Document:

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

EXHIBIT 10.27

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT 

This Third Amendment to Loan and Security Agreement (the "Amendment"), is entered into as of February 28, 2013, by and between SQUARE 1 BANK (the "Bank") and HEAT BIOLOGICS, INC. and HEAT BIOLOGICS I, INC. (collectively known as the "Borrower"). 

RECITALS 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of August 7, 2012 (as amended from time to time, the "Agreement"). The parties desire to amend the Agreement in accordance with the terms of this Amendment. 

NOW, THEREFORE, the parties agree as follows: 

1) 

Bank hereby waives Borrower's existing violation of the Equity Milestone covenant, as more particularly described in Section 6.7(b) of the Agreement (as in effect immediately prior to the date of this Amendment). 

2) 

Section 2.1 (b)(iii) of the Agreement is hereby amended and restated, as follows: 

“(iii) Tranche B Term Loan. Subject to and upon the terms and conditions of this Agreement, Bank agrees to make one (1) term loan to Borrower in an aggregate principal amount not to exceed One Million Dollars ($1,000,000) (the "Tranche B Term Loan", and together with the Tranche A Term Loans, the "Term Loans"). The amount of the Tranche B Term Loan shall be a multiple of $100,000. Borrower may request the Tranche B Term Loan at any time from the day on which Borrower achieves the Tranche B Equity Trigger Event until the Tranche B Term Loan Availability End Date. The proceeds of the Tranche B Term Loan shall be used for general working capital purposes and for capital expenditures.” 

3) 

Section 6.7 of the Agreement is hereby amended and restated, as follows: 

“6.7 Financial Covenants. Borrower shall at all times maintain the following financial ratios and covenants: 

(a) Until Borrower achieves the Equity Milestone set forth in Section 6.7(b) below, Borrower shall maintain the Cash Burn covenant set f0l1h in clause (i) below. Beginning on the date on which Borrower achieves the Equity Milestone, and at all times thereafter, Borrower shall instead maintain the Minimum Cash covenant set forrth in clause (ii) below. 

(i) Cash Burn. Measured monthly as of the last day of each month, and calculated on an average trailing-three-months basis, a Cash Burn of not more than $225,000. 

(ii) Minim um Cash. A balance of Cash at Bank of not less than $1,000,000, monitored on a daily basis. Notwithstanding the foregoing, if Borrower both (A) achieves the Performance Milestone set forth in Section 6.7(d) below and (B) delivers to Bank a term sheet or funding plan in form and content acceptable to Bank, then the foregoing minimum Cash at Bank level shall instead be $500,000. 

(b) Equity Milestone. After February 15, 2013 but on or before March 15, 2013, Borrower shall have received at least $5,000,000 in net Cash proceeds from the sale or issuance of Borrower's equity securities to investors acceptable to Bank. 

(c) Warrant Milestone. Upon requesting the Tranche B Term Loan, Borrower shall deliver to Bank a fully executed warrant in substantially the form of Exhibit E attached hereto. The initial exercise price of such warrant shall be the lowest price per share paid by investors in Borrower's most recent issuance, prior to the date of such request, of Borrower's preferred equity securities. 

(d) Performance Milestone. On or before September 1, 2013, Borrower shall have enrolled at least one patient in Borrower's bladder cancer clinical trial. 

In addition to the foregoing covenants, Bank shall in the future set milestone covenants based upon Borrower's Board-approved annual budget and product timeline, which shall be provided to Bank pursuant to Section 6.2(iii) herein, and incorporated into this Agreement through a written amendment, which Bank and Borrower hereby agree to execute promptly.” 

4) 

The following defined term is hereby added to Exhibit A to the Agreement, as follows: 

"Tranche B Term Loan Availability End Date" means August 7, 2013.” 

5) 

The following defined term in Exhibit A to the Agreement is hereby amended and restated, as follows: 

"Tranche B Equity Trigger Event" means the receipt by Borrower, after February 15, 2013 but on or before March 15, 2013, of net Cash proceeds of at least $5,000,000 from the sale or issuance of Borrower's equity securities to investors acceptable to Bank.” 

6) 

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

7) 

Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment. 

8) 

This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. 

9) 

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

a) 

this Amendment, duly executed by Borrower; 

b) 

payment of all Bank Expenses, including Bank's expenses for the documentation of this Amendment and any related documents, which may be debited from any of Borrower's accounts; and 

c) 

such other documents and completion of such other matters, as Bank may reasonably deem necessary or appropriate.FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

EXHIBIT 10.28

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT 

This Fourth Amendment to Loan and Security Agreement (the "Amendment"), is entered into as of March 19, 2013, by and between SQUARE 1 BANK (the "Bank") and HEAT BIOLOGICS, INC. and HEAT BIOLOGICS 1, INC. (collectively known as the "Borrower"). 

