Document:

tcon-ex102_471.htm

Exhibit 10.2

 

THIRD Amendment

to 

AMENDED AND RESTATED Loan and security agreement

This Third Amendment to Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into as of May 3, 2018, by and between Silicon Valley Bank (“Bank”) and TRACON Pharmaceuticals, Inc., a Delaware corporation (“Borrower”), whose address is 8910 University Center Lane, Suite 700, San Diego, CA 92122.

Recitals

A.Bank and Borrower have entered into that certain Amended and Restated Loan and Security Agreement dated as of May 13, 2015 (as the same has been and may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).  

B.Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.  

C.Borrower has requested that Bank amend the Loan Agreement to (i) make available to Borrower an additional term loan facility, and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.

D.Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

Agreement

Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1.Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.Amendments to Loan Agreement.

2.1Section 2.1.3 (Second Supplemental Growth Capital Loan).  The following new Section 2.1.3 is hereby added to Section 2.1:

2.1.3Second Supplemental Growth Capital Loan.

(a)Availability.  Subject to the terms and conditions of this Agreement, Bank agrees to make one (1) advance to Borrower (the “Second Supplemental Growth Capital Advance”) on or about the Third Amendment Date, in an aggregate amount equal to the Second Supplemental Growth Capital Loan Commitment, which amounts shall be used by Borrower to repay in full all amounts outstanding under the Supplemental Growth Capital Advance as of the Funding Date of the Second Supplemental Growth Capital Advance, including, without limitation, the Supplemental Final Payment, provided that no 

 

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Supplemental Prepayment Fee shall be due and payable in connection with such repayment.  After repayment, the Second Supplemental Growth Capital Advance may not be reborrowed.

(b)Repayment of Second Supplemental Growth Capital Advance.

(i)Interest-Only Payments.  For the Second Supplemental Growth Capital Advance, Borrower shall make monthly payments of interest-only commencing on the first (1st) Business Day of the first (1st) month following the month in which the Funding Date occurs with respect to the Second Supplemental Growth Capital Advance and continuing thereafter during the Second Supplemental Interest-Only Period, on the first (1st) Business Day of each successive month.

(ii)Principal and Interest Payments.  For the amount of the Second Supplemental Growth Capital Advance outstanding as of the last day of the Second Supplemental Interest-Only Period, Borrower shall make thirty (30) consecutive equal monthly payments of principal plus accrued but unpaid interest commencing on the first (1st) Business Day of the first (1st) month after the Second Supplemental Interest-Only Period (the “Second Supplemental Conversion Date”), in amounts that would fully amortize the Second Supplemental Growth Capital Advance, as of the Second Supplemental Conversion Date, over the Second Supplemental Repayment Period.  The Second Supplemental Final Payment and all unpaid principal and accrued and unpaid interest on the Second Supplemental Growth Capital Advance are due and payable in full on the Second Supplemental Growth Capital Maturity Date.

(c)Voluntary Prepayment.  Borrower shall have the option to prepay the Second Supplemental Growth Capital Advance in full, provided Borrower (i) shall provide written notice to Bank of its election to prepay the Second Supplemental Growth Capital Advance at least ten (10) days prior to such prepayment and (ii) pays, on the date of such prepayment, (A) all outstanding principal and accrued but unpaid interest, plus (B) the Second Supplemental Final Payment, plus (C) the Second Supplemental Prepayment Fee, plus (D) all other sums, including Bank Expenses, if any, that shall have become due and payable.

(d)Mandatory Prepayment Upon an Acceleration.  If the Second Supplemental Growth Capital Advance is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal and accrued but unpaid interest, plus (ii) the Second Supplemental Final Payment, plus (iii) the Second Supplemental Prepayment Fee, plus (iv) all other sums, including Bank Expenses, if any, that shall have become due and payable.

2.2Section 2.2 (Payment of Interest on the Credit Extensions).  Section 2.2(a) is amended by adding a new clause (iii) at the end thereof as follows:

(iii)Second Supplemental Growth Capital Advance.  Subject to Section 2.2(b), the principal amount outstanding for the Second Supplemental Growth Capital 

 

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Advance shall accrue interest at a fixed per annum rate equal to nine percent (9.00%), which shall be payable monthly.

