Document:

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.36

AMENDMENT No. 6

This Amendment No. 6 (the “Amendment”) to the Agreement dated 1 September 2006 by and between

	
(1)
	
ASTRAZENECA AB, a company incorporated in Sweden under no. 556011-7482 with registered offices at 151 85 Södertälje and with offices at SE-431 83, Mölndal, Sweden (“AstraZeneca”); and

	
(2)
	
DYNAVAX TECHNOLOGIES CORPORATION, a Delaware corporation with offices at 2929 Seventh Street, Suite 100, Berkeley, CA 94710-2753, USA (“Dynavax”)

as amended (the “Agreement”) is made effective as of 8th December 2014 (the “Amendment Effective Date”).

Recitals 

WHEREAS, the Research Term has expired and the Joint Research has been completed; and 

WHEREAS, under the Agreement, AstraZeneca has nominated AZD1419 as Lead Compound; and 

WHEREAS, under the Agreement, AstraZeneca has the responsibility, as set forth therein, for Developing Candidate Drugs selected and Commercialising Products and Combination products and for costs associated with the Development and Commercialisation; and 

WHEREAS, in furtherance of the Development of AZD1419 the Parties agreed in Amendment No 4 that Dynavax would carry out certain portions of the Development, primarily consisting of the Phase I Study and the Phase II a Study, as more closely described and on the terms set forth in the Amendment No 4; and 

WHEREAS, the Parties agreed in Amendment No 5 to revert parts of the work allocation agreed in Amendment No 4 so that after completion by Dynavax of the Phase I Study, AstraZeneca would 

 

 

resume responsibility for carrying out the Phase II a Study and all subsequent Development of AZD 1419 under the Agreement as envisaged prior to the adoption of the changes set out in Amendment No 4; and

WHEREAS, the Parties now wish to further change the allocation of Development work to be carried out between the Parties under the Agreement by agreeing that Dynavax shall reassume the responsibility for carrying out the Phase II a Study. For the avoidance of doubt, AstraZeneca shall remain responsible for carrying out all subsequent Development of AZD1419 under the Agreement.

WHEREAS, in addition to the agreed work allocation, the Parties acknowledge and agree that the numbering in Sections 1.124 though 1.139 in Amendment 4 and 5 may need clarification. Therefore, the Parties agree that in addition to agreed amendments thereto, to reinstate all Sections 1.124 though 1.139 with correct numbering for clarity. 

WHEREAS, the parties desire to further amend, modify and restate certain terms and conditions of the Agreement.

Agreement

NOW, THEREFORE, in consideration of the mutual covenants contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

	
1
	
Definitions

	

	
Any capitalized term not separately defined in this Amendment shall have the meaning ascribed to it in the Agreement.

	
2
	
Modifications

	
2.1
	
The following modifications and clarifications shall be inserted immediately after Section 1.123 of the Agreement as new or renumbered Sections 1.124 trough 1.138. 

	

	
“1.124“AZD 1419” means Lead Candidate coded by AstraZeneca as AZD1419.

2

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

	

	
1.125“Anti-Corruption Laws” means the US Foreign Corrupt Practices of 1977, the UK Bribery Act 2010 and any other Applicable Law for the prevention of fraud, corruption, racketeering, money laundering and/or terrorism.

	

	
1.126“Authority” means any court or government body, whether national, supranational, federal, state, local, foreign or provincial, including any political subdivision thereof, including any department, commission, board, bureau, agency, or other regulatory or administrative governmental authority or instrumentality, and further including any quasi-governmental person or entity exercising the functions of any of these.

	

	
1.127“Commercially Sensitive Information” means any and all commercially or strategically sensitive information relating to the business of a Party or its Affiliates, including information about prices and pricing policies, cost structures and business strategies.

	

	
1.128“External Interactions Policy” means the AstraZeneca Global Policy – External Interactions available at www.AstraZeneca.com following the links Responsibility / Code, policies & standards / Policies & standards / External interactions, as in force from time to time. 

	

	
1.129“Group” means a Party and its Affiliates.

	

	
1.130“Key Requirements” means the key requirements to be met by AstraZeneca external contractors and suppliers as required by the External Interactions Policy, which requirements are set forth on Schedule 1.

	

	
1.131“Material Anti-Corruption Law Violation” means a violation of any Anti-Corruption Law which would if it was publicly known, in the reasonable view of AstraZeneca, have a material adverse effect on Dynavax or on the reputation of AstraZeneca because of its relationship with Dynavax.

	

	
1.132“Phase I Study” means the clinical study regarding AZD1419 with the design, endpoint, number of subjects and time plan described, and otherwise as described, in the Amendment Development Phase I Study Plan, attached hereto as a Schedule 2. 

3

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

	

	
1.133“Phase II a Study” means the clinical study regarding AZD1419 with the design as described, in the Amendment Development Phase II a Study Plan, attached hereto as a Schedule 3. 

	

	
1.134“Phase II a Manufacturing Services” means the manufacturing of Compound with a quality and in a quantity sufficient, and further in accordance with the specifications and conditions set forth in Schedule  4, attached hereto, for the purpose of carrying out the Phase II a Study.

	

	
1.135“Sub-Contract” means any contract between Dynavax and a third party pursuant to which Dynavax perform its obligations under this Agreement. 

	

	
1.136“Sub-Contractor” means a Person with whom Dynavax enters into a Sub-Contract or such Person’s employees, servants or agents, and any further third party with whom that Person enters into a sub-contract or such further third party’s employees, servants or agents.

	

	
1.137“Toxicology Study” means the twelve weeks toxicology studies being part if the Phase I Study as described in Schedule 5 attached hereto. 

	

	
1.138“Dynavax Development Work” means the Phase I Study, the Phase II a Manufacturing Services and the Phase II a Study.” 

The space for Section 1.139 shall be left blank.

	
2.2
	
The Sections 8.2.B, 8.2 C and 8.2.D are hereby deleted and shall be replaced by new Sections 8.2.B, 8.2.C and 8.2.D .

	

	
“8.2. BNotwithstanding what is stated in Section 8.2; Dynavax shall be responsible for completing the Dynavax Development Work in accordance with the budget and plan agreed by JSC and with what is otherwise stated herein. Upon the request of Dynavax, AstraZeneca agrees to provide necessary and reasonable assistance for the purpose of timely completion of the Phase II a Study. Upon completion of the Dynavax Development Work such Regulatory Documentation, Regulatory Filing and, 

4

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

		
as applicable, Health Registration Approvals, generated by Dynavax shall be transferred to AstraZeneca free of charge in a format useful and suitable for AstraZeneca for the purpose of being able to continue the Development and carry out Commercialisation in accordance with this Agreement. 

	

	
8.2. CWithout prejudice to what is stated in Section 8.3.2, Dynavax shall be responsible for developing Regulatory Documentation and preparing and submitting Regulatory Filings and, as applicable, maintain Health Registration Approvals for AZD1419 for the purpose of the Dynavax Development Work. Upon completion of the Dynavax Development Work, such Regulatory Documentation, Regulatory Filing and, as applicable, Health Registration Approvals, shall be transferred to AstraZeneca free of charge in a format useful and suitable for AstraZeneca for the purpose of being able to continue the Development and carry out Commercialisation on accordance with the Agreement. Sections 8.2, 8.3.4 and 8.3.5 shall apply mutatis mutandis to Dynavax regarding its conduct thereof.

	

	
Dynavax shall use Commercially Reasonable Efforts to carry out the Dynavax Development Work. For the avoidance of doubt, AstraZeneca’s obligation to use Commercially Reasonable Efforts as set forth in Sections 8.2 and 8.10 shall be deemed to have been fulfilled, and deemed to continue to be fulfilled, for as long as the Dynavax Development Work is ongoing. 

	

	
8.2. DImmediately upon completion of the Dynavax Development Work, or at any other time before such completion as decided from time to time by the JSC, Dynavax shall make available and transfer to AstraZeneca any Dynavax Know-How, compounds and other materials generated by or on behalf of Dynavax, solely or jointly with AstraZeneca or any Third Party, in the course of the Dynavax Development Work in a format useful and suitable for AstraZeneca to be able to continue the Development and carry out the Commercialisation in accordance with this Agreement.” 

 

 

5

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

	
2.3
	
The Sections 8.9. B and 8.9. C are hereby deleted and shall be replaced by new Sections 8.9. B, 8.9. C and 8.9. D. 

	

	
“8.9. BNotwithstanding what is stated in Section 8.9, the Parties have agreed on a total estimated cost required for the Phase II a Study and the Phase II a Manufacturing Services to be [*] allocated as set forth in a) through b) which funding is reasonably assessed to cover all Dynavax’ fully loaded costs for all activities contained therein and all costs for outsourcing of services and other Third Party contracts required for the Phase II a Study and the Phase II a Manufacturing Services. 

	

	
AstraZeneca shall provide the following funding as the sole compensation, subject to the reconciliation set forth in Section 8.9 C, to Dynavax for carrying out the Phase II a Study and the Phase II a Manufacturing Services:

	
(a)
	
Eight million U.S. Dollars ($ 8,000,000) payable within twenty (20) days following signature of this Amendment No 6 for the purpose of covering Dynavax’ costs for carrying out the 2015 agreed activities.

	
(b)
	
No later than 31st October each year for the duration of the Dynavax Development Work, Dynavax shall submit to AstraZeneca an invoice, including an accounting of all costs to be incurred by Dynavax pursuant to the plan and annual budget agreed by JSC for the purpose of the Phase II a Study and the Phase II a Manufacturing Services in the subsequent year. AstraZeneca shall pay such invoices within forty five (45) days of receipt of such invoice by AstraZeneca. 

 

For the avoidance of doubt, the aggregate funding invoiced under Section 8.9. B (a) and (b) shall not exceed [*], unless separately approved by AstraZeneca under the following process.

	

	
If in the opinion of Dynavax, additional funding is necessary to complete the Phase II a Study, Dynavax shall provide the JSC with a fully loaded cost estimate and budget for outstanding activities and requested additional funding. Thereafter, the JSC shall discuss and decide whether any additional funding shall be approved and, if so, 

6

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

		
the additional funding amount approved; provided however, that AstraZeneca shall be under no obligation to approve such additional funding.  

	

	
If the JSC or AstraZeneca declines additional funding requested by Dynavax, Dynavax shall be under no obligation to expend any amount greater than the aggregate of the originally agreed total estimated cost and any previously approved additional funding requests.  Under such circumstances, prior to incurring the anticipated excess costs, the JSC shall agree upon reasonable modifications to the Phase II a Study (such as reduction in number of patients, sites, or study visits) to decrease its total cost consistent with the approved funding level.

	

	
No later than the 25th of October each year for the duration of the Dynavax Development Work, the JSC shall agree an annual budget for the purpose of the Phase II a Study and the Phase II a Manufacturing Services activities to be performed by Dynavax in the subsequent year.

	
8.9. C
	
Upon completion of Dynavax Development Work, Dynavax shall forthwith disclose to AstraZeneca in sufficient detail the costs spent or incurred by Dynavax for the completed Dynavax Development Work. Should the total spend and costs incurred have been lower than the amount paid by AstraZeneca for Dynavax Development Work then AstraZeneca may offset the amount corresponding to the excess paid by AstraZeneca from the next milestone payment under Section 9.4 or, if necessary, from royalty payments under Section 10.1. Should no further milestone or payment be due, whether due to AstraZeneca’s termination of this Agreement or otherwise, then Dynavax shall repay the amounts concerned to AstraZeneca within sixty (60) days of the date of completion of the Dynavax Development Work. This Section 8.9. C shall survive the expiration or termination of this Agreement. 

	
8.9. D
	
Should Dynavax notify AstraZeneca in parallel with the submission of the final Phase II a Clinical Study Report (“Phase II a CSR”) to AstraZeneca, of a request for AstraZeneca to order study drug for the purpose of Phase II b Development work, AstraZeneca shall place an order (the “Order”) for the manufacturing of study drug 

7

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

		
with a quality and in a quantity sufficient to initiate Phase II b Development work (“Phase II b Materials”).  Provided, however, that should AstraZeneca despite Commercially Reasonable Efforts not be able to identify a manufacturer to produce Phase II b Materials in sufficient quantity and quality in compliance with AstraZeneca’s internal processes, AstraZeneca shall inform Dynavax thereof and thereby be relieved from this undertaking. 

	

	
Should AstraZeneca have identified an appropriate manufacturer for the purpose of manufacturing the Phase II b Materials but not placed an Order within one hundred and twenty (120) days after receipt of notification by Dynavax of its request for an Order to be placed, AstraZeneca shall be deemed to have served notice under Section 20.2 of its determination not to pursue the Development of AZD1419.”      

   

	
2.4
	
The Section 25.2.is hereby deleted and shall be replaced by new Section 25.2.

