
effect; or (B) 5.00%;

(b)    Late Fee; Default Rate. If any payment is not made within 15 days after
the date such payment is due, Borrower shall pay Bank a late fee equal to the
lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximum amount
permitted to be charged under applicable law. After the occurrence and during
the continuance of an Event of Default, all Obligations shall bear interest,
upon notice of such increase given by Bank, at a rate equal to five
(5) percentage points above the interest rate applicable immediately prior to
the occurrence of the Event of Default (such rate, the “Default Rate”);
provided, that, from and after the occurrence of any Event of Default described
in Section 8.5, such increase shall be automatic and without the requirement of
any notice from Bank. In all such events, and notwithstanding the date on which
application of the Default Rate is communicated to Borrower, the Default Rate
may be accrued (at the election of Bank) from the initial date of any Event of
Default until all existing Events of Default are waived in writing in accordance
with the terms of this Agreement;

(c)    Payments. Interest on the Term Loans shall be due and payable on the
first (1st) calendar day of each month during the term hereof. Borrower
authorizes Bank, at Bank’s option, to charge such interest, all Bank Expenses,
all Periodic Payments, and any other amounts due and owing in accordance with
the terms of this Agreement against any of Borrower’s deposit accounts. Any
interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then
applicable hereunder; and

(d)    Computation. In the event the Prime Rate is changed from time to time
hereafter, the applicable rate of interest hereunder shall be increased or
decreased, effective as of the day the Prime Rate is changed, by an amount equal
to such change in the Prime Rate. All interest chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.

 

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2.3    Crediting Payments. Prior to the occurrence of an Event of Default, Bank
shall credit a wire transfer of funds, check or other item of payment to such
deposit account or Obligation as Borrower specifies. After the occurrence and
during the continuance of an Event of Default, Bank shall have the right, in its
sole discretion to immediately apply any wire transfer of funds, check, or other
item of payment Bank may receive to conditionally reduce Obligations, but such
applications of funds shall not be considered a payment on account unless such
payment is of immediately available federal funds or unless and until such check
or other item of payment is honored when presented for payment. Notwithstanding
anything to the contrary contained herein, any wire transfer or payment received
by Bank after 12:30 p.m. Pacific time (3:30 p.m. Eastern time) shall be deemed
to have been received by Bank as of the opening of business on the immediately
following Business Day. Whenever any payment to Bank under the Loan Documents
would otherwise be due (except by reason of acceleration) on a date that is not
a Business Day, such payment shall instead be due on the next Business Day, and
additional fees or interest, as the case may be, shall accrue and be payable for
the period of such extension.

2.4    Fees. Borrower shall pay to Bank the following:

(a)    Facility Fee. On or before the Closing Date, a fee equal to Three
Thousand Dollars ($3,000), which shall be nonrefundable; and

(b)    Bank Expenses. (i) On the Closing Date, all Bank Expenses incurred
through the Closing Date in an amount not to exceed the sum of (A) $25,000 plus
(B) fifty percent (50%) of Bank Expenses incurred in excess of $25,000, provided
that the amount payable under this Section 2.4(b)(i) shall not exceed $35,000 in
the aggregate, and, (ii) after the Closing Date, all Bank Expenses, as and when
they become due.

2.5    Term. This Agreement shall become effective on the Closing Date and,
subject to Section 12.7, shall continue in full force and effect for so long as
any Obligations (other than contingent indemnity obligations) remain outstanding
or Bank has any obligation to make Credit Extensions under this Agreement.
Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default in accordance with Article 9.

3.    CONDITIONS OF LOANS.

3.1    Conditions Precedent to Closing. The agreement of Bank to enter into this
Agreement on the Closing Date is subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, each of the
following items and completed each of the following requirements:

(a)    this Agreement;

(b)    a Corporate Resolution of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Agreement;

 

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(c)    a financing statement (Form UCC-1);

(d)    current SOS Reports indicating that except for Permitted Liens, there are
no other security interests or Liens of record in the Collateral;

(e)    current financial statements, including company-prepared statements for
Borrower’s most recently ended fiscal year; company prepared consolidated
balance sheets, income statements, and statements of cash flows for the
preceding twelve months and such other updated financial information as Bank may
reasonably request;

(f)    a current Compliance Certificate in accordance with Section 6.2;

(g)    an executed copy of the Regeneron Agreement;

(h)    the Warrant;

(i)    a copy of the Amended and Restated Investors’ Rights Agreement among
Borrower and certain other parties thereto dated July 25, 2019;

(j)    a Borrower Information Certificate;

(k)    Borrower shall have opened and funded not less than Fifty Thousand
Dollars ($50,000) in deposit accounts held with Bank; and

(l)    such other documents or certificates, and completion of such other
matters, as Bank may reasonably request.

3.2    Conditions Precedent to all Credit Extensions. The obligation of Bank to
make each Credit Extension, and including the initial Credit Extension, is
contingent upon the Borrower’s compliance with Section 3.1 above, and is further
subject to the following conditions:

(a)    timely receipt by Bank of the Loan Advance/Paydown Request Form as
provided in Section 2.1;

(b)    Borrower shall be in compliance with Section 6.6 (provided that, for the
avoidance of doubt, nothing herein shall require the Borrower to comply with
such obligation prior to the applicable deadline as a condition to the Bank
making any Credit Extension);

(c)    in Bank’s sole discretion, there has not been a Material Adverse Effect;
and

(d)    the representations and warranties contained in Section 5 shall be true
and correct in all material respects on and as of the date of such Loan
Advance/Paydown Request Form and on the effective date of each Credit Extension
as though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would exist after giving effect to such Credit
Extension (provided, however, that those representations and warranties
expressly referring to another date shall be true and correct in all material
respects as of such date, and provided further that any representation or
warranty that contains a materiality

 

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qualification therein shall be true and correct in all respects). The making of
each Credit Extension shall be deemed to be a representation and warranty by
Borrower on the date of such Credit Extension as to the accuracy of the facts
referred to in this Section 3.2.

3.3    Post-Closing Covenant. Within 30 days from the Closing Date, Borrower
shall deliver to Bank in form and substance satisfactory to Bank (a) a landlord
waiver in favor of Bank for (i) 200 Constitution Drive, Menlo Park, CA 94025,
and (ii) 175 Jefferson Drive, Menlo Park, CA 94025, (b) evidence that the
insurance policies required by Section 6.5 hereof are in full force and effect,
together with appropriate evidence showing loss payable and additional insured
clauses or endorsements in favor of Bank, and (c) a bailee waiver in favor of
Bank for 2910 Fortune Circle West Indianapolis, IN 46241 from Brook Life
Sciences, Inc.; provided that a landlord waiver in favor of Bank for 1000 Bridge
Parkway, Redwood City, CA 94065 shall be delivered within 45 days from the
Closing Date.

4.    CREATION OF SECURITY INTEREST.

4.1    Grant of Security Interest. Borrower grants and pledges to Bank a
continuing security interest in the Collateral to secure prompt repayment of any
and all Obligations and to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except for Permitted Liens or as
disclosed in the Schedule, such security interest constitutes a valid, first
priority security interest in the presently existing Collateral, and will
constitute a valid, first priority security interest in later-acquired
Collateral. Borrower also hereby agrees not to sell, transfer, assign, mortgage,
pledge, lease, grant a security interest in, or encumber any of its intellectual
property. Notwithstanding any termination of this Agreement or of any filings
undertaken related to Bank’s rights under the Code, Bank’s Lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

4.2    Perfection of Security Interest. Borrower authorizes Bank to file at any
time financing statements, continuation statements, and amendments thereto that
(i) either specifically describe the Collateral or describe the Collateral as
all assets of Borrower of the kind pledged hereunder, and (ii) contain any other
information required by the Code for the sufficiency of filing office acceptance
of any financing statement, continuation statement, or amendment, including
whether Borrower is an organization, the type of organization and any
organizational identification number issued to Borrower, if applicable. Borrower
shall have possession of the Collateral, except where expressly otherwise
provided in this Agreement or where Bank chooses to perfect its security
interest by possession in addition to the filing of a financing statement. Where
Collateral is in possession of a third party bailee, Borrower shall take such
steps as Bank reasonably requests for Bank to (i) subject to Section 3.3 and
Section 7.11, obtain an acknowledgment, in form and substance reasonably
satisfactory to Bank, of the bailee that the bailee holds such Collateral for
the benefit of Bank, and (ii) obtain “control” of any Collateral consisting of
investment property, deposit accounts, letter-of-credit rights or electronic
chattel paper (as such items and the term “control” are defined in Revised
Article 9 of the Code) by causing the securities intermediary or depositary
institution or issuing bank to execute a control agreement in form and substance
reasonably satisfactory to Bank. Borrower will not create any chattel paper
without placing a legend on the chattel paper reasonably acceptable to Bank
indicating that Bank has a security interest in the chattel paper. Borrower from
time to time may deposit with Bank specific cash collateral to secure specific
Obligations; Borrower authorizes

 

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Bank to hold such specific balances in pledge and to decline to honor any drafts
thereon or any request by Borrower or any other Person to pay or otherwise
transfer any part of such balances for so long as the specific Obligations are
outstanding. Borrower shall take such other actions as Bank reasonably requests
to perfect its security interests granted under this Agreement.

