Exhibit 10.31
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT to Loan and Security Agreement (this “Amendment”) is made
effective as of October 4, 2017 (the “First Amendment Date”) and made, by and
among OXFORD FINANCE LLC, a Delaware limited liability company with an office
located at 133 North Fairfax Street, Alexandria, Virginia 22314 (in its
individual capacity, “Oxford”; and in its capacity as Collateral Agent,
“Collateral Agent”), the Lenders listed on Schedule 1.1 of the Loan Agreement
(as defined below) from time to time including Oxford in its capacity as a
Lender (each a “Lender” and collectively, the “Lenders”) and REGULUS
THERAPEUTICS INC., a Delaware corporation with offices located at 10614 Science
Center Dr., San Diego, California 92121 (“Borrower”).
WHEREAS, Collateral Agent, Borrower and Lenders party thereto from time to time
have entered into that certain Loan and Security Agreement, dated as of June 17,
2016 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) pursuant to which Lenders have provided to Borrower certain
loans in accordance with the terms and conditions thereof; and
WHEREAS, Borrower, Lenders and Collateral Agent desire to amend certain
provisions of the Loan Agreement as provided herein and subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower, Lenders and Collateral
Agent hereby agree as follows:
1.
Capitalized terms used herein but not otherwise defined shall have the
respective meanings given to them in the Loan Agreement.

2.
Section 13.1 of the Loan Agreement is hereby amended by amending and restating
the following definitions therein as follows:

“Permitted Indebtedness” is:
(a)    Borrower’s Indebtedness to the Lenders and Collateral Agent under this
Agreement and the other Loan Documents;

(b)    Indebtedness existing on the Effective Date and disclosed on the
Perfection Certificate(s);

(c)    Subordinated Debt;

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

(e)    Indebtedness consisting of capitalized lease obligations and purchase
money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries
to finance the acquisition, repair, improvement or construction of fixed or
capital assets of such person, provided that (i) the aggregate outstanding
principal amount of all such Indebtedness does not exceed Two Hundred Fifty
Thousand Dollars ($250,000.00) at any time and (ii) the principal amount of such
Indebtedness does not exceed the lower of the cost or fair market value of the
property so acquired or built or of such repairs or improvements financed with
such Indebtedness (each measured at the time of such acquisition, repair,
improvement or construction is made);

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

(g)    Indebtedness that also constitutes a Permitted Investment under clause
(g) of the definition of “Permitted Investment”;

(h)    Indebtedness relating to the financing of insurance premiums in an
aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000.00) at
any given time; and

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(i)    extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness (a) through (h) above, provided that the
principal amount thereof is not increased and the terms thereof are not modified
to impose materially more burdensome terms upon Borrower, or its Subsidiary, as
the case may be.

“Permitted Liens” are:
(a)Liens existing on the Effective Date and disclosed on the Perfection
Certificates or arising under this Agreement and the other Loan Documents;

(b)Liens for taxes, fees, assessments or other government charges or levies,
either (i) not due and payable or (ii) being contested in good faith and for
which Borrower maintains adequate reserves on its Books, provided that no notice
of any such Lien has been filed or recorded under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations adopted thereunder;

(c)liens securing Indebtedness permitted under clause (e) of the definition of
“Permitted Indebtedness,” provided that (i) such liens exist prior to the
acquisition of, or attach substantially simultaneous with, or within twenty
(20) days after the, acquisition, lease, repair, improvement or construction of,
such property financed or leased by such Indebtedness and (ii) such liens do not
extend to any property of Borrower other than the property (and proceeds
thereof) acquired, leased or built, or the improvements or repairs, financed by
such Indebtedness;

(d)statutory Liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other Persons imposed without action of
such parties, provided the aggregate amount of the obligations secured by such
Liens does not any time exceed Two Hundred Fifty Thousand Dollars ($250,000.00)
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;

(e)Liens to secure payment of workers’ compensation, employment insurance,
old‑age pensions, social security and other like obligations incurred in the
ordinary course of business (other than Liens imposed by ERISA);

(f)leases or subleases of real property granted in the ordinary course of
Borrower’s business (or, if referring to another Person, in the ordinary course
of such Person’s business), and leases, subleases, non‑exclusive licenses or
sublicenses of personal property (other than Intellectual Property) granted in
the ordinary course of Borrower’s business (or, if referring to another Person,
in the ordinary course of such Person’s business), if the leases, subleases,
licenses and sublicenses do not prohibit granting Collateral Agent or any Lender
a security interest therein;

