Document:

Exhibit
10.2

 

Confidential
Treatment Requested As To Certain Information Contained In This Exhibit

 

 

SECURITY AGREEMENT: EQUIPMENT

 

(Dated and
effective as of December 22, 2003)

 

WHEREAS, Massachusetts Development Finance Agency, a
body politic and corporate and a public instrumentality under the laws of the
Commonwealth of Massachusetts with its principal office at 75 Federal Street,
Boston, Massachusetts 02110 (together with its successors and/or assigns, the “Lender”) has agreed
to make a loan to AVANT Immunotherapeutics, Inc., a Delaware corporation with
its principal office located at 119 Fourth Avenue, Needham, Massachusetts 02494
(the “Debtor”),
such loan being evidenced by that certain Secured Promissory Note: Equipment
Loan made by Debtor as of the date hereof to the order of the Lender (the “Note”).  This Security Agreement, the Note and any
UCC-1 financing statements executed in connection with this Security Agreement,
as each may be amended or modified from time to time, are referred to herein,
collectively, as the “Loan
Documents”.

 

WHEREAS, Lender is
willing to extend the above-described loan and enter into the transactions
contemplated by the Loan Documents, provided that, among other things, Debtor
shall execute and deliver this Security Agreement (the “Agreement”) and grant
the security interests in and liens upon its assets to Lender upon the terms
and conditions set forth in this Agreement.

 

NOW, THEREFORE, in
order to induce Lender to enter into the Loan Documents, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions.  Terms not defined herein shall have the
meanings ascribed to them, if any, under the UCC of the Commonwealth of
Massachusetts (as amended or revised from time to time, the “UCC”).  In addition to the terms defined elsewhere
in this Agreement, the following terms shall have the meanings set forth below:

 

“Collateral” means all
personal property and fixtures of Debtor of every kind and description,
tangible or intangible, whether now or hereafter existing, whether now owned or
hereafter acquired, and wherever located, but only to the extent acquired by
Debtor with the proceeds of the Note or for which Debtor was reimbursed for its
costs of acquiring the same with the proceeds of the Note, together in all
cases with (a) all attachments, accessions, accessories, tools, parts,
supplies, increases, and additions to and all replacements of and substitutions
for any property described above, (b) with respect to equipment and software,
any and all licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications and any model conversions, (c) all proceeds and
products of any of the property described above, including, without limitation,
insurance proceeds, and (d) all records and data relating to any of the
property described above, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, and all

 

 

of Debtor’s right,
title, and interest in and to all software required to utilize, create,
maintain and process any such records or data on electronic media.

 

“Costs” means all fees, costs and
expenses of the Lender incurred in connection with or as a result of: (a) the
default, collection, waiver or amendment of any terms of the Loan Documents or
the Obligations; (b) the Lender’s exercise, preservation or enforcement of any
of its rights, remedies or options under the Loan Documents (including without
limitation in connection with any disposition of the Collateral); (c) the
granting, perfecting and protecting of liens upon and security interests in any
Collateral now or hereafter securing the Obligations; and (d) the prosecution
or defense of any claim in any way arising out of, related to or connected with
any of the Loan Documents; including in each case, without limitation, (i)
reasonable fees and expenses of outside legal counsel, (ii) reasonable accounting,
consulting, brokerage or other similar professional fees or expenses, (iii) any
reasonable fees and expenses associated with any appraisals or examinations
conducted in connection with the Collateral, (iv) all filing fees and other
taxes and fees payable or determined to be payable in connection therewith,
including, without limitation, documentary, stamp and similar taxes and
assessments and all recording and filing fees charged by any governmental body
or authority; and (v) all other costs and expenses incurred by the Lender as
are payable by the Debtor under any of the Loan Documents.

 

“Lease” means the
Lease of even date herewith between Lender, as landlord, and Debtor, as tenant,
evidencing the lease of approximately 11,756 square feet of space at the
premises located at 151 Maritime Street, Fall River, Massachusetts (the “Premises”).

 

“Obligations” means
all indebtedness, obligations and liabilities, direct or indirect, matured or
unmatured, primary or secondary, certain or contingent, of Debtor to Lender,
under this Agreement, the Note, or any other Loan Document, and the Lease, and
whether now or hereafter owing or incurred, including, without limitation, all
Costs.  Lender acknowledges and agrees
that Debtor’s indebtedness, obligations and liabilities under the Lease shall
only constitute Obligations hereunder so long as any amounts are due and owing
under the Note.

 

2.                                       Grant
of Security Interest.  As security
for the prompt and unconditional payment and performance of the Obligations,
Debtor hereby pledges, assigns and transfers to Lender and grants to Lender a
continuing first priority security interest in the Collateral.  The security interest granted hereby shall
continue to be effective, irrespective of any retaking and redelivery of Collateral
to Debtor, until all Obligations have been paid in full or are otherwise fully
satisfied.

 

3.                                       Perfection;
Third Parties; Further Assurances.  Debtor authorizes Lender to file all UCC
financing statements, and amendments thereto and continuations thereof,
describing the Collateral necessary to perfect Lender’s security interest
hereunder.  Debtor agrees to take
whatever other actions are requested by Lender to perfect and continue Lender’s
first priority security interest in the Collateral.  The Collateral is and shall remain personal property even though
all or any portion of the Collateral may hereafter become attached or affixed
to real property, and Debtor shall provide Lender, upon Lender’s written
request, with disclaimers and waivers from landlords, mortgagees or any other
persons holding any interest in the real property where any Collateral may be
located, acceptable in all respects to Lender, which may be

 

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necessary or advisable in
the sole discretion of Lender to confirm that the security interest and rights
of Lender in the Collateral are and will remain valid against all other
parties.

 

4.                                       Representations,
Warranties, Acknowledgments and Covenants. 
Until all Obligations have been paid in full or are otherwise fully
satisfied, Debtor hereby represents, warrants, covenants and agrees that:

 

(a)                                  Debtor
has and has duly exercised all requisite power and authority to enter into this
Agreement, to pledge and grant a security interest in the Collateral and to
carry out the transactions contemplated by this Agreement; and this Agreement
has been duly executed and delivered by Debtor and is the legal, valid, and
binding obligation of Debtor enforceable against it in accordance with the
terms hereof except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting generally
the enforcement of creditors’ rights and except to the extent that availability
of the remedy of specific performance, injunctive relief or other equitable
remedies is subject to the discretion of the court before which any case or
proceeding therefor may be brought.