“25.2. Address for Notice

	
For: 
	
AstraZeneca AB 

	

	
Address: AstraZeneca AB

	

	
SE-431 83 Mölndal 

	

	
Sweden

Facsimile:+46 (0)31-776 38 71

	

	
For the attention of: Director, Scientific & Partnering Alliances, Respiratory/Inflammation

 

 

	
With a copy to:
	

 

Address:AstraZeneca UK Limited

	

	
1S92, Mereside 

	

	
Alderley Park, Macclesfield, Cheshire

	

	
England SK10 4TF

	

	
Facsimile:+44 1625 518805

	

	

	

	
For the attention of: Deputy General Counsel

 

8

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

	
For: 
	
Dynavax Technologies Corporation

	

	
Address: Dynavax Technologies Corporation

	

	
2929 Seventh Street

	

	
Suite 100

	

	
Berkeley, CA 94710-2753

Facsimile:(510) 848-1327

	

	
For the attention of: General Counsel

 

 

	
3
	
Counterparts  

	

	
This Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which shall together be deemed to constitute one agreement.  The parties agree that execution of this Amendment by exchanging facsimile or PDF signatures shall have the same legal force and effect as the exchange of original signatures.

	
4
	
Entire Agreement

	

	
This Amendment, together with the Agreement, as amended, constitutes the entire agreement between the parties with respect to the subject matter of the Agreement.  The Agreement together with this Amendment supersedes all prior agreements, whether written or oral, with respect to the subject matter of the Agreement, as amended.  All Attachments referred to in this Amendment are intended to be and are hereby specifically incorporated into and made a part of the Agreement.  The parties hereby agree that subject to the modifications specifically stated in this Amendment, all terms and conditions of the Agreement, as amended, shall remain in full force and effect.

 

 

[SIGNATURE PAGE FOLLOWS.]

 

 

9

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Each party is signing this Amendment on the date stated opposite that party's signature.

 

DYNAVAX TECHNOLOGIES 

CORPORATIONASTRAZENECA AB (publ)

 

 

By:     /s/ Eddie GrayBy:    /s/  Maarten Kraan 

 

Name: eddie grayName:  Maarten Kraan

 

Title: CEOTitle: VP iMed RIA

 

Date:   12.4.2014Date:  December 4, 2014 

 

 

 

 

10

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Schedule 1

KEY REQUIREMENTS — EXTERNAL INTERACTIONS POLICY

1.GIVING ITEMS OF VALUE TO HCPS/HCOS/PAYERS/PUBLIC OFFICIALS

	
1.1
	
The Counterparty must respect the independence of HCPs, HCOs, HCP Service Providers, Payers and Public Officials in whatever capacity they act.

	
1.2
	
The Counterparty must not seek to influence or reward HCPs, HCOs, HCP Service Providers, Payers or Public Officials in any improper way.

	
2.
	
PRODUCT INFORMATION AND PROMOTION

Counterparties engaged in any Promotion or Promotional Activity for AstraZeneca products must ensure:

	
(A)
	
all Promotional Activities and Promotional Materials are accurate, fair and balanced.

	
(B)
	
all Promotional Activities and Promotional Materials are free from ambiguity and allow the therapeutic value of AstraZeneca products to be assessed by HCPs and HCOs in the interest of optimal patient care.

	
(C)
	
Promotional Activities do not compromise the independence of decisions taken by HCPs and HCOs in prescribing medicines for patients, or the recommendation, purchase, administration, authorisation or supply of AstraZeneca products.

	
(D)
	
AstraZeneca Products are only promoted when the time is right to do so (which will never be before the AstraZeneca Product has been given the necessary market approvals).  Off Label uses of AstraZeneca products must never be promoted.

3.NON-PROMOTIONAL COMMUNICATIONS REGARDING OUR PRODUCTS

Counterparties engaged in Non-Promotional Communications regarding AstraZeneca products:

	
3.1
	
Must support the safe and effective use of AstraZeneca products.  Counterparties must not provide medical advice to members of the general public, but Counterparties may provide Non-Promotional educational and scientific information where this is appropriate and permitted by local law.

	
3.2
	
Must never undermine the relationship between HCPs and their patients.  All health-related information provided to members of the general public must be accurate, fair, not misleading, and support HCP-patient interaction

	
4.
	
MEETINGS AND ASSOCIATED HOSPITALITY

Counterparties engaged in organising meetings and associated hospitality relating to their activities for AstraZeneca must:

	
4.1
	
Ensure that every aspect of the Meeting is in keeping with the ABAC Principles, the External Interactions Policy and other AstraZeneca global policies and standards communicated by AstraZeneca to the Counterparty, and must in any event be appropriate in all the circumstances.

	
4.2
	
Meetings organised or sponsored by, or with the participation of, the Counterparty must always have an objectively justifiable business and/or medical education purpose.

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

	
4.3
	
The venue and conduct of Meetings must always be modest, and appropriate for the business and/or medical education purpose of the Meeting.

	
4.4
	
Those AstraZeneca policies concerning payment, compensation or reimbursement for the attendance of HCPs, HCOs, HCP Service Providers, Payers and/or Public Officials at meetings which are provided to Counterparty must be strictly adhered to in all circumstances.

	
4.5
	
The venue, conduct or other arrangements made for Meetings must never be used to reward, influence or induce HCPs, HCOs, Payers or Public Officials to give the Counterparty business or a business advantage, nor create any appearance of doing so.

	
5.
	
ENGAGING HCPS AND OTHER MEDICAL AND SCIENTIFIC CONSULTANTS TO PROVIDE SERVICES TO THE COUNTERPARTY

	
5.1
	
Interactions with HCP Service Providers must at all times be professional exchanges, designed to enhance the practice of medicine to benefit patients.

	
5.2
	
Interactions with HCP Service Providers must be marked by integrity, transparency, ethical conduct and full compliance with applicable laws, regulations and accepted industry codes of practice and the relevant AstraZeneca policies communicated to the Counterparty.

	
5.3
	
HCP Service Providers must only be engaged where there is a legitimate need for their services and the relevant person is an appropriate candidate based on their qualifications and experience in the relevant subject matter or activity.

	
5.4
	
The level of compensation provided to an individual HCP Service Provider must not have, and must not create an impression that either Counterparty or AstraZeneca has undue influence on that HCP Service Provider due to the level of compensation received by that HCP Service Provider or otherwise.

	
6.
	
SAMPLES

	
6.1
	
Samples of AstraZeneca products must only be distributed to enable patients, through their HCPs, to become familiar with AstraZeneca products; to enable HCPs to gain experience with the use and prescription of an AstraZeneca product; to determine a particular patient’s response to an AstraZeneca product; or to evaluate clinical responses to an AstraZeneca product more widely.  Samples must not be distributed for any other purposes.

	
6.2
	
Samples must never be provided to HCPs for the purpose of enabling the HCP to profit or gain a business advantage from the use of the sample, or for any other improper purpose.

	
7.
	
DONATIONS, GRANTS, SPONSORSHIP AND PARTNERSHIPS

	
7.1
	
Counterparty should be committed to making a positive contribution to its local communities and supporting the work of others in the healthcare environment through contributions to charities or other non-profit organisations established for research, educational and/or charitable purposes; sponsorship of activities that may enhance Counterparty’s reputation; and, working in partnership with other organisations.

	
7.2
	
All such contributions and support by Counterparty must always be open and transparent.

	
7.3
	
Counterparty must be vigilant to ensure that any support provided in the form of Donations, Grants and Sponsorship or through Partnerships (collectively, “Support”) does not seek to improperly influence decisions concerning the supply or use of AstraZeneca products or the conduct of Counterparty’s business more generally, and that it is not provided in circumstances where it could be misconstrued as such.

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

	
8.
	
PATIENT GROUPS

Where Counterparty has interactions with Patient Groups in connection with AstraZeneca products:

	
8.1
	
Counterparty must be committed to the advancement and understanding of medicines through open and transparent support of Patient Groups, which may include the provision of Donations and Sponsorship (often comprising or including in-kind assistance) of projects designed to enhance patient welfare.

	
8.2
	
No support must be given by Counterparty to a Patient Group in order to influence decisions concerning the supply or use of AstraZeneca products, nor made in circumstances where it could be misconstrued

	
9.
	
MARKET RESEARCH

Where the Counterparty is authorised to conduct Market Research in respect of AstraZeneca products:

	
9.1
	
Market Research activities in respect of AstraZeneca products must only be undertaken and used to address the Counterparty’s unmet information and business needs so that it is able to make better business decisions.

	
9.2
	
Market Research activities must not be undertaken or used to promote AstraZeneca products or to reward HCPs and HCOs for their willingness to prescribe, recommend or use the Products.

	
10.
	
NON-INTERVENTIONAL STUDIES

	
10.1
	
Counterparty must never in connection with any activities for AstraZeneca be involved in the decision to place a particular patient on a specific medicine.  That decision must be made solely by the patient’s HCP.

	
10.2
	
If there is a NIS relating to an AstraZeneca product, Counterparty must ensure the prescription of the AstraZeneca product is clearly separated from the decision to include a patient in an NIS.  NISs must not include any additional procedures (diagnostic or monitoring) and be observational in nature.  All collected data must undergo a formal analysis

	
11.
	
INVESTIGATOR SPONSORED STUDIES

	
11.1
	
The Counterparty must recognise the importance of ISSs in expanding scientific knowledge related to potential uses of AstraZeneca products.

	
11.2
	
The Counterparty may provide support to an ISS if its activities for AstraZeneca are suitable for an ISS.  The Counterparty must not , be considered to be the sponsor or undertake responsibilities which the applicable regulatory authority has designated as responsibilities of the sponsor.

	
12.
	
DEFINITIONS

The following capitalised terms have the following meanings for purposes of this Schedule:

“Consultant” means an HCP contracted and retained by the Counterparty to provide services to the Counterparty.

“Donation”  means monetary or funding given by the Counterparty to charities/non-profit organisations for which no return is required by or provided to the Counterparty.

“Gift” means any benefit of any kind, including but not limited to money, vouchers, goods, services or other non-financial benefits provided as a mark of appreciation or friendship.

“Grant” means a Donation that is such for a purpose specified by the Counterparty.

“HCO” means any healthcare organisation, which includes hospitals and other healthcare organisations, health insurers (including managed care organisations), pharmacies and formulary or benefit administrators and relevant staff and other individuals employed by, or otherwise affiliated with, such entities who may or do prescribe, 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

administer, recommend, purchase, pay for, reimburse, authorise, approve or supply any AstraZeneca product or AstraZeneca service sold or provided by the Counterparty.

“HCP” means a healthcare professional, including any member of the medical, dental, pharmacy or nursing professions, along with their relevant associated administrative staff who may or does prescribe, administer, recommend, purchase, pay for, reimburse, authorise, approve or supply any AstraZeneca product or AstraZeneca service sold or provided by the Counterparty.

“HCP Service Provider” means an HCP, HCO or other medical or scientific advisor or company retained by the Counterparty to provide contracted services.

“Hospitality” means meals and invitations or tickets to social, entertainment, cultural or sporting events.

“ISS” means a clinical study that is independently initiated, designed and conducted by an external investigator (who assumes both the sponsor and principal investigator role) or medical institution, collaborative research group or academic research organisation (which assumes the Sponsor role and appoints principal investigator(s) for the study).

“Market Research” means the systematic gathering and interpretation of quantitative or qualitative data on the market environment from HCPs and patients using statistical and analytical methods to gain insight and support decision making.  It does not include the gathering and interpretation or ‘real world evidence’.

“Meeting” means a meeting attended by one or more HCPs, HCOs, Payers or Public Officials which the Counterparty has organised or sponsored or which an external organisation (e.g. a medical society) has organised and for which the Counterparty has arranged or sponsored Speakers or Consultants.

“NIS” means a study where the Product is prescribed in the usual manner in accordance with the terms of the marketing authorisation.

“Non-Promotional Activity” means activities which are not Promotional Activities.

“Off Label” means inconsistent with the locally authorised prescribing information for an AstraZeneca product, including indications, uses, doses, or populations that are not included in the local marketing authorisation.

“Partnership” means an agreement that the Counterparty enters into with an organisation to deliver specific measurable outcomes that are solely directed to ensuring patient welfare, including partnerships with non-profit organisations to deliver outcomes that are for the public good.

“Patient Group” means a non-profit organisation (including umbrella organisations to which they belong) mainly composed of patients and/or caregivers that represent and/or support the needs of patients and/or caregivers.

“Payer” means an entity, other than the patient, that finances or reimburses the cost of prescription drugs or healthcare services, e.g. insurance carriers, either private or public (governmental), health plans, or health plan sponsors (employers or unions).

“Promotion,” “Promotional” and “Promotional Activity” means any activity undertaken, organised or sponsored by or on behalf of the Counterparty that is intended to promote the prescription, recommendation, supply, administration, sale or consumption of an AstraZeneca products or services through all media, including the internet.

“Promotional Materials” means any Promotional items or communications that mention an AstraZeneca product name or contain AstraZeneca product or medical information, which are intended for use with, or dissemination to, HCPs and HCOs in a promotional manner.

“Public Officials” are individuals who (i) hold a legislative, administrative or judicial position of any kind whether appointed or elected; (ii) exercise a public function for a country or territory, or any public agency or public enterprise of that country or territory; or (iii) act as an official or agent of a public international organisation.

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

“Sample” means a unit of an AstraZeneca pharmaceutical product that is not to be sold but is provided free of charge to an HCP to allow the HCP and an appropriate patient to determine tolerability and effectiveness of the AstraZeneca product.

“Speaker” means an HCP Service Provider engaged by the Counterparty to speak on behalf of the Counterparty at a Meeting.