 

2.3Section 6.2 (Financial Statements, Reports, Certificates).  Section 6.2 is amended by deleting the last “and” in clause (f), re-lettering clause (g) to make it a new clause (h), and adding the following new language as clause (g):

(g)Annual Audited Financial Statements.  As soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements (provided however, that Borrower's unqualified opinion on financial statements may contain a qualification as to going concern specific to Borrower’s current working capital, anticipated operating expenses and net losses and the uncertainties surrounding Borrower’s ability to raise additional capital raise for a period of one year following the date that the consolidated financial statements are issued) from an independent certified public accounting firm acceptable to Bank in its reasonable discretion, provided that Ernst & Young LLP and any other regional or nationally recognized certified public accounting firm shall be deemed to be acceptable to Bank; and

 

2.4Section 8.1 (Payment Default).  The first parenthetical in Section 8.1(b) is hereby amended by deleting the reference to “Growth Capital Maturity Date or Supplemental Growth Capital Maturity Date” and replacing it with “Second Supplemental Growth Capital Maturity Date”.

2.5Section 12.1 (Termination Prior to Maturity Date; Survival).  Section 12.1 is amended by deleting the reference to “the Growth Capital Maturity Date and/or the Supplemental Growth Capital Maturity Date by Borrower, in accordance with Section 2.1.1 and 2.1.2” and substituting in lieu thereof “the Second Supplemental Growth Capital Maturity Date by Borrower, in accordance with Section 2.1.3”.

2.6Section 13 (Definitions).  The following terms and their respective definitions set forth in Section 13.1 are amended in their entirety and replaced with the following:

“Credit Extension” is any Growth Capital Advance, Supplemental Growth Capital Advance, Second Supplemental Growth Capital Advance, or any other extension of credit by Bank for Borrower’s benefit under this Agreement.

 

“Warrant” is, collectively, (a) that certain Warrant to Purchase Stock dated as of November 14, 2013, executed by Borrower in favor of Bank, (b) that certain Warrant to Purchase Stock dated as of June 4, 2014, executed by Borrower in favor of Bank, (c) that certain Warrant to Purchase Stock dated as of May 13, 2015, executed by Borrower in favor of Bank, (d) that certain Warrant to Purchase Stock dated as of January 25, 2017 executed by Borrower in favor of Bank, and (e) that certain Warrant to Purchase Common Stock dated as of the Third Amendment Date executed by Borrower in favor of Bank.

 

 

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2.7Section 13 (Definitions).  The following terms and their respective definitions are hereby added to Section 13.1 in their appropriate alphabetical order:

“Second Supplemental Conversion Date” is defined in Section 2.1.3(b)(ii).

 

“Second Supplemental Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due in accordance with Section 2.1.3 above, equal to the Second Supplemental Growth Capital Loan Commitment multiplied by the Second Supplemental Final Payment Percentage.

“Second Supplemental Final Payment Percentage” is four percent (4.00%). 

“Second Supplemental Growth Capital Advance” is defined in Section 2.1.3(a).

 

“Second Supplemental Growth Capital Loan Commitment” is Seven Million Dollars ($7,000,000).

“Second Supplemental Growth Capital Maturity Date” is the first (1st) calendar day of the month that is twenty-nine (29) months from the Second Supplemental Conversion Date.

 

“Second Supplemental Interest-Only Period” means, for the Second Supplemental Growth Capital Advance, the period commencing on the first (1st) Business Day following the Funding Date of the Second Supplemental Growth Capital Advance and continuing through June 30, 2019, provided that, if Borrower delivers to Bank by no later than June 30, 2019, evidence that Borrower has (a) raised gross proceeds of at least Twenty Million Dollars ($20,000,000) pursuant to a bona fide equity financing, and (b) has obtained FDA IND approval to start a Phase 1 trial for TRC-694, the Second Supplemental Interest-Only Period shall be extended to November 30, 2019.

 

“Second Supplemental Prepayment Fee” shall be, in connection with any prepayment of the Second Supplemental Growth Capital Advance, an amount equal to (i) three percent (3%) of the outstanding principal balance of the Second Supplemental Growth Capital Advance if such prepayment occurs one (1) year or less after the Third Amendment Date, (ii) two percent (2%) of the outstanding principal balance of the Second Supplemental Growth Capital Advance if such prepayment occurs more than one (1) year and less than two (2) years after the Third Amendment Date, and (iii) one percent (1%) of the outstanding principal balance of the Second Supplemental Growth Capital Advance if such prepayment occurs two (2) years or more after the Third Amendment Date; provided that no Second Supplemental Prepayment Fee shall be charged if the Second Supplemental Growth Capital Advance is replaced with a new facility from Bank.

 

“Second Supplemental Repayment Period” is a period of time commencing on the Second Supplemental Conversion Date and ending on the Second Supplemental Growth Capital Maturity Date.