 

(b)                                 the
execution and delivery of this Agreement and the performance of Debtor’s
obligations hereunder, do not and shall not require the approval of, or the
giving of notice to, or the consent of, any third party (including, without
limitation, any federal, state, local or foreign governmental authority), and
do not and shall not contravene any law binding on Debtor or contravene
Debtor’s charter documents or by-laws, or any agreement, indenture, or other
instrument to which Debtor is a party or by which it may be bound;

 

(c)                                  Debtor
does now (and will in the future, upon payment in full of the invoice price of
each item of equipment included within the Collateral) lawfully possess and own
the Collateral;

 

(d)                                 except
for the security interest granted herein, Debtor has and, upon payment in full
of the invoice price of each item of equipment included within the Collateral,
will have good and marketable title to the Collateral; the Collateral is free
from and will be kept free from all liens, claims, security interests,
attachments and encumbrances; no financing statement covering the Collateral or
any proceeds thereof is now or shall be on file in favor of anyone other than
Lender; and Debtor shall defend Lender’s rights in the Collateral against the
claims and demands of all other persons;

 

(e)                                  Debtor
will not misuse, fail to keep in good repair, sell, assign, rent, lend,
encumber, transfer, secrete or otherwise dispose of any of the Collateral or
any interest therein, nor permit or contract to do any such act (each such act,
a “Transfer”)
except:

 

(i)                                     that
a Transfer may occur to (A) an entity that controls, is under common control
with, or is controlled by Debtor; (B) an entity with whom Debtor merges or
consolidates, or (C) to an entity that acquires all or substantially all of
Debtor’s assets (each of such entities, an “Approved Entity”) so long as (1) Debtor provides
Lender at least thirty (30) days’ prior notice of such proposed Transfer, (2)
the Approved Entity assumes, in a writing to Lender, all of Debtor’s
obligations under the Loan Documents, (3) Debtor remains liable, on a joint and
several basis with the Approved Entity, for all of Debtor’s obligations under
the Loan

 

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Documents, and (4) Debtor and the Approved Entity shall take all
actions requested by Lender to confirm Lender’s security interest in the
Collateral described in this Agreement;

 

(ii)                                  for
a Transfer consented to by Lender to an entity other than an Approved Entity,
provided that Lender’s consent shall not be unreasonably withheld, conditioned
or delayed, but, in addition to any other grounds for denial, Lender’s consent
shall be deemed reasonably withheld if Lender, in its capacity as the Landlord
under and as defined in the Lease, withholds its consent to any assignment,
sublease, license or other transfer of the Lease to the proposed transferee; or

 

(iii)                               Debtor
may sell such of the Collateral as consists of obsolete or surplus equipment if
either (A) Debtor pays to Lender an amount equal to the then-outstanding
principal portion of the Obligations attributable to the equipment being sold,
or (B) Debtor grants to Lender a first-priority security interest in
replacement equipment having an aggregate fair market value (as determined by
Lender in its good faith, reasonable discretion) equal to or greater than the
then-outstanding principal portion of the Obligations attributable to the
equipment being sold such that the replacement equipment becomes Collateral
hereunder;

 

(f)                                    if
any Collateral becomes the subject of any instrument, chattel paper, negotiable
document of title, including any warehouse receipt or bill of lading, or if any
Collateral at any time consists of certificated investment property, Debtor
shall deliver such instrument, paper or document or the certificates evidencing
such investment property to Lender, together with such assignments in blank or
other documents of transfer as Lender shall request;

 

(g)                                 Debtor
shall defend at Debtor’s own cost any action, proceeding or claim affecting the
Collateral;

 

(h)                                 Debtor
shall pay promptly all taxes, assessments, license fees and other public or
private charges when levied or assessed against the Collateral;

 

(i)                                     Upon
at least three (3) days’ prior notice, except during the pendency of an Event
of Default that extends beyond the expiration of applicable notice and cure
periods, and except in the case of an emergency, when in each case no prior
notice shall be required, Debtor shall permit Lender and its agents to enter
into the portions of the Premises that are not one of the Controlled Areas (as
defined below) at reasonable times, to examine and inspect the Collateral and
to inspect and make abstracts from records of Debtor concerning the Collateral;
provided, however, that except in the case of an emergency or during the
pendency of an Event of Default that extends beyond the expiration of
applicable notice and cure periods, such access shall only be performed when
escorted by a representative of Debtor. 
Lender acknowledges that Debtor’s business operations require strict
compliance with federal and state regulations regarding the development,
production and testing of human use biological products and, therefore, Lender
covenants that its representative (and any access of the Premises or
examination of the Collateral by Lender or anyone claiming by, through or under
Lender) shall comply in all respects with such regulations;

 

(j)                                     Debtor
intends to use certain portions of the Premises for experimentation, testing
and development of highly sensitive materials and vaccines and, in order to
establish the

 

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necessary control setting for such experimentation, testing, and
development, such portions of the Premises (each such portion a “Controlled Area” and
collectively the “Controlled
Areas”) will need to be segregated and properly sealed off from
the other portions of the Premises. 
Upon at least three (3) days’ prior notice, except during the pendency
of a monetary or other material Event of Default that extends beyond the
expiration of applicable notice and cure periods, and except in the case of
emergency which requires immediate access to the Controlled Areas, when in each
case no prior notice shall be required, Debtor shall permit a Qualified
Representative of Lender (as defined below) to enter the Controlled Areas at
reasonable times to perform inspections of any Collateral in the Controlled
Areas; provided, that, except during the pendency of a monetary or other
material Event of Default that extends beyond the expiration of applicable
notice and cure periods, and except in the case of an emergency which requires
immediate access to the Controlled Areas, such entry by a Qualified
Representative of Lender shall only be performed when escorted by a
representative of Debtor.  A “Qualified Representative of Lender”
shall mean an individual that possess the credentials and the training required
to enter and inspect a facility (i) regulated by the FDA and (ii) which is
engaged in business operations of the type Debtor will be carrying on in the
Premises.  Lender shall submit
information and documentation reasonably required by Debtor or any other
governmental entity to establish an individual’s qualification as a Qualified
Representative of Lender in advance of any such entry and Debtor shall
reasonably cooperate in good faith with Lender in approving such individual as
a Qualified Representative of Lender. 
Lender shall apprise the Qualified Representative of Lender of the
sensitivity of Debtor’s operations that are to be conducted in the Controlled
Areas and shall use all diligent, good faith efforts to cause such party to
adhere to all applicable legal requirements, all requirements of the FDA
applicable to such access and Debtor’s reasonable guidelines and safety rules
for entering the Controlled Areas, including wearing protective clothing and masks
before entering the Controlled Areas in order to protect the processes that
Debtor will be conducting in the Controlled Areas.