4.3    Pledge of Collateral. Borrower hereby pledges, assigns and grants to Bank
a security interest in all the Shares, together with all proceeds and
substitutions thereof, all cash, stock and other moneys and property paid
thereon, all rights to subscribe for securities declared or granted in
connection therewith, and all other cash and noncash proceeds of the foregoing,
as security for the performance of the Obligations. Borrower will deliver to
Bank (i) on the Closing Date, the certificate or certificates for any
then-certificated Shares of any Subsidiary (other than Adicet Israel), and
(ii) with respect to any Shares uncertificated as of the Closing Date,
immediately upon certification, the certificate or certificate for the Shares of
any Subsidiary (other than Adicet Israel), in each case accompanied by an
instrument of assignment duly executed in blank governing the Shares. Borrower
shall cause the books of each entity whose Shares are part of the Collateral and
any transfer agent to reflect the pledge of the Shares. Upon the occurrence of
an Event of Default hereunder, Bank may effect the transfer of any securities
included in the Collateral (including but not limited to the Shares) into the
name of Bank and cause new certificates (if any) representing any such
securities to be issued in the name of Bank or its transferee. Unless an Event
of Default shall have occurred and be continuing, Borrower shall be entitled to
exercise any voting rights with respect to the Shares and to give consents,
waivers and ratifications in respect thereof, provided that no vote shall be
cast or consent, waiver or ratification given or action taken which would be
inconsistent with any of the terms of this Agreement or which would constitute
or create any violation of any of such terms. All such rights to vote and give
consents, waivers and ratifications shall terminate upon the occurrence and
continuance of an Event of Default.

5.    REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants as follows:

5.1    Due Organization and Qualification. Borrower and each Subsidiary is an
entity duly existing under the laws of the jurisdiction in which it is organized
and qualified and licensed to do business in any state in which the conduct of
its business or its ownership of property requires that it be so qualified,
except in each case where the failure to do so would not reasonably be expected
to cause a Material Adverse Effect.

5.2    Due Authorization; No Conflict. The execution, delivery, and performance
of the Loan Documents are within Borrower’s powers, have been duly authorized,
and are not in conflict with nor constitute a breach of any provision contained
in Borrower’s Certificate of Incorporation or Bylaws, nor will they constitute
an event of default under any material agreement by which Borrower is bound.
Borrower is not in default under any agreement by which it is bound, except to
the extent such default would not reasonably be expected to cause a Material
Adverse Effect.

5.3    Collateral. Borrower has rights in or the power to transfer the
Collateral, and its title to the Collateral is free and clear of Liens, adverse
claims, and restrictions on transfer

 

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or pledge except for Permitted Liens. All Collateral is located solely in the
United States, other than (i) certain patents and know-how held in Israel that
have no material value, and (ii) certain immaterial value-added tax receivables.
All Inventory is in all material respects of good and merchantable quality, free
from all material defects, except for Inventory for which adequate reserves have
been made. Except as set forth in the Schedule or as permitted in Section 6.6,
none of Borrower’s Cash is maintained or invested with a Person other than Bank
or Bank’s Affiliates.

5.4    Intellectual Property. Borrower is the sole owner of the intellectual
property created or, to its knowledge, purchased by Borrower, except for
(i) non-exclusive licenses granted by Borrower to its customers, suppliers and
other business partners, (ii) licenses granted by Borrower to Regeneron or other
interests or encumbrances imposed upon such intellectual property pursuant to
the Regeneron Agreement and (iii) intellectual property that Borrower jointly
owns with Regeneron. The intellectual property created, purchased or licensed by
Borrower constitutes all material intellectual property necessary for the
conduct of Borrower’s business as now conducted and as presently proposed to be
conducted. To Borrower’s knowledge, (a) each of the copyrights, trademarks and
patents created or purchased by Borrower is valid and enforceable, and (b) no
part of the intellectual property created or purchased by Borrower has been
judged invalid or unenforceable, in whole or in part, and no claim has been made
to Borrower that any part of the intellectual property created or purchased by
Borrower violates the rights of any third party except to the extent such claim
would not reasonably be expected to cause a Material Adverse Effect.

5.5    Name; Location of Chief Executive Office. Except as disclosed in the
Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof, and its exact legal name is as set forth
in the first paragraph of this Agreement. The chief executive office of Borrower
is located at the address indicated in Section 10 hereof.

5.6    Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court,
or administrative agency, in which a likely adverse decision would reasonably be
expected to have a Material Adverse Effect.

5.7    No Material Adverse Change in Financial Statements. The financial
statements related to Borrower and any Subsidiary that are delivered by Borrower
to Bank fairly present in all material respects Borrower’s consolidated (and
consolidating, if consolidated and consolidating financial statements are
required to be delivered by Borrower to Bank pursuant to Section 6.2) financial
condition as of the date thereof and Borrower’s consolidated (and consolidating,
if applicable) results of operations for the period then ended. There has not
been a material adverse change in the consolidated (and consolidating, if
applicable) financial condition of Borrower since the date of the most recent of
such financial statements submitted to Bank.

5.8    Solvency, Payment of Debts. Borrower and its Subsidiaries are able to pay
their debts (including trade debts) as they mature; the fair saleable value of
their assets (including goodwill minus disposition costs) exceeds the fair value
of their liabilities; and Borrower and its Subsidiaries, on a consolidated
basis, are not left with unreasonably small capital after the transactions
contemplated by this Agreement.

 

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5.9    Compliance with Laws and Regulations. Borrower and each Subsidiary have
met the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. No event has occurred resulting from Borrower’s
failure to comply with ERISA that is reasonably likely to result in Borrower’s
incurring any liability that could reasonably be expected to have a Material
Adverse Effect. Borrower is not an “investment company”, or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations T and of
the Board of Governors of the Federal Reserve System). Borrower has not violated
any statutes, laws, ordinances or rules applicable to it, the violation of which
could reasonably be expected to have a Material Adverse Effect. Borrower and
each Subsidiary have filed or caused to be filed all income and other material
tax returns required to be filed, and have paid, or have made adequate provision
for the payment of, all taxes reflected therein except those being contested in
good faith with adequate reserves under GAAP or where the failure to file such
returns or pay such taxes could not reasonably be expected to have a Material
Adverse Effect.

5.10    Subsidiaries. Borrower does not own any stock, partnership interest or
other equity securities of any Person, except for its Subsidiaries disclosed to
Bank in writing or Permitted Investments.

5.11    Government Consents. Borrower and each Subsidiary have obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower’s business as currently conducted,
except where the failure to do so would not reasonably be expected to cause a
Material Adverse Effect.

5.12    Inbound Licenses. Except as disclosed on the Schedule or as disclosed in
writing to Bank pursuant to Section 6.7, Borrower is not a party to, nor is
bound by, any material license or other agreement important for the conduct of
Borrower’s business that prohibits or otherwise restricts Borrower from granting
a security interest in Borrower’s interest in such license or agreement or any
other property important for the conduct of Borrower’s business, other than this
Agreement or the other Loan Documents.

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

5.14    Full Disclosure. No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Bank taken
together with all such certificates and written statements furnished to Bank
contains any untrue statement of a material

 

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fact or omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading in light of the
circumstances in which such statements were made, it being recognized by Bank
that the projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not to be viewed as facts and that actual
results during the period or periods covered by any such projections and
forecasts may differ from the projected or forecasted results.

6.    AFFIRMATIVE COVENANTS.

Borrower covenants that, until payment in full of all outstanding Obligations,
and for so long as Bank may have any commitment to make a Credit Extension
hereunder, Borrower shall do all of the following:

6.1    Good Standing and Government Compliance. (a) Borrower shall maintain its
and each of its Subsidiaries’ organizational existence and good standing in its
respective state of formation, shall maintain qualification and good standing in
each other jurisdiction in which the failure to so qualify would reasonably be
expected to have a Material Adverse Effect, and shall furnish to Bank the
organizational identification number issued to Borrower by the authorities of
the state in which Borrower is organized, if applicable; (b) Borrower shall
meet, and shall cause each Subsidiary to meet, the minimum funding requirements
of ERISA with respect to any employee benefit plans subject to ERISA; and
(c) Borrower shall comply, and shall cause each Subsidiary to comply, with all
material statutes, laws, ordinances and government rules and regulations to
which it is subject, and shall maintain, and shall cause each of its
Subsidiaries to maintain, in force all licenses, approvals and agreements, the
failure to comply with which, or the loss of which, would reasonably be expected
to have a Material Adverse Effect.