“Sponsorship” means the provision of funding in monetary or non-monetary form for an activity or initiative where the Counterparty’s name is associated with the activity, the funding is dedicated to a certain pre-defined initiative/activity and the Counterparty may receive an opportunity to engage in certain activities in association with the sponsorship that may enhance its reputation (such as providing an exhibition stand at a meeting).

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Schedule 2

Phase 1 Study Plan

[*]

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Schedule 3

Phase 2a study plan

[*]

 

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Schedule 4

Phase 2a Manufacturing Services

[*]

 

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Schedule 5

12 week Toxicology Studies in Mice and Non-human Primates

[*]

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Exhibit 10.37

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is made and dated as of December 23, 2014 and is entered into by and between DYNAVAX TECHNOLOGIES CORPORATION, a Delaware corporation (hereinafter referred to as the “Borrower”) the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent for itself and the Lender (in such capacity, the “Agent”).  

RECITALS

A.Borrower has requested Lender to make available to Borrower a loan in an aggregate principal amount of up to Forty Million Dollars ($40,000,000.00) (the "Term Loan"); and 

B.Lender is willing to make the Term Loan on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, Borrower, Agent and Lender agree as follows:

SECTION 1.  DEFINITIONS AND RULES OF CONSTRUCTION

1.1Unless otherwise defined herein, the following capitalized terms shall have the following meanings:

“Account Control Agreement(s)” means any agreement entered into by and among the Agent, Borrower and a third party Bank or other institution (including a Securities Intermediary) in which Borrower maintains a Deposit Account or an account holding Investment Property and which perfects Agent’s security interest in the subject account or accounts.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially the form of Exhibit H.

“Advance(s)” means a Term Loan Advance.

“Advance Date” means the funding date of any Advance.

“Advance Request” means a request for an Advance submitted by Borrower to Agent in substantially the form of Exhibit A.

“Agent” has the meaning given to it in the preamble to this Agreement.

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“Agreement” means this Loan and Security Agreement, as amended from time to time.

“Amortization Date” means February 1, 2016; provided however, if Performance Milestone A is achieved and no default or Event of Default shall have occurred, then August 1, 2016, and if Performance Milestone B is achieved and no default or Event of Default shall have occurred, then February 1, 2017.

“Assignee” has the meaning given to it in Section 11.13.

“Borrower Products” means all products, software, service offerings, technical data or technology currently being designed, manufactured or sold by Borrower or which Borrower intends to sell, license, or distribute in the future including any products or service offerings under development, collectively, together with all products, software, service offerings, technical data or technology that have been sold, licensed or distributed by Borrower since its incorporation.

“Business Day” means any day other than Saturday, Sunday and any other day on which banking institutions in the State of California are closed for business.

“Cash” means all cash and liquid funds.

“Change in Control” means any (i) reorganization, recapitalization, consolidation or merger (or similar transaction or series of related transactions) of Borrower or any Subsidiary, sale or exchange of outstanding shares (or similar transaction or series of related transactions) of Borrower or any Subsidiary in which the holders of Borrower or Subsidiary’s outstanding shares immediately before consummation of such transaction or series of related transactions do not, immediately after consummation of such transaction or series of related transactions, retain shares representing more than fifty percent (50%) of the voting power of the surviving entity of such transaction or series of related transactions (or the parent of such surviving entity if such surviving entity is wholly owned by such parent), in each case without regard to whether Borrower or Subsidiary is the surviving entity, or (ii) sale or issuance by Borrower of new shares of Preferred Stock of Borrower to investors, none of whom are current investors in Borrower, and such new shares of Preferred Stock are senior to all existing Preferred Stock and Common Stock with respect to liquidation preferences, and the aggregate liquidation preference of the new shares of Preferred Stock is more than fifty percent (50%) of the aggregate liquidation preference of all shares of Preferred Stock of Borrower.  

“Claims” has the meaning given to it in Section 11.10.

“Closing Date” means the date of this Agreement.

“Collateral” means the property described in Section 3.

“Commitment Fee” means $45,000, which fee has been paid, and shall be deemed fully earned on the Closing Date regardless of the early termination of this Agreement.

“Confidential Information” has the meaning given to it in Section 11.12.

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“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

“Copyrights” means all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof, or of any other country.

“Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit.

“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.

“DSMB” means Data and Safety Monitoring Board.

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

“Event of Default” has the meaning given to it in Section 9.

“Facility Charge” means $400,000, representing one percent (1.0%) of Maximum Term Loan Amount.

“Financial Statements” has the meaning given to it in Section 7.1.

“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized under the laws of any state or other jurisdiction within the United States.

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

“Guarantor” means Rhein Biotech GmbH.

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“Guaranty” means the secured Guaranty of Guarantor in a form reasonably acceptable to Agent.

“Guarantor Collateral” means the personal property assets of Guarantor described in Section 3.2.

“Guarantor Security Documents” means the documents described in Section 3.2.

“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business due within ninety (90) days), including reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations.

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask works; domain names and websites; Borrower’s applications therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill associated with any of the foregoing, together with Borrower’s rights to sue for past, present and future infringement of Intellectual Property and the goodwill associated therewith.

“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person.

“Joinder Agreements” means for each Domestic Subsidiary, a completed and executed Joinder Agreement in substantially the form attached hereto as Exhibit G.

“Lender” has the meaning given to it in the preamble to this Agreement.

“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest.

“Loan” means the Advances made under this Agreement.

“Loan Documents” means this Agreement, the Notes (if any), the ACH Authorization, the Account Control Agreements, the Joinder Agreements, all UCC Financing Statements, the Guaranty, the Guarantor Security Documents, any guaranties and related security 

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documents executed after the Closing Date, and any other documents executed in connection with the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.

“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets, or condition (financial or otherwise) of Borrower; or (ii) the ability of Borrower to perform the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lender to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the Collateral or the priority of such Liens.

“Maximum Term Loan Amount” means Forty Million and No/100 Dollars ($40,000,000.00). 

“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.

“Note(s)” means a Term Note.

“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement Borrower now holds or hereafter acquires any interest.

“Patents” means all letters patent of, or rights corresponding thereto, in the United States or in any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States or any other country.

“Performance Milestone A” means Borrower’s receipt on or before September 30, 2015 of a positive decision in each of the first, second and third DSMB meetings for the ongoing HEPLISAV–B Phase 3 study.

“Performance Milestone B” means Borrower’s meeting the primary endpoints of the HEPLISAV–B Phase 3 trial on or before August 1, 2016.

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender or Agent arising under this Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date which is disclosed in Schedule 1A; (iii) Indebtedness of up to $1,000,000 (excluding Indebtedness existing on the Closing Date which is disclosed in Schedule 1A) outstanding at any time secured by a Lien described in clause (vii) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the Equipment financed with such Indebtedness; (iv) Indebtedness to trade creditors incurred in the ordinary course of business, including Indebtedness incurred in the ordinary course of business with corporate credit cards; (v) Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated Indebtedness; (vii) reimbursement obligations in connection with corporate credit cards and letters of credit that are secured by cash or cash equivalents and issued on behalf of the Borrower or a Subsidiary thereof in an amount not to exceed $1,500,000 at any time outstanding, (viii) Indebtedness secured by a Lien described in clause (xi) of the defined term Permitted Liens, (ix) Indebtedness consisting of fees, royalties, advances for research and development activities, and other amounts paid by third parties to Borrower or a Subsidiary 

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thereof which, by the express terms of the agreement, license, contract or other instrument to which they relate, are payable in advance, and with respect to the payment of which Borrower or a Subsidiary may have contingent liabilities, (x) other Indebtedness in an amount not to exceed $250,000 at any time outstanding, and (xi) extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose materially more burdensome terms upon Borrower or its Subsidiary, as the case may be.

“Permitted Investment” means: (i) Investments existing on the Closing Date which are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of deposit issued by any bank with assets of at least $500,000,000 maturing no more than one year from the date of investment therein, (d) money market accounts, and (e) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Borrower’s Board of Directors; (iii) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; (iv) repurchases of stock from former employees, directors, or consultants of Borrower under the terms of applicable repurchase agreements at the original issuance price of such securities in an aggregate amount not to exceed $250,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases; (v) Investments accepted in connection with Permitted Transfers; (vi) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business; (vii) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not affiliates, in the ordinary course of business, provided that this subparagraph (vii) shall not apply to Investments of Borrower in any Subsidiary; (viii) Investments consisting of loans not involving the net transfer on a substantially contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of capital stock of Borrower pursuant to employee stock purchase plans or other similar agreements approved by Borrower’s Board of Directors; (ix) Investments consisting of travel advances and relocation loans in the ordinary course of business, provided however that Investments consisting of relocation loans shall not exceed $500,000 in the aggregate in any fiscal year; (x) Investments by Borrower in newly-formed or acquired Domestic Subsidiaries, provided that each such Domestic Subsidiary enters into a Joinder Agreement promptly after its formation or acquisition by Borrower and executes such other documents as shall be reasonably requested by Agent; (xi) Investments by Borrower in newly-formed or acquired or previously existing Foreign Subsidiaries (including Rhein Biotech GmbH) by way of contributions to capital, purchases of capital securities, or loans or advances, in an aggregate amount not to exceed $6,000,000 in 2015 and $3,000,000 in each subsequent year, provided that each such newly-formed or acquired Foreign Subsidiary enters into a guaranty promptly after its formation or acquisition by Borrower and executes such other documents as shall be reasonably requested by Agent, (xii) joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing, or, subject to clause (ii) of Permitted Transfers, 

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exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed $250,000 in the aggregate in any fiscal year; (xiii) Investments consisting of Deposit Accounts or accounts holding Investment Property subject to compliance with Section 7.12; (xiv) mergers and acquisitions permitted under Section 7.9; and (xv) additional Investments that do not exceed $400,000 in the aggregate.

“Permitted Liens” means any and all of the following: (i) Liens in favor of Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; provided, that Borrower maintains adequate reserves therefor in accordance with GAAP; (iv) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of Borrower’s business and imposed without action of such parties; provided, that the payment thereof is not yet required; (v) Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder; (vi) the following deposits, to the extent made in the ordinary course of business:  deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders, leases or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; (vii) Liens on Equipment or software or other intellectual property constituting purchase money Liens and Liens in connection with capital leases securing Indebtedness permitted in clause (iii) of “Permitted Indebtedness”;  (viii) Liens incurred in connection with Subordinated Indebtedness; (ix) (a)leasehold interests in leases or subleases and (b) licenses granted by Borrower or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the business of Borrower or any of its Subsidiaries; (x) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on or before the date they become due; (xi) Liens securing the payment of financed insurance premiums that are promptly paid on or before the date they become due provided that such Liens extend only to the insurance policies and all money due Borrower thereunder (including the return of premiums and dividends) and not to any other property or assets; (xii) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms; (xiii) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do not materially impair the value or marketability of the related property; (xiv) Liens on cash or cash equivalents securing obligations permitted under clause (vii) of the definition of Permitted Indebtedness; and (xv) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (i) through (xiv) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase.

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“Permitted Transfers” means (i) sales or other dispositions of Inventory in the ordinary course of business, (ii) non-exclusive licenses and similar arrangements for the use of Intellectual Property in the ordinary course of Borrower’s business, and exclusive licenses for the use of Intellectual Property in the ordinary course of Borrower’s business, including the exclusive licenses existing on the Closing Date which are disclosed in Schedule 1D; provided that, with respect to exclusive licenses for the use of Intellectual Property in the ordinary course of Borrower’s business entered into after the Closing Date, prior to execution and delivery of such license, (A) Borrower shall have provided Agent written notice of such license and (B) Borrower’s Board of Directors shall have approved such license, (iii) dispositions of worn-out, obsolete or surplus Equipment at fair market value in the ordinary course of business, (iv) the sale or dissolution of Dynavax International, B.V.; (v) Permitted Liens and Permitted Investments; and (vi) other Transfers of assets having a fair market value of not more than $400,000 in the aggregate in any fiscal year.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.

“Preferred Stock” means at any given time any equity security issued by Borrower that has any rights, preferences or privileges senior to Borrower’s common stock.

“Prepayment Charge” shall have the meaning assigned to such term in Section 2.5. 

“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto.

“Required Lenders” means  at any time, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans then outstanding.

“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous governmental authority.

“Secured Obligations” means Borrower’s obligations under this Agreement and any Loan Document, including any obligation to pay any amount now owing or later arising.

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions satisfactory to Agent in its sole discretion.

“Subsequent Financing” means the closing of any Borrower financing which becomes effective after the Closing Date and results in aggregate proceeds to Borrower of at least $15,000,000.

“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Borrower owns or controls 50% or more of the outstanding voting securities, including each entity listed on Schedule 1 hereto.

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“Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to the Borrower in a principal amount not to exceed the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1.  

“Term Loan Advance” means any Term Loan funds advanced under this Agreement. 

“Term Loan Interest Rate” means for any day a per annum rate of interest equal to the greater of either (i) 9.75% plus the prime rate as reported in The Wall Street Journal minus 5.25%, and (ii) 9.75%.

“Term Loan Maturity Date” means July 1, 2018, but if the Amortization Date is August 1, 2016 or February 1, 2017, then January 1, 2019.

“Term Note” means a Promissory Note in substantially the form of Exhibit B.

“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 

“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof.

“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of California; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.  

Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement.  Unless otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP, consistently applied. Unless otherwise defined herein or in the other Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in the UCC.

SECTION 2.  THE LOAN

2.1[Intentionally Omitted.]

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2.2Term Loan.

(a)Advances.  Subject to the terms and conditions of this Agreement, Lender will severally (and not jointly) make in an amount not to exceed its respective Term Commitment, and Borrower agrees to draw, a Term Loan Advance of $10,000,000 on the Closing Date.  From the date of Borrower’s achievement of Performance Milestone A and continuing until September 30, 2015, Borrower may request an additional Term Loan Advance in the amount of $30,000,000.  The aggregate outstanding Term Loan Advances may be up to the Maximum Term Loan Amount.

(b)Advance Request.  To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least five (5) Business Days before the Advance Date) to Agent.  Lender shall fund the Term Loan Advance in the manner requested by the Advance Request provided that each of the conditions precedent to such Term Loan Advance is satisfied as of the requested Advance Date.

(c)Interest.  The principal balance of each Term Loan Advance shall bear interest thereon from such Advance Date at the Term Loan Interest Rate based on a year consisting of 360 days, with interest computed daily based on the actual number of days elapsed.  The Term Loan Interest Rate will float and change on the day the Prime Rate changes from time to time, provided however, that if Borrower achieves Performance Milestone B on or before August 1, 2016, the Term Loan Interest Rate shall be fixed at the rate in effect on the date Borrower achieves Performance Milestone B. 

(d)Payment.  Borrower will pay interest on the outstanding principal amount of each Term Loan Advance on the first day of each month, beginning the month after the Advance Date thereof.  Borrower shall repay the aggregate Term Loan principal balance that is outstanding on the day immediately preceding the Amortization Date, in equal monthly installments of principal and interest (mortgage style) amortized over a 30-month schedule beginning on the Amortization Date and continuing on the first Business Day of each month thereafter until the Term Loan Maturity Date, or subject to Section 2.5, any earlier repayment of the Secured Obligations.  The entire Term Loan principal balance, including a balloon payment of principal, as applicable, and all accrued but unpaid interest hereunder, shall be due and payable on the Term Loan Maturity Date.  Borrower shall make all payments under this Agreement without setoff, recoupment or deduction and regardless of any counterclaim or defense. Lender will initiate debit entries to the Borrower’s account as authorized on the ACH Authorization (i) on each payment date of all periodic obligations payable to Lender under each Term Advance and (ii) of out-of-pocket legal fees and costs incurred by Agent or Lender in connection with and subject to Section 11.11 of this Agreement.

2.3Maximum Interest.  Notwithstanding any provision in this Agreement or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans) (the “Maximum Rate”).  If a court of competent jurisdiction shall finally determine that Borrower has actually paid to Lender an amount of interest in excess of the amount that 

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would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrower shall be applied as follows:  first, to the payment of the Secured Obligations consisting of the outstanding principal; second, after all principal is repaid, to the payment of Lender’s accrued interest, costs, expenses, professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess (if any) shall be refunded to Borrower.  

2.4Default Interest.  In the event any payment is not paid on the scheduled payment date, an amount equal to five percent (5%) of the past due amount shall be payable on demand. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, all Secured Obligations, including principal, interest, compounded interest, and professional fees, shall bear interest at a rate per annum equal to the rate set forth in 2.2(c), plus five percent (5%) per annum.  In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forth in Section 2.2(c) or Section 2.4, as applicable.

2.5Prepayment.  At its option upon at least seven (7) Business Days prior notice to Agent, Borrower may terminate Lender’s commitment to make Term Loan Advances hereunder and prepay all, but not less than all, of the outstanding Advances by paying the entire principal balance and all accrued and unpaid interest thereon, together with a prepayment charge equal to 1.5% of the Advance amount being prepaid if such Advance amounts are prepaid on or before the Amortization Date (a “Prepayment Charge”); if such Advance amounts are prepaid after the Amortization Date, there shall be no Prepayment Charge.  Borrower agrees that the Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of the difficulties and impracticality of determining actual damages resulting from an early repayment of the Advances.  Borrower shall prepay the outstanding amount of all principal and accrued interest through the prepayment date upon the occurrence of a Change in Control, and, if the Change in Control occurs on or before the Amortization Date, the Prepayment Charge.

2.6End of Term Charge.  On the earliest to occur of (i) the Term Loan Maturity Date, (ii) the date that Borrower prepays the outstanding Secured Obligations, or (iii) the date that the Secured Obligations become due and payable, Borrower shall pay Lender a charge of either (a) $840,000 if the aggregate amount of Term Loan Advances made under Section 2.2(a) is $10,000,000, or (b) $2,400,000 if the aggregate amount of Term Loan Advances made under Section 2.2(a) is $40,000,000. Notwithstanding the required payment date of such charge, it shall be deemed earned by Lender as of the Closing Date.

2.7Notes.  If so requested by Lender by written notice to Borrower, then Borrower shall execute and deliver to Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of Lender pursuant to Section 11.13) (promptly after the Borrower’s receipt of such notice) a Note or Notes to evidence Lender’s Loans.

2.8Pro Rata Treatment.  Each payment (including prepayment) on account of any fee and any reduction of the Term Loans shall be made pro rata according to the Term Commitments of the relevant Lender.

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SECTION 3.  SECURITY INTEREST

3.1As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower grants to Agent a security interest in all of Borrower’s right, title, and interest in and to the following personal property whether now owned or hereafter acquired (collectively, the “Collateral”):  (a) Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles (other than Intellectual Property); (e) Inventory; (f) Investment Property; (g) Deposit Accounts; (h) Cash; (i) Goods; and all other tangible and intangible personal property of Borrower whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Borrower and wherever located, and any of Borrower’s property in the possession or under the control of Agent; and, to the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.  Notwithstanding the foregoing, the Collateral shall not include (i) any Intellectual Property, whether now owned or hereafter acquired; provided, however, that the Collateral shall include all Accounts and General Intangibles that consist of rights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the Intellectual Property (the “Rights to Payment”).  Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of the date of this Agreement, include the Intellectual Property to the extent necessary to permit perfection of Agent’s security interest in the Rights to Payment; (ii) rights held under a license that are not assignable by their terms without the consent of the licensor thereof (but only to the extent such restriction on assignment is enforceable under applicable law), (iii) any interest of Borrower as a lessee or sublessee under a real property lease, (iv) any interest in Equipment being financed by Borrower as a lessee under an Equipment lease or as a purchaser under a vendor agreement if Borrower is prohibited by the terms of such lease or agreement from granting a security interest in the Equipment subject to such lease or agreement or under which such assignment or Lien would cause a default to occur under such lease or agreement, provided, however, that upon termination of such prohibition, such interest shall immediately become Collateral without any action by Borrower or Agent, and (v) cash or cash equivalents securing obligations permitted under clause (vii) of the definition of Permitted Indebtedness.

3.2As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Guarantor shall execute or issue the Guaranty, together with pledge, debenture and related documents (collectively, the “Guarantor Security Documents”) granting Agent a security interest in all of Guarantor’s personal property assets other than Guarantor’s intellectual property (collectively, the “Guarantor Collateral”), to be delivered in accordance with Section 7.16 hereof.  

3.3As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower shall deliver and pledge to the Agent all certificated securities and interests held in its Subsidiaries (other than Dynavax International BV) and if such securities and interests are uncertificated, Borrower shall provide Agent with appropriate control agreements, as 

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applicable, providing the Agent with control over such securities and interests and first priority of its Liens in such Collateral.

3.4If this Agreement is terminated, Agent’s Lien in the Collateral shall continue until the Secured Obligations (other than inchoate indemnity obligations) are satisfied in full, and at such time, Agent shall, at Borrower’s sole cost and expense, terminate its security interest in the Collateral and all rights therein shall revert to Borrower.

SECTION 4.  CONDITIONS PRECEDENT TO LOAN

The obligations of Lender to make the Loan hereunder are subject to the satisfaction by Borrower of the following conditions:

4.1Initial Advance.  On or prior to the Closing Date, Borrower shall have delivered to Agent the following:

(a)executed originals of the Loan Documents, Account Control Agreements, a legal opinion of Borrower’s counsel, and all other documents and instruments reasonably required by Agent to effectuate the transactions contemplated hereby or to create and perfect the Liens of Agent with respect to all Collateral, in all cases in form and substance reasonably acceptable to Agent;

(b)certified copy of resolutions of Borrower’s board of directors evidencing approval of the Loan and other transactions evidenced by the Loan Documents;

(c)certified copies of the Certificate of Incorporation and the Bylaws, as amended through the Closing Date, of Borrower;

(d)a certificate of good standing for Borrower from its state of incorporation and similar certificates from all other jurisdictions in which it does business and where the failure to be qualified would have a Material Adverse Effect;

(e)payment of the Facility Charge and reimbursement of Agent’s and Lender’s current expenses reimbursable pursuant to this Agreement, which amounts may be deducted from the initial Advance (Agent and Lender acknowledge that, prior to the date hereof, they have received the Commitment Fee to be applied in its entirety toward the payment of any non-legal transaction costs and non-legal due diligence expenses incurred by Agent and Lender through the Closing Date); and 

(f)such other documents as Agent may reasonably request.

4.2All Advances.  On each Advance Date:

(a)Agent shall have received (i) an Advance Request for the relevant Advance as required by 2.2(b), each duly executed by Borrower’s Chief Executive Officer or Principal Financial Officer, and (ii) any other documents Agent may reasonably request.

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(b)The representations and warranties set forth in this Agreement and in Section 5 shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.

(c)Borrower shall be in compliance with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance, and no Event of Default shall have occurred and be continuing.

(d)Each Advance Request shall be deemed to constitute a representation and warranty by Borrower on the relevant Advance Date as to the matters specified in paragraphs (b) and (c) of this Section 4.2 and as to the matters set forth in the Advance Request.

4.3No Default.  As of the Closing Date and each Advance Date, (i) no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default and (ii) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. 

SECTION 5.  REPRESENTATIONS AND WARRANTIES OF BORROWER

Borrower represents and warrants that:

5.1Corporate Status.  Borrower is a corporation duly organized, legally existing and in good standing under the laws of the State of Delaware, and is duly qualified as a foreign corporation in all jurisdictions in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse Effect.  Borrower’s present name, former names (if any), locations, place of formation, tax identification number, organizational identification number and other information are correctly set forth in Exhibit C, as may be updated by Borrower in a written notice (including any Compliance Certificate) provided to Agent after the Closing Date. 

5.2Collateral.  Borrower owns the Collateral and the Intellectual Property, free of all Liens, except for Permitted Liens.  Borrower has the power and authority to grant to Agent a Lien in the Collateral as security for the Secured Obligations .  

5.3Consents.  Borrower’s execution, delivery and performance of this Agreement and all other Loan Documents (i) have been duly authorized by all necessary corporate action of Borrower, (ii) will not result in the creation or imposition of any Lien upon the Collateral, other than Permitted Liens and the Liens created by this Agreement and the other Loan Documents, (iii) do not violate any provisions of Borrower’s Certificate or Articles of Incorporation (as applicable), bylaws, or any, law, regulation, order, injunction, judgment, decree or writ to which Borrower is subject and (iv) except as described on Schedule 5.3, do not violate any contract or agreement or require the consent 

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or approval of any other Person which has not already been obtained.  The individual or individuals executing the Loan Documents are duly authorized to do so.

5.4Material Adverse Effect.  No event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. Borrower is not aware of any event likely to occur that is reasonably expected to result in a Material Adverse Effect.

5.5Actions Before Governmental Authorities.  Except as described on Schedule 5.5, there are no actions, suits or proceedings at law or in equity or by or before any governmental authority now pending or, to the knowledge of Borrower, threatened against or affecting Borrower or its property. 

5.6Laws.  Borrower is not in violation of any law, rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any governmental authority, where such violation or default is reasonably expected to result in a Material Adverse Effect.  Borrower is not in default in any manner under any provision of any agreement or instrument evidencing Indebtedness, or any other material agreement to which it is a party or by which it is bound.

5.7Information Correct and Current.  No information, report, Advance Request, financial statement, exhibit or schedule furnished, by or on behalf of Borrower to Agent in connection with any Loan Document or included therein or delivered pursuant thereto contained, contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are or will be made, not misleading at the time such statement was made or deemed made. Additionally, any and all financial or business projections provided by Borrower to Agent, whether prior to or after the Closing Date, shall be (i) provided in good faith and based on the most current data and information available to Borrower, and (ii) the most current of such projections provided to Borrower’s Board of Directors. 

5.8Tax Matters.  Except as described on Schedule 5.8, (a) Borrower has filed all federal, state and local tax returns that it is required to file, (b) Borrower has duly paid or fully reserved for all taxes or installments thereof (including any interest or penalties) as and when due, which have or may become due pursuant to such returns, and (c) Borrower has paid or fully reserved for any tax assessment received by Borrower for the three (3) years preceding the Closing Date, if any (including any taxes being contested in good faith and by appropriate proceedings).

