Document:

Exhibit 10.4

		
			Exhibit 10.4      
		

		
			SECOND AMENDMENT
     TO
     LOAN AND SECURITY AGREEMENT
		

		
			This Second Amendment to Loan and Security Agreement (the “Amendment”) is entered into as of July 31, 2017,  by and among Pacific Western Bank, a California state chartered bank  (“PWB”), in its capacity as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 of the Agreement (as defined below) or otherwise a party thereto from time to time, including PWB in its capacity as a Lender and Oxford Finance LLC, a Delaware limited liability company (each a “Lender” and collectively, the “Lenders”), and Aratana Therapeutics, Inc., a Delaware corporation (“Parent”) and Vet Therapeutics, Inc., a Delaware corporation  (individually and collectively, jointly and severally, “Borrower”).
		

		
			RECITALS
		

		
			Collateral Agent, the Lenders, and Borrower are parties to that certain Loan and Security Agreement dated as of October 16, 2015 (as amended by that certain First Amendment to Loan and Security Agreement, dated as of February 24, 2017, and as the same may from time to time be further amended, modified, supplemented or restated, the “Agreement”).  The parties desire to amend the Agreement in accordance with the terms of this Amendment.
		

		
			NOW, THEREFORE, the parties agree as follows:
		

			
	
			
				 1)
			

			
	
			
			Section 2.2(b) of the Agreement is hereby amended and restated, as follows:

		
			“(b)Repayment.  Borrower shall make monthly payments of interest only on the Payment Date of each month after the Second Amendment Effective Date through and including the Payment Date immediately preceding the Amortization Date.  Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, plus interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.4(a), and (3) a repayment schedule equal to twenty-one (21) months.  All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on the Term Loan Maturity Date. The Term Loan may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).”
		

		
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				 2)
			

			
	
			
			Section 2.3 of the Agreement is hereby amended and restated, as follows:

		
			“2.3 Advances under Revolving Line.
		

		
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			(a) Amount.  The Lenders have previously made to Parent a single Advance, according to each Lender’s Revolving Line Commitment as set forth on Schedule 1.1 hereto, in the aggregate outstanding principal amount equal to the Revolving Line.  Amounts borrowed pursuant to this Section 2.3(a) may be repaid and reborrowed at any time prior to the Term-Out Date.
		

		

		

		 

 

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			(b)Term-Out of Advance.  Borrower shall repay the principal amount of the Advance outstanding on the Term-Out Date (the “Termed-Out Advance”) in 12 consecutive equal monthly payments of principal, plus interest, in arrears, to each Lender, beginning on November 1, 2018 and continuing on the Payment Date of each month thereafter through the Revolving Maturity Date.  The Termed-Out Advance, once repaid, may not be reborrowed.        
		

		
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			(c) Termination; Repayment. The Revolving Line terminates on the Revolving Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line (including but not limited to the Termination Fee and the Second Termination Fee), and all other Obligations due hereunder (other than Cash-Secured Obligations that may otherwise be due), shall be immediately due and payable.”
		

		
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				 3)
			

			
	
			
			Section 2.6(e) of the Agreement is hereby amended and restated, as follows:

		
			“(e)Termination Fee and Second Termination Fee.  The Termination Fee and the Second Termination Fee, each when due hereunder; and”
		

		
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				 4)
			

			
	
			
			Section 6.10 of the Agreement is hereby amended and restated, as follows:

		
			“6.10Minimum Cash.  Borrower shall maintain at all times the greater of (i) minimum Cash in accounts with Bank or subject to Control Agreements equal to fifty percent (50.00%) of outstanding Credit Extensions or (ii) Remaining Months’ Liquidity equal to six (6) or greater.”
		

		
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				 5)
			

			
	
			
			To correct a scrivener’s error, Section 6.11 of the Agreement is hereby amended by replacing both occurrences of “Five Hundred Thousand ($500,000.00)” with “Five Hundred Thousand Dollars ($500,000.00)”.