6.2    Financial Statements, Reports, Certificates, Collateral Audits. Borrower
shall deliver to Bank:

(a)    Each of the following:

(i)    promptly upon becoming available, but in any event within thirty
(30) days after the end of each calendar month, a company prepared consolidated
balance sheet, income statement, and statement of cash flows covering Borrower’s
operations during such period, in a form reasonably acceptable to Bank and
certified by a Responsible Officer, provided that such statement in consolidated
and consolidating form shall be provided upon Bank’s request;

(ii)    promptly upon becoming available, but in any event within Two Hundred
Seventy (270) days after the end of Borrower’s fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion (or an opinion qualified only for
going concern due to Borrower’s projected need for additional funding to
continue operations so long as Borrower’s investors provide additional equity as
needed, or as otherwise consented to by Bank in writing) on such financial
statements from an independent certified public accounting firm of nationally
recognized standing or otherwise reasonably acceptable to Bank (the “Audited
Financial Statements”); provided that, if Borrower’s board of directors (the
“Board”) requires a different level of annual financial statements (e.g.,
company-prepared) for any applicable fiscal year, Borrower shall deliver to Bank
such annual financial statements required by the Board for such fiscal year;

 

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(iii)    an annual budget approved by the Board promptly upon becoming available
but no later than February 28 of each year during the term hereof;

(iv)    if applicable, copies of all statements, reports and notices sent or
made available generally by Borrower to its security holders or to any holders
of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission;

(v)    promptly upon, but in any event within five (5) Business Days following,
receipt by Borrower of notice thereof, a report of any legal actions pending or
threatened against Borrower or any Subsidiary that would reasonably be expected
to result in damages or costs to Borrower or any Subsidiary of $250,000 or more;

(vi)    promptly upon, but in any event within five (5) Business Days following,
receipt by Borrower, each management letter prepared by Borrower’s independent
certified public accounting firm regarding Borrower’s management control
systems;

(vii)    such budgets, sales projections, operating plans, financial exhibits,
material FDA correspondence or other financial information as Bank may
reasonably request from time to time;

(viii)    promptly upon becoming available, but in any event within forty five
(45) days of the last day of each fiscal quarter, a report signed by Borrower,
in form reasonably acceptable to Bank, describing in reasonable detail any
clinical updates that have occurred during such quarter; and

(ix)    promptly upon receipt of notice thereof, notice of all returns and
recoveries and of all disputes and claims involving inventory having a book
value of more than Two Hundred Fifty Thousand Dollars ($250,000).

(b)    Within thirty (30) days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
certified as of the last day of the applicable month and signed by a Responsible
Officer in substantially the form of Exhibit D hereto;

(c)    promptly upon becoming available, but in any event within thirty
(30) days after the end of each calendar month, Borrower shall deliver to Bank
copies of all bank account statements for accounts maintained at financial
institutions other than Bank;

(d)    as soon as possible, but in any event within three (3) Business Days
after a Responsible Officer of Borrower becoming aware of the occurrence or
existence of an Event of Default hereunder, Borrower shall deliver to Bank a
written statement of a Responsible Officer setting forth details of the Event of
Default, and the action which Borrower has taken or proposes to take with
respect thereto; and

 

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(e)    Bank (through any of its officers, employees, or agents) shall have the
right, upon reasonable prior notice, from time to time during Borrower’s usual
business hours but no more than twice a year (unless an Event of Default has
occurred and is continuing), to inspect Borrower’s Books and to make copies
thereof and to check, test, inspect, audit and appraise the Collateral at
Borrower’s expense in order to verify Borrower’s financial condition or the
amount, condition of, or any other matter relating to, the Collateral.

Borrower may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer.
Borrower shall include a submission date on any certificates and reports to be
delivered electronically.

6.3    Inventory and Equipment; Returns. Borrower shall keep all Inventory and
Equipment in good and merchantable condition, free from all material defects
except for Inventory and Equipment (i) sold in the ordinary course of business,
and (ii) for which adequate reserves have been made, in all cases in the United
States. Returns and allowances, if any, as between Borrower and its account
debtors shall be on the same basis and in accordance with the usual customary
practices of Borrower, as they exist on the Closing Date.

6.4    Taxes. Borrower shall make, and cause each Subsidiary to make, due and
timely payment or deposit of all material federal, state, and local taxes,
assessments, or contributions required of it by law, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and will execute and deliver to Bank, on demand and to the extent readily
obtainable by Borrower from the applicable taxing authority, proof reasonably
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits and any appropriate certificates attesting to the payment
or deposit thereof; provided that (i) Borrower shall exercise and cause each
Subsidiary to exercise best efforts to obtain the foregoing proof and
(ii) Borrower or a Subsidiary need not make any payment if the amount or
validity of such payment is contested in good faith by appropriate proceedings
and is reserved against (to the extent required by GAAP) by Borrower or such
Subsidiary.

6.5    Insurance. Borrower, at its expense, shall (i) keep the Collateral
insured against loss or damage, and (ii) maintain liability and other insurance,
in each case as ordinarily insured against by other owners in businesses similar
to Borrower’s. All such policies of insurance shall be in such form, with such
companies, and in such amounts reasonably satisfactory to Bank. All policies of
property insurance shall contain a lender’s loss payable endorsement, in a form
satisfactory to Bank, showing Bank as lender’s loss payee. All liability
insurance policies shall show, or have endorsements showing, Bank as an
additional insured. Any such insurance policies shall specify that the insurer
must give at least twenty (20) days notice to Bank before canceling its policy
for any reason. Within thirty (30) days of the Closing Date, Borrower shall
cause to be furnished to Bank a copy of its policies including any endorsements
covering Bank or showing Bank as an additional insured. Upon Bank’s request,
Borrower shall deliver to Bank certified copies of the policies of insurance and
evidence reasonably satisfactory to Bank of all premium

 

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payments. Proceeds payable under any casualty policy will, at Borrower’s option,
be payable to Borrower to replace the property subject to the claim, provided
that any such replacement property shall be deemed Collateral in which Bank has
been granted a first priority security interest, provided that if an Event of
Default has occurred and is continuing, all proceeds payable under any such
policy shall, at Bank’s option, be payable to Bank to be applied on account of
the Obligations.

6.6    Primary Depository. Subject to the provisions of Section 3.1(k), within
sixty (60) days of the Closing Date, Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, all of its Cash in depository and
operating accounts with Bank and all of its investment accounts to be managed by
Bank or Bank’s Affiliates (but which investment accounts may, for the avoidance
of doubt, be held by a third-party custodian, including, without limitation,
U.S. Bank) (an “Investment Account”); provided that (i) prior to Borrower
maintaining any Investment Accounts with Bank’s Affiliates, Borrower, Bank, and
any such affiliate shall have entered into a securities account control
agreement with respect to any such Investments Accounts, in form and substance
reasonably satisfactory to Bank and (ii) upon the maturity of any investments
maintained in any Investment Account, such investments shall be liquidated and
all cash proceeds resulting therefrom shall be transferred to one of Borrower’s
deposit accounts at Bank within fourteen (14) Business Days after such maturity.
For the avoidance of doubt, Borrower shall not be permitted to reinvest such
cash proceeds into new investment assets. Notwithstanding the foregoing,
(a) Borrower shall be permitted to maintain an aggregate amount not to exceed
Twenty Thousand Dollars ($20,000) in one or more accounts outside of Bank, and
(b) Adicet Israel shall be permitted to maintain an aggregate amount not to
exceed Two Hundred Fifty Thousand Dollars ($250,000) in one or more foreign
accounts outside of Bank.

6.7    Consent of Inbound Licensors. Promptly following entering into or
becoming bound by any material inbound license or agreement, Borrower shall:
(i) provide written notice to Bank of the material terms of such license or
agreement with a description of its likely impact on Borrower’s business or
financial condition, subject to any confidentiality obligations to which
Borrower is contractually bound; and (ii) in good faith use commercially
reasonable efforts to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for Borrower’s interest in such licenses or
contract rights to be deemed Collateral and for Bank to have a security interest
in it that might otherwise be restricted by the terms of the applicable license
or agreement, whether now existing or entered into in the future, provided,
however, that the failure to obtain any such consent or waiver shall not
constitute a default under this Agreement.

