Document:

torc-ex101_41.htm

Exhibit 10.1

resTORBIO, INC. 

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made as of the 30th day of August, 2018, between resTORbio, Inc., a Delaware corporation (the “Company”), and Meredith S. Manning (the “Executive”) and is effective as of September 17, 2018 (the “Effective Date”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Employment.

(a)Term.  The term of this Agreement shall commence on the Effective Date and continue until terminated in accordance with the provisions hereof (the “Term”).  The Executive’s employment with the Company will continue to be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement. 

(b)Position and Duties.  During the Term, the Executive shall serve as the Chief Commercial Officer of the Company, and shall have supervision and control over and responsibility for the day‐to‐day business and affairs of the Company and shall have such other powers and duties as may from time to time be prescribed by the Board of Directors of the Company (the “Board”), the Chief Executive Officer of the Company (the “CEO”), or other authorized executive.  The Executive shall devote her full working time and efforts to the business and affairs of the Company.  Notwithstanding the foregoing, the Executive may serve on other boards of directors, with the approval of the Board, or engage in religious, charitable or other community activities as long as such services and activities are disclosed to the Board and do not materially interfere with the Executive’s performance of her duties to the Company as provided in this Agreement.

2.Compensation and Related Matters.

(a)Base Salary.  During the Term, the Executive’s annual base salary shall be $345,000.  The Executive’s base salary shall be reviewed annually by the Board or the Compensation Committee of the Board (the “Compensation Committee”).  The base salary in effect at any given time is referred to herein as “Base Salary.”  The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for executive officers.

(b)Incentive Compensation.  During the Term, the Executive shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time.  The Executive’s initial target annual incentive compensation shall be 40% percent of her Base Salary (the “Target Annual Incentive Compensation”).  To earn incentive compensation, the Executive must be employed by the Company on the day such incentive compensation is paid.

 

 

(c)Equity.  As soon as practicable following the execution of this Agreement, and subject to the approval of the Company’s Board of Directors the Executive shall be granted an incentive stock option (the “Option”) under resTORbio’s Stock Incentive Plan (the “Plan”) to purchase 175,000 of shares of Common Stock.  The Option shall vest over four years from the Effective Date, with 1/4 of the shares underlying such option vesting on the first anniversary of the Effective Date and the remaining 3/4 of such shares vesting in 12 equal quarterly installments following such first anniversary, provided that the Executive is engaged by the Company on each such vesting date.  The Option shall have an exercise price equal to the fair market value of the Common Stock on the date of grant and shall be subject to the provisions set forth in the Plan and the Form of Incentive Stock Option Agreement previously approved by the Board.

(d)Expenses.  The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by her during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its executive officers.

(e)Other Benefits.  During the Term, the Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans.  In addition, the Company shall promptly reimburse the Executive for up to $35,000 of documented expenses incurred by the Executive in connection with relocation to the Boston, MA area for her employment with the Company. If on or before the first anniversary of the Effective Date, the Executive voluntarily terminates her employment with the Company without Good Reason or if the Executive’s employment is terminated for Cause pursuant to Section 3, the Executive shall promptly repay the Company in full for the amount of such relocation expenses actually paid by the Company.

(f)Vacations.  During the Term, the Executive shall be entitled to paid vacation in accordance with the Company’s policies and procedures.  The Executive shall also be entitled to all paid holidays given by the Company to its executive officers.

3.Termination.  During the Term, the Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

(a)Death.  The Executive’s employment hereunder shall terminate upon her death.

(b)Disability.  The Company may terminate the Executive’s employment if she is disabled and unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period.  If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue.  The 

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Executive shall cooperate with any reasonable request of the physician in connection with such certification.  If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive.  Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.  

(c)Termination by Company for Cause.  The Company may terminate the Executive’s employment hereunder for Cause.  For purposes of this Agreement, “Cause” shall mean: (i) conduct by the Executive constituting a material act of misconduct in connection with the performance of her duties, including, without limitation, misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes; (ii) the commission by the Executive of any felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Executive that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates if she were retained in her position; (iii) continued non-performance by the Executive of her duties hereunder (other than by reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such non-performance from the CEO; (iv) a breach by the Executive of any of the provisions contained in Section 7 of this Agreement; (v) a material violation by the Executive of the Company’s written employment policies; or (vi) failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

(d)Termination Without Cause.  The Company may terminate the Executive’s employment hereunder at any time without Cause.  Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

(e)Termination by the Executive.  The Executive may terminate her employment hereunder at any time for any reason, including but not limited to Good Reason.  For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in the Executive’s responsibilities, authority or duties; (ii) a material diminution in the Executive’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; (iii) a material change in the geographic location at which the Executive provides services to the Company; or (iv) the material breach of this Agreement by the Company.  “Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the 

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“Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates her employment within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

(f)Notice of Termination.  Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

(g)Date of Termination.  “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by her death, the date of her death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company under Section 3(d), the date on which a Notice of Termination is given; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

4.Compensation Upon Termination.