			
	
			
				 6)
			

			
	
			
			To correct a scrivener’s error, Section 7.10 of the Agreement is hereby amended by replacing the phrase “in excess of Fifty Thousand Dollars ($50,0000.00)” with “in excess of Fifty Thousand Dollars ($50,000.00)”.

			
	
			
				 7)
			

			
	
			
			Section 8.2(a) of the Agreement is hereby amended by replacing “6.10 (Milestone/ Financial Covenants)” with “6.10 (Minimum Cash)”.

			
	
			
				 8)
			

			
	
			
			The following defined terms are hereby added to Section 13.1 of the Agreement, as follows:

		
			“Original Revolving Maturity Date” is October 16, 2017, or such earlier date as the Revolving Line is terminated and/or the Term Loan is prepaid, whether pursuant to Section 2.2(c) or (d).
		

		
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			“Second Amendment Effective Date” is July 31, 2017.
		

		
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			“Second Termination Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due upon the earliest to occur of (a) the Revolving Maturity Date, (b) the acceleration of the Revolving Line or (c) 
		

		 

 

		termination of the Revolving Line or this Agreement for any reason prior to the Revolving Maturity Date, in addition to the payment of any other amounts then-owing, in an amount equal to One Hundred Sixty-Five Thousand Dollars ($165,000.00).
		

		
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			“Term-Out Date” means October 16, 2018.
		

		
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				 9)
			

			
	
			
			The following defined terms in Section 13.1 of the Agreement are hereby amended and restated, as follows:

		
			“Amortization Date” is February 1, 2018.
		

		
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			“Basic Rate” is the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the greater of (i) Seven and Sixty-Six Hundredths Percent (7.66%) and (ii) the sum of (a) the Prime Rate, as reported in the Wall Street Journal on the date occurring on the last Business Day of the month that immediately precedes the month in which the interest will accrue, plus (b) Three and Sixty-Six Hundredths Percent (3.66%).”
		

		
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			“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Unused Fee, the Final Payment, the Termination Fee, the Second Termination Fee and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents (other than any warrants or any other equity instruments issued in favor of the Lenders), including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents (other than any warrants or any other equity instruments issued in favor of the Lenders).
		

		
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			“Revolving Maturity Date” is October 16, 2019, or such earlier date as the Revolving Line is terminated and/or the Term Loan is prepaid, whether pursuant to Section 2.2(c) or (d).
		

		
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			“Termination Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due upon the earliest to occur of (a) the Original Revolving Maturity Date, (b) the acceleration of the Revolving Line or (c) termination of the Revolving Line or this Agreement for any reason prior to the Original Revolving Maturity Date, in addition to the payment of any other amounts then-owing, in an amount equal to One Hundred Sixty-Five Thousand Dollars ($165,000.00).
		

		
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				 10)
			

			
	
			
			The defined term “Interest-Only Extension Option” and its definition in Section 13.1 of the Agreement are hereby deleted.

			
	
			
				 11)
			

			
	
			
			The following is added to the end of the defined term “Unused Fee” in Section 13.1 of the Agreement:

		
			“For the avoidance of doubt, no Unused Fee shall accrue on the Revolving Line during the period on and after the Term-Out Date.”
		

			
	
			
				 12)
			

			
	
			
			Exhibit C (Compliance Certificate) to the Loan Agreement hereby is replaced in its entirety with Exhibit C attached hereto.

			
	
			
				 13)
			

			
	
			
			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, accurate, and complete in all material respects as of such date, and provided that any representation or warranty that contains a materiality qualification therein shall be true, accurate, and complete in all respects), and (b) no Event of Default has occurred and is continuing;

			
	
			
				 b)
			

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

			
	
			
				 c)
			

			
	
			
			The organizational documents of Borrower delivered to Collateral Agent and Lenders on the Effective Date, or subsequent thereto, 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 Agreement, as amended by this Amendment, have been duly authorized;

			
	
			
				 e)
			

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

			
	
			
				 f)
			

			
	
			
			The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the 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 has already been obtained; and

		 

 

			
	
			
				 g)
			

			
	
			
			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.