5.9Intellectual Property Claims.  Borrower is the sole owner of, or otherwise has the right to use, the Intellectual Property except for joint ownership of Intellectual Property pursuant to research collaboration and license agreements disclosed on Schedule 5.9.  Except as described on Schedule 5.9, (i) to the best of Borrower’s knowledge, each of the material Copyrights, Trademarks and Patents is valid and enforceable, (ii) no material part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and (iii) no claim has been made to Borrower that any material part of the Intellectual Property violates the rights of any third party. Exhibit D is a true, correct and complete list 

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of each of Borrower’s Patents, registered Trademarks, registered Copyrights, and material agreements under which Borrower licenses Intellectual Property from third parties (other than shrink-wrap software licenses), together with application or registration numbers, as applicable, owned by Borrower or any Subsidiary, in each case as of the Closing Date. Borrower is not in material breach of, nor has Borrower failed to perform any material obligations under, any of the foregoing contracts, licenses or agreements and, to Borrower’s knowledge, no third party to any such contract, license or agreement is in material breach thereof or has failed to perform any material obligations thereunder.  

5.10Intellectual Property.  Except as described on Schedule 5.10, Borrower has, or in the case of any proposed business, will have, all material rights with respect to Intellectual Property necessary in the operation or conduct of Borrower’s business as currently conducted and proposed to be conducted by Borrower.  Without limiting the generality of the foregoing, and in the case of Licenses, except for restrictions that are unenforceable under applicable law, Borrower has the right, to the extent required to operate Borrower’s business, to freely transfer, license or assign Intellectual Property without condition, restriction or payment of any kind (other than license payments in the ordinary course of business) to any third party, except for Intellectual Property subject to Licenses to the extent such Licenses constitute Permitted Transfers of the type described in clause (ii) of the definition of Permitted Transfer, and Borrower owns or has the right to use, pursuant to valid licenses, all software development tools, library functions, compilers and all other third-party software and other items that are used in the design, development, promotion, sale, license, manufacture, import, export, use or distribution of Borrower Products.  

5.11Borrower Products.  Except as described on Schedule 5.11, no Intellectual Property owned by Borrower or Borrower Product has been or is subject to any actual or, to the knowledge of Borrower, threatened litigation, proceeding (including any proceeding in the United States Patent and Trademark Office or any corresponding foreign office or agency) or outstanding decree, order, judgment, settlement agreement or stipulation that restricts in any manner Borrower’s use, transfer or licensing thereof or that may affect the validity, use or enforceability thereof. There is no decree, order, judgment, agreement, stipulation, arbitral award or other provision entered into in connection with any litigation or proceeding that obligates Borrower to grant licenses or ownership interest in any future Intellectual Property related to the operation or conduct of the business of Borrower or Borrower Products.  Borrower has not received any written notice or claim, or, to the knowledge of Borrower, oral notice or claim, challenging or questioning Borrower’s ownership in any Intellectual Property (or written notice of any claim challenging or questioning the ownership in any licensed Intellectual Property of the owner thereof) or suggesting that any third party has any claim of legal or beneficial ownership with respect thereto nor, to Borrower’s knowledge, is there a reasonable basis for any such claim.  Neither Borrower’s use of its Intellectual Property nor the production and sale of Borrower Products infringes the Intellectual Property or other rights of others. 

5.12Financial Accounts.  Exhibit E, as may be updated by the Borrower in a written notice provided to Agent after the Closing Date, is a true, correct and complete list of (a) all banks and other financial institutions at which Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions at which Borrower or any Subsidiary 

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maintains an account holding Investment Property, and such exhibit correctly identifies the name, address and telephone number of each bank or other institution, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

5.13Employee Loans.  Except for Permitted Investments disclosed in Schedule 5.13, Borrower has no outstanding loans to any employee, officer or director of the Borrower nor has Borrower guaranteed the payment of any loan made to an employee, officer or director of the Borrower by a third party.

5.14Capitalization and Subsidiaries.  Borrower’s capitalization as of the Closing Date is set forth on Schedule 5.14 annexed hereto.  Borrower does not own any stock, partnership interest or other securities of any Person, except for Permitted Investments.  Attached as Schedule 5.14, as may be updated by Borrower in a written notice provided after the Closing Date, is a true, correct and complete list of each Subsidiary.

SECTION 6.  INSURANCE; INDEMNIFICATION

6.1Coverage.  Borrower shall cause to be carried and maintained commercial general liability insurance, on an occurrence form, against risks customarily insured against in Borrower’s line of business.  Such risks shall include the risks of bodily injury, including death, property damage, personal injury, advertising injury, and contractual liability per the terms of the indemnification agreement found in Section 6.3.  Borrower must maintain a minimum of $1,000,000 of commercial general liability insurance for each occurrence with a minimum of $1,000,000 additional umbrella liability coverage.  Borrower has and agrees to maintain a minimum of $2,000,000 of directors’ and officers’ insurance for each occurrence and $5,000,000 in the aggregate.  So long as there are any Secured Obligations (other than inchoate indemnity obligations) outstanding, Borrower shall also cause to be carried and maintained insurance upon the Collateral, insuring against special form of physical loss or damage howsoever caused, in an amount not less than the full replacement cost of the Collateral, provided that such insurance may be subject to standard exceptions and deductibles.  

6.2Certificates.  Borrower shall deliver to Agent certificates of insurance that evidence Borrower’s compliance with its insurance obligations in Section 6.1 and the obligations contained in this Section 6.2.  Borrower’s insurance certificate shall state Agent (shown as “Hercules Technology Growth Capital, Inc., as Agent”) is an additional insured for commercial general liability, a loss payee for special form property damage insurance, subject to the insurer’s approval, and a loss payee for property insurance and additional insured for liability insurance for any future insurance that Borrower may acquire from such insurer.  Attached to the certificates of insurance will be additional insured endorsements for liability and lender’s loss payable endorsements for all risk property damage insurance.  Borrower will provide a minimum of thirty (30) days (ten (10) days for non-payment of premium) advance written notice to Agent of cancellation or any other change adverse to Agent’s interests.  Any failure of Agent to scrutinize such insurance certificates for compliance is not a waiver of any of Agent’s rights, all of which are reserved.

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6.3Indemnity.  Borrower agrees to indemnify and hold Agent, Lender and their officers, directors, employees, agents, in-house attorneys, representatives and shareholders (each, an “Indemnified Person”) harmless from and against any and all claims, costs, expenses, damages and liabilities (including such claims, costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort), including reasonable attorneys’ fees and disbursements and other costs of investigation or defense (including those incurred upon any appeal) (collectively, “Liabilities”), that may be instituted or asserted against or incurred by such Indemnified Person as the result of credit having been extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or failures to act in connection therewith, or arising out of the disposition or utilization of the Collateral, excluding in all cases Liabilities to the extent resulting from any Indemnified Person’s gross negligence or willful misconduct. Borrower agrees to pay, and to save Agent and Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Agent or Lender) that may be payable or determined to be payable with respect to any of the Collateral or this Agreement.  In no event shall any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings).

SECTION 7.  COVENANTS OF BORROWER

Borrower agrees as follows:

7.1Financial Reports.  Borrower shall furnish to Agent the financial statements and reports listed hereinafter (the “Financial Statements”):

(a)as soon as practicable (and in any event within 30 days) after the end of each month, unaudited monthly and year-to-date financial statements as of the end of such month (prepared on a consolidated and consolidating basis, if applicable), including balance sheet and related statements of income accompanied by a report detailing any material contingencies (including the commencement of any material litigation by or against Borrower) or any other occurrence that would reasonably be expected to have a Material Adverse Effect, all certified by Borrower’s Chief Executive Officer or Principal Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, (ii) that they are subject to normal quarterly and year end adjustments, and (iii) they do not contain certain non-cash items that are customarily included in quarterly and annual financial statements; 

(b)as soon as practicable (and in any event within 45 days) after the end of each calendar quarter, unaudited interim and year-to-date financial statements as of the end of such calendar quarter (prepared on a consolidated and consolidating basis, if applicable), including interim and year-to-date balance sheet and related statements of income and year-to-date cash flows accompanied by a report detailing any material contingencies (including the commencement of any material litigation by or against Borrower) or any other occurrence that would reasonably be expected to have a Material Adverse Effect, certified by Borrower’s Chief Executive Officer or Principal Financial 

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Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, and (ii) that they are subject to normal year end adjustments;

(c)as soon as practicable (and in any event within ninety (90) days) after the end of each fiscal year, unqualified audited consolidated financial statements as of the end of such year, including balance sheet, related statements of operations, cash flows and footnotes, and setting forth in comparative form the corresponding figures for the preceding fiscal year, certified by a firm of independent certified public accountants selected by Borrower and reasonably acceptable to Agent, accompanied by any management report from such accountants; 

(d) as soon as practicable (and in any event at the same time as the financial statements are delivered pursuant to Section 7.1(a) and (b)), a Compliance Certificate in the form of Exhibit F;

(e)as soon as practicable (and in any event within 30 days) after the end of each month, a report showing agings of accounts receivable and accounts payable;

(f)promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that Borrower has made available to its stockholders and copies of any regular, periodic and special reports or registration statements that Borrower files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or any national securities exchange; and

(g)financial and business projections promptly following their approval by Borrower’s Board of Directors, and in any event, within 60 days after the end of Borrower’s fiscal year, as well as budgets, operating plans and other financial information reasonably requested by Agent. 

	

	
Borrower shall not (without the consent of Agent, such consent not to be unreasonably withheld or delayed), make any change in its (a) accounting policies or reporting practices, except as required by GAAP or (b) fiscal years or fiscal quarters. The fiscal year of Borrower shall end on December 31.

	

	
The executed Compliance Certificate may be sent via facsimile to Agent at (650) 473-9194 or via e-mail to pedwards@herculestech.com.  All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to financialstatements@herculestech.com with a copy to pedwards@herculestech.com provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to Agent at: (866) 468-8916, attention Chief Investment Officer.  To the extent any documents required to be delivered pursuant to the terms hereof are included in materials otherwise filed with the SEC, Borrower electronically may deliver such documents by e-mailing a link to the applicable filing posted on the SEC website currently located at http://www.sec.gov.

7.2Management Rights.  Borrower shall permit any representative that Agent or Lender authorizes, including its attorneys and accountants, to inspect the Collateral and examine and make copies and abstracts of the books of account and records of Borrower at 

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reasonable times and upon reasonable notice during normal business hours; provided that, such inspection and examination shall be conducted no more often than twice every twelve (12) months unless an Event of Default has occurred and is continuing.  In addition, any such representative shall have the right to meet with management and officers of Borrower to discuss such books of account and records.  In addition, Agent or Lender shall be entitled at reasonable times and intervals to consult with and advise the management and officers of Borrower concerning significant business issues affecting Borrower.  Such consultations shall not unreasonably interfere with Borrower’s business operations.  The parties intend that the rights granted Agent and Lender shall constitute “management rights” within the meaning of 29 C.F.R Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Agent or Lender with respect to any business issues shall not be deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender of, control over Borrower’s management or policies. 

7.3Further Assurances.  Borrower shall from time to time execute, deliver and file, alone or with Agent, any financing statements, security agreements, collateral assignments, notices, control agreements, or other documents to perfect or give the highest priority to Agent’s Lien on the Collateral.  Borrower shall from time to time procure any instruments or documents as may be reasonably requested by Agent, and take all further action that may be necessary or desirable, or that Agent may reasonably request, to perfect and protect the Liens granted hereby and thereby.  In addition, and for such purposes only, Borrower hereby authorizes Agent to execute and deliver on behalf of Borrower and to file such financing statements, collateral assignments, notices, control agreements, security agreements and other documents without the signature of Borrower either in Agent’s name or in the name of Agent as agent and attorney-in-fact for Borrower.  Borrower shall protect and defend Borrower’s title to the Collateral and Agent’s Lien thereon against all Persons claiming any interest adverse to Borrower or Agent other than Permitted Liens.  

7.4Indebtedness.  Borrower shall not create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except for the Secured Obligations, the conversion of Indebtedness into equity securities and the payment of cash in lieu of fractional shares in connection with such conversion.

7.5Collateral.  Borrower shall at all times keep the Collateral, the Intellectual Property and all other property and assets used in Borrower’s business or in which Borrower now or hereafter holds any interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any legal process affecting the Collateral, the Intellectual Property, such other property and assets, or any Liens thereon, provided however, that the Collateral and such other property and assets may be subject to Permitted Liens except that there shall be no Liens whatsoever on Intellectual Property other than Permitted Liens of the type described in clauses (i), (ii), (iii) and (ix) of the definition of Permitted Liens.  Borrower shall cause its Subsidiaries to protect and defend such Subsidiary’s title to its assets from and against all Persons claiming any interest adverse to such Subsidiary, and Borrower shall cause its Subsidiaries at all times to keep such Subsidiary’s property and assets free and clear from any legal process or Liens whatsoever (except for Permitted Liens, provided however, that there shall be no 

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Liens whatsoever on Intellectual Property other than Permitted Liens of the type described in clauses (i), (ii), (iii) and (ix)(b) of the definition of Permitted Liens), and shall give Agent prompt written notice of any legal process affecting such Subsidiary’s assets.  Borrower shall not agree with any Person other than Agent or Lender not to encumber its property except for Permitted Liens of the type describe in clauses (ii), (vii), (ix)(b) and (xiv) of the definition of Permitted Liens and customary anti-assignment provisions in contracts or licenses, in each case only to the extent such covenant not to encumber is limited to the specific asset that is the subject of the applicable Permitted Lien.  To the extent Borrower’s equity interest in any Subsidiary becomes certificated, Borrower shall promptly deliver to Agent or Agent’s custodian, as requested by Agent, possession of the applicable stock certificate.