(a)Termination Generally.  If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to her authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) and unused vacation that accrued through the Date of Termination on or before the time required by law but in no event more than 30 days after the Executive’s Date of Termination; and (ii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefit”).

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(b)Termination by the Company Without Cause or by the Executive with Good Reason.  During the Term, if the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates her employment for Good Reason as provided in Section 3(e), then the Company shall pay the Executive her Accrued Benefit.  In addition, subject to the Executive signing a separation agreement containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement, in a form and manner satisfactory to the Company (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable and fully effective, all within 60 days after the Date of Termination (or such shorter time period provided in the Separation Agreement and Release):

(i)the Company shall pay the Executive an amount equal to the sum of 0.5 times the Executive’s Base Salary.  Notwithstanding the foregoing, if the Executive breaches any of the provisions contained in Section 7 of this Agreement, all payments of the Severance Amount shall immediately cease; 

(ii)if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for 6 months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and

(iii)the amounts payable under Section 4(b)(i) and (ii) shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over 6 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

5.Change in Control Payment.  The provisions of this Section 5 set forth certain terms of an agreement reached between the Executive and the Company regarding the Executive’s rights and obligations upon the occurrence of a Change in Control of the Company.  These provisions are intended to assure and encourage in advance the Executive’s continued attention and dedication to her assigned duties and her objectivity during the pendency and after the occurrence of any such event.  These provisions shall apply in lieu of, and expressly supersede, the provisions of Section 4(b) regarding severance pay and benefits upon a termination of employment, if such termination of employment occurs within 12 months after the occurrence of the first event constituting a Change in Control.  These provisions shall terminate and be of no further force or effect beginning 12 months after the occurrence of a Change in Control.

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(a)Change in Control.  During the Term, if within 12 months after a Change in Control, the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates her employment for Good Reason as provided in Section 3(e), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable and fully effective, all within 60 days after the Date of Termination (or such shorter time period provided in the Separation Agreement and Release): 

(i)the Company shall pay the Executive a lump sum in cash in an amount equal to one (1.0) times the sum of (A) the Executive’s current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) the Executive’s Average Incentive Compensation.  For purposes of this Agreement, “Average Incentive Compensation” shall mean the average of the Target Annual Incentive Compensation received by the Executive for the three immediately preceding fiscal years.  In no event shall “Average Incentive Compensation” include any sign-on bonus, retention bonus or any other special bonus. 

(ii)notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all time-based stock options and other time-based stock-based awards held by the Executive shall immediately accelerate and become fully exercisable or nonforfeitable as of the Date of Termination; 

(iii)if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for 18 months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and

(iv)The amounts payable under Section 5(a)(i) and (iii) shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

(b)Additional Limitation.

(i)Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it 

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would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

(ii)For purposes of this Section 5(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 

(iii)The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 5(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

(c)Definitions.  For purposes of this Section 5, the following terms shall have the following meanings:

“Change in Control” shall mean any of the following:

(i)any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50 percent or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Board (“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company); or

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(ii)the date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or

(iii)the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company. 

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or more of the combined voting power of all of the then outstanding Voting Securities, then a Change in Control shall be deemed to have occurred for purposes of the foregoing clause (i). In addition, a “Change in Control” must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5), to the extent required by Section 409A of the Code. 

6.Section 409A.

(a)Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death.  If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.  

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(b)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses).  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c)To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A‐1(h).

(d)The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A‐2(b)(2).  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(e)The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

7.Confidential Information, Noncompetition and Cooperation.

(a)Confidential Information.  As used in this Agreement, “Confidential Information” means information belonging to the Company which is of value to the Company in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Company.  Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know‐how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Company.  Confidential Information includes information developed by the Executive in the course of the Executive’s employment by the Company, as well as other information to which the Executive may have access in connection with the 

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Executive’s employment.  Confidential Information also includes the confidential information of others with which the Company has a business relationship.  Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless due to breach of the Executive’s duties under Section 7(b).

(b)Confidentiality.  The Executive understands and agrees that the Executive’s employment creates a relationship of confidence and trust between the Executive and the Company with respect to all Confidential Information.  At all times, both during the Executive’s employment with the Company and after its termination, the Executive will keep in confidence and trust all such Confidential Information and will not use or disclose any such Confidential Information without the written consent of the Company, except as may be necessary in the ordinary course of performing the Executive’s duties to the Company.  For avoidance of doubt, nothing in this Agreement shall be interpreted or applied to prohibit the Executive from making any good faith report to any governmental agency or other governmental entity concerning any act or omission that the Executive reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation.  In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(c)Documents, Records, etc.  All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, which are furnished to the Executive by the Company or are produced by the Executive in connection with the Executive’s employment will be and remain the sole property of the Company.  The Executive will return to the Company all such materials and property as and when requested by the Company.  In any event, the Executive will return all such materials and property immediately upon termination of the Executive’s employment for any reason.  The Executive will not retain with the Executive any such material or property or any copies thereof after such termination.