 

(k)                                  Within
120 days after the end of each of its fiscal years, Debtor shall deliver to the
Lender a copy of Debtor’s income statement, balance sheet and any other related
financial statements for the fiscal year then ended, which statements shall
have been prepared in accordance with GAAP (except as otherwise noted therein)
and audited by independent certified public accountants reasonably acceptable
to the Lender; within 45 days after the end of each of Debtor’s fiscal
quarters, Debtor shall deliver to the Lender a copy of Debtor’s
management-prepared income statement, balance sheet and any other related
financial statements for the fiscal quarter then ended, which statements shall
have been prepared in accordance with GAAP (except as otherwise noted therein);
the Lender hereby waives the foregoing financial reporting obligations during
such time as Debtor remains obligated to file periodic reports pursuant to
Section 12 or Section 15(d) of the Securities Exchange Act of 1934, as amended,
provided that during such time, Debtor shall provide Lender with copies of its
10K and 10Q reports promptly after the filing of the same with the Securities
and Exchange Commission;

 

(l)                                     Debtor’s
correct legal name, jurisdiction of organization, employer identification
number and, if applicable, state organizational number are as set forth on the
signature page hereto, and Debtor shall give Lender sixty (60) days’ prior
written notice before changing any such name, jurisdiction of organization or
number(s) and shall take all actions required by virtue of any such change to
continue the perfection of the security interest granted to Lender hereunder;

 

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(m)                               Debtor
shall promptly notify Lender of any Event of Default (as defined below in
Section 7) or any event causing a substantial loss or diminution in the value
or functional utility of all or any material part of the Collateral, or
affecting Lender’s rights or remedies hereunder with respect to the disposition
of all or any material part of the Collateral;

 

(n)                                 Debtor
understands that Lender’s agreement to enter into this Agreement and extend the
loan evidenced by the Note was predicated on Debtor’s agreement to use all
diligent, commercially reasonable efforts to create and retain jobs at the
Premises.  Accordingly, Debtor shall
create and fill ***Confidential Treatment Requested as to this Information***
new employment positions to be staffed at its facility located at the Premises
no later than the date Debtor obtains a final certificate of occupancy for the
Premises (“Debtor’s
Occupancy Date”) and shall use all diligent, commercially
reasonable efforts to maintain the same while any Obligations remain
outstanding.  Debtor shall also add
***Confidential Treatment Requested as to this Information*** other employment
positions to be staffed at its operations at the Premises, either by
transferring positions from other facilities to the Premises or by creating new
positions (or by a combination of the two), within one (1) year after Debtor’s
Occupancy Date, and Debtor shall use all diligent, commercially reasonable
efforts to maintain the same while any Obligations remain outstanding.  Debtor shall deliver a certificate to
Lender, within fifteen (15) days after Debtor’s Occupancy Date, certifying as
to Debtor’s compliance with the ***Confidential Treatment Requested as to this
Information*** employment creation requirements of this Section, shall deliver
a certificate to Lender, within fifteen (15) days after the first (1st)
anniversary of Debtor’s Occupancy Date, certifying as to Debtor’s compliance
with the employment creation and/or transfer requirements of this paragraph,
and shall deliver a certificate to Lender, within fifteen (15) days after the
end of each calendar quarter thereafter, certifying as to Debtor’s compliance
with the employment maintenance requirements of this Section; and

 

(o)                                 Debtor
is in material compliance with, and shall hereafter comply with and use its
assets in material compliance with, all statutes, regulations, ordinances,
directives, and orders of any federal, state, municipal, and other governmental
authority which has or claims jurisdiction over Debtor, any of Debtor’s assets,
or any person in any capacity under which Debtor would be responsible for the
conduct of such person (including, without limitation, those relating to labor
and employment.

 

All representations and
warranties made herein shall survive until such time as all of the Obligations
have been paid in full or are otherwise fully satisfied.

 

5.                                       Insurance.  For so long as any Obligations remain
outstanding, Debtor shall maintain, with insurers reasonably acceptable to
Lender, (a) fire, theft and property damage insurance with extended or combined
additional coverage on the Collateral for the full replacement value thereof,
and (b) comprehensive general liability insurance with policy limits and other
terms customary to companies of similar size in Debtor’s industry .  Each such policy shall contain a standard
mortgagee’s long form endorsement showing Lender as loss payee and additional
insured, as its interest may appear, which endorsement shall provide at least thirty
(30) days’ prior written notice to Lender of any material change, cancellation
or non-renewal of coverage.  Debtor
shall deliver certificates evidencing such insurance to Lender upon Lender’s
reasonable request.

 

6

 

6.                                       Default.  Time is of the essence in the payment and
performance of all Obligations.  It
shall be an “Event of Default”  hereunder if (a) a Note Default (as defined in the Note)
occurs and is not waived or cured within the time period applicable thereto, if
any, (b) Debtor breaches any representation, warranty, covenant or provision
hereof (other than the obligation to pay the Obligations or to maintain
insurance as set forth above in Section 5 and except for a breach of the
provisions of Section 4(n) hereof (other than a breach of Debtor’s obligations
to provide the certificates described therein), which breach shall not
constitute an Event of Default), and such breach is not cured within ten (10)
days after notice from Lender, (c) Debtor fails to maintain insurance as set
forth above in Section 5, (d) a material portion of the Collateral is lost or
destroyed, (e) other than as a result of Lender’s failure to file UCC-1
financing statements (or continuations thereof), the security interests granted
hereunder are challenged as to either perfection or priority or if Lender’s
rights in the Collateral become materially impaired, or (f) the Obligations are
accelerated for any reason.