RECITALS

Borrower and Bank are patties to that certain Loan and Security Agreement dated as of August 7, 2012 (as amended from time to time, the "Agreement"). The parties desire to amend the Agreement in accordance with the terms of this Amendment. 

NOW, THEREFORE, the parties agree as follows: 

1) 

Bank hereby waives Borrower's violation of the Equity Milestone covenant, as more particularly described in Section 6.7(b) of the Agreement (as in effect immediately prior to the date of this Amendment), occurring on or before the date of this Amendment. 

2) 

Section 6.7(b) of the Agreement is hereby amended and restated, as follows: 

“(b) Equity Milestone. After February 15, 2013 but on or before March 31, 2013, Borrower shall have received at least $4,500,000 in net Cash proceeds from the sale or issuance of Borrower's equity securities to investors acceptable to Bank”. 

3) 

The following defined term in Exhibit A to the Agreement is hereby amended and restated, as follows: 

"Tranche B Equity Trigger Event" means the receipt by Borrower, after February 15, 2013 but on or before March 31, 2013, of net Cash proceeds of at least $4,500,000 from the sale or issuance of Borrower's equity securities to investors acceptable to Bank.” 

4) 

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

5) 

Borrower represents and warrants that the representations and warranties contained in the Agreement are time and correct as of the date of this Amendment. 

6) 

This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one investment to Heat Biologics, Inc. -4th Amendment to LSA.

7) 

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

a) 

this Amendment, duly executed by Borrower; 

b) 

payment of a $2,500 amendment fee, which may be debited from any of Borrower's accounts; 

c) 

payment of all Bank Expenses, including Bank's expenses for the documentation of this Amendment and any related documents, which may be debited from any of Borrower's accounts; and 

d) 

such other documents and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 

[Signature Page to Follow] 

Heal Biologics, II/c. -4th Amendment to LSA

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

						
	HEAT BIOLOGICS, INC. 

	 
	 
	SQUARE 1 BANK 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	By:

	/s/ Jeffrey Wolf

	 
	 
	By:

	/s/ 

	Name:

	Jeffrey Wolf

	 
	 
	Name:

	 

	Title:

	President

	 
	 
	Title:LICENSE AGREEMENT

EXHIBIT 10.29

OPTION CONTRACT FOR EXCLUSIVE LICENSE

This Option Contract for Exclusive License (the “Contract” or the “Agreement”) is entered into and made effective the 1st day of April, 2013 (the "Effective Date") by and between UNIVERSITY OF MIAMI, a Florida not-for-profit corporation, having business office at 1400 NW 10th Ave, Suite 1200 (R64), Miami, Florida 33136 (hereinafter referred to as "University") and Heat Biologics, Inc., a Delaware  corporation, whose principal place of business is at 100 Europa Drive, Suite 420, Chapel Hill, NC 27517  (hereinafter referred to as "Company").

RECITALS

WHEREAS, the University owns the “Intellectual Property,” more specifically described as follows:

(a)

United States Patent Application No. 12/303,036, entitled “Perforin-2 Proteins”; filed December 2, 2008; and 

(b)

Canadian Patent Application No. 2,653,966, entitled “Perforin-2 Proteins”; filed November 28, 2008; and 

(c)

European Patent Application No. 07798029.0 entitled “Perforin-2 Proteins”; filed December 12, 2008; and 

(d)

The United States Provisional Patent Application No. 61/637,455, entitled “Perforin 2 Defense Against Invasive and Multi-drug Resistant Bacteria”, filed April 24, 2012; and

(e)

all United States patents and foreign patents and patent applications based on these applications;  all divisionals, continuations of the foregoing; and those claims in continuations-in-part of the foregoing that are described in sufficient detail in applications set forth in (a)-(d) above to meet the requirements of 35 U.S.C. 112¶1; and any re-examinations or reissues of the foregoing [(a)-(e) collectively referred to herein as the “Intellectual Property.”

WHEREAS, Company desires to procure from University an option to license the Intellectual Property in order for Company to develop products relating to Perforin-2 (the “Company Business”); and

WHEREAS, the University desires to grant to Company such option upon the terms and conditions as are hereinafter set forth;  

NOW, THEREFORE, in consideration of the good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby covenant and agree as follows:

1.

Recitals.  The above recitals are true and correct and are incorporated herein by reference.

2.