(d)Noncompetition and Nonsolicitation.  During the Executive’s employment with the Company and for 12 months months thereafter, regardless of the reason for the termination, the Executive (i) will not, directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or invest in any Competing Business (as hereinafter defined); (ii) will refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Company (other than terminations of employment of subordinate employees undertaken in the course of the Executive’s employment with the Company); and (iii) will refrain from soliciting or encouraging any customer or supplier to terminate or otherwise modify adversely its business relationship with the Company.  The Executive understands that the restrictions set forth in this Section 7(d) are intended to protect the Company’s interest in its Confidential Information and established employee, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and 

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appropriate for this purpose.  For purposes of this Agreement, the term “Competing Business” shall mean a business conducted anywhere in North America or the five major European countries (UK, Germany, France, Italy and Spain) which is competitive with any business which the Company or any of its affiliates conducts or proposes to conduct at any time during the employment of the Executive.  Notwithstanding the foregoing, the Executive may own up to one percent (1%) of the outstanding stock of a publicly held corporation which constitutes or is affiliated with a Competing Business.

(e)Third-Party Agreements and Rights.  The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business.  The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

(f)Litigation and Regulatory Cooperation.  During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company.  The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company.  The Company shall reimburse the Executive for any reasonable out‐of‐pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7(f).

(g)Relief.  The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 7, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, subject to Section 8 of this Agreement, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company. In addition, in the event the Executive breaches this Section 7 during a period when she is receiving severance payments pursuant to Section 4 or Section 5 hereof, the Company shall have the right to suspend or terminate such severance payments.  Such suspension or termination shall not limit the Company’s other options with respect to relief for such breach and shall not relieve the Executive of her duties under this Agreement.

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(h)Protected Disclosures and Other Protected Action.  Nothing contained in this Agreement limits the Executive’s ability to communicate with any federal, state or local governmental agency or commission, including to provide documents or other information, without notice to the Company.  

8.Arbitration of Disputes.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of the Executive’s employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American Arbitration Association (“AAA”) in Boston, Massachusetts in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to the selection of arbitrators.  In the event that any person or entity other than the Executive or the Company may be a party with regard to any such controversy or claim, such controversy or claim shall be submitted to arbitration subject to such other person or entity’s agreement.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  This Section 8 shall be specifically enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 8.

9.Consent to Jurisdiction.  To the extent that any court action is permitted consistent with or to enforce Section 8 of this Agreement, the parties hereby consent to the jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts.  Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

10.Integration.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, including the Prior Agreement.

11.Withholding.  All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

12.Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after her termination of employment but prior to the completion by the Company of all payments due to her under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to her death (or to her estate, if the Executive fails to make such designation).

12

 

13.Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

14.Survival.  The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

15.Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

16.Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

17.Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

18.Governing Law.  This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles thereof.

19.Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

20.Successor to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

21.Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

 

			
	
RESTORBIO, INC.

	
 
	
 
	
 

	
/s/ Chen Schor

	
By:
	
 
	
Chen Schor

	
Its:
	
 
	
CEO

 

			
	
EXECUTIVE

	
 
	
 
	
 

	
/s/ Meredith S. Manning

	
Meredith S. Manning 

 

14EX-10.1

 Exhibit 10.1 

TERMINATION OF LIMITED RECOURSE GUARANTY AND AMENDMENT NO. 6 

Dated as of November 8, 2018 

to 
 AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT 
 Dated as of December 12, 2016 

THIS TERMINATION AND AMENDMENT NO. 6 (this “Termination and Amendment”), dated as of November 8, 2018, is entered into
by and among TAXI MEDALLION LOAN TRUST III, a Delaware statutory trust (the “Borrower”), MEDALLION FUNDING LLC (successor by merger to Medallion Funding Corp.), a New York limited liability company (the “Transferor”
or the “Guarantor”), MEDALLION FINANCIAL CORP., a Delaware corporation (“Parent”), MEDALLION CAPITAL, INC., a Minnesota corporation (“Medallion Capital”), FRESHSTART VENTURE CAPITAL CORP., a New
York corporation (“Freshstart” and, together with the Borrower, the Transferor, Parent and Medallion Capital, the “MF/Borrower Related Parties”), and DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM
MAIN (successor by assignment to Autobahn Funding Company LLC), as a Lender (in such capacity, the “Lender”) and as agent under the Loan Agreement (as defined below) (in such capacity, the “Agent”). 

PRELIMINARY STATEMENTS 

A.    Reference is made to (i) that certain Amended and Restated Loan and Security Agreement, dated as of
December 12, 2016, by and among the Borrower, Autobahn Funding Company LLC, a Delaware limited liability company, as a Lender (the “Original Lender”), and the Agent (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”) and (ii) that certain Limited Recourse Guaranty, dated as of December 12, 2008, by the Guarantor in favor of the Original Lender and the Agent (the
“Guaranty”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement or the Guaranty, as applicable. 

