Exhibit 10.1

 

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of August 28, 2020 (the “Amendment Effective Date”), is made among Axcella
Health Inc., a Delaware corporation (the “Axcella”), and Acora Nutrition LLC, a
Delaware limited liability company (“Acora” and, individually and collectively,
jointly and severally with Axcella, the “Borrower”), Solar Capital Ltd., a
Maryland corporation (“Solar”), in its capacity as collateral agent (in such
capacity, together with its successors and assigns in such capacity, “Collateral
Agent”) and the Lenders listed on Schedule 1.1 of the Loan and Security
Agreement (as defined below) or otherwise a party hereto from time to time
including Solar in its capacity as a Lender (each a

 

“Lender” and collectively, the “Lenders”).

 

The Borrower, the Lenders and Collateral Agent are parties to a Loan and
Security Agreement dated as of January 9, 2018 (as amended by that certain First
Amendment to Loan and Security Agreement, dated as of October 5, 2018, and that
certain Second Amendment to Loan and Security Agreement, dated as of
November 30, 2018, and as further amended, restated or modified from time to
time, the “Loan and Security Agreement”). The Borrower has requested that the
Lenders agree to certain amendments to the Loan and Security Agreement. The
Lenders have agreed to such request, subject to the terms and conditions hereof.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1          Definitions; Interpretation.

 

(a)           Terms Defined in Loan and Security Agreement. All capitalized
terms used in this Amendment (including in the recitals hereof) and not
otherwise defined herein shall have the meanings assigned to them in the Loan
and Security Agreement.

 

(b)           Interpretation. The rules of interpretation set forth in
Section 1.1 of the Loan and Security Agreement shall be applicable to this
Amendment and are incorporated herein by this reference.

 

SECTION 2          Amendments to the Loan and Security Agreement.

 

(a)           The Loan and Security Agreement shall be amended as follows
effective as of the Amendment Effective Date:

 

(i)           New Definitions. The following definitions are added to
Section 1.3 in their proper alphabetical order:

 

“Fifth Interest Only Extension Conditions” shall mean satisfaction of each of
the following: (a) no Default or Event of Default shall have occurred and be
continuing and Borrower has achieved First Interest Only Extension Conditions,
Second Interest Only Conditions, Third Interest Only Extension Conditions and
Fourth Interest Only Extension Conditions; and (b) after the Third Amendment
Effective Date and on or before September 30, 2021, Borrower shall have provided
Collateral Agent evidence satisfactory to Collateral Agent of achievement of
each of the following: (i) Borrower shall have submitted an IND for AXA-1665,
(ii) Borrower shall have submitted an IND for AXA-1125 in adult Nonalcoholic
Steatohepatitis and (iii) a patient has completed enrollment in a
Borrower-sponsored Phase 2b clinical trial for adult Nonalcoholic
Steatohepatitis.

 

“Fourth Interest Only Extension Conditions” shall mean satisfaction of each of
the following: (a) no Default or Event of Default shall have occurred and be
continuing and Borrower has achieved First Interest Only Extension Conditions,
Second Interest Only Conditions and Third Interest Only Extension Conditions;
and (b) after the Third Amendment Effective Date and on or before September 30,
2021, Borrower shall have provided Collateral Agent evidence satisfactory to
Collateral Agent of achievement of any two of the following: (i) Borrower shall
have submitted an IND for AXA-1665, (ii) Borrower shall have submitted an IND
for AXA-1125 in adult Nonalcoholic Steatohepatitis and (iii) a patient has
completed enrollment in a Borrower-sponsored Phase 2b clinical trial for adult
Nonalcoholic Steatohepatitis.

 

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“IND” means an Investigational New Drug Application submitted to the FDA
pursuant to 21 C.F.R. § 312 (or its successor regulation) requesting
authorization to initiate clinical trials in human subjects.

 

“Third Amendment Effective Date” means August 28, 2020.

 

(ii)          Amended and Restated Definitions. The following definitions are
hereby amended and restated as follows:

 

“Amortization Date” is November 1, 2021; provided that, (i) if the Fourth
Interest Only Extension Conditions are satisfied and Borrower so elects, then
February 1, 2022; and (ii) if the Fifth Interest Only Extension Conditions are
satisfied and Borrower so elects, then May 1, 2022.