7.6Investments.  Borrower shall not directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments.

7.7Distributions.  Borrower shall not, and shall not allow any Subsidiary to, (a) repurchase or redeem any class of stock or other equity interest other than (i) pursuant to employee, director or consultant stock purchase or repurchase plans or other similar agreements, provided, however, in each case the repurchase or redemption price does not exceed the original consideration paid for such stock or equity interest, and (ii) the conversion of any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange therefor, or (b) declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest, except that a Subsidiary may pay dividends or make distributions to Borrower, and Borrower may pay dividends solely in common stock, or (c) except for Permitted Investments, lend money to any employees, officers or directors or guarantee the payment of any such loans granted by a third party or (d) waive, release or forgive any Indebtedness owed by any employees, officers or directors in excess of $100,000 in the aggregate.

7.8Transfers.  Except for Permitted Transfers, Borrower shall not voluntarily or involuntarily transfer, sell, lease, license, lend or in any other manner convey any equitable, beneficial or legal interest in any material portion of its assets.

7.9Mergers or Acquisitions.  Borrower shall not merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of (a) a Subsidiary which is not a Borrower into another Subsidiary or into Borrower or (b) a Borrower into another Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person except where (i) the cash consideration paid in respect of such transactions does not in the aggregate exceed $1,000,000 during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such transactions, (iii) such transactions do not result in a Change in Control, and (iv) Borrower is the surviving entity. 

7.10Taxes.  Borrower and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties) now or hereafter imposed or assessed against Borrower, Agent, Lender (in the case of Agent and 

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Lender, solely to the extent constituting present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document but excluding taxes on Agent’s or Lender’s net income) or the Collateral or upon Borrower’s ownership, possession, use, operation or disposition thereof or upon Borrower’s rents, receipts or earnings arising therefrom.  Borrower shall file on or before the due date therefor all personal property tax returns in respect of the Collateral.  Notwithstanding the foregoing, Borrower may contest, in good faith and by appropriate proceedings, taxes for which Borrower maintains adequate reserves therefor in accordance with GAAP.

7.11Corporate Changes.  Neither Borrower nor any Subsidiary shall change its corporate name, legal form or jurisdiction of formation without twenty (20) days’ prior written notice to Agent.  Neither Borrower nor any Subsidiary shall suffer a Change in Control. Neither Borrower nor any Subsidiary shall relocate its chief executive office or its principal place of business unless: (i) it has provided prior written notice to Agent; and (ii) in the case of Borrower or any Domestic Subsidiary, such relocation shall be within the continental United States.  Neither Borrower nor any Subsidiary shall relocate any item of Collateral (other than (x) Permitted Transfers, (y) relocations of Collateral having an aggregate value of up to $150,000 in any fiscal year, and (z) relocations of Collateral from a location described on Exhibit C to another location described on Exhibit C) unless (i) it has provided prompt written notice to Agent, (ii) in the case of Borrower or any Domestic Subsidiary, such relocation is within the continental United States and, (iii) if such relocation is to a third party bailee, it has delivered a bailee agreement in form and substance reasonably acceptable to Agent.

7.12Deposit Accounts.  Neither Borrower nor any Domestic Subsidiary shall maintain any Deposit Accounts, or accounts holding Investment Property, except with respect to which Agent has an Account Control Agreement (other than Deposit Accounts identified on Exhibit E (i) holding cash or cash equivalents securing obligations permitted under clause (vii) of the definition of Permitted Indebtedness and (ii) holding health savings/flexible spending plan deposits).  

7.13Borrower shall notify Agent of each Subsidiary formed or acquired subsequent to the Closing Date and, within 15 days of formation, shall cause any such newly formed or acquired Domestic Subsidiary to execute and deliver to Agent a Joinder Agreement and cause any such newly formed or acquired Foreign Subsidiary to execute and deliver to Agent a guaranty and appropriate guaranty security documents.

7.14Borrower shall not permit the Foreign Subsidiaries (including without limitation any Guarantor) to hold more than $5,000,000 USD in cash at any given time.

7.15Notification of Event of Default.  Borrower shall notify Agent promptly of the occurrence of any Event of Default.

7.16Post-Closing Conditions.  

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(a)On or before March 1, 2015, Borrower shall cause Guarantor to deliver to Agent the fully executed Guaranty and the Guarantor Security Documents.

(b)On or before March 1, 2015, Borrower shall complete the dissolution of its Netherlands Subsidiary Dynavax International, B.V.

(c)Borrower shall use its commercially reasonable efforts to deliver or cause to be delivered the documents listed on Schedule 7.16 on or before the corresponding dates set forth on Schedule 7.16.

SECTION 8.  RIGHT TO invest

8.1Lender or its assignee or nominee shall have the right, in its discretion, to participate in any Subsequent Financing in an aggregate amount of up to $1,500,000 (that is, a maximum amount of $1,500,000 with respect to all Subsequent Financings collectively) on the same terms, conditions and pricing afforded to others participating in any such Subsequent Financing.

SECTION 9.  EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an Event of Default:

9.1Payments.  Borrower fails to pay any amount due under this Agreement or any of the other Loan Documents on the due date; provided, however, that an Event of Default shall not occur on account of a failure to pay due solely to an administrative or operational error of Agent in auto-debiting Borrower’s account, or of any depositary institution that is crediting by ACH or wiring such payment if Borrower had the funds to make the payment when due and makes the payment within three (3) days following Borrower’s knowledge of such failure to pay; or

9.2Covenants.  Borrower breaches or defaults in the performance of any covenant or Secured Obligation under this Agreement, or any of the other Loan Documents or any other agreement among Borrower, Agent and Lender, and (a) with respect to a default under any covenant under this Agreement (other than under Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15 and 7.16), any other Loan Document or any other agreement among Borrower, Agent and Lender, such default continues for more than ten (10) days after the earlier of the date on which (i) Agent or Lender has given notice of such default to Borrower and (ii) Borrower has actual knowledge of such default or (b) with respect to a default under any of Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15 and 7.16, the occurrence of such default; or 

9.3Material Adverse Effect.  A circumstance has occurred that would reasonably be expected to have a Material Adverse Effect; or

9.4Representations.  Any representation or warranty made by Borrower in any Loan Document shall have been false or misleading in any material respect when made; or 

9.5Insolvency.  (A) Borrower (i) shall make an assignment for the benefit of creditors; or (ii) shall be unable to pay its debts as they become due, or be unable to pay or 

23

 

perform under the Loan Documents, or shall become insolvent; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of Borrower or of all or any substantial part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its business as its business has normally been conducted, or terminate substantially all of its employees; or (vii) Borrower or its directors or majority shareholders shall take any action initiating any of the foregoing actions described in clauses (i) through (vi); or (B) either (i) thirty (30) days shall have expired after the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against Borrower in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) thirty (30) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or

9.6Attachments; Judgments.  Any portion of Borrower’s assets is attached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment of money, individually or in the aggregate, of at least $500,000 (in the case of judgments, in excess of amounts covered by independent third party insurance as to which liability has been accepted by such insurance carrier as of the date of such entry of judgment) and such attachment, seizure, levy or judgment remains unsatisfied, unvacated or unstayed for a period of ten (10) days after the entry thereof, or Borrower is enjoined or in any way prevented by court order from conducting any part of its business; or

9.7Settlements.  The execution by Borrower of any agreement obligating Borrower to pay in any fiscal year any amounts in excess of $500,000 in the aggregate not otherwise covered by insurance in settlement of any litigation, claims or disputes, or the payment by Borrower in any fiscal year of such uninsured settlement amounts in excess of $500,000; or

9.8Other Obligations.  The occurrence of any default under any agreement or obligation of Borrower involving any Indebtedness in excess of $250,000, or the occurrence of any default under any agreement or obligation of Borrower that could reasonably be expected to have a Material Adverse Effect.

9.9Guaranty.  If the any guaranty of the Secured Obligations, including without limitation the Guaranty, ceases for any reason to be in full force and effect, or if any guarantor thereof, including without limitation Guarantor, fails to perform any obligation under such guaranty or under any of the security documents applicable thereto, including 

24

 

without limitation the Guarantor Security Documents, or any event of default occurs under such guaranty or such guarantor security documents or any guarantor revokes or purports to revoke its guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth any guaranty or the applicable guarantor security documents or in any certificate delivered to Agent in connection with such guaranty or such guarantor security documents, or if any of the circumstances described in Sections 9.3 through 9.8 occur with respect to any guarantor.

SECTION 10.  REMEDIES

10.1General.  Upon and during the continuance of any one or more Events of Default, (i) Agent may, at its option, accelerate and demand payment of all or any part of the Secured Obligations together with a Prepayment Charge and declare them to be immediately due and payable (provided, that upon the occurrence of an Event of Default of the type described in Section 9.5, all of the Secured Obligations shall automatically be accelerated and made due and payable, in each case without any further notice or act), (ii) Agent may, at its option, sign and file in Borrower’s name any and all collateral assignments, notices, control agreements, security agreements and other documents it deems necessary or appropriate to perfect or protect the repayment of the Secured Obligations, and in furtherance thereof, Borrower hereby grants Agent an irrevocable power of attorney coupled with an interest, and (iii) Agent may notify any of Borrower’s account debtors to make payment directly to Agent, compromise the amount of any such account on Borrower’s behalf and endorse Agent’s name without recourse on any such payment for deposit directly to Agent’s account.  Agent may exercise all rights and remedies with respect to the Collateral under the Loan Documents or otherwise available to it under the UCC and other applicable law, including the right to release, hold, sell, lease, liquidate, collect, realize upon, or otherwise dispose of all or any part of the Collateral and the right to occupy, utilize, process and commingle the Collateral.  All Agent’s rights and remedies shall be cumulative and not exclusive.  Notwithstanding anything contained herein to the contrary, Agent agrees not to deliver any notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any control agreement or similar agreement providing control of any Collateral unless an Event of Default has occurred and is continuing.

10.2Collection; Foreclosure.  Upon the occurrence and during the continuance of any Event of Default, Agent may, at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in such order as Agent may elect.  Any such sale may be made either at public or private sale at its place of business or elsewhere.  Borrower agrees that any such public or private sale may occur upon ten (10) calendar days’ prior written notice to Borrower.  Agent may require Borrower to assemble the Collateral and make it available to Agent at a place designated by Agent that is reasonably convenient to Agent and Borrower.  The proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be applied by Agent in the following order of priorities:

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First, to Agent and Lender in an amount sufficient to pay in full Agent’s and Lender’s costs and professionals’ and advisors’ fees and expenses as described in Section 11.11;

	

	
Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations (including principal, interest, and the Default Rate interest), in such order and priority as Agent may choose in its sole discretion; and

	

	
Finally, after the full, final, and indefeasible payment in Cash of all of the Secured Obligations, to any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as a court of competent jurisdiction may direct.

Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.

10.3No Waiver.  Agent shall be under no obligation to marshal any of the Collateral for the benefit of Borrower or any other Person, and Borrower expressly waives all rights, if any, to require Agent to marshal any Collateral.  

10.4Cumulative Remedies.  The rights, powers and remedies of Agent hereunder shall be in addition to all rights, powers and remedies given by statute or rule of law and are cumulative.  The exercise of any one or more of the rights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies with respect to any other rights, powers and remedies of Agent.

SECTION 11.  MISCELLANEOUS

11.1Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

11.2Notice.  Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or other communication (including the delivery of Financial Statements) that is required, contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the day of transmission by facsimile or hand delivery or delivery by an overnight express service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States mails, with proper first class postage prepaid, in each case addressed to the party to be notified as follows:

(a)If to Agent:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Legal Department
Attention:  Chief Legal Officer and Paul Edwards
400 Hamilton Avenue, Suite 310

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Palo Alto, CA  94301
Facsimile:  650-473-9194
Telephone:  650-289-3060

(b)If to Lender:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Legal Department
Attention:  Chief Legal Officer and Paul Edwards
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
Facsimile:  650-473-9194
Telephone:  650-289-3060

(c)If to Borrower:

DYNAVAX TECHNOLOGIES CORPORATION

Attention:  Chief Business Officer and Principal Financial Officer
2929 Seventh Street, Suite 100
Berkeley, CA 94710
Facsimile:  (510) 848-1327
Telephone:  (510) 848-5100

or to such other address as each party may designate for itself by like notice.

11.3Entire Agreement; Amendments.  

(a)This Agreement and the other Loan Documents constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety any prior proposals, term sheets, non-disclosure or confidentiality agreements, letters, negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof or thereof (including Agent’s revised proposal letter dated November 27, 2014 and accepted by Borrower on December 1, 2014).  

(b)Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.3(b).  The Required Lenders and Borrower party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Agent and the Borrower party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or the Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (A) forgive the principal amount or extend 

27

 

the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder) or extend the scheduled date of any payment thereof, in each case without the written consent of each Lender directly affected thereby; (B) eliminate or reduce the voting rights of any Lender under this Section 11.3(b) without the written consent of such Lender; (C) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release a Borrower from its obligations under the Loan Documents, in each case without the written consent of all Lenders; or (D) amend, modify or waive any provision of Section 11.17 without the written consent of the Agent.  Any such waiver and any such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, the Lender, the Agent and all future holders of the Loans.