 

The occurrence of a loss
or destruction of a material portion of the Collateral described in clause (e)
of this Section shall not constitute an Event of Default if proceeds of
insurance on such portion are received by Lender and, at Debtor’s election,
either applied to the Obligations, or held in escrow by Lender for disbursement
by Lender upon (A) the receipt by Lender of a written request from Debtor to
use such proceeds to purchase items of equipment to replace the Collateral lost
or destroyed, (B) the receipt by Lender of the manufacturers’ invoices for such
replacement items, specifying per item serial numbers and costs and indicating
that the costs of such replacement items are, in the aggregate, equal to or
greater than the aggregate fair market value (as determined by Lender in its
good faith, reasonable discretion) of the Collateral lost or destroyed, and (C)
the grant by Debtor to Lender of a first-priority security interest in such
replacement items such that the same become Collateral hereunder.

 

7.                                       Remedies.  Upon the occurrence of an Event of Default
hereunder, all Obligations, at Lender’s option and without notice, shall become
immediately due and payable, and Lender shall have all rights and remedies of a
secured party under the UCC and any other applicable law, and in addition, and
without limiting the foregoing, Lender may exercise the following rights and
remedies, each of which Debtor hereby agrees are commercially reasonable:

 

(a)                                  sell
all or any part of the Collateral at public or private sale at such price(s) as
Lender may deem satisfactory, and in connection with any such sale, Lender may
give or refrain from giving such warranties of title, possession, quiet
enjoyment and otherwise, and accept cash, promissory notes or other property in
exchange for the Collateral, all as Lender may determine in its sole and
absolute discretion; Lender shall not incur any liability as a result of the
sale of any of the Collateral, or any part thereof, at any private sale which
complies with the requirements of this Section; Debtor hereby waives, to the
extent permitted by applicable law, any claims against Lender arising by reason
of the fact that the price at which any of the Collateral, or any part thereof,
may have been sold at such private sale was less than the price that might have
been obtained at a public sale, even if Lender accepts the first offer deemed
by Lender in good faith to be commercially reasonable under the circumstances
and does not offer any of the Collateral to more than one offeree;

 

(b)                                 require
Debtor to assemble all or any part of the Collateral and any records pertaining
thereto and make it available to the Lender at a place to be designated by the
Lender;

 

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(c)                                  enter
the premises of Debtor and take possession of the Collateral and any records pertaining
thereto;

 

(d)                                 to
ask, demand, collect, sue for, recover, compromise, receive and give acceptance
and receipts for moneys due and to become due under or in respect of any of the
Collateral;

 

(e)                                  receive,
endorse, and collect any drafts or other instruments, documents and chattel
paper, in connection with the Collateral;

 

(f)                                    to
file any claims or take any action or institute any proceedings which Lender
may deem necessary or desirable for the collection of any of the Collateral, or
otherwise to enforce the rights of Debtor with respect to any of the
Collateral; and

 

(g)                                 grant
extensions, compromise claims and settle accounts in any amount for less than
face value or book value or otherwise without prior notice to Debtor.

 

Debtor hereby irrevocably
authorizes Lender to endorse Debtor’s name on all collections, receipts,
instruments or other documents, and appoints Lender as Debtor’s
attorney-in-fact to exercise to the extent permitted by law all powers, rights
and remedies necessary to enable Lender to exercise its rights hereunder.  At any sale of the Collateral, unless
prohibited by applicable law, Lender may bid for and purchase all or any part
thereof so sold free from any right or equity of redemption of Debtor.  In the event Lender seeks to take possession
of any or all of the Collateral by court process, Debtor hereby irrevocably
waives any bonds and any surety or security relating thereto required by any
statute, court rule or otherwise as an incident to such possession, and waives
any demand for possession prior to the commencement of any suit or action to
recover with respect thereto. Any notice required to be given by Lender of a
sale or other disposition or other intended action by Lender with respect to
any of the Collateral or otherwise which is made in accordance with the terms
of this Agreement at least five (5) days prior to such proposed action, shall
constitute commercially reasonable notice to Debtor of any such action.  Lender shall be liable to Debtor only for
its gross negligence or willful misconduct in failing to comply with any
applicable law imposing duties upon Lender. 
Lender’s liability for any such failure shall be limited to the actual
loss suffered by Debtor directly resulting from such failure, and Lender shall
have no liability to Debtor in tort or for incidental or consequential damages.

 

8.                                       Remedies
Cumulative.  Each right, power and
remedy of Lender provided for in this Agreement or now or hereafter existing at
law or in equity or by statute shall be cumulative and concurrent and shall be
in addition to every other such right, power or remedy.  The exercise or beginning of the exercise by
Lender of any one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by Lender of all such other rights, powers
or remedies.  No course of dealing or
delay or omission on the part of Lender in exercising any such right, power or
remedy shall operate as a waiver thereof or otherwise be prejudicial thereto,
nor shall any single or partial exercise thereof preclude any other or future
exercise thereof or the exercise of any other such right, power or remedy.

 

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9.                                       Application
of Moneys by Lender.  All moneys
collected upon any sale by or on behalf of Lender of the Collateral, together
with all other moneys received by Lender hereunder or by virtue of payments
made by Debtor, shall be applied as follows: (a) to the payment of all Costs;
(b) then to satisfy the other Obligations; and (c) then to Debtor to the extent
of any surplus proceeds.  Debtor shall
remain liable for any deficiency.  To
the extent that Debtor uses any of the proceeds of the Obligations to purchase
Collateral, all moneys collected upon any sale by or on behalf of Lender of the
Collateral, together with all other moneys received by Lender hereunder or by
virtue of payments made by Debtor, shall be applied on a “first-in, first-out”
basis so that the portion of the Obligations used to purchase a particular item
of Collateral shall be paid in the chronological order in which Debtor
purchased the Collateral.

