Document:

Document

November 14, 2022
Evelo Biosciences, Inc.
620 Memorial Drive, 5th Floor
Cambridge, MA 02139
Attention: Marella Thorell
Re:      Waiver of Specified Defaults and Modification of Terms
Ladies and Gentlemen:
Reference is made to that certain Loan and Security Agreement, dated as of July 19, 2019 (as amended, restated, supplemented or otherwise modified, from time to time, the “Agreement”), among EVELO BIOSCIENCES, INC., a Delaware corporation (“Borrower Representative”), and each other Person party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”), the lenders from time to time party thereto (collectively, “Lenders”, and each, a “Lender”), K2 HEALTHVENTURES LLC, as administrative agent for Lenders (in such capacity, and together with its successors, “Administrative Agent”), and ANKURA TRUST COMPANY, LLC, as collateral agent for Lenders. Capitalized terms not defined herein have meanings as defined in the Agreement.  This letter (“Modification Letter”) confirms the parties’ agreement to waive certain Events of Default are waived and modify certain terms of the Agreement and the other Loan Documents. 
1.Waiver of Specified Defaults.  Borrower Representative acknowledges that certain Events of Default occurred, as set forth on Schedule 1 hereto (the “Specified Defaults”).  Subject to the terms and conditions of this Modification Letter, the Specified Defaults are hereby waived and that application of interest at the Default Rate with respect to the Specified Defaults is hereby waived. 
2.Modification of Conversion Price.  Borrower Representative and the undersigned Lenders, constituting Required Lenders, hereby agree to amend the defined term “Conversion Price” in Exhibit A of the Agreement as set forth below: 
“Conversion Price” means $2.00 per share of Common Stock, subject to adjustment in accordance with Section 2.2(e)(i).
3.Conditions.  This Modification Letter shall be effective upon the due execution and delivery of this Modification Letter, together with an Amended and Restated Warrant to Purchase Common Stock and an Amended and Restated Fee Letter (“collectively, the “Related Documents”), and a copy of the resolutions duly approved by the Board approving this Modification Letter and the Related Documents.
Except as expressly modified by this Modification Letter, the Agreement shall remain unchanged and in full force and effect in accordance with its terms.  Borrower representative represents and warrants that: Borrower Representative has the power and authority to execute this Modification Letter and perform the obligations under the Agreement, as modified by this Modification Letter; and the execution and delivery of this Modification Letter and the other Related Documents, and the performance by each Borrower of its obligations under the Loan Documents, as modified by this Modification Letter and the Related Documents, have been duly authorized by all requisite action and do not contravene any material Requirement of Law, any material contractual restriction in any material agreement binding on Borrower Representative or the Operating Documents of Borrower Representative, and do not require any order, consent, approval, license, authorization, validation of, or filing, recording or registration with, or exemption by, any Governmental Authority, except as has already been obtained or made, and this Modification Letter and the Related documents have been duly executed and delivered and are the binding obligation of Borrower Representative, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. The copy of the resolutions of the Board delivered to Administrative Agent as of the date hereof have been duly approved by the Board and remain in full force and effect as of the date hereof.
Except as expressly modified by this Modification Letter, the Agreement and the other Loan Documents shall remain unchanged and in full force and effect in accordance with its terms.  The foregoing waiver shall be limited to the circumstances described and shall not imply any other waiver or establish a course of dealing or obligate the undersigned to waive any other Event of Default, whether existing or arising in the future, from time to time.  This Modification Letter may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.  The words “execution,” “signed,” “signature” and 

words of like import herein shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. Delivery of an executed counterpart of a signature page of this Modification Letter or any document delivered in connection therewith by electronic means including by email delivery of a “.pdf” format data file shall be effective as delivery of an original executed counterpart thereof. This Modification Letter shall constitute a Loan Document, and accordingly, shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of any laws other than those of the State of New York. 
[Signature Pages Follow]

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Sincerely,
ADMINISTRATIVE AGENT:
K2 HEALTHVENTURES LLC 
By: /s/ Parag Shah    
Name: Parag Shah
Title: Managing Director and Chief Executive Officer
LENDER:
K2 HEALTHVENTURES LLC 
By: /s/ Parag Shah                    
Name: Parag Shah
Title: Managing Director and Chief Executive Officer

If the foregoing accurately sets forth our agreement, please countersign this letter in the space provided below.
Agreed and accepted:
BORROWER REPRESENTATIVE:
EVELO BIOSCIENCES, INC.
By: /s/ Marella Thorell    
Name: Marella Thorell
Title: CFO

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Schedule 1
Specified Defaults
1.Section 6.2(c) - Borrower Representative did not timely deliver various Compliance Certificates from time to time prior to the date of this Modification Letter.

2.Section 6.2(m) - Borrower Representative did not provide an update respecting the determination as to whether the pledge of more than 65% of the Voting Stock of any of its Foreign Subsidiaries would reasonably be expected to result in a material adverse tax consequence to Borrowers.

3.Section 6.5(b) - Borrower Representative’s property and general liability policies did not have a lender’s loss payable endorsement showing Collateral Trustee as lender’s loss payee.

4.Section 6.5(d) - Borrower Representative’s property and general liability insurance policies described in Section 6.5(b) did not have an endorsement that the insurer will endeavor to give the Collateral Trustee 30 days prior written notice before any such policy is cancelled.