 

“Final Fee” is a payment (in addition to and not a substitution for the regular
monthly payments of principal plus accrued interest) due on the earliest to
occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or
(c) the prepayment of a Term Loan by Borrower pursuant to Section 2.2(c) or (d),
equal to 6.35% of the Term Loans funded under this Agreement.

 

“LIBOR Rate” means the greater of (a) 0.20% per annum, and (b) the rate per
annum rate published by the Intercontinental Exchange Benchmark Administration
Ltd. (the “Service”) (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service) for a term of one month, which
determination by Collateral Agent shall be conclusive in the absence of manifest
error.

 

(b)           References Within Loan and Security Agreement. Each reference in
the Loan and Security

 

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

 

SECTION 3 Conditions of Effectiveness. The effectiveness of Section 2 of this
Amendment shall be subject to the satisfaction of each of the following
conditions precedent:

 

(a)           Fees and Expenses. The Borrower shall have paid (i) an amendment
fee of $39,000, (ii) all invoiced costs and expenses then due in accordance with
Section 5(e), and (iii) all other fees, costs and expenses, if any, due and
payable as of the Amendment Effective Date under the Loan and Security
Agreement.

 

(b)          This Amendment. Collateral Agent shall have received this
Amendment, executed by Collateral Agent, the Lenders and the Borrower.

 

(c)           Representations and Warranties; No Default. On the Amendment
Effective Date, after giving effect to the amendment of the Loan and Security
Agreement contemplated hereby:

 

(i)           The representations and warranties contained in Section 4 shall be
true and correct on and as of the Amendment Effective Date as though made on and
as of such date; and

 

(ii)          There exist no Events of Default or events that with the passage
of time would result in an Event of Default.

 

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SECTION 4          Representations and Warranties. To induce the Lenders to
enter into this Amendment, the Borrower hereby confirms, as of the date hereof,
(a) that the representations and warranties made by it in Section 5 of the Loan
and Security Agreement and in the other Loan Documents are true and correct in
all material respects; provided, however, that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; (b) that there has not
been and there does not exist a Material Adverse Change; and (c) that the
information included in the Perfection Certificate delivered to Collateral Agent
on the Effective Date is true and correct in all material respects as of the
Amendment Effective Date, subject to changes reflected in Borrower’s monthly
Compliance Certificates. For the purposes of this Section 4, (i) each reference
in Section 5 of the Loan and Security Agreement to “this Agreement,” and the
words “hereof,” “herein,” “hereunder,” or words of like import in such Section,
shall mean and be a reference to the Loan and Security Agreement as amended by
this Amendment, and (ii) any representations and warranties which relate solely
to an earlier date shall not be deemed confirmed and restated as of the date
hereof (provided that such representations and warranties shall be true, correct
and complete in all material respects as of such earlier date).

 

SECTION 5          Miscellaneous.

 

(a)            Loan Documents Otherwise Not Affected; Reaffirmation. Except as
expressly amended pursuant hereto or referenced herein, the Loan and Security
Agreement and the other Loan Documents shall remain unchanged and in full force
and effect and are hereby ratified and confirmed in all respects. The Lenders’
and Collateral Agent’s execution and delivery of, or acceptance of, this
Amendment shall not be deemed to create a course of dealing or otherwise create
any express or implied duty by any of them to provide any other or further
amendments, consents or waivers in the future. The Borrower hereby reaffirms the
grant of security under Section

 

4.1            of the Loan and Security Agreement and hereby reaffirms that such
grant of security in the Collateral secures all Obligations under the Loan and
Security Agreement, including without limitation any Term Loans funded on or
after the Amendment Effective Date, as of the date hereof.

 

(b)            Conditions. For purposes of determining compliance with the
conditions specified in Section 3, each Lender that has signed this Amendment
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless Collateral Agent
shall have received notice from such Lender prior to the Amendment Effective
Date specifying its objection thereto.