B.    The parties hereto have agreed to terminate the Guaranty and, as consideration therefor, that the Transferor shall
issue to the Agent, for the benefit of the Lender and its assigns, a Promissory Note in the amount of $1,400,000. 

C.    The parties hereto have agreed to amend the Loan Agreement on the terms and conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows: 
 SECTION 1.    Termination of Guaranty. 

1.1    Pursuant to Section 5.07 of the Loan Agreement and with the effect of a termination pursuant to
Section 12 of the Guaranty (and subject to any surviving rights or obligations set forth therein), each of the parties hereto hereby terminates, effective as of the date hereof, the Guaranty and agrees that the Guaranty shall henceforth be
terminated; that the Guarantor, the Agent, the Original Lender and the Lender are each released and discharged from any further obligations to each other with respect to the Guaranty and that any of their respective rights against each other
thereunder are cancelled. 

 1.2    As consideration for the termination of the Guaranty, the
Transferor agrees to issue to the Lender and the Agent a Promissory Note in the amount of $1,400,000, substantially in the form attached hereto as Exhibit A (the “Note”). 

SECTION 2.    Amendments. Effective as of the Effective Date (as defined below), the Loan Agreement is hereby
amended as follows: 
 2.1    The definition of “Loan Documents” in Section 1.01 of the Loan Agreement is
hereby amended by deleting the words “the Medallion Funding Guaranty” therein in their entirety and inserting in replacement thereof the words “the Medallion Funding Note”. 

2.2    The definition of “Medallion Funding Guaranty” in Section 1.01 of the Loan Agreement is hereby
deleted in its entirety. 
 2.3    The following definition is hereby inserted in Section 1.01 of the Loan
Agreement in the appropriate alphabetical position: 
 “Medallion Funding Note” means the promissory note,
dated November 8, 2018, executed by Medallion Funding in favor of the Lender and its successors and assigns, as amended, restated, supplemented or otherwise modified from time to time. 

2.4    Section 5.02(c) of the Loan Agreement is hereby amended by deleting the phrase “(except as provided in the
Medallion Funding Guaranty)” therein in its entirety. 
 SECTION 3.    Representations and Warranties. 

3.1    The Borrower hereby represents and warrants to the Agent and the Lender as of the date hereof that: 

(a)    The Borrower is a Delaware statutory trust duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation and has the power and all licenses and permits necessary to own its assets and to transact the business in which it is presently engaged, and is duly qualified and in good standing under the laws of each
jurisdiction where the conduct of its business requires such qualification. 
 (b)    The Borrower has the power,
authority and legal right to make, deliver and perform this Agreement and all of the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. This Agreement
constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws
of general application affecting creditors’ rights generally and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law). No consent of any other party and no consent, license, approval or
authorization of, or registration or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by it of this Agreement, or the validity or enforceability of this Agreement, other than such as
have been met or obtained. 
 (c)    The Borrower’s execution, delivery and performance of this Agreement will not
(i) create any Adverse Claim on the Collateral other than as contemplated in the Loan Agreement; (ii) 

  
 2 

 
violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or the certificate of formation or by-laws of the Borrower or any mortgage, indenture, contract or other agreement to which the Borrower is a party or by which the Borrower or any of its property or assets may be bound or (iii) constitute a
breach of the Loan Agreement, as amended hereby, or any of the other Loan Documents. 
 (d)    No litigation or
administrative proceeding of or before any court, tribunal or governmental body is presently pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its properties or with respect to this Agreement which, if adversely
determined, could have a material effect on the business, assets or financial condition of the Borrower or which would draw into question the validity of this Agreement. 

(e)    The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the
Borrower to the Agent and the Lender in connection with the negotiation, preparation or delivery of this Agreement or included herein or therein or delivered pursuant hereto or thereto are true and correct in every material respect, or (in the case
of projections) are based on reasonable estimates, on the date as of which such information is stated or certified. 

(f)    The Borrower is not required to register as an “investment company,” as such term is defined in the
Investment Company Act, in reliance either (i) on not meeting the definition of “investment company” under Section 3(a)(1) of the Investment Company Act or (ii) on an exemption from the definition of “investment
company” other than Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. The performance of the transactions contemplated by this Agreement will not violate any provision of the Investment Company Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder. 
 3.2    The Transferor hereby
represents and warrants to the Agent and the Lender as of the date hereof that: 
 (a)    The Transferor is a New York
limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has the power and all licenses and permits necessary to own its assets and to transact the business in which it
is presently engaged, and is duly qualified and in good standing under the laws of each jurisdiction where the conduct of its business requires such qualification. 