6.8    Creation/Acquisition of Subsidiaries. In the event Borrower or any
Subsidiary of Borrower creates or acquires any Subsidiary, Borrower or such
Subsidiary shall within ten (10) days thereafter notify Bank of such creation or
acquisition, and Borrower or such Subsidiary shall take all actions reasonably
requested by Bank to achieve any of the following with respect to such “New
Subsidiary” (defined as a Subsidiary formed after the date hereof during the
term of this Agreement): (i) to cause such New Subsidiary to become either (A) a
co-borrower hereunder, if such New Subsidiary is organized under the laws of the
United States, or (B) a secured guarantor with respect to the Obligations, if
such New Subsidiary is not organized under the laws of the United States; and
(ii) to grant and pledge to Bank a perfected security interest in 100% of the
stock, units or other evidence of ownership held by Borrower or its Subsidiaries
of any such New Subsidiary.

 

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6.9    Existing Letters of Credit. Borrower shall be permitted to maintain
Borrower’s existing cash collateral accounts at Silicon Valley Bank (the “SVB
Collateral Accounts”) securing that certain letter of credit for $4,131,720 in
favor of Westport Office Park LLC (the “Westport Letter of Credit”) and that
certain letter of credit for $150,000 in favor of Facebook (the “Facebook Letter
of Credit”, together with the Westport Letter of Credit, the “SVB Letters of
Credit”), provided further that (x) the aggregate balance of the SVB Collateral
Accounts shall not exceed $4,281,720 at any time and (y) with respect to each
SVB Letter of Credit, upon the earlier of (x) the maturity date of such SVB
Letter of Credit as of the Closing Date which is November 8, 2020 with respect
to the Westport Letter of Credit and November 2, 2020 with respect to the
Facebook Letter of Credit) and (z) such earlier maturity or termination of such
SVB Letter of Credit, the entire balance held in the applicable SVB Collateral
Account shall immediately be transferred to one of Borrower’s accounts at Bank.
For the avoidance of doubt, the Westport Letter of Credit and Facebook Letter of
Credit shall not be renewed or extended so long as Bank shall have provided
similar replacement letters of credit in favor of the applicable beneficiaries
in such amounts and on terms substantially similar to the terms of the Westport
Letter of Credit and Facebook Letter of Credit, as applicable, resulting in
replacement letters of credit that are reasonably acceptable to the applicable
beneficiaries.

6.10    Further Assurances. At any time and from time to time Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.

7.    NEGATIVE COVENANTS.

Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until the outstanding Obligations are paid in full or for so long
as Bank may have any commitment to make any Credit Extensions, Borrower will not
do any of the following without Bank’s prior written consent, which shall not be
unreasonably withheld:

7.1    Dispositions. Convey, sell, lease, license, transfer, or otherwise
dispose of (collectively, to “Transfer”), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, or move cash balances on
deposit with Bank to accounts opened at another financial institution, other
than Permitted Transfers.

7.2    Change in Name, Location, Executive Office, or Executive Management;
Change in Business; Change in Fiscal Year; Change in Control; Divide. Change its
name or the state of Borrower’s formation or relocate its chief executive office
without ten (10) days prior written notification to Bank; replace or suffer the
departure of its chief executive officer or, following the appointment of a
permanent chief financial officer, its chief financial officer, without
delivering written notification to Bank within ten (10) days thereof; fail to
appoint an interim replacement or fill a vacancy in the position of chief
executive officer or chief financial officer for more than thirty
(30) consecutive days; suffer a change on its board of directors which results
in the failure of at least one partner or managing director of Orbimed or its
Affiliates to serve as a voting member, in such case without written notice to
Bank prior to or within three (3) Business Days after such occurrence; take
action to liquidate, wind up, or otherwise cease to conduct business in the
ordinary course; engage in any business, or permit any of its Subsidiaries to
engage in any business, other than or reasonably related or incidental to the
businesses currently engaged in by Borrower and its Subsidiaries, taken as a
whole; change its fiscal year end; convert to another form of incorporated or
unincorporated business or entity; have a Change in Control; Divide.

 

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7.3    Mergers or Acquisitions. 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 Subsidiary into another
Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another
Person, or a division, line of business, or business unit of another Person, in
each case except where (a) each of the following conditions is applicable:
(i) the consideration paid in connection with such transactions (including
assumption of liabilities) does not in the aggregate exceed Five Hundred
Thousand Dollars ($500,000) during any fiscal year, (ii) no Event of Default has
occurred, is continuing or would exist after giving effect to such transactions,
(iii) such transactions do not result in a Change in Control, (iv) Borrower
shall have provided 5 Business Days notice to Bank prior to consummation of any
such transactions having consideration in excess of Two Hundred Fifty Thousand
Dollars ($250,000), and (v) Borrower is the surviving entity; or (b) the
Obligations are repaid in full and this Agreement is terminated concurrently
with the closing of any merger or consolidation of Borrower in which Borrower is
not the surviving entity. Borrower shall not, without Bank’s prior written
consent, enter into any binding contractual arrangement with any investment
banker, business broker, or similar Person to attempt to facilitate a merger or
acquisition of Borrower or Borrower’s assets (any such agreement, an “Investment
Banker Agreement”); unless (i) no Event of Default exists when such Investment
Banker Agreement is entered into by Borrower, and (ii) such Investment Banker
Agreement does not give the counterparty the right, in connection with a sale of
Borrower’s stock or assets pursuant to or resulting from an assignment for the
benefit of creditors, an asset turnover to Borrower’s creditors (including,
without limitation, Bank), foreclosure, bankruptcy or similar liquidation, to
claim any fee, payment or damages from any parties, other than from Borrower or
Borrower’s investors. Notwithstanding the foregoing, this Section 7.3 shall not
apply to Permitted Transactions.

7.4    Indebtedness. (a) 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, (b) prepay any Indebtedness or take any actions which
impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness
to Bank.

7.5    Encumbrances. Create, incur, assume or allow any Lien with respect to its
property, or assign or otherwise convey any right to receive income, including
the sale of any Accounts, or permit any of its Subsidiaries so to do, except for
Permitted Liens, or covenant to any other Person (other than (i) the licensors
of in-licensed property with respect to such property or (ii) the lessors of
specific equipment or lenders financing specific equipment with respect to such
leased or financed equipment) that Borrower in the future will refrain from
creating, incurring, assuming or allowing any Lien with respect to any of
Borrower’s property.

7.6    Distributions. Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock, except that Borrower may (i) repurchase the stock of former employees,
directors or consultants pursuant to stock repurchase agreements in an aggregate
amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in any fiscal
year, as long as an Event of Default does not exist prior to such

 

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repurchase or would not exist after giving effect to such repurchase;
(ii) repurchase the stock of former employees, directors or consultants pursuant
to stock repurchase agreements where the consideration for repurchase is the
cancellation of indebtedness owed by such former employees, directors or
consultants to Borrower regardless of whether an Event of Default exists;
(iii) cause or permit its Subsidiaries to make dividends and distributions to
Borrower (including, without limitation, distributions to Borrower in connection
with any liquidation, wind up, or equivalent procedure within the respective
Subsidiary’s relevant jurisdiction, initiated in respect of any Subsidiary);
(iv) convert Subordinated Debt into equity securities of Borrower to the extent
permitted under the terms of the applicable subordination or intercreditor
agreement with Bank; and (v) distribute capital stock to current or former
employees, officers or consultants or directors upon the exercise of warrants,
options or other similar instruments so long as such distribution does not
result in a Change of Control.

7.7    Investments. Directly or indirectly acquire or own an Investment in, or
make any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments, or maintain or invest any of its
investment property with a Person other than Bank or permit any Subsidiary to do
so unless such Person has entered into a control agreement with Bank, in form
and substance reasonably satisfactory to Bank, or suffer or permit any
Subsidiary to be a party to, or be bound by, an agreement that restricts such
Subsidiary from paying dividends or otherwise distributing property to Borrower;
provided however, for the avoidance of doubt, that payments to third party
service providers in the ordinary course of business shall not constitute
Investments hereunder.

7.8    Capitalized Expenditures. Make Capitalized Expenditures in excess of
Twenty Five Million Dollars ($25,000,000) in the aggregate for fiscal years 2020
and 2021, or in excess of One Million Five Hundred Thousand Dollars ($1,500,000)
in the aggregate in any fiscal year thereafter.

7.9    Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any material transaction by Borrower with any Affiliate of Borrower
except for (i) transactions that are in the ordinary course of Borrower’s
business, upon fair and reasonable terms that are not materially less favorable
to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person; (ii) compensation arrangements (including bonus or
incentive arrangements), equity awards and benefit plans for officers,
directors, consultants and other employees of the Borrower and its Subsidiaries
(or similar managing or governing persons) approved by Borrower’s board of
directors or a committee thereof; (iii) the sale or issuance of Borrower’s
equity securities in bona fide transactions with Borrower’s existing investors
that do not result in a Change in Control, or any agreements now existing or
subsequently entered into in connection with the foregoing, and any amendments,
modifications or restatements thereof; (iv) Permitted Transactions; or
(v) transactions with Affiliates otherwise permitted under this Agreement.