11.4No Strict Construction.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

11.5No Waiver.  The powers conferred upon Agent and Lender by this Agreement are solely to protect its rights hereunder and under the other Loan Documents and its interest in the Collateral and shall not impose any duty upon Agent or Lender to exercise any such powers.  No omission or delay by Agent or Lender at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by Borrower at any time designated, shall be a waiver of any such right or remedy to which Agent or Lender is entitled, nor shall it in any way affect the right of Agent or Lender to enforce such provisions thereafter.

11.6Survival.  All agreements, representations and warranties contained in this Agreement and the other Loan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit of Agent and Lender and shall survive the execution and delivery of this Agreement.  The indemnity obligations of Borrower in Section 6.3 shall survive until the statute of limitations with respect to such claim or cause of action Agent or Lender may have in connection with such indemnity obligations shall have run.  The Lender’s right to invest in Section 8.1 shall survive the termination of this Agreement, but in no event later than the closing of a Change of Control.

11.7Successors and Assigns.  The provisions of this Agreement and the other Loan Documents shall inure to the benefit of and be binding on Borrower and its permitted assigns (if any).  Borrower shall not assign its obligations under this Agreement or any of the other Loan Documents without Agent’s express prior written consent, and any such attempted assignment shall be void and of no effect.  Agent and Lender may assign, transfer, or endorse its rights hereunder and under the other Loan Documents without prior notice to Borrower, and all of such rights shall inure to the benefit of Agent’s and Lender’s successors and assigns.

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11.8Governing Law.  This Agreement and the other Loan Documents have been negotiated and delivered to Agent and Lender in the State of California, and shall have been accepted by Agent and Lender in the State of California.  Payment to Agent and Lender by Borrower of the Secured Obligations is due in the State of California.  This Agreement and the other Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

11.9Consent to Jurisdiction and Venue.  All judicial proceedings (to the extent that the reference requirement of Section 11.10 is not applicable) arising in or under or related to this Agreement or any of the other Loan Documents may be brought in any state or federal court located in the State of California.  By execution and delivery of this Agreement, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa Clara County, State of California; (b) waives any objection as to jurisdiction or venue in Santa Clara County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other Loan Documents.  Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective and received as set forth in Section 11.2.  Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

11.10Mutual Waiver of Jury Trial / Judicial Reference.  

(a)Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert Person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws.  EACH OF BORROWER, AGENT AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST BORROWER.  This waiver extends to all such Claims, including Claims that involve Persons other than Agent, Borrower and Lender; Claims that arise out of or are in any way connected to the relationship among Borrower, Agent and Lender; and any Claims for damages, breach of contract, tort, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement or any other Loan Document.  

(b)If the waiver of jury trial set forth in Section 11.10(a) is ineffective or unenforceable, the parties agree that all Claims shall be resolved by reference to a private judge sitting without a jury, pursuant to Code of Civil Procedure Section 638, before a mutually acceptable referee or, if the parties cannot agree, a referee selected by the Presiding Judge of the Santa Clara County, California.  Such proceeding shall be 

29

 

conducted in Santa Clara County, California, with California rules of evidence and discovery applicable to such proceeding.    

(c)In the event Claims are to be resolved by judicial reference, either party may seek from a court identified in Section 11.9, any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial reference.

11.11Professional Fees.  Borrower promises to pay Agent’s and Lender’s fees and expenses that are reasonable, documented (with redactions) and necessary to finalize the loan documentation, including but not limited to reasonable attorneys fees, UCC searches, filing costs, and other miscellaneous expenses; provided, however, that Agent and Lender shall use best efforts to keep such fees of Agent’s U.S. counsel and expenses below $40,000. In addition, Borrower promises to pay any and all reasonable and documented (with redactions) attorneys’ and other professionals’ fees and expenses (including fees and expenses of in-house counsel) incurred by Agent and Lender after the Closing Date in connection with or related to:  (a) the Loan; (b) the administration, collection, or enforcement of the Loan; (c) the amendment or modification of the Loan Documents; (d) any waiver, consent, release, or termination under the Loan Documents; (e) the protection, preservation, audit, field exam, sale, lease, liquidation, or disposition of Collateral or the exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative, arbitration, or out of court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof, in each case that constitutes a Liability for which Borrower is obligated to indemnify an Indemnified Person under Section 6.3; and (g) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout, foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, including representing Agent or Lender in any adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s estate, and any appeal or review thereof.  Notwithstanding anything to the contrary, Agent and Lender shall provide to Borrower in advance documentation (including hourly rate and number of hours, but excluding detailed time entries) setting forth all such fees and expenses under this Section 11.11for which Agent and Lender seek reimbursement from Borrower.  Borrower shall have a reasonable period to review each such request.  If Borrower has not objected in writing to any such fees or expenses within such period, then Agent and Lender may initiate a debit entry to Borrower’s account in accordance with the ACH Authorization.

11.12Confidentiality.  Agent and Lender acknowledge that certain items of Collateral and information provided to Agent and Lender by Borrower are confidential and proprietary information of Borrower, if and to the extent such information either (x) is marked as confidential by Borrower at the time of disclosure, or (y) should reasonably be understood to be confidential (the “Confidential Information”).  Accordingly, Agent and Lender agree that any Confidential Information it may obtain shall not be disclosed to any other Person or entity in any manner whatsoever, in whole or in part, without the prior written consent of Borrower, except that Agent and Lender may disclose any such information:  (a) to its own directors, officers, employees, accountants, counsel and other professional advisors and to its affiliates if Agent or Lender in their sole discretion 

30

 

determines that any such party should have access to such information in connection with such party’s responsibilities in connection with the Loan or this Agreement and, provided that such recipient of such Confidential Information either (i) agrees to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions that reasonably protect against the disclosure of Confidential Information; (b) if such information is generally available to the public through no fault of Agent or Lender; (c) if required in any report, statement or testimony submitted to any governmental authority having or claiming to have jurisdiction over Agent or Lender; (d) if required in response to any summons or subpoena or in connection with any litigation, to the extent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to comply with any legal requirement or law applicable to Agent or Lender; (f) to the extent reasonably necessary in connection with the exercise of any right or remedy under any Loan Document, including Agent’s sale, lease, or other disposition of Collateral after default; (g) to any participant or assignee of Agent or Lender or any prospective participant or assignee; provided, that such participant or assignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or (h) otherwise with the prior written consent of Borrower; provided, that any disclosure made in violation of this Agreement shall not affect the obligations of Borrower or any of its affiliates or any guarantor under this Agreement or the other Loan Documents. 

11.13 Assignment of Rights.  Borrower acknowledges and understands that Agent or Lender may sell and assign all or part of its interest hereunder and under the Loan Documents to any Person or entity (an “Assignee”).  After such assignment the term “Agent” or “Lender” as used in the Loan Documents shall mean and include such Assignee, and such Assignee shall be vested with all rights, powers and remedies of Agent and Lender hereunder with respect to the interest so assigned; but with respect to any such interest not so transferred, Agent and Lender shall retain all rights, powers and remedies hereby given.  No such assignment by Agent or Lender shall relieve Borrower of any of its obligations hereunder.  Lender agrees that in the event of any transfer by it of the Note(s)(if any), it will endorse thereon a notation as to the portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the date to which interest shall have been last paid thereon.

11.14Revival of Secured Obligations.  This Agreement and the Loan Documents shall remain in full force and effect and continue to be effective if any petition is filed by or against Borrower for liquidation or reorganization, if Borrower becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is appointed for all or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is recovered from Agent or Lender.  The Loan Documents and the Secured Obligations and Collateral security shall continue to be effective, or shall be revived or reinstated, as the case may be, if at any time payment and performance of the Secured Obligations or any transfer of Collateral to Agent, or any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise be restored or returned by, or is recovered from, Agent, Lender or by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer of Collateral had not been made.  In the event that any payment, or any part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or recovered, 

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the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated except to the extent of the full, final, and indefeasible payment to Agent or Lender in Cash.

11.15Counterparts.  This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.

11.16No Third Party Beneficiaries.  No provisions of the Loan Documents are intended, nor will be interpreted, to provide or create any third-party beneficiary rights or any other rights of any kind in any Person other than Agent, Lender and Borrower unless specifically provided otherwise herein, and, except as otherwise so provided, all provisions of the Loan Documents will be personal and solely among Agent, the Lender and the Borrower. 

11.17Agency.  

(a)Lender hereby irrevocably appoints Hercules Technology Growth Capital, Inc. to act on its behalf as the Agent hereunder and under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

(b)Lender  agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so), according to its respective Term Commitment percentages (based upon the total outstanding Term Commitments) in effect on the date on which indemnification is sought under this Section 11.17, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder.

(c)Agent in Its Individual Capacity.  The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent and the term “Lender” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each such Person serving as Agent hereunder in its individual capacity. 

(d)Exculpatory Provisions.  The Agent shall have no duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Agent shall not:

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(i)
	
be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing;

	
(ii)
	
have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and

	
(iii)
	
except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Borrower or any of its affiliates that is communicated to or obtained by any Person serving as the Agent or any of its affiliates in any capacity.

(e)The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Lender or as the Agent shall believe in good faith shall be necessary, under the circumstances or (ii) in the absence of its own gross negligence or willful misconduct.

(f)The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent. 

(g)Reliance by Agent.  Agent may rely, and shall be fully protected in acting, or refraining to act, upon, any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document that it has no reason to believe to be other than genuine and to have been signed or presented by the proper party or parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties.  In the absence of its gross negligence or willful misconduct, Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to Agent and conforming to the requirements of the Loan Agreement or any of the other Loan Documents.  Agent may consult with counsel, and any opinion or legal advice of such counsel shall be full and complete authorization and protection in respect of any action taken, not taken or suffered by Agent hereunder or under any Loan Documents in accordance therewith.  Agent shall have the right at any time to seek instructions concerning the administration of the Collateral from any court of competent jurisdiction.  

33

 

Agent shall not be under any obligation to exercise any of the rights or powers granted to Agent by this Agreement, the Loan Agreement and the other Loan Documents at the request or direction of Lenders unless Agent shall have been provided by Lender with adequate security and indemnity against the costs, expenses and liabilities that may be incurred by it in compliance with such request or direction.

11.18Publicity.  None of the parties hereto nor any of its respective member businesses and affiliates shall, without the other parties’ prior written consent (which shall not be unreasonably withheld or delayed), publicize or use (a) the other party's name (including a brief description of the relationship among the parties hereto), logo or hyperlink to such other parties’ web site, separately or together, in written and oral presentations, advertising, promotional and marketing materials, client lists, public relations materials or on its web site (together, the " Publicity Materials"); (b) the names of officers of such other parties in the Publicity Materials; and (c) such other parties’ name, trademarks, servicemarks in any news or press release concerning such party; provided however, notwithstanding anything to the contrary herein, no such consent shall be required (i) to the extent necessary to comply with the requests of any regulators, legal requirements or laws applicable to such party, pursuant to any listing agreement with any national securities exchange (so long as such party provides prior notice to the other party hereto to the extent reasonably practicable) and (ii) to comply with Section 11.12.   

(SIGNATURES TO FOLLOW)

34

 

IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered this Loan and Security Agreement as of the day and year first above written.

BORROWER:

DYNAVAX TECHNOLOGIES CORPORATION

By:_____/s/_MICHAEL OSTRACH_  __

Print Name:_______________________________

Title:_______________________________

Accepted in Palo Alto, California:

AGENT:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

By:___________/s/ BEN BANG_______      ____

Ben Bang, Associate General Counsel

 

LENDER:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

By:___________/s/ BEN BANG           ___       __

Ben Bang, Associate General Counsel

 

 

35

 

Table of Exhibits and Schedules

 

Exhibit A:Advance Request 
Attachment to Advance Request

Exhibit B:Term Note

Exhibit C:Name, Locations, and Other Information for Borrower

Exhibit D:Borrower’s Patents, Trademarks, Copyrights and Licenses

Exhibit E:Borrower’s Deposit Accounts and Investment Accounts

Exhibit F:Compliance Certificate

Exhibit G:Joinder Agreement

Exhibit H: ACH Debit Authorization Agreement

Schedule 1Subsidiaries
Schedule 1.1Commitments

Schedule 1AExisting Permitted Indebtedness
Schedule 1BExisting Permitted Investments
Schedule 1CExisting Permitted Liens

Schedule 1DExisting Exclusive Licenses
Schedule 5.3Consents, Etc.
Schedule 5.5Actions Before Governmental Authorities
Schedule 5.8Tax Matters
Schedule 5.9Intellectual Property Claims
Schedule 5.10Intellectual Property
Schedule 5.11Borrower Products
Schedule 5.14Capitalization

Schedule 7.16Post-Closing Items

36

 

EXHIBIT A

ADVANCE REQUEST

To: Agent:Date:__________, 201_

Hercules Technology Growth Capital, Inc. (the “Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
Facsimile:  650-473-9194
Attn:

Dynavax Technologies Corporation (“Borrower”) hereby requests from Hercules Technology Growth Capital, Inc. (“Lender”) an Advance in the amount of _____________________ Dollars ($________________) on ______________, 201_ (the “Advance Date”) pursuant to the Loan and Security Agreement among Borrower, Agent and Lender (the “Agreement”). Capitalized words and other terms used but not otherwise defined herein are used with the same meanings as defined in the Agreement.