 

10.                                 Lender’s
Exoneration.  Lender may, but shall
not be required to, take any action of any kind to collect, preserve or protect
its or Debtor’s rights in the Collateral. 
The powers conferred upon Lender pursuant to any appointment as Debtor’s
attorney-in-fact hereunder are solely for the purpose of protecting Lender’s
interests in the Collateral and shall not be deemed to impose any duty on
Lender to exercise such powers.  Debtor
shall remain liable under each contract, instrument, license and other
agreement constituting a portion of the Collateral to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
and Lender shall not be required or obligated in any manner (a) to perform or
fulfill any of the obligations of Debtor, (b) to make any payment or inquiry,
or (c) to take any action of any kind to collect, compromise or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times under or pursuant to any such
contract, instrument, license or other agreement.

 

11.                                 Waivers
by Debtor.  To the fullest extent
permitted by applicable law, and except as otherwise set forth in this
Agreement, Debtor waives:  (a)
presentment, demand and protest, and notice of presentment, dishonor, intent to
accelerate, acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all Loan Documents or
any portion of the Collateral; (b) all rights to notice and a hearing prior to
Lender’s taking possession or control of, or to Lender’s replevy, attachment or
levy upon, any Collateral; (c) the benefit of all valuation, appraisal and
exemption laws; (d) all rights to require Lender to marshal any present or
future collateral security (including but not limited to this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations, or to
resort to such collateral security or other assurances of payment in any
particular order; and (e) the performance by Lender of any duties imposed by
the UCC upon secured parties; provided, however, that to the extent that the
UCC prohibits the waiver of such performance, Debtor acknowledges that Lender’s
performance shall be measured by a commercial reasonableness standard.  Debtor acknowledges that it has been advised
by counsel of its choices and decisions with respect to this Agreement and the
transactions evidenced hereby, including, without limitation, with respect to
the waivers set forth in this Section.

 

12.                                 Powers
of Attorney.  It is hereby
acknowledged that each power of attorney granted hereunder is coupled with an
interest.  Debtor hereby irrevocably
appoints Lender as Debtor’s attorney-in-fact, with full authority in the place
and stead of Debtor and in the name of Debtor or otherwise, from time to time
in Lender’s discretion, to take any action and to execute any instrument which
Lender may deem necessary or advisable to accomplish the purposes of

 

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this Agreement, including, without limitation, in connection with the
exercise of the rights and remedies granted to Lender hereunder.

 

13.                                 Termination;
Revival of Security Interest.  At
such time as the Obligations have been paid in full or are otherwise fully
satisfied and Lender shall be under no further obligation to extend credit to
or enter into credit arrangements with Debtor, under the Loan Documents or
otherwise, this Agreement shall terminate and, at the expense of Debtor, Lender
will release its security interest in, and will duly assign, transfer and
deliver to Debtor such of the Collateral as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.  To the extent that Debtor makes a payment or
other transfer to Lender, or Lender receives any payment of proceeds of
Collateral, which is later invalidated, declared to be a fraudulent transfer or
preference, set aside or required to be repaid under any bankruptcy law, other
law or equitable principle, Lender’s security interest in the Collateral shall
be revived and continue as if the payment, transfer or proceeds had never been
received by Lender.

 

14.                                 Lender
May Perform.  If Debtor fails to
perform any agreement or obligation contained herein within the time periods
for performance set forth herein, Lender may, upon five (5) days’ prior written
notice to Debtor, perform or cause the performance of such agreement or
obligation, and the costs and expenses of Lender incurred in connection
therewith shall constitute Costs and shall be payable by Debtor forthwith upon
demand.

 

15.                                 Demands
and Notices.  All notices, requests
and demands permitted or required under the terms of this Agreement shall be in
writing, and shall be deemed to have been given when delivered by hand, when
sent by facsimile (transmission confirmed), 1 day after delivery to any
national overnight delivery service (delivery charges prepaid), or 3 days after
deposit in the U.S. mails (postage prepaid, certified and return receipt
requested), and addressed to the parties at their respective addresses
appearing in the initial paragraph hereof or to such other address as a party
may designate in a written notice to the other party given in accordance with
this Section.  Notices to Debtor shall
be sent as aforesaid to the attention of Mr. Michael Furlong (or his successor
as Senior Director, Business Development), with a copy to the Mr. Avery Catlin
(or his successor as Chief Financial Officer).

 

16.                                 Amendments,
Waivers, Etc.  No provision of this
Agreement can be changed, waived, discharged or terminated except by an
instrument in writing signed by Lender and Debtor expressly referring to the
provision of this Agreement to which such instrument relates and no such waiver
shall extend to, affect or impair any right of Lender with respect to any
Obligation which is not expressly dealt with therein.  No course of dealing or delay or omission on the part of Lender
in exercising any right, power or privilege hereunder or under the Loan
Documents shall operate as a waiver thereof or otherwise be prejudicial
thereto, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.

 

17.                                 Further
Assurances.  Debtor at its sole cost
and expense agree to do all such things and execute, acknowledge and deliver
all such documents and instruments as Lender from time to time may request in
order to give full effect to this Agreement and to perfect and preserve the
rights and powers of Lender hereunder.

 

10

 

18.                                 Conflicts.  In the event of any conflict between any
provision of this Agreement and the Loan Documents or any other document
evidencing the Obligations or Lender’s security interest in the Collateral, it
is the express and absolute understanding and agreement of Debtor that this
Agreement shall be interpreted so as to be consistent with such other
agreements and documents and to give full effect to the rights granted to
Lender herein and therein.

 

19.                                 Provisions
to Survive.  All representations,
warranties, covenants and agreements contained in this Agreement shall survive
the execution and delivery hereof and of the Loan Documents and any other
document executed in connection herewith or therewith and shall continue until
the Obligations have been paid in full or are otherwise fully satisfied.