			
	
			
				 14)
			

			
	
			
			Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Collateral Agent or Lenders under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

			
	
			
				 15)
			

			
	
			
			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.

			
	
			
				 16)
			

			
	
			
			As a condition to the effectiveness of this Amendment, Collateral Agent shall have received, in form and substance satisfactory to Collateral Agent and each Lender, the following:

			
	
			
				 a)
			

			
	
			
			this Amendment, duly executed by each Borrower;

			
	
			
				 b)
			

			
	
			
			duly executed original officer’s certificate for each Borrower, in a form acceptable to Collateral Agent and the Lenders;

			
	
			
				 c)
			

			
	
			
			payment of a fully earned, non-refundable amendment fee of One Hundred Fifty Thousand Dollars ($150,000.00) to be shared between the Lenders pursuant to their respective Commitment Percentages, which may be debited (or ACH’d) from any of Borrower’s accounts;

			
	
			
				 d)
			

			
	
			
			payment of a fully earned, non-refundable facility fee of Sixty Thousand Dollars ($60,000.00) to be shared between the Lenders pursuant to their respective Commitment Percentages, which may be debited (or ACH’d) from any of Borrower’s accounts;

			
	
			
				 e)
			

			
	
			
			payment of all Lenders’ Expenses invoiced to Borrower prior to the Second Amendment Effective Date, including Collateral Agent’s and each Lender’s expenses for the documentation of this Amendment and any related documents, and any UCC, good standing or intellectual property search or filing fees, which Collateral Agent may debit from any of Borrower’s accounts at PWB; and

			
	
			
				 f)
			

			
	
			
			such other documents and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate.

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

		
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			BORROWER:
		

		
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						ARATANA THERAPEUTICS, INC.

				
	
					
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						By:       /s/ Craig Tooman

				
	
					
						Name:  Craig Tooman

					
						Title:    CFO and Treasurer

				

		
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						VET THERAPEUTICS, INC.

				
	
					
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						By:       /s/ Craig Tooman 

				
	
					
						Name:  Craig Tooman

					
						Title:    Treasurer

				

		
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						COLLATERAL AGENT:

					
						 

					
						pacific western Bank

				
	
					
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						By:       /s/ Sean Noonan

				
	
					
						Name:  Sean Noonan

					
						Title:    Vice President

				

		
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			LENDERS:
		

		
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						pacific western Bank

				
	
					
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						By:       /s/ Sean Noonan

				
	
					
						Name:  Sean Noonan

					
						Title:    Vice President

				

		
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						OXFORD FINANCE LLC

				
	
					
						By:       /s/ Colette H. Featherly

				
	
					
						Name:  Colette H. Featherly

					
						Title:    Senior Vice President

				

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

		 

 

		
		

		
			EXHIBIT C
		

		
			
Compliance Certificate
		

		
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		CORPORATE BORROWING CERTIFICATE
		

			
					
						Borrower:

					
					
						ARATANA THERAPEUTICS, INC.

					
					
						Date:  July 31, 2017

				
	
					
						Lenders:

					
					
						PACIFIC WESTERN BANK, as Collateral Agent and Lender

					
					
						 

				
	
					
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						OXFORD FINANCE LLC, as Lender

					
					
						 

				

		
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			I hereby certify, solely in my capacity as an officer of Borrower, and not in my individual capacity, as follows, as of the date set forth above:
		

		
			1.I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.
		

		
			2.Borrower’s exact legal name is set forth above.  Borrower is a corporation existing under the laws of the State of Delaware.
		

		
			3.Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws.  Neither such Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof.  
		

		
			4.The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.
		