 

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“Third Amendment Date” is May 3, 2018.

 

2.8Exhibit D (Compliance Certificate).  Exhibit D to the Loan Agreement is amended in its entirety and replaced with Exhibit D attached hereto.

	
3.
	
Limitation of Amendments.

3.1The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

3.2This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

4.Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

4.1Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

4.2Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.3The organizational documents of Borrower most recently delivered to Bank remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

4.4The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized; 

4.5The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 

 

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4.6The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

4.7This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower 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.

5.Integration.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

6.Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

7.Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) the due execution and delivery to Bank of the Warrant to be issued on the date hereof, and (c) payment of Bank’s legal fees and expenses in connection with the negotiation and preparation of this Amendment.

[Signature page follows.]

 

 

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In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

		
	
BANK
	
BORROWER

	
 

Silicon Valley Bank

 

 

By:  _/s/ Igor DaCruz_____________

Name: _Igor DaCruz_____________

Title:  _Vice President____________
	
 

Tracon Pharmaceuticals, Inc.

 

 

By:  _/s/ Patricia L Bitar __________

Name: _Patricia L Bitar___________

Title:  _Chief Financial Officer _____

 

 

[signature page of Third Amendment to Amended and Restated Loan and Security Agreement]

 

EXHIBIT D

COMPLIANCE CERTIFICATE

TO:SILICON VALLEY BANKDate: ________________________

FROM:TRACON PHARMACEUTICALS, INC.

The undersigned authorized officer of TRACON PHARMACEUTICALS, INC. (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, except as noted below, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, have timely filed all required tax returns and reports or obtained extensions therefor, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, with respect to unaudited financial statements, for the absence of footnotes and subject to year-end adjustments.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

			
	
Please indicate compliance status by circling Yes/No under “Complies” column.

	
 

	
Reporting Covenant
	
Required
	
Complies

	
 
	
 
	
 

	
Monthly financial statements with 
Compliance Certificate
	
Upon request by Bank
	
Yes  No

	
Compliance Certificate
	
To be delivered with any financial statements delivered to Bank
	
Yes  No

	
Annual Board Approved Financial Projections
	
Within earlier of 7 days of approval or 60 days after FYE
	
Yes  No

	
Annual Audited Financial Statements
	
Within 180 days after FYE
	
Yes  No

	
10‐Q, 10‐K, 8-K, and any other material SEC filings
	
Within 5 days after filing with SEC (if applicable)
	
Yes   No

 

[Continued on following page]

 

 

 

 

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)

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TRACON PHARMACEUTICALS, INC.

By:______________________________

Name: ___________________________

Title: ____________________________
	
BANK USE ONLY

Received by: _____________________

authorized signer

Date: _________________________

Verified: ________________________

authorized signer

Date: _________________________

Compliance Status:Yes  NoEX-4.2

 Exhibit 4.2 

RESTATED CERTIFICATE OF INCORPORATION 

OF 
 EVELO BIOSCIENCES, INC. 

The name of the corporation is Evelo Biosciences, Inc., and the corporation was originally incorporated by the filing of its original
Certificate of Incorporation with the Secretary of State of the State of Delaware on May 6, 2014. This Restated Certificate of Incorporation of the corporation, which restates and integrates and also further amends the provisions of the
corporation’s Certificate of Incorporation, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and by the written consent of its stockholders in accordance with
Section 228 of the General Corporation Law of the State of Delaware. The Certificate of Incorporation of the corporation is hereby amended, integrated and restated to read in its entirety as follows: 

FIRST: The name of the Corporation is Evelo Biosciences, Inc. 

SECOND: The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at that address is The Corporation Trust Company. 

THIRD: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the State of Delaware. 
 FOURTH: The total number of
shares of all classes of stock which the Corporation shall have authority to issue is 210,000,000 shares, consisting of (a) 200,000,000 shares of Common Stock, $0.001 par value per share (“Common Stock”), and (b) 10,000,000 shares of
Preferred Stock, $0.001 par value per share (“Preferred Stock”). 
 The following is a statement of the designations and the
powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation. 

A. COMMON STOCK. 

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the
rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “Board of Directors”) upon any issuance of the Preferred Stock of any series. 

2. Voting. The holders of the Common Stock shall have voting rights at all meetings of stockholders, each such holder being
entitled to one vote for each share thereof held by such holder; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Restated Certificate of
Incorporation 

  
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(which, as used herein, shall mean the certificate of incorporation of the Corporation, as amended from time to time, including the terms of any certificate of designations of any series of
Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series,
to vote thereon pursuant to this Restated Certificate of Incorporation or the General Corporation Law of the State of Delaware. There shall be no cumulative voting. 