7.10    Subordinated Debt. (a) Make any payment in respect of any Subordinated
Debt, or permit any of its Subsidiaries to make any such payment, except in
compliance with the terms of such Subordinated Debt, or (b) amend any provision
affecting Bank’s rights contained in any documentation relating to the
Subordinated Debt without Bank’s prior written consent.

 

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7.11    Inventory and Equipment. Subject to Section 3.3 above, (a) store
Inventory or Equipment of a book value in excess of Five Hundred Thousand
Dollars ($500,000) with a bailee, warehouseman, collocation facility or similar
third party unless such third party has been notified of Bank’s security
interest and Bank has received a bailee waiver in favor of Bank, in form and
substance reasonably satisfactory to Bank, duly executed by Borrower and such
third party; or (b) with respect to any leased or licensed real property, store
Collateral of a book value in excess of Five Hundred Thousand Dollars ($500,000)
unless the landlord has been notified of Bank’s security interest and Bank has
received a landlord waiver, in form and substance reasonably satisfactory to
Bank, duly executed by Borrower and such landlord.

7.12    No Investment Company; Margin Regulation. Become or be controlled by an
“investment company,” within the meaning of the Investment Company Act of 1940,
or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Credit Extension for such
purpose.

7.13    Subsidiary Assets. Permit Subsidiaries, individually or collectively, to
own, hold, acquire or receive any property or assets, measured in accordance
with GAAP, with an aggregate book value of greater than Two Hundred Fifty
Thousand Dollars ($250,000), provided that Adicet Israel may maintain an
additional Five Hundred Thousand Dollars ($500,000) solely to satisfy tax
liabilities in connection with its dissolution so long as prior notice of such
dissolution shall be delivered to Bank.

8.    EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:

8.1    Payment Default. If Borrower fails to pay any of the Obligations when
due;

8.2    Covenant Default.

(a)    If Borrower (i) fails to perform any obligation under Sections 6.2
(financial reporting), 6.4 (taxes), 6.5 (insurance), or 6.6 (primary accounts)
or (ii) violates any of the covenants contained in Article 7 of this Agreement;
or

(b)    If Borrower fails or neglects to perform or observe any other material
term, provision, condition, covenant contained in this Agreement, in any of the
Loan Documents, or in any other present or future agreement between Borrower and
Bank and as to any default under such other term, provision, condition or
covenant that can be cured, has failed to cure such default within ten (10) days
after Borrower receives notice thereof or any officer of Borrower becomes aware
thereof; provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional reasonable
period (which shall not in any case exceed thirty (30) days) to attempt to cure
such default, and within such reasonable time period the failure to have cured
such default shall not be deemed an Event of Default but no Credit Extensions
will be made;

 

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8.3    Material Adverse Change. If there occurs any circumstance or any
circumstances which would reasonably be expected to have a Material Adverse
Effect;

8.4    Attachment. If any material portion of Borrower’s assets is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within 10 days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower’s assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any material portion of Borrower’s assets by the United
States Government, or any department, agency, or instrumentality thereof, or by
any state, county, municipal, or governmental agency, and the same is not paid
within ten days after Borrower receives notice thereof, provided that none of
the foregoing shall constitute an Event of Default where such action or event is
stayed or an adequate bond has been posted pending a good faith contest by
Borrower (provided that no Credit Extensions will be made during such cure
period);

8.5    Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding
is commenced by Borrower, or if an Insolvency Proceeding is commenced against
Borrower and is not dismissed or stayed within forty-five (45) days (provided
that no Credit Extensions will be made prior to the dismissal of such Insolvency
Proceeding);

8.6    Other Agreements. If (a) there is a default or other failure to perform
in any agreement to which Borrower is a party with a third party or parties
(i) resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess
of Two Hundred Fifty Thousand Dollars ($250,000), (ii) in connection with any
lease of real property, or (iii) that would reasonably be expected to have a
Material Adverse Effect, or (b) any default or event of default (however
designated) shall occur with respect to any Subordinated Debt which is not cured
within any applicable cure period;

8.7    Judgments. If a final, uninsured judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least Two Hundred
Fifty Thousand Dollars ($250,000) shall be rendered against Borrower and shall
remain unsatisfied and unstayed for a period of 10 days (provided that no Credit
Extensions will be made prior to the satisfaction or stay of the judgment); or

8.8    Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document.

 

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9.    BANK’S RIGHTS AND REMEDIES.

9.1    Rights and Remedies. Upon the occurrence and during the continuance of an
Event of Default, Bank may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:

(a)    Declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan Documents, or otherwise, immediately due and payable (provided
that upon the occurrence of an Event of Default described in Section 8.5
(insolvency), all Obligations shall become immediately due and payable without
any action by Bank);

(b)    Demand that Borrower (i) deposit cash with Bank in an amount equal to the
amount of any Letters of Credit remaining undrawn, as collateral security for
the repayment of any future drawings under such Letters of Credit, and (ii) pay
in advance all Letter of Credit fees scheduled to be paid or payable over the
remaining term of the Letters of Credit, and Borrower shall promptly deposit and
pay such amounts;

(c)    Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement or under any other agreement between Borrower and
Bank;

(d)    Settle or adjust disputes and claims directly with account debtors for
amounts, upon terms and in whatever order that Bank reasonably considers
advisable;

(e)    Make such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral. Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral
available to Bank as Bank may designate. Borrower authorizes Bank to enter the
premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or lien which in Bank’s determination appears to be prior
or superior to its security interest and to pay all expenses incurred in
connection therewith. With respect to any of Borrower’s owned premises, Borrower
hereby grants Bank a license to enter into possession of such premises and to
occupy the same, without charge, in order to exercise any of Bank’s rights or
remedies provided herein, at law, in equity, or otherwise;

(f)    place a “hold” on any account maintained with Bank, decline to honor
presentments (including but not limited to checks, wires, and ACH drafts)
against any account at Bank, and/or deliver a notice of exclusive control, any
entitlement order, or other directions or instructions pursuant to any control
agreement or similar agreements providing control of any Collateral;

(g)    Set off and apply to the Obligations any and all (i) balances and
deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or
for the credit or the account of Borrower held by Bank;

(h)    Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Bank is hereby granted a license or other right, solely pursuant to
the provisions of this Section 9.1, to use, without charge, Borrower’s labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank’s
exercise of its rights under this Section 9.1, Borrower’s rights under all
licenses and all franchise agreements shall inure to Bank’s benefit;

 

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(i)    Sell the Collateral at either a public or private sale, or both, by way
of one or more contracts or transactions, for cash or on terms, in such manner
and at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Bank deems appropriate. Bank may sell the Collateral without
giving any warranties as to the Collateral. Bank may specifically disclaim any
warranties of title or the like, which procedure will not be considered as
adversely affecting the commercial reasonableness of any sale of the Collateral.
If Bank sells any of the Collateral upon credit, Borrower will be credited only
with payments actually made by the purchaser, received by Bank, and applied to
the indebtedness of the purchaser. If the purchaser fails to pay for the
Collateral, Bank may resell the Collateral and Borrower shall be credited with
the proceeds of the sale;

(j)    Bank may credit bid and purchase at any public sale;

(k)    Apply for the appointment of a receiver, trustee, liquidator or
conservator of the Collateral, without notice and without regard to the adequacy
of the security for the Obligations and without regard to the solvency of
Borrower, any guarantor or any other Person liable for any of the Obligations;
and

(l)    Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Borrower.

Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered as adversely affecting the commercial reasonableness of any sale of
the Collateral.

9.2    Power of Attorney. Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank’s designated officers, or employees) as Borrower’s true and
lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank’s security interest in the Accounts; (b) endorse
Borrower’s name on any checks or other forms of payment or security that may
come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle
and adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; and
(g) file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral; provided
Bank may exercise such power of attorney to sign the name of Borrower on any of
the documents described in clause (g) above, regardless of whether an Event of
Default has occurred. The appointment of Bank as Borrower’s attorney in fact,
and each and every one of Bank’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Bank’s obligation to provide advances hereunder is terminated.

9.3    Accounts Collection. At any time after the occurrence and during the
continuation of an Event of Default, Bank may notify any Person owing funds to
Borrower of

 

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Bank’s security interest in such funds and verify the amount of such Account.
Borrower shall collect all amounts owing to Borrower for Bank, receive in trust
all payments as Bank’s trustee, and immediately deliver such payments to Bank in
their original form as received from the account debtor, with proper
endorsements for deposit.