		
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		Resolved, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:
		

			
					
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						Name

					
					
						Title

					
					
						Signature

					
					
						Authorized to Add or Remove Signatories

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				

		
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			Resolved Further, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.
		

		
			Resolved Further,  that such individuals may, on behalf of Borrower:
		

		
			Borrow Money.  Borrow money from to time from the Lenders, and negotiate and procure loans, letters of credit, foreign exchange contracts and other financial accommodations from the Lenders; and authorize and direct the Lenders to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign.
		

		
			Execute Loan Documents.  Execute any loan documents Collateral Agent and the Lenders require, including without limitation, that certain Loan and Security Agreement dated as of October 16, 2015, and also to execute and deliver to Collateral Agent and the Lenders one or more renewals, extensions, or modifications thereof, including that certain First Amendment to Loan and Security Agreement dated as of February 24, 2017 and that certain Second Amendment to Loan and Security Agreement dated as of July 31, 2017.  
		

		
			Grant Security.  Grant Collateral Agent and the Lenders a security interest in any of Borrower’s assets, by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of Borrower.
		

		
			Negotiate Items.  Negotiate or discount all drafts, trade acceptances, promissory notes, commercial or other business paper or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
		

		
			Transfer of Securities.  Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by Borrower, whether or not registered in the name of Borrower.
		

		
			Further Acts.  Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreements that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions; and execute and deliver in form and content as may be required by Collateral Agent or any Lender any and all notes, evidences of indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of Borrower’s property and assets.
		

		
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			Resolved Further, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.
		

		
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		5.The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.
		

		
			ARATANA THERAPEUTICS, INC.
		

			
					
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						By:

				
	
					
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						Name:

				
	
					
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						Title:

				

		
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			*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.
		

		
			I, the __________________________  [print title] of Borrower, hereby certify, solely in my capacity as an officer of Borrower, and not in my individual capacity,  as to paragraphs 1 through 5 above, as of the date set forth above.
		

			
					
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						By:

				
	
					
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						Name:

				
	
					
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						Title:

				

		
			 
		

		 

		

			[Signature Page to Corporate Borrowing Certificate]

		

		

			 

		

 

		

			 

		

			
					
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			CORPORATE BORROWING CERTIFICATE
		

			
					
						Borrower:

					
					
						VET THERAPEUTICS, INC.

					
					
						Date:  July 31, 2017

				
	
					
						Lenders:

					
					
						PACIFIC WESTERN BANK, as Collateral Agent and Lender

					
					
						 

				
	
					
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						OXFORD FINANCE LLC, as Lender

					
					
						 

				

		
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			I hereby certify, solely in my capacity as an officer of Borrower, and not in my individual capacity, as follows, as of the date set forth above:
		

		
			1.I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.
		

		
			2.Borrower’s exact legal name is set forth above.  Borrower is a corporation existing under the laws of the State of Delaware.
		

		
			3.Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws.  Neither such Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof.  
		

		
			4.The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.
		

		
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		Resolved, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:
		

			
					
						Name

					
					
						Title

					
					
						Signature

					
					
						Authorized to Add or Remove Signatories

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				
	
					
						

					
					
						

					
					
						

					
					
						□

				

		
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			Resolved Further, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.
		

		
			Resolved Further,  that such individuals may, on behalf of Borrower:
		

		
			Borrow Money.  Borrow money from to time from the Lenders, and negotiate and procure loans, letters of credit, foreign exchange contracts and other financial accommodations from the Lenders; and authorize and direct the Lenders to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign.
		

		
			Execute Loan Documents.  Execute any loan documents Collateral Agent and the Lenders require, including without limitation, that certain Loan and Security Agreement dated as of October 16, 2015, and also to execute and deliver to Collateral Agent and the Lenders one or more renewals, extensions, or modifications thereof, including that certain First Amendment to Loan and Security Agreement dated as of February 24, 2017 and that certain Second Amendment to Loan and Security Agreement dated as of July 31, 2017.  
		