(g)banker’s liens, rights of setoff and Liens in favor of financial institutions
incurred in the ordinary course of business arising in connection with
Borrower’s deposit accounts or securities accounts held at such institutions
solely to secure payment of fees and similar costs and expenses and provided
such accounts are maintained in compliance with Section 6.6(b) hereof;

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

(i)Liens consisting of Permitted Licenses;

(j)deposits to secure the performance of leases incurred in the ordinary course
of business and not representing an obligation for borrowed money so long as (1)
each such deposit is made at the commencement of a lease or its renewal when
there is no underlying default under such lease, and (2) the aggregate amount of
all such deposits at any given time does not exceed Two Hundred Fifty Thousand
Dollars ($250,000.00) (excluding deposits to secure the performance of leases
disclosed in the Perfection Certificate on the Effective Date);

(k)easements, reservations, rights-of-way, restrictions, minor defects or
irregularities in title and other similar Liens affecting real property not
interfering in any material respect with the ordinary course of the business;

(l)deposits (not to exceed in the aggregate an amount of Two Hundred Fifty
Thousand Dollars ($250,000.00) at any given time) to secure the performance of
bids, trade contracts (other than for borrowed money), contracts for the
purchase of property permitted hereunder, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case, incurred in the ordinary course of business and not constituting, in the
aggregate, obligations in excess of Two Hundred Fifty Thousand Dollars
($250,000.00) at any given time;

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(m)Liens in favor of custom and revenue authorities arising in the ordinary
course of business as a matter of law to secure the payment of custom duties in
connection with the importation of goods provided such Liens are restricted to
the goods being imported and do not exceed Two Hundred Fifty Thousand Dollars
($250,000.00) at any given time;

(n)Liens securing Indebtedness permitted under clause (h) of the definition of
“Permitted Indebtedness,” provided that such Liens are restricted to the
insurance policies whose premiums are being financed by such Permitted
Indebtedness and any additional premiums required under such financed insurance
policies; and

(o)Liens incurred in the extension, renewal or refinancing of the indebtedness
secured by Liens described in (a) through (n), but any extension, renewal or
replacement Lien must be limited to the property encumbered by the existing Lien
and the principal amount of the indebtedness may not increase.

3.
Limitation of Amendment.

a.
The amendment set forth in Section 2 above is effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed
to (a) be a consent to any amendment, waiver or modification of any other term
or condition of any Loan Document, or (b) otherwise prejudice any right, remedy
or obligation which Lenders or Borrower may now have or may have in the future
under or in connection with any Loan Document, as amended hereby.

b.
This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

4.
To induce Collateral Agent and Lenders to enter into this Amendment, Borrower
hereby represents and warrants to Collateral Agent and Lenders as follows:

a.
Immediately after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

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

c.
The organizational documents of Borrower delivered to Collateral Agent on the
Effective Date, and updated pursuant to subsequent deliveries by the Borrower to
the Collateral Agent, remain true, accurate and complete and have not been
amended, supplemented or restated and are and continue to be in full force and
effect;

d.
The execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (i) any law or regulation binding on
or affecting Borrower, (ii) any contractual restriction with a Person binding on
Borrower, (iii) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on Borrower, or
(iv) the organizational documents of Borrower;

e.
The execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

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

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5.
Except as expressly set forth herein, the Loan Agreement shall continue in full
force and effect without alteration or amendment. This Amendment and the Loan
Documents represent the entire agreement about this subject matter and supersede
prior negotiations or agreements.

6.
This Amendment shall be deemed effective as of the Amendment Date upon the due
execution and delivery to Collateral Agent of this Amendment by each party
hereto.

7.
Borrower agrees to promptly pay (but in no event in less than 5 Business Days of
invoice date) all unpaid Lenders’ Expenses incurred through the date hereof,
which may be debited (or ACH’d) from any of Borrower’s accounts.

8.
This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which, taken together, shall constitute
one and the same instrument.

9.
This Amendment and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Loan
and Security Agreement to be executed as of the date first set forth above.
BORROWER:
 
 
 
 
 
REGULUS THERAPEUTICS INC.
 
 
 
 
 
By: /s/ Joseph P. Hagan
 
 
Name: Joseph P. Hagan
 
 
Title: President and CEO
 
 
 
 
 
COLLATERAL AGENT AND LENDER:
 
 
 
 
 
OXFORD FINANCE LLC
 
 
 
 
 
By: /s/ Colette H. Featherly
 
 
Name: Colette H. Featherly
 
 
Title: Senior Vice President