(b)    The Transferor has the power, authority and legal right to make, deliver and perform this Agreement and the Note and
all of the transactions contemplated hereby and thereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the Note. This Agreement and the Note constitute the legal, valid and binding
obligations of the Transferor, enforceable against it in accordance with their terms except as the enforceability hereof and thereof may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws of general application
affecting creditors’ rights generally and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law). No consent of any other party and no consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by it of this Agreement or the Note, or the validity or enforceability of this Agreement or the Note, other than such
as have been met or obtained. 
 (c)    The Transferor’s execution, delivery and performance of this Agreement and
the Note will not (i) create any Adverse Claim on the Collateral other than as contemplated in the Loan Agreement; (ii) violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or
administrative agency or the certificate of formation or by-laws of the Transferor or any mortgage, indenture, contract or other agreement to which the Transferor is a party or by which the Transferor or any
of its property or assets may be bound or (iii) constitute a breach of the Loan Agreement, as amended hereby, or any of the other Loan Documents. 

  
 3 

 (d)    No litigation or administrative proceeding of or before any
court, tribunal or governmental body is presently pending or, to the knowledge of the Transferor, threatened against the Transferor or any of its properties or with respect to this Agreement or the Note which, if adversely determined, could have a
material effect on the business, assets or financial condition of the Transferor or which would draw into question the validity of this Agreement or the Note. 

(e)    The Transferor is solvent and will not become insolvent after giving effect to the transactions contemplated hereby;
the Transferor is paying its debts as they become due; and the Transferor, after giving effect to the transactions contemplated hereby, will have adequate capital to conduct its business. 

(f)    The Transferor has received fair consideration and reasonably equivalent value in exchange for the execution and
delivery of the Note. 
 (g)    The information, reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Transferor to the Agent and the Lender in connection with the negotiation, preparation or delivery of this Agreement and the Note or included herein or therein or delivered pursuant hereto or thereto are true and
correct in every material respect, or (in the case of projections) are based on reasonable estimates, on the date as of which such information is stated or certified. 

(h)    The Transferor is not required to register as an “investment company,” as such term is defined in the
Investment Company Act, in reliance either (i) on not meeting the definition of “investment company” under Section 3(a)(1) of the Investment Company Act or (ii) on an exemption from the definition of “investment
company” other than Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. Neither the delivery of the Note nor the performance of the other transactions contemplated by this Agreement will violate any provision of the
Investment Company Act or any rule, regulation or order issued by the Securities and Exchange Commission thereunder. 

3.3    Parent hereby represents and warrants to the Agent and the Lender as of the date hereof that: 

(a)    Parent is a Delaware corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has the power and all licenses and permits necessary to own its assets and to transact the business in which it is presently engaged, and is duly qualified and in good standing under the laws of each jurisdiction
where the conduct of its business requires such qualification. 
 (b)    Parent has the power, authority and legal right
to make, deliver and perform this Agreement and all of the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. This Agreement constitutes the legal, valid and
binding obligation of Parent, enforceable against it in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws of general application affecting
creditors’ rights generally and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law). No consent of any other party and no consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by it of this Agreement, or the validity or enforceability of this Agreement, other than such as have been met or
obtained. 

  
 4 

 (c)    Parent’s execution, delivery and performance of this
Agreement will not (i) create any Adverse Claim on the Collateral other than as contemplated in the Loan Agreement; (ii) violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or
administrative agency or the certificate of formation or by-laws of Parent or any mortgage, indenture, contract or other agreement to which Parent is a party or by which Parent or any of its property or assets
may be bound or (iii) constitute a breach of the Loan Agreement, as amended hereby, or any of the other Loan Documents. 

(d)    No litigation or administrative proceeding of or before any court, tribunal or governmental body is presently
pending or, to the knowledge of Parent, threatened against Parent or any of its properties or with respect to this Agreement which, if adversely determined, could have a material effect on the business, assets or financial condition of Parent or
which would draw into question the validity of this Agreement. 
 (e)    The information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of Parent to the Agent and the Lender in connection with the negotiation, preparation or delivery of this Agreement or included herein or delivered pursuant hereto are true and correct in
every material respect, or (in the case of projections) are based on reasonable estimates, on the date as of which such information is stated or certified. 

3.4    Medallion Capital hereby represents and warrants to the Agent and the Lender as of the date hereof that: 

(a)    Medallion Capital is a Minnesota corporation duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation and has the power and all licenses and permits necessary to own its assets and to transact the business in which it is presently engaged, and is duly qualified and in good standing under the laws of each
jurisdiction where the conduct of its business requires such qualification. 
 (b)    Medallion Capital has the power,
authority and legal right to make, deliver and perform this Agreement and all of the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. This Agreement
constitutes the legal, valid and binding obligation of Medallion Capital, enforceable against it in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws of general application affecting creditors’ rights generally and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law). No consent of any other party and no consent, license,
approval or authorization of, or registration or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by it of this Agreement, or the validity or enforceability of this Agreement, other
than such as have been met or obtained. 
 (c)    Medallion Capital’s execution, delivery and performance of this
Agreement will not (i) create any Adverse Claim on the Collateral other than as contemplated in the Loan Agreement; (ii) violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or
administrative agency or the certificate of formation or by-laws of Medallion Capital or any mortgage, indenture, contract or other agreement to which Medallion Capital is a party or by which Medallion Capital
or any of its property or assets may be bound or (iii) constitute a breach of the Loan Agreement, as amended hereby, or any of the other Loan Documents. 