 

20.                                 Governing
Law; Consent to Jurisdiction.  This
Agreement is intended to take effect as a sealed instrument to be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts,
including without limitation the UCC (without regard to conflicts of law
provisions).  In any action or
proceedings arising out of or relating to this Agreement or the interpretation
or enforcement thereof, Debtor hereby absolutely and irrevocably (a) consents
to the application of the laws of the Commonwealth of Massachusetts, including
without limitation the UCC (without regard to conflicts of law provisions), and
(b) agrees that the service thereof may be made in the manner and to the
addresses specified for notices in this Agreement.  Anything hereinbefore to the contrary notwithstanding, Lender may
sue any Debtor in the courts of any country, state of the United States or
place where a Debtor or any of its property or assets may be found or in any
other appropriate jurisdictions (including, without limitation, the state and
federal courts located in the Commonwealth of Massachusetts), and Debtor hereby
waives any objection that it may have to the location of any such court in
which Lender has commenced any proceeding. 
Debtor specifically acknowledges that application of Massachusetts law to
any action or proceedings arising out of or relating to this Agreement or the
interpretation or enforcement thereof constitutes a material inducement for
Lender to enter into this Agreement and the Loan Documents.

 

21.                                 Costs.  All Costs shall be payable on demand, and
interest shall accrue thereon at the highest rate chargeable under and in the
manner set forth in the Note from date of such demand until payment in full.

 

22.                                 Miscellaneous
Provisions.  This Agreement shall
inure to the benefit of Lender and its successors and assigns, and shall be
binding on Debtor and its successors, assigns and legal representatives.  This Agreement may be assigned by Lender in
connection with any assignment, transfer or other disposition (in whole or in
part) of the Obligations or the Loan Documents by Lender.  The rights and remedies herein provided are
cumulative and not exclusive of any remedies provided by law or any other
agreement.  The invalidity or
unenforceability of any one or more sections of this Agreement in their
entirety or under certain circumstances shall not affect the validity or
enforceability of its remaining provisions or the invalid or unenforceable
provisions in different circumstances. 
Captions are for ease of reference only and shall not affect the meaning
of the relevant provisions.  The
meanings of all defined terms used in this Agreement shall be equally
applicable to the singular and plural forms of the terms defined.

 

24.                                 WAIVER
OF JURY TRIAL AND DAMAGES.  DEBTOR
AND LENDER

 

11

 

MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY JURISDICTION, COURT AND
PROCEEDING WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THE LOAN
DOCUMENTS, THE OBLIGATIONS OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT
HERETO OR THERETO OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS OR ACTIONS OF LENDER RELATING TO THE ADMINISTRATION OR
ENFORCEMENT OF THE LOAN DOCUMENTS. 
DEBTOR AND LENDER AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.  EXCEPT AS
PROHIBITED BY LAW, DEBTOR WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR
RECOVER IN ANY PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL OR
OTHER TYPE OF DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  DEBTOR
CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS.  DEBTOR ACKNOWLEDGES
THAT THE FOREGOING WAIVERS CONSTITUTE A MATERIAL INDUCEMENT FOR LENDER TO ENTER
INTO THE LOAN DOCUMENTS AND ACCEPT THIS AGREEMENT.  BY EXECUTING AND DELIVERING THIS AGREEMENT, DEBTOR CONFIRMS THAT
THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

 

(Remainder
of Page Intentionally Left Blank; Signature Page Follows)

 

12

 

IN WITNESS
WHEREOF, the parties have executed this Security Agreement under seal as of the
date first above written.

 

	
   

  	
  DEBTOR:

  	
  AVANT
  Immunotherapeutics, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Una S. Ryan

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Una S. Ryan, President
  and C.E.O.

  	
   

  
	
   

  	
   

  	
   

  	
  (Printed Name and
  Title)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jurisdiction of
  Organization:

  	
  Delaware

  
	
   

  	
   

  	
  Federal Employer
  Identification #:

  	
  13-3191702

  
	
   

  	
   

  	
  State Organizational
  Identification #:

  	
  2023075

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Massachusetts
  Development Finance Agency

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David T. Slatery

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  David T. Slatery,
  President and C.E.O.

  	
   

  
	
   

  	
   

  	
   

  	
  (Printed Name and
  Title)

  
													

 

13Exhibit 10.3

 

Confidential
Treatment Requested As To Certain Information Contained In This Exhibit

 

 

SECURED PROMISSORY NOTE: EQUIPMENT LOAN

 

SUMMARY OF TERMS AND
DEFINITIONS

 

	
  Date of Note:

  	
   

  	
  December 22, 2003

  
	
   

  	
   

  	
   

  
	
  Principal Amount:

  	
   

  	
  Not to exceed *** Confidential Treatment Requested
  as to this Information***

  
	
   

  	
   

  	
   

  
	
  Maker:

  	
   

  	
  AVANT Immunotherapeutics, Inc.

  119 Fourth Avenue

  Needham, Massachusetts  02494

  
	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  	
  Massachusetts Development Finance Agency

  75 Federal Street

  Boston, MA  02110

  
	
   

  	
   

  
	
   

  	
  The term Lender shall include successors and assigns
  of Massachusetts Development Finance Agency and any future holder of this
  Note, and any participants in this Note.

  
	
   

  	
   

  	
   

  
	
  Maturity Date:

  	
   

  	
  December 21, 2010

  
	
   

  	
   

  	
   

  
	
  Interest Rate:

  	
   

  	
  *** Confidential Treatment Requested as to this
  Information*** per annum

  
	
   

  	
   

  	
   

  
	
  Loan Term:

  	
   

  	
  84 months

  
	
   

  	
   

  	
   

  
	
  Amortization Schedule:

  	
   

  	
  *** Confidential Treatment Requested as to this
  Information***

  
	
   

  	
   

  	
   

  
	
  Monthly Payment:

  	
   

  	
  *** Confidential Treatment Requested as to this
  Information***, subject to adjustment as provided in Section 4 of this Note.

  
	
   

  	
   

  	
   

  
	
  Payment Day:

  	
   

  	
  The first day of each month during the Loan Term,
  commencing with January 1, 2004.  If
  any such day is not a day when commercial banks are open for business in
  Boston, Massachusetts, then the applicable Payment Day shall be the next
  calendar day on which such banks are open for business.

  
	
   

  	
   

  	
   

  
	
  Collateral:

  	
   

  	
  All equipment now owned and acquired by the Maker,
  or hereafter acquired by the Maker, but only to the extent acquired by Maker,
  or for which Maker was reimbursed for its costs of acquiring the same, with
  the proceeds of this Note, together with all proceeds thereof, all as more
  particularly described in the Security Agreement of even date herewith
  between the Maker and the Lender.

