Exhibit 10.1


 


FIRST AMENDMENT TO LOAN AND guaranty
AGREEMENT


AND AFFIRMATION OF PLEDGE AND SECURITY AGREEMENT


 


This FIRST AMENDMENT TO LOAN AND
guaranty AGREEMENT (this “Amendment”) is entered into as of May 17,
2021 among Variation Biotechnologies Inc., a Canadian federal corporation (“Borrower
Representative”), VBI Vaccines Inc., a British Columbia corporation (“Parent”,
and together with Borrower Representative, collectively, “Borrowers”, and each, a “Borrower”), each
of the parties set forth on the signature page hereto as guarantors (“Guarantors” and each, a “Guarantor”),
K2 HEALTHVENTURES LLC and any other lenders party hereto (collectively, “Lenders”, and each, a “Lender”)
constituting Required Lenders (as defined in the Loan Agreement (as defined below)), and K2 HEALTHVENTURES LLC, as administrative
agent for Lenders (in such capacity, together with its successors, “Administrative Agent”).


 


RECITALS


 


A.
Reference is made to (i) that certain Loan and Guaranty Agreement, dated as of May 22, 2020 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), by and among
Borrowers, Guarantors, Lenders, Administrative Agent and, and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such
capacity, together with its successors, “Collateral Trustee”), and (ii) that
certain Pledge and Security Agreement, dated as of May 22, 2020, by and among Parent, VBI VACCINES (DELAWARE) INC., a Delaware
corporation, VARIATION BIOTECHNOLOGIES (US), INC., a Delaware corporation (collectively “US Loan Parties”),
Administrative Agent and Collateral Trustee (the “Pledge and Security Agreement”). 


 


B.
Administrative Agent acknowledges receipt of clinical data as contemplated by clauses (a) and (c) of the defined term “Second
Tranche Milestones” and confirms its determination that the corresponding Second Tranche Milestones are met. 


 


C.
The parties hereto have agreed to modify the terms of the Loan Agreement to extend the availability of the Second Tranche Term Loan
Commitment, increase the Second Tranche Term Loan Commitment and make certain other changes as set forth herein, subject to the
terms and conditions set forth in this Amendment. 


 


AGREEMENT


 


The
parties hereto hereby agree as follows: 


 


1.1 Exhibit
A to the Loan Agreement is hereby amended by amending and restating or, as applicable, adding in appropriate alphabetical order, the
following defined terms:


 


“Amortization
Date” means January 1, 2023.


 


“Applicable
Rate” means a variable annual rate equal to the greater of (i) 8.25%, and (ii) the sum of (A)
the Prime Rate, plus (B) 5.00%, provided that, with respect to the Second Tranche Term Loan, the Applicable Rate shall mean a variable
annual rate equal to the greater of (i) 7.75% and (ii) the sum of (A) the Prime Rate, plus (B) 4.50%.


 


“First
Amendment Effective Date” means May 17, 2021.


 


1.2 Exhibit
A to the Loan Agreement is hereby amended by deleting the following defined terms: “Second Tranche Availability Period”,
“Second Tranche Maximum Amount”.


 


1.3 Section
2.2(a)(ii) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:


 


(ii) Subject
to satisfaction of a Second Tranche Milestone, submission of a Loan Request, and the terms and conditions of this Agreement, each Lender
agrees, severally and not jointly, to make to Borrowers an advance on or about the First Amendment Effective Date in principal amount
of the Second Tranche Term Loan Commitment (the “Second Tranche Term Loan”). Lenders’ commitments to make the
Second Tranche Term Loan shall terminate upon the date the Second Tranche Term Loan has been funded by each Lender in accordance with
the foregoing.


 




    	 



     


    

 


 


1.4 Section
2.2(b) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:


 


(b) Repayment.
Commencing on the Amortization Date, and continuing thereafter on the each Payment Date through the Term Loan Maturity Date, Borrowers
shall make consecutive monthly payments of equal principal and interest, which would fully amortize the principal amount of the Term Loans
and accrued interest thereon by the Term Loan Maturity Date, provided that if the Applicable Rate is adjusted, in accordance with its
terms, the amortization schedule and the required monthly installment shall be recalculated based on the adjusted Applicable Rate. Any
and all unpaid Obligations, including principal and accrued and unpaid interest in respect of the Term Loans, the fees pursuant to the
Fee Letter and any other fees and other sums due hereunder, if any, shall be due and payable in full on the Term Loan Maturity Date. The
Term Loans may only be prepaid in accordance with Sections 2.2(c) or (d).


 


1.5 Schedule
1 to the Loan Agreement is hereby amended and restated as set forth in Schedule 1 attached hereto.


 


2. Representations
and Warranties.


 


2.1 Loan
Parties represent and warrant that:


 


(a) the
representations and warranties contained in the Loan Agreement and in the Loan Documents to which they are a party are true and correct
in all material respects as of the date of this Amendment (except to the extent such representations and warranties relate to an earlier
date, in which case they are true and correct in all material respects as of such date), and no Default or Event of Default has occurred
and is continuing;


 


(b) each
Loan Party has the power and authority to execute and deliver this Amendment and perform its obligations under the Loan Agreement and
the other Loan Documents to which it is a party, as modified by this Amendment (if applicable);


 


(c) the
execution and delivery by each Loan Party of this Amendment, and the performance by each Loan Party of its obligations under the Loan
Agreement and the Loan Documents to which it is a party, as modified by this Amendment (if applicable), have been duly authorized by all
requisite action;


 