  
 5 

 (d)    No litigation or administrative proceeding of or before any
court, tribunal or governmental body is presently pending or, to the knowledge of Medallion Capital, threatened against Medallion Capital or any of its properties or with respect to this Agreement which, if adversely determined, could have a
material effect on the business, assets or financial condition of Medallion Capital or which would draw into question the validity of this Agreement. 

(e)    The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of
Medallion Capital to the Agent and the Lender in connection with the negotiation, preparation or delivery of this Agreement or included herein or delivered pursuant hereto are true and correct in every material respect, or (in the case of
projections) are based on reasonable estimates, on the date as of which such information is stated or certified. 

3.5    Freshstart hereby represents and warrants to the Agent and the Lender as of the date hereof that: 

(a)    Freshstart is a New York corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has the power and all licenses and permits necessary to own its assets and to transact the business in which it is presently engaged, and is duly qualified and in good standing under the laws of each jurisdiction
where the conduct of its business requires such qualification. 
 (b)    Freshstart has the power, authority and legal
right to make, deliver and perform this Agreement and all of the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. This Agreement constitutes the legal, valid
and binding obligation of Freshstart, enforceable against it in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws of general application
affecting creditors’ rights generally and by general principles of equity (whether such enforceability is considered in a proceeding in equity or at law). No consent of any other party and no consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by it of this Agreement, or the validity or enforceability of this Agreement, other than such as have been met or
obtained. 
 (c)    Freshstart’s execution, delivery and performance of this Agreement will not (i) create any
Adverse Claim on the Collateral other than as contemplated in the Loan Agreement; (ii) violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or the certificate of
formation or by-laws of Freshstart or any mortgage, indenture, contract or other agreement to which Freshstart is a party or by which Freshstart or any of its property or assets may be bound or
(iii) constitute a breach of the Loan Agreement, as amended hereby, or any of the other Loan Documents. 
 (d)    No
litigation or administrative proceeding of or before any court, tribunal or governmental body is presently pending or, to the knowledge of Freshstart, threatened against Freshstart or any of its properties or with respect to this Agreement which, if
adversely determined, could have a material effect on the business, assets or financial condition of Freshstart or which would draw into question the validity of this Agreement. 

(e)    The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of
Freshstart to the Agent and the Lender in connection with the negotiation, preparation or delivery of this Agreement or included herein or delivered pursuant hereto are true and correct in every material respect, or (in the case of projections) are
based on reasonable estimates, on the date as of which such information is stated or certified. 

  
 6 

 SECTION 4.    Indemnity. The Transferor agrees to reimburse the
Agent and the Lender as and when billed by the Agent or the Lender for all of such Person’s reasonable and documented out-of-pocket costs and expenses incurred in
connection with the enforcement of, or the preservation of the rights of such Person under, this Agreement, the Note or any transaction contemplated hereby or thereby, including without limitation the reasonable and documented out-of-pocket fees and expenses of its counsel; provided that the Transferor shall not be obligated to reimburse the Agent or the Lender under this Section for any such costs
or expenses that exceed, in the aggregate, $50,000. 
 SECTION 5.    Condition Precedent. This Termination and
Amendment shall become effective as of November 8, 2018 (the “Effective Date”) upon the Agent’s receipt of 