  

 

 

	
  Loan Documents:

  	
   

  	
  This Note, the Security Agreement and any UCC-1
  financing statements executed and delivered in connection therewith.

  
	
   

  	
   

  	
   

  
	
  Obligations:

  	
   

  	
  The Principal Amount, all interest accruing thereon
  at the Interest Rate, and all other payment obligations of the Maker under
  this Note.

  

 

 

1.  Promise to Pay; Payment.  For value received, Maker does hereby
promise to pay to Lender, or to order, at the office of Lender set forth above
or at such other place or to such other party as the holder of this Note may
from time to time designate, the Principal Amount of this Note (as adjusted
pursuant to Section 4 of this Note), together with interest thereon, as
follows: (a) on the first Payment Day, an amount equal to all interest that has
accrued (at the Interest Rate) on the outstanding balance of the Principal
Amount from the date hereof through the first Payment Day; (b) on each of the
next eleven Payment Days, an amount equal to all interest that has accrued (at
the Interest Rate) on the outstanding balance of the Principal Amount since the
Payment Day immediately preceding each such Payment Day; (c) on all subsequent
Payment Days, an amount equal to the Monthly Payment; and (d) on the Maturity
Date, a payment in an amount equal to all then outstanding Obligations.

 

2.  Calculation of Interest.  Interest shall be calculated on the basis of
a year of 360 days comprised of 12 months of 30 days each and, for partial
months, on the basis of actual days elapsed. 
Interest on the Principal Amount shall be calculated as aforesaid and
shall be payable in arrears on each Payment Day as part of the Monthly Payment.

 

3.  Conditions of Funding; Use of Proceeds.  The Lender shall have no obligation to
advance any portion of the Principal Amount until (a) all of the documents set
forth on Closing Agenda of even date herewith (describing, among other things,
the loan evidenced hereby) have been executed and/or delivered to the Lender,
and (b) the Maker shall have delivered manufacturers’ invoices for the items of
equipment to be purchased with the proceeds of each such advance, specifying on
a per item basis the serial numbers and costs therefor, together with such
other information concerning such items of equipment as the Lender shall
reasonably request.  The Maker shall use
the proceeds of this Note solely to acquire, or to reimburse the Maker solely
for the acquisition cost of, such items of equipment as the Lender shall
approve in writing, such approval not to be unreasonably withheld, conditioned
or delayed.

 

4.  Draw Downs; Recalculation of the Monthly
Payment.  The Principal Amount shall
be permanently reduced by any undisbursed portion thereof utilized by the Maker
as a portion of the “Specialized TI Allowance” in accordance with Section 4.2
of the Lease.  The Maker may request
advances of the Principal Amount from the Lender (in aggregate amount not to
exceed the Principal Amount) until the first anniversary of the date of this
Note.  Such requests shall specify the
items of equipment to be acquired with the advances and shall be accompanied by
manufacturers’ invoices therefore, specifying per item serial numbers and
costs, together with such other information as the Lender may reasonably
request.  If by the first anniversary of
the date of this Note, the Maker has not requested advances equal to the full
Principal Amount, then Lender’s commitment to lend hereunder shall be reduced
to the aggregate principal amount advanced as of such anniversary and the
Monthly Payment shall be adjusted, effective as of the thirteenth Payment Day
and all Payment Days thereafter, to be an amount sufficient to amortize the
aggregate principal amount advanced hereunder, with interest accruing thereon
at the Interest Rate, over a six (6) year amortization schedule.

 

5.  Commitment Fee.  In consideration of the extension of the
loan evidenced hereby, Maker shall pay a commitment fee to the Lender in the
amount of *** Confidential Treatment Requested as to this Information***, which
fee shall be nonrefundable, and shall be deemed fully earned and shall be
payable on the date hereof.

 

1

 

6.  Application of Payments.  All payments and collections hereunder shall
be applied first to Lender’s Costs, then to outstanding late charges, then to
accrued and unpaid interest (including interest accrued at the default rate
described herein), and then to reduce the Principal Amount then
outstanding.  As used in this Note,
“Costs” has the meaning given to such term in the Security Agreement.

 

7.  Prepayment.  Maker may at any time during the Loan Term make payment in full
or in part of the Principal Amount outstanding hereunder, provided that all
other outstanding Obligations have first been paid in full, and if they have
not, then the amounts intended to be principal prepayments will, at Lender’s
discretion, first be applied to such Obligations.  Any partial prepayment applied to the Principal Amount will be
applied to principal due at the end of the term of this Note and will not
postpone or reduce the amount of the Monthly Payment.

 

8.  Late Charge.  If any Monthly Payment or other Obligation
shall remain unpaid for a period of ten (10) days after the due date therefor,
the Maker shall then pay to Lender, in addition to all other amounts payable
hereunder, a late charge equal to five percent (5%) of the amount of such
Monthly Payment or other Obligation.

 

9.  Default Rate; Acceleration.  If (a) any Monthly Payment or other
Obligation shall remain unpaid for a period of thirty (30) days after the due
date therefor, (b) a default or event of default as described in Section 12.1
of the Lease of even date herewith between the Maker and the Lender (the
“Lease”) occurs and is not waived or cured within the time period applicable
thereto, if any, or (c) any event designated as an “Event of Default” in any
other Loan Document occurs and is not waived or cured within the time period
applicable thereto, if any (each of the foregoing, a “Note Default”), then (a)
the Interest Rate shall be immediately and automatically increased by five
percent (5%) per annum from the date of the Note Default until the date of such
Note Default is cured, calculated on a daily basis, and (b) on the date of the
expiration of the cure period applicable to a Note Default or at any time
thereafter, the Lender may, upon written notice to Maker, declare all
then-outstanding Obligations to be immediately due and payable.  Notwithstanding Lender’s option to
accelerate, all then-outstanding Obligations shall automatically become
immediately due and payable upon the occurrence of any of the following: (i) a
proceeding under the United States Bankruptcy Code, as amended, and any similar
or successor federal or state statute, or the rules and regulations promulgated
thereunder, or under any other bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute, is filed with
respect to Maker; or (ii) Maker becomes insolvent or fails generally to pay its
debts as they become due. 
Notwithstanding the foregoing provisions of this Section, the Lender
acknowledges and agrees that any payment default under Section 9(a) above shall
not constitute a default or an event of default under the Lease unless such
payment default continues for five (5) days after notice from the Lender
designating such default.