 

(c)            Release. In consideration of the agreements of Collateral Agent
and each Lender contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrower, on
behalf of itself and its successors, assigns, and other legal representatives,
hereby fully, absolutely, unconditionally and irrevocably releases, remises and
forever discharges Collateral Agent and each Lender, and its successors and
assigns, and its present and former shareholders, affiliates, subsidiaries,
divisions, predecessors, directors, officers, attorneys, employees, agents and
other representatives (Collateral Agent, the Lenders and all such other persons
being hereinafter referred to collectively as the “Releasees” and individually
as a “Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities whatsoever
of every name and nature, known or unknown, suspected or unsuspected, both at
law and in equity, which Borrower, or any of its successors, assigns, or other
legal representatives may now or hereafter own, hold, have or claim to have
against the Releasees or any of them for, upon, or by reason of any
circumstance, action, cause or thing whatsoever which arises at any time on or
prior to the day and date of this Amendment, including, without limitation, for
or on account of, or in relation to, or in any way in connection with the Loan
Agreement, or any of the other Loan Documents or transactions thereunder or
related thereto. Borrower understands, acknowledges and agrees that the release
set forth above may be pleaded as a full and complete defense and may be used as
a basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
release. Borrower agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.

 

(d)            No Reliance. The Borrower hereby acknowledges and confirms to
Collateral Agent and the Lenders that the Borrower is executing this Amendment
on the basis of its own investigation and for its own reasons without reliance
upon any agreement, representation, understanding or communication by or on
behalf of any other Person.

 

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(e)            Costs and Expenses. The Borrower agrees to pay to Collateral
Agent within thirty (30) days of its receipt of an invoice (or on the Amendment
Effective Date to the extent invoiced on or prior to the Amendment Effective
Date), the out-of-pocket costs and expenses of Collateral Agent and the Lenders
party hereto, and the reasonable documented fees and disbursements of counsel to
Collateral Agent and the Lenders party hereto (including allocated costs of
internal counsel), in connection with the negotiation, preparation, execution
and delivery of this Amendment and any other documents to be delivered in
connection herewith on the Amendment Effective Date or after such date.

 

(f)            Binding Effect. This Amendment binds and is for the benefit of
the successors and permitted assigns of each party.

 

(g)           Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS
OTHER THAN THE LAWS OF THE STATE OF NEW YORK), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE
COLLATERAL.

 

(h)            Complete Agreement; Amendments; Exit Fee Agreement. This
Amendment and the Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements with respect to
such subject matter. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of
this Amendment and the Loan Documents merge into this Amendment and the Loan
Documents. For the avoidance of doubt and notwithstanding anything to the
contrary in this Amendment, Borrower (a) reaffirms its obligations under the
Exit Fee Agreement, including without limitation its obligation to pay the Exit
Fee (as defined in the Exit Fee Agreement) if and when due thereunder, and (b)
agrees that the defined term “Loan Agreement” as defined in the Exit Fee
Agreement shall on and after the Amendment Effective Date mean the Loan and
Security Agreement as amended by this Amendment and as may be amended, restated
or modified from time to time on or after the Amendment Effective Date.

 

(i)            Severability of Provisions. Each provision of this Amendment is
severable from every other provision in determining the enforceability of any
provision.

 

(j)            Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, is an original, and all taken together, constitute
one Amendment. Delivery of an executed counterpart of a signature page of this
Amendment by facsimile, portable document format (.pdf) or other electronic
transmission will be as effective as delivery of a manually executed counterpart
hereof.

 

(k)           Loan Documents. This Amendment and the documents related thereto
shall constitute Loan Documents.

 

(l)            Electronic Execution of Certain Other Documents. The words
“execution,” “execute”, “signed,” “signature,” and words of like import in or
related to any document to be signed in connection with this Amendment and the
transactions contemplated hereby (including without limitation assignments,
assumptions, amendments, waivers and consents) shall be deemed to include
electronic signatures, the electronic matching of assignment terms and contract
formations on electronic platforms approved by Collateral Agent, or the keeping
of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

[Balance of Page Intentionally Left Blank; Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.

 

BORROWER:       AXCELLA HEALTH INC.,   as Borrower       By: /s/ Laurent
Chardonnet     Name: Laurent Chardonnet   Title: Chief Financial Officer

 

  ACORA NUTRITION LLC,   as Borrower       By: Axcella Health Inc., its sole
member       By: /s/ Laurent Chardonnet     Name: Laurent Chardonnet   Title:
Chief Financial Officer

 

[Signature Page to Third Amendment to Loan and Security Agreement]

 

 

 

  COLLATERAL AGENT AND LENDER:       SOLAR CAPTAL LTD.,   as Collateral Agent
and a Lender       By: /s/ Anthony Storino     Name: Anthony Storino   Title:
Authorized Signatory

 

[Signature Page to Third Amendment to Loan and Security Agreement]