5.1    A copy of this Termination and Amendment duly executed by the Borrower, the Lender, the Agent, the
Transferor, the Parent, Medallion Capital and Freshstart; 
 5.2    The original Note duly executed by
the Transferor; 
 5.3    A legal opinion of Willkie Farr and Gallagher LLP, counsel to Medallion, in
form and substance satisfactory to the Agent and the Lender, including as to (i) due authorization, execution, delivery and enforceability of this Agreement and the Note; (ii) absence of conflicts and (iii) the termination of the
Guaranty, the issuance of the Note and other transactions pursuant to this Agreement not adversely affecting the conclusion in such firm’s non-consolidation opinion delivered in connection with the Loan
Agreement, taking into account changes in legal authority since the date thereof and 
 5.4    A legal
opinion or memorandum of Willkie Farr & Gallagher LLP, in form and substance satisfactory to the Agent and the Lender, as to the availability of an exemption with respect to each of the Borrower and Medallion from the Investment Company Act
of 1940, other than pursuant to Section 3(c)(1) or 3(c)(7) thereof. 
 SECTION 6.    Release. Each of the
MF/Borrower Related Parties hereby acknowledges and confirms, on its own behalf and on behalf of its officers and directors; its predecessors, successors, assigns, agents and other legal representatives and any Person claiming by or through any of
them (collectively, the “Releasors”), that (i) it does not have any grounds, and hereby agrees not, to challenge (or to allege or pursue any matter, cause or claim arising under or with respect to), in any case based upon acts or
omissions of the Lender, the Agent or any other Indemnified Party occurring prior to the date hereof or facts otherwise known to it as of the date hereof, the effectiveness, genuineness, validity, collectability or enforceability of the Loan
Documents and (ii) it does not possess, and hereby unconditionally and forever waives, remises, releases, discharges and holds harmless the Lender, the Agent and any other Indemnified Party; each of their respective affiliates, stockholders,
directors, officers, employees, attorneys, agents, representatives, heirs, executors, administrators, successors and assigns; each Person acting or purporting to act for them or on their behalf and the successors and assigns of any such Persons
(collectively, the “Designated Parties”) from and against, and agrees not to allege or pursue, any action, cause of action, suit, debt, liability, loss, expense, claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand
or other right of action whatsoever, whether now known or unknown, past or present, asserted or unasserted, contingent or liquidated, whether in law, equity or otherwise, which any of the Releasors ever had, now have, may have or claim to have
against any of the Designated Parties, by reason of any matter, cause or thing whatsoever, with respect to events or omissions occurring or arising on or prior to the date hereof and relating to the Loan Documents, any transaction relating thereto
or any actions or omissions in connection therewith (collectively, the “Claims”). The foregoing release shall be construed in the broadest sense possible. 

  
 7 

 The MF/Borrower Related Parties warrant and represent that they are the sole and lawful
owners of all right, title and interest in and to every Claim being released hereby and that they have not assigned, pledged, hypothecated or otherwise divested or encumbered all or any part of any Claim being released hereby. The MF/Borrower
Related Parties hereby agree to indemnify, defend and hold harmless any and all of the Designated Parties from and against any Claims asserted against any Designated Party based on, or arising in connection with, any such prior assignment or
transfer, whether actual or purported. The MF/Borrower Related Parties hereby absolutely, unconditionally and irrevocably agree never to commence, prosecute, cause to be commenced or prosecuted, voluntarily aid in any way or foment any suit, action
or other proceeding (at law, in equity, in any regulatory proceeding or otherwise), or otherwise seek any recovery, against any of the Designated Parties based on any of the Claims being released hereby. The MF/Borrower Related Parties hereby
specifically warrant, represent, acknowledge and agree that (a) none of the provisions of this general release shall be construed as, or constitute, an admission of any liability on the part of any Designated Party and (b) the provisions
of this general release shall constitute an absolute bar to any Claim of any kind, whether any such Claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. 

SECTION 7.    Reference to and Effect on the Loan Agreement. 

7.1    Upon the effectiveness of this Termination and Amendment, each reference in the Loan Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein,” “hereby” or words of like import shall mean, and shall be a reference to, the Loan Agreement as amended hereby, and each reference to the Loan Agreement in any
other document, instrument or agreement executed and/or delivered in connection with the Loan Agreement shall mean, and shall be a reference to, the Loan Agreement as amended hereby. 

7.2    Except as specifically provided herein, the Loan Agreement, the other Loan Documents and all other documents,
instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 

7.3    The execution, delivery and effectiveness of this Termination and Amendment shall not operate as a waiver of any
right, power or remedy of the Agent or the Lender under the Loan Agreement, the other Loan Documents or any other document, instrument or agreement executed in connection therewith, nor shall it constitute a waiver of any provision contained
therein. 
 SECTION 8.    Governing Law. THIS TERMINATION AND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). 

SECTION 9.    Execution in Counterparts. This Termination and Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Termination and Amendment by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Termination and Amendment. 

SECTION 10.    Headings. Section headings in this Termination and Amendment are included herein for convenience of
reference only and shall not constitute a part of this Termination and Amendment for any other purpose. 
 [Remainder of page
intentionally left blank] 

  
 8 

 IN WITNESS WHEREOF, the parties hereto have caused this Termination and Amendment to be
executed by their respective signatories thereunto duly authorized as of the date first written above. 
  

			
	TAXI MEDALLION LOAN TRUST III, as Borrower
		
	By	 	/s/ Andrew M. Murstein
	Name: Andrew M. Murstein
	Title: President

  
 [Signature Page to
Termination of Limited Recourse Guaranty and Amendment No. 6 to Amended and Restated Loan and Security Agreement] 

 
			
	MEDALLION FINANCIAL CORP.
		
	By	 	/s/ Andrew M. Murstein
	Name: Andrew M. Murstein
	Title: President
	
	MEDALLION CAPITAL, INC.
		
	By	 	/s/ Dean Pickerell
	Name: Dean Pickerell
	Title: EVP
	
	FRESHSTART VENTURE CAPITAL CORP.
		