 

10.  Waiver; Cumulative Remedies.  Maker and all other parties who may be
liable (whether as endorsers, guarantors, sureties or otherwise) for payment of
any sum or sums due or to become due under the terms of this Note waive
diligence, presentment, demand, protest, notice of dishonor, notice of
intention to accelerate, notice of acceleration and notice of any other kind
whatsoever (except for notices of defaults under this Note, the Security
Agreement and/or the Lease that Lender has specifically agreed to give pursuant
to the terms of this Note, the Security Agreement and/or Lease) and hereby
consent to any number of renewals or extensions

 

2

 

at any time in the payment of this Note.  No extension of time for payment of this Note made by any
agreement with any person now or hereafter liable for payment of this Note
shall operate to release, discharge, modify, change or affect the original
liability of Maker under this Note, either in whole or in part.  No delay or failure by Lender in exercising
any right, power, privilege or remedy under the Loan Documents or applicable
law shall be deemed to be a waiver of the same or any part thereof; nor shall
any single or partial exercise thereof or any failure to exercise the same in
any instance preclude any future exercise thereof, or exercise of any other
right, power, privilege or remedy, and the rights and remedies provided for
hereunder are cumulative and not exclusive of any other right or remedy
available at law or in equity.  Lender
may proceed against all or any of the Collateral or against any guarantor
hereof, or may proceed contemporaneously or in the first instance against
Maker, in such order and at such times following default hereunder as Lender
may determine in its sole discretion. 
All of the Obligations are absolute and unconditional, and shall not be
subject to any offset or deduction whatsoever. 
Maker waives any right to assert, by way of counterclaim or affirmative
defense in any action to enforce Maker’s obligations hereunder, any claim
whatsoever against the Lender of this Note, except for claims based solely on
Lender’s gross negligence or willful misconduct.

 

11.  The Loan Documents.  This Note is the Note referred to in the
Loan Documents.  Maker’s acknowledges
that payment and performance of all of the Obligations are secured by the
Collateral.

 

12.  Amendments; Notices.  This Note may not be changed orally, but
only by an agreement in writing signed by Maker and Lender.  All notices, requests and demands permitted
or required under the terms of this Note shall be in writing, and shall be
deemed to have been given when delivered by hand, when sent by facsimile
(transmission confirmed), 1 day after delivery to any national overnight
delivery service (delivery charges prepaid), or 3 days after deposit in the
U.S. mails (postage prepaid, certified and return receipt requested), and
addressed to the parties at their respective addresses appearing on the first
page hereof or to such other address as a party may designate in a written
notice to the other party given in accordance with this Section.  Notices to Maker shall be sent as aforesaid
to the attention of the Mr. Michael Furlong (or his successor as Senior
Director, Business Development), with a copy to Mr. Avery Catlin (or his
successor as Chief Financial Officer).

 

13.  Governing Law; Jurisdiction and Forum for
Enforcement.  This Note is executed
and delivered by Maker in Boston, Massachusetts and is intended to take effect
as a sealed instrument to be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, (without regard to conflicts of law
provisions).  In any action or
proceedings arising out of or relating to this Note or the interpretation or
enforcement thereof, Maker hereby absolutely and irrevocably (a) consents to
the application of the laws of the Commonwealth of Massachusetts (without
regard to conflicts of law provisions), and (b) agrees that the service thereof
may be made in the manner and to the addresses specified for notices in this
Note.  Anything hereinbefore to the
contrary notwithstanding, Lender may sue any Maker in the courts of any
country, state of the United States or place where Maker or any of its property
or assets may be found or in any other appropriate jurisdictions (including,
without limitation, the state and federal courts located in the Commonwealth of
Massachusetts), and Maker hereby waives any objection that it may have to the
location of any such court in which Lender has commenced any proceeding.  Maker specifically acknowledges that
application of Massachusetts law to any

 

3

 

action or proceedings arising out of or relating to this Note or the interpretation
or enforcement thereof constitutes a material inducement for Lender to accept
this Note and to enter into the Loan Documents.

 

14.  Severability; Usury.  If any provision of this Note shall be
determined to be invalid or unenforceable under law, such determination shall
not affect the validity or enforcement of the remaining provisions of this
Note.  Notwithstanding any provision
contained in this Note or in any Loan Document, the maximum amount of interest
and other charges in the nature thereof contracted for or payable shall not
exceed the maximum amount of interest and other charges allowable by law.  If the same shall be determined to exceed
such maximum amount, the same shall be deemed reduced to such maximum amount.

 

15.  WAIVER OF JURY TRIAL AND DAMAGES.  MAKER AND LENDER MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
JURISDICTION, COURT AND PROCEEDING WITH RESPECT TO, IN CONNECTION WITH, OR
ARISING OUT OF THIS NOTE, THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS OR ANY
INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO OR THERETO OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF LENDER RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF THIS NOTE
AND THE OTHER LOAN DOCUMENTS.   MAKER
AND LENDER AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT AS PROHIBITED BY LAW, MAKER WAIVES
ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL OR OTHER TYPE OF DAMAGES OTHER THAN, OR IN ADDITION
TO, ACTUAL DAMAGES.  MAKER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS.  MAKER ACKNOWLEDGES THAT THE FOREGOING WAIVERS
CONSTITUTE A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN DOCUMENTS
AND ACCEPT THIS NOTE.  BY EXECUTING AND
DELIVERING THIS NOTE, MAKER CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED
AND FREELY MADE.

 

(Remainder of page
intentionally left blank; signature page follows)

 

4

 

Executed as a
sealed instrument as of the date first set forth above.

 

 

	
  WITNESS:

  	
   

  	
  AVANT
  IMMUNOTHERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David T. Slatery

  	
   

  	
   

  	
  By:

  	
  /s/ Una S. Ryan

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  David T. Slatery

  	
   

  	
   

  	
  Una S. Ryan

  	
   

  
	
  President and C.E.O.

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
  (Printed Name and
  Title)

  	
   

  	
   

  	
  (Printed Name and
  Title)

  
													

 

5

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