Grant of Option.  University, in consideration of a non-refundable payment in the amount of two thousand dollars ($2000.00) ("Option Fee") to be paid by Company to University within thirty (30) days from the Execution Date of this Agreement, receipt of which is acknowledged by University, grants to Company during the Option Period an exclusive option for the exclusive right to enter into an agreement granting Company an exclusive, worldwide, license in the Option Field for the Intellectual Property, pursuant to commercially reasonable terms and conditions. As partial consideration of granting the Option, Company shall pay University another non-refundable payment in the amount of three thousand dollars ($3000.00) as reimbursement of past patent expenditure incurred by University in relation to the preparing and filing the United States Provisional Patent Application No. 61/637,455, entitled “Perforin 2 Defense Against Invasive and Multi-drug Resistant Bacteria”. The “Option Field” shall mean all fields except for the use of perforin 2 knock-out mice as research tools or research reagents.

3.

Option Period.  The term of this option shall be for a period of twelve (12) months beginning on the Execution Date of this Agreement (“Option Term”).  The term of this option shall be extended and remain in effect as long as Company is paying patent expenses directly related to the Intellectual Property and/or sponsoring research directly related to Intellectual Property at University under a separate agreement.  This Option and the right to enter into the exclusive License Agreement hereunder shall expire and become void at the expiration of the Option Term and all sums paid hereunder by Company to University shall be retained by University as full consideration for the Option.  

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During the Option Term, University shall make reasonable and diligent efforts in seeking the filing, prosecution and maintenance of patents in foreign countries.  Company shall advise University in such filing, prosecution and maintenance in foreign countries provided however, that the decision to file, prosecute, and maintain patents in foreign countries shall be in the sole and absolute discretion of the University, and that Company agrees to promptly pay University’s patent counsel (currently Alston & Bird) directly for all costs incurred by University directly related to the filing, prosecution and maintenance of patents in foreign countries during the Option Term.

4.

Milestones.  Company shall prepare a commercialization plan and a detailed product development business plan of the Company Business for submission to University no later than three (3) months from the execution date of the license agreement.  Furthermore, during the Option Term, Company shall provide annual progress reports to University indicating the Company’s fundraising activities if so requested by the University.

5.

Default by Company.  Should Company default under its obligations set forth in Paragraph 4 hereunder, University, after first giving Company sixty (60) days from delivery of a written notice to cure such default, at its sole option, may, at University’s sole discretion terminate this Option Agreement and neither party shall have any further liability to the other party. 

6.

Method of Exercising Option. If Company shall elect to exercise the Option, then Company shall give written notice of the election any time during the Option Term by delivering to University a duly executed Notice of Exercise (the “Exercise Notice”). 

7.

 Notices.  All notices provided for herein shall be deemed to have been duly given if and when sent by United States first class, certified mail with proper and sufficient postage affixed or by overnight mail, properly addressed to the party for whom intended at the party's below listed address, or when delivered personally to such party.

To University:

To Company:

University of Miami

Heat Biologics, Inc.

Attn: Director

Attn: 

CEO

Intellectual Property Strategy and Licensing

100 Europa Drive, Suite 420

1400 NW 10th Avenue, Room 1200, 

Chapel Hill, NC 27517

Miami, Florida 33136

8.

Paragraph Headings.  The section and paragraph headings herein contained are for the purposes of identification only and shall not be considered in construing this Contract.

9.

Amendment.  No modification or amendment of this Contract shall be of any force or effect unless in writing executed by both University and Company.

10.

Governing Law.  This Contract shall be interpreted in accordance with the laws of the State of Florida, and exclusive venue shall be in the courts located in Miami-Dade County Florida.

11.

Computation of Time.  Any time period provided for in this Contract which ends on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. on the next full Business Day.  

12.

Successors and Assigns.  This Contract shall inure to the benefit of and be binding upon the permitted successors and assigns of the parties hereto.

13.

Assignment and Delegation.  Neither party may assign any rights or delegate any obligations under this Agreement without the written consent of the other party, except that Company may assign this agreement to a subsidiary.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized to be effective as of the Effective Date.

					
	UNIVERSITY OF MIAMI

	 
	HEAT BIOLOGICS, INC.

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:

	/s/ Dr. Norma Kenyon

	 
	By:

	/s/ Jeffrey Wolf

	NAME:

	Dr. Norma Kenyon

	 
	NAME:

	J effrey Wolf

	TITLE:

	Vice Provost of Innovation

	 
	TITLE:

	P resident and CEO

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Date:

	March 26, 2013

	 
	Date:

	April 3, 2013

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