(d) the
execution and delivery by each Loan Party of this Amendment and the performance by each Loan Party of its obligations under the Loan Agreement
and the other Loan Documents to which it is a party, as modified by this Amendment (if applicable), do not and will not contravene (a)
any material Requirement of Law, (b) any material contractual restriction in any material agreement with a Person binding on such Loan
Party, (c) any order, judgment or decree of any Governmental Authority binding on such Loan Party, or (d) the Operating Documents of such
Loan Party, and do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration
with, or exemption by any Governmental Authority, except as already has been obtained or made; and


 


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


 






    	 	2	 



     


    

 


3. Conditions
to Effectiveness.


 


The effectiveness of this
Amendment is subject to the following conditions precedent:


 


3.1 Administrative
Agent shall have received this Amendment duly executed by Loan Parties and shall have received the documents and certificates set forth
on Schedule 2 hereto, in each case, in form and substance satisfactory to Administrative Agent; and


 


3.2 Borrowers
shall have paid any reasonable and documented Lender Expenses due and payable as of the date hereof, which Borrowers hereby authorize
may be debited by Administrative Agent, in accordance with Section 2.4(b) of the Loan Agreement.


 


4. Post-Closing
Delivery


 


4.1 Within
fourteen (14) days, Borrowers shall deliver duly executed signatures to any Israeli Security Documents deemed reasonably necessary by
Lenders for purpose of amending security interest registration.


 


5. Affirmations.


 


5.1 The
Loan Parties agree and acknowledge that the Loan Agreement, as modified by this Amendment, remains in full force and effect and that the
same is hereby ratified and confirmed in all respects.


 


5.2 The
US Loan Parties agree and acknowledge that the security interest as granted pursuant to the Pledge and Security Agreement continues from
the Closing Date without novation.


 


5.3 The
Guarantors agree and acknowledge the terms of this Amendment and confirm that the guaranty pursuant to Section 13 of the Loan Agreement
remains in full force and effect as of the date hereof with respect to the Obligations (as modified by the terms of this Amendment).


 


6. General
Provisions.


 


6.1 Unless
otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Loan Agreement. Lenders’ agreement
to enter into the amendments as set forth herein shall not establish any course of dealing with respect to future amendments or waivers
or otherwise obligate Administrative Agent or any Lender to waive any future Event of Default or make any modification to any Loan Document.


 


6.2 This
Amendment and the Loan Documents represent the entire agreement with respect to this subject matter and supersede prior negotiations or
agreements. 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.


 


6.3 This
Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one instrument.


 


6.4 This
Amendment shall constitute a Loan Document. Accordingly, the provisions of Section 11 of the Loan Agreement shall likewise apply
to this Amendment.


 


[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]


 




    	3



     


    




 


[signature
page to FIRST AMENDMENT TO loan and GUARANTY agreement AND AFFIRMATION OF PLEDGE AND SECURITY AGREEMENT]


 


IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed as of the Closing Date.


 


	 	BORROWERS:
	 	 
	 	Variation
    Biotechnologies Inc., a Canadian federal corporation
	 	 
	 	By	/s/
    Jeff Baxter
	 	Name:	Jeff Baxter
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	VBI Vaccines
    Inc., a British Columbia corporation 
	 	 
	 	By	/s/ Jeff
    Baxter
	 	Name:	Jeff Baxter
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	GUARANTORS:
	 	 
	 	SciVac Ltd.,
    an Israeli corporation
	 	 
	 	By	/s/ Jeff
    Baxter
	 	Name:	Jeff Baxter
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	VBI VACCINES (DELAWARE) INC., a
    Delaware corporation 
	 	 
	 	By	/s/ Jeff
    Baxter
	 	Name:	Jeff Baxter
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	VARIATION BIOTECHNOLOGIES (US), INC.,
    a Delaware corporation 
	 	 
	 	By	/s/ Jeff
    Baxter
	 	Name:	Jeff Baxter
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	ADMINISTRATIVE
    AGENT: 
	 	 
	 	K2 HEALTHVENTURES LLC 
	 	 
	 	By	/s/ Anup
    Arora
	 	Name:	Anup Arora
	 	Title:	Managing Director
    &CIO
	 	 	 
	 	LENDER:
    
	 	 
	 	K2 HEALTHVENTURES LLC 
	 	 
	 	By	/s/ Anup
    Arora
	 	Name:	Anup Arora
	 	Title:	Managing Director
    &CIO





 




    	 	 	 



     


    

 


SCHEDULE
1


 


COMMITMENTS


 


	LENDER	 	FIRST TRANCHE TERM LOAN COMMITMENT	 	 	SECOND TRANCHE TERM LOAN COMMITMENT	 	 	THIRD TRANCHE TERM LOAN COMMITMENT	 	 	FOURTH TRANCHE TERM LOAN COMMITMENT	 	 	TOTAL COMMITMENTS	 
	K2 HEALTHVENTURES LLC	 	$	20,000,000	 	 	$	12,000,000	 	 	$	10,000,000	 	 	$	10,000,000	 	 	$	52,000,000	 



 




    	 	 	 



     


    

 


SCHEDULE 2


 


amendment documents


 


	1.	An Amended and Restated Warrant, duly executed by Parent;
	2.	An Affirmation of Canadian Security Documents, duly executed by Canadian Loan Parties;
	3.	A certificate of each Borrower, duly executed by a Responsible Officer, certifying and attaching (i) the Operating Documents, (ii) resolutions duly approved by the Board with respect to this Amendment and the documents to be delivered in connection therewith, (iii) any resolutions, consent or waiver duly approved by the requisite holders of such Loan Party’s Equity Interests, if applicable, and (iv) a schedule of incumbency, provided that to the extent there has been no change to the Operating Documents or the Responsible Officers listed in the schedule of incumbency, such certificate may instead certify that there has been no change to the Operating Documents or the incumbency schedule delivered as of the Closing Date