9.4    Bank Expenses. If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following after
reasonable notice to Borrower: (a) make payment of the same or any part thereof;
and/or (b) obtain and maintain insurance policies of the type discussed in
Section 6.5 of this Agreement, and take any action with respect to such policies
as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute
Bank Expenses, shall be immediately due and payable, and shall bear interest at
the then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Bank shall not constitute an agreement by Bank
to make similar payments in the future or a waiver by Bank of any Event of
Default under this Agreement.

9.5    Bank’s Liability for Collateral. Bank has no obligation to clean up or
otherwise prepare the Collateral for sale. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.

9.6    No Obligation to Pursue Others. Bank has no obligation to attempt to
satisfy the Obligations by collecting them from any other person liable for them
and Bank may release, modify or waive any collateral provided by any other
Person to secure any of the Obligations, all without affecting Bank’s rights
against Borrower. Borrower waives any right it may have to require Bank to
pursue any other Person for any of the Obligations.

9.7    Remedies Cumulative. Bank’s rights and remedies under this Agreement, the
Loan Documents, and all other agreements shall be cumulative. Bank shall have
all other rights and remedies not inconsistent herewith as provided under the
Code, by law, or in equity. No exercise by Bank of one right or remedy shall be
deemed an election, and no waiver by Bank of any Event of Default on Borrower’s
part shall be deemed a continuing waiver. No delay by Bank shall constitute a
waiver, election, or acquiescence by it. No waiver by Bank shall be effective
unless made in a written document signed on behalf of Bank and then shall be
effective only in the specific instance and for the specific purpose for which
it was given. Borrower expressly agrees that this Section 9.7 may not be waived
or modified by Bank by course of performance, conduct, estoppel or otherwise.

9.8    Demand; Protest. Except as otherwise provided in this Agreement, Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment and any other notices relating to the Obligations.

10.    NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
reporting required pursuant to Section 6.2 of this Agreement, which shall be
sent as directed in the monthly reporting forms provided by Bank) shall

 

20

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be personally delivered or sent by a recognized overnight delivery service,
certified mail, postage prepaid, return receipt requested, or by electronic mail
to Borrower or to Bank, as the case may be, at its addresses set forth below:

 

  If to Borrower:    Adicet Bio, Inc.      200 Constitution Drive      Menlo
Park, CA 94025      Attn: Anil Singhal, Ph.D., President and CEO      E-Mail:
asinghal@adicetbio.com                                            
with a copy to:                    Morrison & Foerster LLP      425 Market
Street      San Francisco, CA 94105      Attn: Darío Avram      E-mail:
davram@mofo.com   If to Bank:    Pacific Western Bank      406 Blackwell Street,
Suite 240      Durham, North Carolina 27701      Attn: Loan Operations Manager  
   E-Mail: loannotices@pacwest.com   with a copy to:    Pacific Western Bank  
   501 2nd Street, Suite 212      San Francisco, CA 94107      Attn: Benjermin
Colombo      E-mail: bcolombo@pacwest.com

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

11.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of North Carolina, without regard to principles of
conflicts of law. Jurisdiction shall lie in the State of North Carolina. All
disputes, controversies, claims, actions and similar proceedings arising with
respect to Borrower’s account or any related agreement or transaction shall be
brought in the General Court of Justice of North Carolina sitting in Durham
County, North Carolina, or the United States District Court for the Middle
District of North Carolina, except as provided below with respect to arbitration
of such matters. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY,

 

21

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VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. If the jury waiver set forth in
this Section 11 is not enforceable, then any dispute, controversy, claim, action
or similar proceeding arising out of or relating to this Agreement, the Loan
Documents or any of the transactions contemplated therein shall be settled by
final and binding arbitration held in Durham County, North Carolina in
accordance with the then current Commercial Arbitration Rules of the American
Arbitration Association by one arbitrator appointed in accordance with those
rules. The arbitrator shall apply North Carolina law to the resolution of any
dispute, without reference to rules of conflicts of law or rules of statutory
arbitration. Judgment upon any award resulting from arbitration may be entered
into and enforced by any state or federal court having jurisdiction thereof.
Notwithstanding the foregoing, the parties may apply to any court of competent
jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this Section. The costs and expenses of the
arbitration, including without limitation, the arbitrator’s fees and reasonable
and documented expert witness fees, and reasonable and documented attorneys’
fees, incurred by the parties to the arbitration may be awarded to the
prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such costs and expenses, both parties shall share equally in the payment of
the arbitrator’s fees as and when billed by the arbitrator.

12.    GENERAL PROVISIONS.

12.1    Successors and Assigns. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties and shall bind all persons who become bound as a debtor to this
Agreement; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Bank’s prior written consent,
which consent may be granted or withheld in Bank’s sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, assign,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank’s obligations, rights and benefits hereunder. Notwithstanding
the foregoing, so long as no Event of Default has occurred and is continuing,
Bank shall not assign its interest herein or the Loan Documents to any Person
who is (i) a direct competitor of Borrower, whether as an operating company or
direct or indirect parent with voting control over such operating company, or
(ii) any “vulture fund” or similar hedge fund, private equity fund or other
investor that invests in distressed debt as a material part of its investment
strategy.

12.2    Indemnification. Borrower shall defend, indemnify and hold harmless Bank
and its officers, directors, employees, affiliates, advisors and agents against:
(a) all obligations, demands, claims, and liabilities claimed or asserted by any
other party in connection with the transactions contemplated by this Agreement;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank, its officers, employees and agents as a result of or in any

 

22

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way arising out of, following, or consequential to transactions between Bank and
Borrower whether under this Agreement, or otherwise (including without
limitation reasonable and documented attorneys fees and expenses), except for
losses caused by Bank’s gross negligence or willful misconduct as determined by
a court of competent jurisdiction by final and non-appealable order.

12.3    Time of Essence. Time is of the essence for the performance of all
obligations set forth in this Agreement.

12.4    Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

12.5    Amendments in Writing, Integration. All amendments to or terminations of
this Agreement or the other Loan Documents must be in writing. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement
and the other Loan Documents, if any, are merged into this Agreement and the
Loan Documents.

12.6    Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Executed copies of the signature pages of this Agreement sent by facsimile or
transmitted electronically in Portable Document Format (“PDF”), or any similar
format, shall be treated as originals, fully binding and with full legal force
and effect, and the parties waive any rights they may have to object to such
treatment.

12.7    Survival. All covenants, representations and warranties made in this
Agreement shall continue in full force and effect so long as any Obligations
remain outstanding or Bank has any obligation to make any Credit Extension to
Borrower. The obligations of Borrower to indemnify Bank with respect to the
expenses, damages, losses, costs and liabilities described in Section 12.2 shall
survive until all applicable statute of limitations periods with respect to
actions that may be brought against Bank have run.

12.8    Confidentiality and Publicity.

(a)    Other than (i) to the extent required by it by law, (ii) as may be
required in connection with the examination, audit, or similar investigation of
Borrower, (iii) in response to any subpoena or other legal process or informal
investigative demand, or (iv) in connection with the actual or potential
exercise or enforcement of any right or remedy under any Loan Document, Borrower
shall not, and shall not permit any of its Affiliates to: (A) publish or
publicly disclose any materials containing Bank’s name, including in any press
release or otherwise in connection with any advertising or marketing, without
first obtaining Bank’s prior written consent, or (B) use Bank’s name (or the
name of any of its Affiliates) in connection with its operations or business;
and

(b)    In handling any confidential information, Bank shall exercise
commercially reasonable efforts to maintain in confidence, in accordance with
its customary procedures for handling

 

23

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confidential information, all non-public information furnished to Bank in
connection with the Loan Documents or derived by or on behalf of Bank through
inspection, analysis or observation of the foregoing (“Confidential
Information”) other than any such Confidential Information that becomes
generally available to the public or becomes available to Bank from a source
other than Borrower and that is not known to Bank to be subject to
confidentiality obligations, and shall not disclose any such Confidential
Information to any other party; provided, that Bank and its Affiliates shall
have the right to disclose Confidential Information to (provided, that in the
case of (i)-(vi) below, such Person is bound by similar restrictions regarding
disclosure and use of such information): (i) such Person’s Affiliates; (ii) such
Person or such Person’s Affiliates’ lenders, funding sources, or financing
sources; (iii) such Person’s or such Person’s Affiliates’ directors, officers,
trustees, partners, members, managers, employees, agents, advisors,
representatives, attorneys, equity owners, professional consultants, portfolio
management services and rating agencies; (iv) any successor or assign of Bank;
(v) any Person to whom Bank offers to sell, assign or transfer any Credit
Extension or any part thereof or any interest or participation therein in
accordance with the terms of this Agreement; (vi) any Person that provides
statistical analysis and/or information services to Bank or its Affiliates; and
(vii) any Person (A) to the extent required by it by law, rule, regulation or
stock exchange requirements, (B) as may be required in connection with the
examination, audit, or similar investigation of Bank, (C) in response to any
subpoena or other legal process or informal investigative demand, (D) in
connection with any litigation, or (E) in connection with the actual or
potential exercise or enforcement of any right or remedy under any Loan
Document. The obligations of Bank and its Affiliates under this Section 12.8
shall supersede and replace any other confidentiality obligations agreed to by
Bank or its Affiliates.