		
			Grant Security.  Grant Collateral Agent and the Lenders a security interest in any of Borrower’s assets, by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of Borrower.
		

		
			Negotiate Items.  Negotiate or discount all drafts, trade acceptances, promissory notes, commercial or other business paper or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
		

		
			Transfer of Securities.  Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by Borrower, whether or not registered in the name of Borrower.
		

		
			Further Acts.  Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreements that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions; and execute and deliver in form and content as may be required by Collateral Agent or any Lender any and all notes, evidences of indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of Borrower’s property and assets.
		

		
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			Resolved Further, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.
		

		
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		5.The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.
		

		
			VET THERAPEUTICS, INC.
		

			
					
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						By:

				
	
					
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						Name:

				
	
					
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						Title:

				

		
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			*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.
		

		
			I, the __________________________  [print title] of Borrower, hereby certify, solely in my capacity as an officer of Borrower, and not in my individual capacity,  as to paragraphs 1 through 5 above, as of the date set forth above.
		

			
					
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						By:

				
	
					
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						Name:

				
	
					
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						Title:

				

		
			﻿Exhibit

Exhibit 10.3

Execution Version

FOURTH AMENDMENT
TO
CREDIT AGREEMENT
Dated as of May 22, 2017
Among
PARSLEY ENERGY, LLC, 
as Borrower,
PARSLEY ENERGY, INC.,

WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as Administrative Agent, 
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent,

BMO HARRIS BANK, N.A.,
as Documentation Agent,

and

The Lenders Party Thereto
________________________________
 
WELLS FARGO SECURITIES, LLC 
Sole Lead Arranger and Sole Bookrunner 
 
________________________________

FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”) dated as of May 22, 2017, is among Parsley Energy, LLC, a Delaware limited liability company (the “Borrower”); Parsley Energy, Inc., a Delaware corporation (“PEI”), each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”); each of the Lenders party hereto; and Wells Fargo Bank, National Association (in its individual capacity, “Wells Fargo”), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
R E C I T A L S
A.    The Borrower, PEI, the Administrative Agent and the Lenders are parties to that certain Credit Agreement dated as of October 28, 2016 (as amended, modified, supplemented or restated from time to time prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.
B.    The Borrower and the Guarantors are parties to that certain Guarantee and Collateral Agreement, dated as of October 28, 2016 made by the Borrower and each of the other Grantors party thereto in favor of the Administrative Agent (as amended, modified, supplemented or restated from time to time prior to the date hereof, the “Guaranty Agreement”).
C.    The Borrower has requested and the Administrative Agent and the Lenders party hereto have agreed to amend the Credit Agreement, subject to the terms and conditions of this Fourth Amendment.
D.    NOW, THEREFORE, to induce the Administrative Agent and the Lenders to enter into this Fourth Amendment and in consideration of the promises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Fourth Amendment.  Unless otherwise indicated, all section references in this Fourth Amendment refer to sections of the Credit Agreement.
Section 2.    Amendments to Credit Agreement.
2.1    Amendments to Section 1.02 – Certain Defined Terms.  
(a)    The following definitions are hereby amended and restated in their entirety to read as follows:
“Agreement” means this Credit Agreement, including any schedules and exhibits hereto, as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment, and as the same may from time to time be amended, modified, supplemented or restated.