	By	 	/s/ Alvin Murstein
	Name: Alvin Murstein
	Title: Chairman & Chief Executive Officer

  
 [Signature Page to
Termination of Limited Recourse Guaranty and Amendment No. 6 to Amended and Restated Loan and Security Agreement] 

 
			
	DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN, as Agent and as the Lender

 
			
		
	By	 	/s/ Jayan Krishnan
	Name: Jayan Krishnan
	Title: Head of Asset Securitization Group
		
	By	 	/s/ Franziska Hummel
	Name: Franziska Hummel
	Title: Senior Vice President

  
 [Signature Page to
Termination of Limited Recourse Guaranty and Amendment No. 6 to Amended and Restated Loan and Security Agreement] 

 The undersigned hereby (i) acknowledges and agrees to the foregoing Termination and Amendment,
(ii) reaffirms all of its obligations under the Loan Documents to which it is a party and (iii) acknowledges and agrees that such other Loan Documents remain in full force and effect. 

 

			
	MEDALLION FUNDING LLC
		
	By	 	/s/ Alvin Murstein
	Name: Alvin Murstein
	Title: Chairman & Chief Executive Officer

  
 [Signature Page to
Termination of Limited Recourse Guaranty and Amendment No. 6 to Amended and Restated Loan and Security Agreement] 

 EXHIBIT A 

Promissory Note 

 PROMISSORY NOTE 

 

	 $1,400,000 
	 New York, New York 

November 8, 2018 
 FOR VALUE
RECEIVED, the undersigned, MEDALLION FUNDING LLC, a New York limited liability company (“Medallion”), hereby promises to pay to DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN (“DZ”) (successor by
assignment to Autobahn Funding Company LLC (“Autobahn”)), as a Lender (in such capacity, the “Lender”) and as agent under the Loan Agreement (as defined below) (in such capacity, the “Agent”),
and/or the registered assigns of the Lender and/or the Agent, in lawful money of the United States of America in immediately available funds, in accordance with the instructions of the Agent and the Lender, the principal sum of ONE MILLION FOUR
HUNDRED THOUSAND DOLLARS ($1,400,000), in regular, equal quarterly payments, such principal payments, for the avoidance of doubt, to be in the amounts set forth on Schedule 1 attached hereto and to be due on the last business day of each
calendar quarter, beginning on March 29, 2019, with the outstanding balance of the principal sum of this Note to be due on the earlier of (i) the date on which, as a result of an Event of Default and acceleration, all of the Secured
Obligations become immediately due and payable and (ii) December 29, 2023. 
 Medallion also promises to make regular quarterly
payments of all accrued unpaid interest on the unpaid principal amount of this Note, at a rate of 4% per annum, in like money from January 1, 2019 until this Note is fully paid, such interest payments to be due on the last business day of each
calendar quarter, beginning on March 29, 2019, and, for the avoidance of doubt, to be in the amounts set forth on Schedule 1 attached hereto. 

Reference is hereby made to that certain Amended and Restated Loan and Security Agreement, dated as of December 12, 2016, by and among
Taxi Medallion Loan Trust III, as the Borrower (in such capacity, the “Borrower”), Autobahn, as a Lender, and the Agent (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”). Capitalized terms used herein but not defined herein shall have the meanings ascribed thereto in the Loan Agreement. 

This Note is the Note referred to in that certain Termination of Limited Recourse Guaranty and Amendment No. 6 to Amended and Restated
Loan and Security Agreement, dated as of November 8, 2018 (the “Termination Agreement”), by and among the Borrower, Medallion, as the Transferor, Medallion Financial Corp., Medallion Capital, Inc., Freshstart Venture Capital
Corp., the Lender and the Agent and is entitled to the benefits thereof and of the other Loan Documents. 
 Payments hereunder are to be
made in lawful money of the United States of America in same day or immediately available funds to the relevant account identified in, or pursuant to, the Loan Agreement for payment of principal and interest thereunder or to such other account as
may be specified by the Lender by written notice to Medallion. Medallion hereby waives presentment, demand, protest or notice of any kind in connection with this Note. 

  
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 The Agent and the Lender shall be indemnified for the costs of enforcement or collection
hereof, or the preservation of the rights of the Agent or the Lender hereunder, as provided in the Termination Agreement. 
 Whenever in
this Note reference is made to the Lender or Medallion, such reference shall be deemed to include, as applicable, a reference to its successors and assigns. The provisions of this Note shall be binding upon and shall inure to the benefit of such
successors and assigns. Medallion’s successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for Medallion. 

Medallion agrees that, upon surrender of this Note together with a written instrument of transfer reasonably satisfactory to Medallion, duly
executed by the Lender or an authorized representative thereof, Medallion will issue a new Note in the form hereof and in the principal sum so assigned to the assignee thereof and shall issue to the Lender a new Note in the form hereof representing
any portion of the principal sum hereof not so assigned. No service charge shall be payable for such transfer. 
 THIS NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES). 

  
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	MEDALLION FUNDING LLC
		
	By:	 	 
		 	Name:
		 	Title:

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