[Balance of Page Intentionally Left Blank]

 

24

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

 

ADICET BIO, INC. By:  

/s/ Anil Singhal

Name:   Anil Singhal Title:   CEO PACIFIC WESTERN BANK By:  

/s/ Benjermin Colombo

Name:   /s/ Benjermin Colombo Title:   Managing Director

[Signature Page to Loan and Security Agreement]

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EXHIBIT A

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DEFINITIONS

“Accounts” means all presently existing and hereafter arising accounts, contract
rights, payment intangibles and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower and
Borrower’s Books relating to any of the foregoing.

“Adicet Israel” means Adicet Bio Israel Ltd. (f/k/a Applied Immune Technologies
Ltd.), Borrower’s wholly-owned Subsidiary formed under the laws of Israel.

“Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, and each of such Person’s senior
executive officers, directors, and general partners.

“Amortization Start Date” means the first (1st) day of the month immediately
following the Interest Only End Date.

“Authorized Officer” means someone designated as such in the corporate
resolution provided by Borrower to Bank in which this Agreement and the
transactions contemplated hereunder are authorized by Borrower’s board of
directors. If Borrower provides subsequent corporate resolutions to Bank after
the Closing Date, the individual(s) designated as “Authorized Officer(s)” in the
most recently provided resolution shall be the only “Authorized Officers” for
purposes of this Agreement.

“Availability End Date” means the date eighteen (18) months after the Closing
Date.

“Bank Expenses” means all reasonable costs or expenses (including reasonable
attorneys’ fees and expenses, whether generated by in-house or by outside
counsel) incurred in connection with the preparation, negotiation,
administration, and enforcement of the Loan Documents; reasonable Collateral
audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether
generated in-house or by outside counsel) incurred in amending, enforcing or
defending the Loan Documents (including fees and expenses of appeal), incurred
before, during and after an Insolvency Proceeding, whether or not suit is
brought.

“Borrower’s Books” means all of Borrower’s books and records including: ledgers;
records concerning Borrower’s assets or liabilities, the Collateral, business
operations or financial condition; and all computer programs, or tape files, and
the equipment, containing such information.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of North Carolina are authorized or required to close.

“Capitalized Expenditures” means current period unfinanced cash expenditures
that are capitalized and amortized over a period of time in accordance with
GAAP, including but not limited to capitalized cash expenditures for capital
equipment, capitalized manufacturing and labor costs as they relate to
inventory, and capitalized cash expenditures for software development.

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

“Cash” means unrestricted cash and cash equivalents.

“Change in Control” shall mean a transaction other than a bona fide equity
financing or series of financings on terms and from investors reasonably
acceptable to Bank in which any “person” or “group” (within the meaning of
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of a sufficient number of shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority
of the Board of Directors of Borrower, who did not have such power before such
transaction, provided that the Permitted Transactions shall not constitute a
Change in Control.

“Closing Date” means the date of this Agreement.

“Code” means the North Carolina Uniform Commercial Code as amended or
supplemented from time to time.

“Collateral” means the property described on Exhibit B attached hereto and all
Negotiable Collateral to the extent not described on Exhibit B, except to the
extent any such property (i) is non-assignable by its terms without the consent
of the licensor thereof or another party (but only to the extent such
prohibition on transfer is enforceable under applicable law, including, without
limitation, §25-9-406 and §25-9-408 of the Code), (ii) is property for which the
granting of a security interest therein is contrary to applicable law, provided
that upon the cessation of any such restriction or prohibition, such property
shall automatically become part of the Collateral, (iii) constitutes the capital
stock of a controlled foreign corporation (as defined in the IRC), in excess of
65% of the voting power of all classes of capital stock of such controlled
foreign corporations entitled to vote, if the grant of a security interest in
such capital stock pursuant to this Agreement would result in material adverse
“deemed dividend” tax consequences to Borrower due to the application of IRC
§956, or (iv) is property (including any attachments, accessions or
replacements) that is subject to a Lien that is permitted pursuant to clause
(c) of the definition of Permitted Liens, if the grant of a security interest
with respect to such property pursuant to this Agreement would be prohibited by
the agreement creating such Permitted Lien or would otherwise constitute a
default thereunder, provided, that such property will be deemed “Collateral”
hereunder upon the termination and release of such Permitted Lien.

“Compliance Certificate” means a compliance certificate, in substantially the
form of Exhibit D attached hereto, executed by a Responsible Officer of the
Borrower.

“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, without limitation, 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 any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.

“Credit Extension” means each Term Loan or any other extension of credit by Bank
to or for the benefit of Borrower hereunder.

“Divide” means, with respect to any Person that is an entity, the dividing of
such Person into two or more separate Persons, with the dividing Person either
continuing or terminating its existence as part of such division, including as
contemplated under Section 18-217 of the Delaware Limited Liability Company Act
for limited liability companies formed under Delaware law, or any analogous
action taken pursuant to any other statute with respect to any corporation,
limited liability company, partnership, or other entity.

“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

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

“Event of Default” has the meaning assigned in Article 8.

“FDA” means the United States Food and Drug Administration.

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

“IND Milestone” means Bank’s receipt of evidence reasonably satisfactory to Bank
of receipt by Borrower of net payments, in one or more installments, from
Regeneron equal to Twenty Million Dollars ($20,000,000) occurring within
eighteen (18) months after the Closing Date in respect of Borrower’s achievement
of (i) Borrower’s filing of an investigational new drug application with the FDA
for ADI-001 and (ii) selection of a second clinical product candidate,
“ADI-002”.

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
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, including but not limited to
any sublimit contained herein.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

“Interest Only End Date” means (i) if Borrower does not achieve the IND
Milestone, the date eighteen (18) months after the Closing Date, and (ii) if
Borrower achieves the IND Milestone, the date twenty-four (24) months after the
Closing Date.

“Inventory” means all present and future inventory in which Borrower has any
interest.

“Investment” means any beneficial ownership of (including stock, partnership or
limited liability company interest or other securities) any Person, or any loan,
advance or capital contribution to any Person.

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

“Letter of Credit” means a commercial or standby letter of credit or similar
undertaking issued by Bank (or any of its correspondent banks) at Borrower’s
request.

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

“Loan Documents” means, collectively, this Agreement, any note or notes executed
by Borrower, and any other document, instrument or agreement entered into in
connection with this Agreement, all as amended or extended from time to time.

“Material Adverse Effect” means a material adverse effect on (i) the operations,
business or financial condition of Borrower and its Subsidiaries taken as a
whole, (ii) the ability of Borrower to repay the Obligations or otherwise
perform its obligations under the Loan Documents, or (iii) Borrower’s interest
in, or the value, perfection or priority of Bank’s security interest in the
Collateral.

“Maturity Date” means April     , 2024.

“Negotiable Collateral” means all of Borrower’s present and future letters of
credit of which it is a beneficiary, drafts, instruments (including promissory
notes), securities, documents of title, and chattel paper, and Borrower’s Books
relating to any of the foregoing.

“New Subsidiary” has the meaning set forth in Section 6.8 hereof.

“Obligations” means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent,

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due or to become due, now existing or hereafter arising, including any interest
that accrues after the commencement of an Insolvency Proceeding and including
any debt, liability, or obligation owing from Borrower to others that Bank may
have obtained by assignment or otherwise.

“Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.

“Permitted Indebtedness” means:

(a)    Indebtedness of Borrower in favor of Bank arising under this Agreement or
any other Loan Document;

(b)    Indebtedness existing on the Closing Date and disclosed in the Schedule;

(c)    Indebtedness (including capital lease obligations and purchase money
indebtedness) not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate at any time secured by a Lien described in clause 12.8(c) of the
defined term “Permitted Liens,” provided such Indebtedness does not exceed at
the time it is incurred the lesser of the cost or fair market value of the
property financed with such Indebtedness;

(d)    Subordinated Debt;

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

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

(g)    Indebtedness associated with the SVB Letters of Credit, subject to the
terms of Section 6.9;

(h)    Other, unsecured Indebtedness of Borrower and any Subsidiary in an
aggregate principal amount not to exceed Two Hundred Fifty Thousand Dollars
($250,000); and

(i)    Extensions, refinancings and renewals of any items of Permitted
Indebtedness, provided that the principal amount is not increased or the terms
modified to impose more burdensome terms upon Borrower or its Subsidiary, as the
case may be.