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Exhibit 10.1

THIRD AMENDMENT TO OFFICE LEASE
This THIRD AMENDMENT TO OFFICE LEASE ("Third Amendment") is made and entered into as of October 7, 2022 (the “Effective Date”), by and between KILROY REALTY, L.P., a Delaware limited partnership ("Landlord"), and DERMTECH, INC., a Delaware corporation ("Tenant").
R E C I T A L S :
A.    Landlord and Tenant are parties to the Office Lease dated July 1, 2021 (the "Original Lease"), as amended by that certain First Amendment to Office Lease dated April 22, 2022 (the "First Amendment") and that certain Second Amendment to Office Lease dated April 22, 2022 (the "Second Amendment," and together with the Original Lease and First Amendment, the "Lease"), whereby Tenant leases 110,082 rentable (and usable) square feet of space ("Premises") consisting of the entire office building located at 12340 El Camino Real, San Diego, California  92130 ("Building").
B.    Landlord and Tenant desire to enter into this Third Amendment to make certain modifications to the Lease, and in connection therewith, Landlord and Tenant desire to amend the Lease as hereinafter provided.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.Capitalized Terms.  All capitalized terms when used herein shall have the same meaning as is given such terms in the Lease unless expressly superseded by the terms of this Third Amendment.
2.No Fitness Center.  Notwithstanding anything to the contrary in the Lease, Landlord and Tenant hereby acknowledge and agree that the fitness center located in the 12390 Building shall be used exclusively by another tenant of the Project effective as of January 1, 2023, and accordingly, such fitness center shall thereafter not constitute part of the Project Common Areas.
3.Measurement of Premises due to Reduction in Project Common Area.  As a result of such fitness center no longer constituting part of the Project Common Areas, notwithstanding anything to the contrary in the Lease, effective as of January 1, 2023, the measurement of the Expansion Premises (and accordingly, the Building and the Premises) shall be amended such that (a) the Expansion Premises (as defined in the Second Amendment) contains a total of approximately 13,310 rentable (and usable) square feet of space (reduced from 14,085 rentable (and usable) square feet of space as originally stated in the Second Amendment), and (b) accordingly, the Premises and the Building contain a total of approximately 109,307 rentable (and usable) square feet (reduced from 110,082 rentable (and usable) square feet of space as originally stated in the Lease), and (c) in connection with such new measurements, all amounts owning by Tenant under the Lease shall be decreased in connection with such modified rentable (and usable) square feet of the Expansion Premises, Premises and Building.  Accordingly, and notwithstanding anything to the contrary contained in the Lease, from and following January 1, 2023, Tenant shall continue to pay monthly installments of Base Rent for the Existing Premises in accordance with the Lease, Tenant shall pay monthly installments of 
									
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[Third Amendment]
[DermTech, Inc.]

Base Rent for the Expansion Premises as set forth in Schedule 1 attached hereto, and Tenant's Share of the Project with respect to the entire Premises shall be 59.88%, and Tenant shall otherwise pay Base Rent and Tenant's Share of Direct Expenses with respect to the entire Premises in accordance with the terms of the Lease.
4.Broker.  Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Third Amendment other than Cushman & Wakefield (the "Broker"), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Third Amendment.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from and against any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including, without limitation, reasonable attorneys' fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party's dealings with any real estate broker or agent, other than the Broker, occurring by, through, or under the indemnifying party.  The terms of this Section 4 shall survive the expiration or earlier termination of the term of the Lease, as hereby amended.
5.Statutory Disclosure and Related Terms.  For purposes of Section 1938(a) of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that Premises have not undergone inspection by a Certified Access Specialist (CASp).  The terms and conditions of Section 24.3 of the Original Lease shall continue to apply to the Lease, as hereby amended, with full force and effect as if stated herein in full.
6.Signatures.  The parties hereto consent and agree that this Third Amendment may be signed and/or transmitted by facsimile, e-mail of a .pdf document or using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the party so signing as a paper copy bearing such party’s handwritten signature. The parties further consent and agree that (1) to the extent a party signs this Third Amendment using electronic signature technology, by clicking “SIGN”, such party is signing this Third Amendment electronically, and (2) the electronic signatures appearing on this Third Amendment shall be treated, for purposes of validity, enforceability and admissibility, the same as handwritten signatures.
7.No Further Modification.  Except as set forth in this Third Amendment, all of the terms and provisions of the Lease shall apply with respect to the Expansion Premises and shall remain unmodified and in full force and effect.  
[signatures follow on next page]
									
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	-2-
	

[Third Amendment]
[DermTech, Inc.]

IN WITNESS WHEREOF, this Third Amendment has been executed on November 11, 2022, as of the day and year first above written.  

						
	

	"LANDLORD":
REALTY, L.P.,
a Delaware limited partnership
By:    Kilroy Realty Corporation,
a Maryland corporation
Its:  General Partner
By:    /s/Nelson Ackerly
Name: Nelson Ackerly 
Its:    Senior Vice President, Leasing 
By:    /s/ Annie Caldwell 
Name:     Annie Caldwell 
Its:    Vice President, Leasing 
"TENANT":
DERMTECH, INC.,
a Delaware corporation
By:    /s/ John Doback 
Name:    John Dobak, M.D.
Its:    CEO

									
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[Third Amendment]
[DermTech, Inc.]

SCHEDULE 1
BASE RENT SCHEDULE FOR EXPANSION PREMISES

									
	Period During
Expansion Term
		Monthly Installment of Base Rent

	Expansion Commencement Date – December 31, 2022		$41,507.56
	January 1, 2023 – Last day of Month 12		$39,453.81
	Months 13 - 24		$76,189.41
	Months 25 - 36		$78,349.62
	Months 37 – 48		$80,574.64
	Months 49 – 60		$82,866.41
	Months 61 – 72		$85,226.93
	Months 73 – 84		$87,658.27
	Months 85 – 96		$90,162.55
	Months 97 – 108		$92,741.96
	Months 109 – 120		$95,398.75
	Months 121 – Lease Expiration Date		$98,135.24

									
	4857-8585-9887.1
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	SCHEDULE 1
-1-
	

[Third Amendment]
[DermTech, Inc.]

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