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“LC Commitment” at any time means Thirty Million dollars ($30,000,000).
(b)    The following definition is hereby added where alphabetically appropriate to read as follows:
“Fourth Amendment” means that certain Fourth Amendment to Credit Agreement, dated as of May 22, 2017, among the Borrower, PEI, the Guarantors, the Administrative Agent and the Lenders party thereto.
2.2    Amendments to Section 9.07.  Section 9.07 is hereby amended and restated in its entirety to read as follows:
Section 9.07    Limitation on Leases.  The Borrower will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases, leases of Hydrocarbon Interests and leases of drilling rigs), under leases or lease agreements which would cause the aggregate amount of all payments made by the Borrower and the Restricted Subsidiaries pursuant to all such leases or lease agreements, including, without limitation, any residual payments at the end of any lease, to exceed at any time two and one-half percent (2.5%) of the Borrowing Base then in effect at such time, in any period of twelve consecutive calendar months most recently ended prior to such date of determination during the life of such leases.
Section 3.    Conditions of Effectiveness.  This Fourth Amendment will become effective on the date on which each of the following conditions precedent is satisfied or waived in accordance with Section 12.02 of the Credit Agreement (the “Fourth Amendment Effective Date”):
3.1    The Administrative Agent shall have received from the Borrower, PEI, each Guarantor, the Issuing Bank and the Lenders, counterparts (in such number as may be requested by the Administrative Agent) of this Fourth Amendment signed on behalf of such Person.
3.2    The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Fourth Amendment Effective Date, including all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement (including fees and expenses invoiced by Paul Hastings LLP).
3.3    No Default or Event of Default shall have occurred and be continuing as of the Fourth Amendment Effective Date.
3.4    The Administrative Agent shall have received such other documents as the Administrative Agent or its special counsel may reasonably require.
The Administrative Agent is hereby authorized and directed to declare this Fourth Amendment to be effective when it has received documents confirming compliance with the 

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conditions set forth in this Section 3 or the waiver of such conditions as agreed to by the Majority Lenders.  Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 4.    Miscellaneous.
4.1    Confirmation.  The provisions of the Credit Agreement, as amended by this Fourth Amendment, shall remain in full force and effect following the effectiveness of this Fourth Amendment.
4.2    Ratification and Affirmation; Representations and Warranties.  Each of PEI and each Obligor hereby: (a) acknowledges the terms of this Fourth Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby; (c) agrees that from and after the Fourth Amendment Effective Date each reference to the Credit Agreement in the other Loan Documents shall be deemed to be a reference to the Credit Agreement, as amended by this Fourth Amendment; and (d) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Fourth Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except that any representation and warranty that is qualified by materiality shall be true and correct in all respects), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (except that any representation and warranty that is qualified by materiality shall be true and correct in all respects) as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event, development or circumstance has occurred or exists that has resulted in, or could reasonably be expected to have, a Material Adverse Effect. 
4.3    Counterparts.  This Fourth Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Fourth Amendment by telecopy, facsimile, as an attachment to an email or other similar electronic means shall be effective as delivery of a manually executed counterpart of this Fourth Amendment.
4.4    NO ORAL AGREEMENT.  THIS FOURTH AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
4.5    GOVERNING LAW.  THIS FOURTH AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE 

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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
4.6    Loan Document.  This Fourth Amendment is a “Loan Document” as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto.
4.7    Payment of Expenses.  In accordance with Section 12.03, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket costs and expenses incurred in connection with this Fourth Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
4.8    Severability.  Any provision of this Fourth Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
4.9    Successors and Assigns. This Fourth Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly executed and delivered by their proper and duly authorized officer(s) as of the day and year first above written.
	
		
	BORROWER:
	PARSLEY ENERGY, LLC

	

PEI:
	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

PARSLEY ENERGY, INC.

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer
     

	GUARANTOR:
	PARSLEY GP, LLC

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	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer
        

	GUARANTOR:
	PARSLEY ENERGY, L.P.
BY: PARSLEY GP, LLC, its general partner

	 
	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer
        

	GUARANTOR:
	PARSLEY ENERGY OPERATIONS, LLC

	 
	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer
        

	GUARANTOR:
	PARSLEY ENERGY AVIATION, LLC

	

	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

	GUARANTOR:
	PARSLEY MINERALS, LLC

	

	By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

	GUARANTOR:

	PARSLEY FINANCE CORP.