“Permitted Investment” means:

(a)    Investments existing on the Closing Date disclosed in the Schedule;

(b)    (i) Marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency or any State thereof maturing within
two (2) years from the date of acquisition thereof, (ii) commercial paper
maturing no more than two (2) years from the date of creation thereof and
currently having rating of at least A-1 or P-1 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit
maturing no more than two (2) years from the date of investment therein,
(iv) Bank’s money market

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accounts; (v) Investments in regular deposit or checking accounts held with Bank
or as otherwise permitted by, and subject to the terms and conditions of,
Section 6.6 of this Agreement; and (vi) Investments consistent with any
investment policy adopted by Borrower’s board of directors;

(c)    Investments accepted in connection with Permitted Transfers;

(d)    (i) Investments of Subsidiaries in or to other Subsidiaries or Borrower
and Investments by Borrower in Subsidiaries not to exceed Two Hundred Fifty
Thousand Dollars ($250,000) in the aggregate in any fiscal year, and
(ii) additional Investments by Borrower in Adicet Israel solely to satisfy tax
liabilities in connection with Adicet Israel’s dissolution not to exceed Five
Hundred Thousand Dollars ($500,000), provided that prior notice of such
dissolution shall be delivered to Bank;

(e)    Investments not to exceed Two Hundred Fifty Thousand Dollars ($250,000)
outstanding in the aggregate at any time consisting of (i) travel advances and
employee relocation loans and other employee loans and advances in the ordinary
course of business, and (ii) loans to employees, officers or directors relating
to the purchase of equity securities of Borrower or its Subsidiaries pursuant to
employee stock purchase plan agreements approved by Borrower’s Board of
Directors;

(f)    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 Borrower’s business;

(g)    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 (g) shall not
apply to Investments of Borrower in any Subsidiary;

(h)    Joint ventures or strategic alliances in the ordinary course of
Borrower’s business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided that
any cash Investments by Borrower do not exceed Two Hundred Fifty Thousand
Dollars ($250,000) in the aggregate in any fiscal year; and

(i)    Investments permitted under Section 7.3.

“Permitted Liens” means the following:

(a)    Any Liens existing on the Closing Date and disclosed in the Schedule
(excluding Liens to be satisfied with the proceeds of the Credit Extensions) or
arising under this Agreement, the other Loan Documents, or any other agreement
in favor of Bank;

(b)    Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by appropriate
proceedings and for which Borrower maintains adequate reserves;

(c)    Liens not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate at any time (i) upon or in any Equipment (other than Equipment
financed by a Credit

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Extension) acquired or held by Borrower or any of its Subsidiaries to secure the
purchase price of such Equipment or indebtedness incurred solely for the purpose
of financing the acquisition or lease of such Equipment, or (ii) existing on
such Equipment at the time of its acquisition, in each case provided that the
Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such Equipment;

(d)    Liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by Liens of the type described in clauses
(a) through (c) 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 does
not increase;

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

(f)    Liens held by Borrower in the assets of any of its Subsidiaries securing
intercompany debt permitted under this Agreement;

(g)    Liens of carriers, warehousemen, suppliers, or other Persons that are
possessory in nature arising in the ordinary course of business so long as such
Liens attach only to Inventory, securing liabilities in the aggregate amount not
to exceed Two Hundred Fifty Thousand Dollars ($250,000) and which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto and for which
Borrower maintains adequate reserves;

(h)    pledges or deposits on assets worth an aggregate amount not to exceed Two
Hundred Fifty Thousand Dollars ($250,000) to secure the performance of bids,
trade contracts (other than for borrowed money), leases, licenses, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

(i)    Liens securing Subordinated Debt, provided that such Liens do not
encumber assets beyond those assets comprising the Collateral.

(j)    Liens in favor of other financial institutions arising in connection with
Borrower’s deposit accounts held at such institutions to secure standard fees
for deposit services charged by, but not financing made available by, such
institutions, provided that Bank has a perfected security interest in the
amounts held in such deposit accounts.

“Permitted Transactions” means (i) a proposed reverse triangular merger among
Borrower, a publicly traded company previously disclosed to Bank (“Parent”), and
a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub
will merge with and into Borrower with Borrower surviving as a wholly owned
subsidiary of Parent in accordance with the terms of that certain merger
agreement by and between Borrower, Parent and Merger Sub (the “Merger
Agreement”), as summarized in that certain Summary of Terms of Funding and
Merger and provided to Bank (as may be modified by the terms of the Merger
Agreement, the “Summary of Terms” and such transaction the “Merger”), (ii) the
entry by such parties into agreements,

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documents and instruments and the making of filings (including, without
limitation, public filings disclosing this Agreement, the other Loan Documents
and their terms) for and related to the Merger, and (iii) the transactions
contemplated by or entered into in connection with any of the foregoing
transactions or agreements; provided, that, (a) the Merger is consummated
substantially in accordance with the Summary of Terms unless otherwise approved
by Bank in writing, (b) Borrower has delivered to Bank (1) the Merger Agreement,
all exhibits thereto, and all material documents, instruments, certificates
and/or agreements to be executed by Borrower in connection with the Merger (the
“Merger Documents”) and (2) all diligence materials reasonably requested by Bank
(the “Merger Diligence”), (c) Bank has confirmed in writing its approval of the
Merger Documents and the Merger Diligence prior to the consummation of the
Merger (and Borrower has delivered to Bank the executed copies of all Merger
Documents) and (iv) simultaneously with or promptly following the consummation
of the Merger, Borrower takes all actions reasonably required by Bank in its
sole discretion to cause Parent to guarantee Borrower’s obligations under this
Agreement, together with such other documents, and completion of such other
matters, including, without limitation, a new warrant as provided for in
Section 2.2 of the Warrant, and Parent shall grant and pledge to Bank a
perfected security interest in substantially all of its assets other than
Intellectual Property, including, without limitation, the stock, units or other
evidence of ownership of Borrower.

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of:

(a)    Inventory in the ordinary course of business;

(b)    non-exclusive licenses of Intellectual Property granted to third parties
in the ordinary course of business, and licenses of Intellectual Property that
could not result in a legal transfer of title of the licensed property that may
be exclusive in respects other than territory and that may be exclusive as to
territory only as to discrete geographical areas outside of the United States;

(c)    worn-out, surplus or obsolete Equipment not financed with the proceeds of
Credit Extensions;

(d)    grants of security interests and other Liens that constitute Permitted
Liens;

(e)    any asset of any Subsidiary to Borrower;

(f)    cash and cash equivalents (i) in the ordinary course of business and in a
manner not otherwise prohibited by this Agreement, or (ii) permitted by clause
(d) of the definition of Permitted Investments; and

(g)    other assets of Borrower or its Subsidiaries that do not in the aggregate
exceed Two Hundred Fifty Thousand Dollars ($250,000) during any fiscal year.

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

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“Prime Rate” means the variable rate of interest, per annum, most recently
announced by Bank, as its “prime rate,” whether or not such announced rate is
the lowest rate available from Bank.

“Regeneron” means Regeneron Pharmaceuticals, Inc., a New York corporation.

“Regeneron Agreement” means that certain License and Collaboration Agreement by
and between Borrower and Regeneron, dated as of July 29, 2016, as amended by
that certain Amendment No. 1 to License and Collaboration Agreement dated as of
April 4, 2019.

“Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, Vice President of Finance and
the Controller of Borrower, as well as any other officer or employee identified
as an Authorized Officer in the corporate resolution delivered by Borrower to
Bank in connection with this Agreement.

“Schedule” means the schedule of exceptions attached hereto, as the same may be
updated from time to time to the extent approved by Bank.

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

“SOS Reports” means the official reports from the Secretaries of State of the
state where Borrower’s chief executive office is located, the state of
Borrower’s formation and other applicable federal, state or local government
offices identifying all current security interests filed in the Collateral and
Liens of record as of the date of such report.

“Subordinated Debt” means any debt incurred by Borrower that is subordinated in
writing to the debt owing by Borrower to Bank on terms reasonably acceptable to
Bank (and identified as being such by Borrower and Bank).

“Subsidiary” means any corporation, partnership or limited liability company or
joint venture in which (i) any general partnership interest or (ii) more than
50% of the stock, limited liability company interest or joint venture of which
by the terms thereof ordinary voting power to elect the Board of Directors,
managers or trustees of the entity, at the time as of which any determination is
being made, is owned by Borrower, either directly or through an Affiliate.

“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

“Warrant” means that certain Warrant to Purchase Stock issued by Borrower to
Bank dated as of the Closing Date.