Please:

(a)Issue a check payable to Borrower________

or

(b)Wire Funds to Borrower’s account________

Bank:                        _____________________________
Address:                    _____________________________
                                  _____________________________
ABA Number:          _____________________________
Account Number:     _____________________________
Account Name:        _____________________________

Borrower represents that the conditions precedent to the Advance set forth in the Agreement are satisfied and shall be satisfied upon the making of such Advance, including but not limited to:  (i) that no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing; (ii) that the representations and warranties set forth in the Agreement are and shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date; (iii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as of the Advance Date, no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents.  Borrower understands and acknowledges that Agent has the right to review the financial information supporting this representation and, based upon such review in its reasonable discretion, Lender may decline to fund the requested Advance.

37

 

Borrower hereby represents that Borrower’s corporate status and locations have not changed since the date of the Agreement or, if the Attachment to this Advance Request is completed, are as set forth in the Attachment to this Advance Request.

Borrower agrees to notify Agent promptly before the funding of the Loan if any of the matters which  have been represented above shall not be true and correct on the Advance Date and if Agent has received no such notice before the Advance Date then the statements set forth above shall be deemed to have been made and shall be deemed to be true and correct as of the Advance Date.

Executed as of [              ], 20[   ].

BORROWER: DYNAVAX TECHNOLOGIES CORPORATION

BY:_______________________________
TITLE:_____________________________
PRINT NAME:______________________

38

 

ATTACHMENT TO ADVANCE REQUEST

Dated: _______________________

Borrower hereby represents and warrants to Agent that Borrower’s current name and organizational status is as follows:

	
Name:
	
Dynavax Technologies Corporation

	
Type of organization:
	
Corporation

	
State of organization:
	
Delaware

	
Organization file number:
	
3302804

Borrower hereby represents and warrants to Agent that the street addresses, cities, states and postal codes of its current locations are as follows:

 

39

 

EXHIBIT B

SECURED TERM PROMISSORY NOTE

		
	
$[  ],000,000
	
Advance Date:  ___ __, 20[  ]

	
 
	
Maturity Date:  _____ ___, 20[ ]

FOR VALUE RECEIVED, Dynavax Technologies Corporation, a Delaware corporation,  (the “Borrower”) hereby promises to pay to the order of Hercules Technology Growth Capital, Inc., a Maryland corporation or the holder of this Note (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of [  ] Million Dollars ($[  ],000,000) or such other principal amount as Lender has advanced to Borrower, together with interest at the Term Loan Interest Rate as such term is defined in that certain Loan and Security Agreement dated December 23, 2014, by and among Borrower, Hercules Technology Growth Capital, Inc., a Maryland corporation (the “Agent”) and the several banks and other financial institutions or entities from time to time party thereto as lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”).  The Term Loan Interest Rate may be a floating or a fixed rate subject to Section 2.2(c) of the Loan Agreement.

This Promissory Note is the Term Note referred to in, and is executed and delivered in connection with, the Loan Agreement, and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof.  All payments shall be made in accordance with the Loan Agreement.   All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein.  An Event of Default under the Loan Agreement shall constitute a default under this Promissory Note.  

Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under the UCC or any applicable law.   Borrower agrees to make all payments under this Promissory Note without setoff, recoupment or deduction and regardless of any counterclaim or defense.  This Promissory Note has been negotiated and delivered to Lender and is payable in the State of California.  This Promissory Note shall be governed by and construed and enforced in accordance with, the laws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.

BORROWER:DYNAVAX TECHNOLOGIES CORPORATION

By:
Title:

 

 

EXHIBIT C

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

1.  Borrower represents and warrants to Agent that Borrower’s current name and organizational status as of the Closing Date is as follows:

	
Name:
	
Dynavax Technologies Corporation

	
Type of organization:
	
Corporation

	
State of organization:
	
Delaware

	
Organization file number:
	
3302804

2.  Borrower represents and warrants to Agent that for five (5) years prior to the Closing Date, Borrower did not do business under any other name or organization or form except the following:

Name:
Used during dates of:
Type of Organization:
State of organization:
Organization file Number:

3.  Borrower’s fiscal year ends on December 31.

4.  Borrower’s federal employer tax identification number is: 33-0728374.

5.  Borrower represents and warrants to Agent that its chief executive office is located at 2929 Seventh Street, Suite 100, Berkeley, CA  94710.

 

 

EXHIBIT D

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

Copyrights:  none

Patents:  See attached file (Dynavax Case List October 2014)

Trademarks:  See attached file (Quarterly Trademark Status Report as of November 12, 2014)

 

Material Inbound Licenses:

(1) License Agreement dated as of June 26, 2007 between Coley Pharmaceutical Group, Inc. and Borrower.

(2) Research Collaboration and License Agreement dated as of September 1, 2006 between AstraZeneca AB and Borrower.

 

 

 

EXHIBIT E

BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

				
	
Institution Name and Address
	
Account Number
	
Average Balance in Account
	
Name of Account Owner

	
XXXXX Bank

XXXXX

XXXXX, XXXXX XXXXX

 

800-XXX-XXXX

 
	
XXXXX
	
XXXXX
	
Dynavax Technologies Corporation

	
XXXXX Bank

XXXXX

XXXXX, XXXXX XXXXX

 

XXX-XXX-XXXX

800-XXX-XXXX
	
XXXXX 
	
XXXXX
	
Dynavax Technologies Corporation

	
XXXXX Bank

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

 

XXX XXX-XXXX

 
	
XXXXX 

 
	
XXXXX
	
Rhein Biotech GmbH

 

 

	
XXXXX Bank

XXXXX

XXXXX XXXXX XXXXX

XXXXX

 

XXXXX

 

+XX XX XXX XXXX

 

 
	
XXXXX
	
XXXXX
	
Dynavax International, B.V.

 

 

 

EXHIBIT F

COMPLIANCE CERTIFICATE

Hercules Technology Growth Capital, Inc. (as “Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301

Reference is made to that certain Loan and Security Agreement dated December 23, 2014 and all ancillary documents entered into in connection with such Loan and Security Agreement all as may be amended from time to time, (hereinafter referred to collectively as the “Loan Agreement”) by and among Hercules Technology Growth Capital, Inc. (the “Agent”), the several banks and other financial institutions or entities from time to time party thereto (collectively, the “Lender”) and Hercules Technology Growth Capital, Inc., as agent for the Lender (the “Agent”) and Dynavax Technologies Corporation (the “Company”) as Borrower. All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement.

The undersigned is an Officer of the Company, knowledgeable of all Company financial matters, and is authorized to provide certification of information regarding the Company; hereby certifies that in accordance with the terms and conditions of the Loan Agreement, the Company is in compliance for the period ending ___________ of all covenants, conditions and terms contained therein and hereby reaffirms that all representations and warranties contained therein are true and correct on and as of the date of this Compliance Certificate with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, after giving effect in all cases to any standard(s) of materiality contained in the Loan Agreement as to such representations and warranties.  Attached are the required documents supporting the above certification.  The undersigned further certifies that these are prepared in accordance with GAAP (except for the absence of footnotes with respect to unaudited financial statement and subject to normal year end adjustments) and are consistent from one period to the next except as explained below.

			
	
REPORTING REQUIREMENT
	
REQUIRED
	
CHECK IF ATTACHED

	
Interim Financial Statements 
	
Monthly within 30 days
	
 

	
Interim Financial Statements 
	
Quarterly within 45 days
	
 

	
Audited Financial Statements 
	
FYE within 90 days
	
 

Very Truly Yours,

DYNAVAX TECHNOLOGIES CORPORATION

	
By:
	
____________________________

Name:   _____________________________

	
Its:
	
____________________________

 

 

EXHIBIT G

FORM OF JOINDER AGREEMENT

This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [          ], 20[  ], and is entered into by and between__________________., a ___________ corporation (“Subsidiary”), and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (as “Agent”).  

RECITALS

A.  Subsidiary’s Affiliate, Dynavax Technologies Corporation (“Company”) has entered into that certain Loan and Security Agreement dated December 23, 2014, with the several banks and other financial institutions or entities from time to time party thereto as lender (collectively, the “Lender”) and the Agent, as such agreement may be amended (the “Loan Agreement”), together with the other agreements executed and delivered in connection therewith; 

B.  Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from Company’s execution of the Loan Agreement and the other agreements executed and delivered in connection therewith;

AGREEMENT

NOW THEREFORE, Subsidiary and Agent agree as follows:

	
1.
	
The recitals set forth above are incorporated into and made part of this Joinder Agreement.  Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement.

	
2.
	
 By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the Loan Agreement the same as if it were the Borrower (as defined in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided however, that (a) with respect to (i) Section 5.1 of the Loan Agreement, Subsidiary represents that it is an entity duly organized, legally existing and in good standing under the laws of [        ], (b) neither Agent nor Lender shall have any duties, responsibilities or obligations to Subsidiary arising under or related to the Loan Agreement or the other agreements executed and delivered in connection therewith, (c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not be required to maintain separate insurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Company satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separate Financial Statements.  To the extent that Agent or Lender has any duties, responsibilities or obligations arising under or related to the Loan Agreement or the other agreements executed and delivered in connection therewith, those duties, responsibilities or obligations shall flow only to Company and not to Subsidiary or any other Person or entity.  By way of example (and not an exclusive list): (i) Agent’s providing notice to Company in accordance with the Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or make any other demand on Lender.

 

 

	
3.
	
Subsidiary agrees not to certificate its equity securities without Agent’s prior written consent, which consent may be conditioned on the delivery of such equity securities to Agent in order to perfect Agent’s security interest in such equity securities.

	
4.
	
Subsidiary acknowledges that it benefits, both directly and indirectly, from the Loan Agreement, and hereby waives, for itself and on behalf of any and all successors in interest (including without limitation any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder Agreement are avoidable as a fraudulent conveyance.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

[SIGNATURE PAGE TO JOINDER AGREEMENT]

SUBSIDIARY:

_________________________________.

	

	

	

	
By:

	

	
Name:

	

	
Title: 

	

	
Address:

	

	

	

	

	

	
Telephone: ___________

	

	
Facsimile: ____________

AGENT:

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

By:____________________________________
Name:__________________________________
Title: ___________________________________

Address:
400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
Facsimile:  650-473-9194
Telephone:  650-289-3060

 

 

EXHIBIT H

ACH DEBIT AUTHORIZATION AGREEMENT

Hercules Technology Growth Capital, Inc. 
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301

Re:  Loan and Security Agreement dated December 23, 2014 (the “Agreement”) by and among Dynavax Technologies Corporation (“Borrower”) and Hercules Technology Growth Capital, Inc., as agent (“Company”) and the lenders party thereto (collectively, the “Lender”)

In connection with the above referenced Agreement, the Borrower hereby authorizes the Company to initiate debit entries for (i) the periodic payments due under the Agreement and (ii) out-of-pocket legal fees and costs incurred by Agent or Lender pursuant to Section 11.11 of the Agreement to the Borrower’s account indicated below, after application of the Commitment Fee in the case of such non-legal fees and costs incurred through the Closing Date.  The Borrower authorizes the depository institution named below to debit to such account.

 

 

		
	
Depository Name
	
Branch

	
City
	
State and Zip Code

	
Transit/ABA Number
	
Account Number

This authority will remain in full force and effect so long as any amounts are due under the Agreement. 

DYNAVAX TECHNOLOGIES CORPORATION

By: _________________________________________

Date: ________________________________________

 

 

SCHEDULE 1.1

COMMITMENTS

		
	
LENDER
	
TERM COMMITMENT

	
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	
$40,000,000

	
TOTAL COMMITMENTS
	
$40,000,000

 

 

 

SCHEDULE 7.16

POST-CLOSING ITEMS

 

On or before the time frames set forth below (or such later date agreed to by the Agent in its sole discretion in writing or as may be waived by the Agent in its sole discretion in writing), the Borrower shall use commercially reasonable efforts to execute and deliver to the Agent each of the following items and/or take the actions described below, in each case, to the Agent’s reasonable satisfaction:

1.On or before January 31, 2015, a consent of landlord in form and substance reasonably satisfactory to Agent with the landlord of the premises leased by Borrower at 2929 Seventh Street, Berkeley, CA 94710.

2.On or before January 31, 2015, a bailee acknowledgment in form and substance reasonably satisfactory to Agent from Baxter BioPharma Solutions, the bailee in possession of Borrower’s manufacturing equipment located at 927 S. Curry Pike, Bloomington, IN 47403.

3.On or before January 31, 2015, Borrower shall deliver to Agent or Agent’s custodian, as requested by Agent, possession of the original note issued by Rhein Biotech GmbH to Borrower on April 21, 2006 in the amount of Euros 3,664,807.98.

4.On or before December 29, 2014, Borrower shall deliver to Agent a fully executed Account Control Agreement with respect to Borrower’s assets invested with Capital Advisors Group as the Investment Manager and State Street Bank and Trust Company as the Securities Intermediary.

5.On or before December 31, 2014, Borrower shall deliver to Agent a fully executed Deposit Account Control Agreement with respect to Borrower’s deposit accounts held with Silicon Valley Bank.

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