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	GUARANTOR:

	DOUBLE EAGLE LONE STAR LLC

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

	GUARANTOR:

	DE OPERATING LLC

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

	
		
	GUARANTOR:

	VERITAS ENERGY PARTNERS, LLC

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

	GUARANTOR:

	NOVUS LAND SERVICES LLC

By:  /s/ Ryan Dalton _________________________ 
Name:   Ryan Dalton
Title:   Executive Vice President – Chief Financial Officer

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	ADMINISTRATIVE AGENT, ISSUING BANK AND LENDER:
	WELLS FARGO BANK, NATIONAL ASSOCIATION

	 
	

By:  /s/ Edward Pak__________________________ 
Name: Edward Pak
Title:   Director           
        

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	JPMORGAN CHASE BANK, N.A.

	 
	

By:  /s/ Greg Determann______________________ 
Name: Greg Determann
Title: Managing Director   
        

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	BMO HARRIS BANK, N.A.

	 
	

By:  /s/ Matthew L. Davis_____________________ 
Name: Matthew L. Davis 
Title: Vice President 
        

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	MORGAN STANLEY BANK, N.A.

By:  /s/ Patrick Layton_______________________ 
Name: Patrick Layton
Title: Authorized Signatory  

	LENDER:
	MORGAN STANLEY SENIOR FUNDING, INC.

By:  /s/ Patrick Layton_______________________ 
Name: Patrick Layton
Title: Vice President  

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

By:  /s/ Nupur Kumar________________________ 
Name: Nupur Kumar
Title: Authorized Signatory   

By:  /s/ Warren Van Heyst____________________ 
Name: Warren Van Heyst
Title: Authorize Signatory

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	BOKF NA DBA BANK OF TEXAS

By:  /s/ Colin Watson_______________________ 
Name: Colin Watson
Title:   Senior Vice President

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	FROST BANK, A TEXAS STATE BANK

By:  /s/ Jack Herndon________________________ 
Name: Jack Herndon
Title:   Senior Vice President

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	ROYAL BANK OF CANADA

By:  /s/ Kristan Spivey_______________________ 
Name: Kristan Spivey 
Title:   Authorized Signatory

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	U.S. BANK NATIONAL ASSOCIATION

By:  /s/ Nicholas Hanford_____________________ 
Name: Nicholas Hanford
Title:   Vice President

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	THE BANK OF NOVA SCOTIA

By:  /s/ Alan Dawson_______________________ 
Name: Alan Dawson
Title:   Director

	 
	 

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	COMPASS BANK

By:  /s/ Kari McDaniel______________________ 
Name: Kari McDaniel
Title:   Vice President

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	CANADIAN IMPERIAL BANK OF COMMERCE-NEW YORK BRANCH

By:  /s/ William M. Reid______________________ 
Name: William M. Reid
Title:   Authorized Signatory

By:  /s/ Trudy Nelson________________________ 
Name: Trudy Nelson
Title:   Authorized Signatory

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	CAPITAL ONE, NATIONAL ASSOCIATION

By:  /s/ Michael Higgins______________________ 
Name: Michael Higgins
Title:   Senior Director

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	CITIBANK, N.A.

By:  /s/ Saqeeb Ludhi________________________ 
Name: Saqeeb Ludhi
Title:   Vice President

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	PNC BANK, NATIONAL ASSOCIATION

By:  /s/ Sandra Aultman______________________ 
Name: Sandra Aultman
Title:   Managing Director

[Parsley Energy, LLC - Fourth Amendment Signature Page]

	
		
	LENDER:
	UBS AG, STAMFORD BRANCH

By:  /s/ Craig Pearson________________________ 
Name: Craig Pearson
Title:   Associate Director

By:  /s/ Houssem Daly_______________________ 
Name: Houssem Daly
Title:   Associate Director

[Parsley Energy, LLC - Fourth Amendment Signature Page]

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