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware. 

3. Dividends. Dividends may be declared and paid on the Common Stock if, as and when determined by the Board of Directors
subject to any preferential dividend or other rights of any then outstanding Preferred Stock and to the requirements of applicable law. 
 4.
Liquidation. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders,
subject to any preferential or other rights of any then outstanding Preferred Stock. 
 B. PREFERRED STOCK. 

Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and
in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors as hereinafter provided. 

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with the General Corporation Law of
the State of Delaware, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the
fullest extent now or hereafter permitted by the General Corporation Law of the State of Delaware. The powers, preferences and relative, participating, optional and other special rights of each such series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Without limiting the generality of the foregoing, the resolution or resolutions providing for the issuance of any series of
Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law. 

  
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 Subject to the rights of the holders of any series of Preferred Stock pursuant to the terms of
this Restated Certificate of Incorporation or any resolution or resolutions providing for the issuance of such series of stock adopted by the Board of Directors, the number of authorized shares of Preferred Stock may be increased or decreased (but
not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law
of the State of Delaware. 
 FIFTH: Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute and this Restated Certificate of Incorporation, and all rights conferred upon stockholders, directors or any other
persons herein are granted subject to this reservation. 
 SIXTH: In furtherance and not in limitation of the powers conferred upon it
by the General Corporation Law of the State of Delaware, and subject to the terms of any series of Preferred Stock, the Board of Directors shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation. The stockholders may
not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith, unless such action is approved, in addition to any other vote required by this Restated Certificate of Incorporation, by the affirmative
vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon. Notwithstanding any other provisions of law, this
Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds
in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article SIXTH. 

SEVENTH: Except to the extent that the General Corporation Law of the State of Delaware prohibits the elimination or limitation of
liability of directors for breaches of fiduciary duty, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any
provision of law imposing such liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal. If the General Corporation Law of the State of Delaware is amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware as so amended.

EIGHTH: This Article EIGHTH is inserted for the management of the business and for the conduct of the affairs of the Corporation. 

1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of
Directors. 

  
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 2. Number of Directors; Election of Directors. Subject to the rights of holders
of any series of Preferred Stock to elect directors, the number of directors of the Corporation shall be established from time to time by the Board of Directors. Election of directors need not be by written ballot, except as and to the extent
provided in the Bylaws of the Corporation. 
 3. Classes of Directors. Subject to the rights of holders of any series of
Preferred Stock to elect directors, the Board of Directors shall be and is divided into three classes, designated as Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The Board of Directors is authorized to assign members of the Board of Directors to Class I, Class II or
Class III. 
 4. Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors,
each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to
Class I shall serve for a term expiring at the Corporation’s first annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; each director initially assigned to Class II shall serve for
a term expiring at the Corporation’s second annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; and each director initially assigned to Class III shall serve for a term expiring at the
Corporation’s third annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; provided further, that the term of each director shall continue until the election and qualification of
his or her successor and be subject to his or her earlier death, resignation or removal. 
 5. Quorum. The greater of (a) a
majority of the directors at any time in office and (b) one-third of the number of directors fixed pursuant to Section 2 of this Article EIGHTH shall constitute a quorum of the Board of
Directors. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a
quorum shall be present. 
 6. Action at Meeting. Every act or decision done or made by a majority of the directors present at a
meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by this Restated Certificate of Incorporation. 

7. Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the Corporation may be removed but only
for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote at an election of directors. 

8. Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly created directorship in the
Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders, unless the Board of

  
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Directors determines by resolution that any such vacancy or newly created directorship shall be filled by the stockholders. A director elected to fill a vacancy shall hold office until the
next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal. 

9. Stockholder Nominations and Introduction of Business, Etc. Advance notice of stockholder nominations for election of
directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws of the Corporation. 

10. Amendments to Article. Notwithstanding any other provisions of law, this Restated Certificate of Incorporation or the
Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of
capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article EIGHTH. 

NINTH: No action that is required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of
stockholders may be effected by written consent of stockholders in lieu of a meeting. Notwithstanding any other provisions of law, this Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a
lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon
shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article NINTH. 
 TENTH: Special meetings of
stockholders for any purpose or purposes may be called at any time only by the Board of Directors, the chairperson of the Board of Directors, the chief executive officer or the president (in the absence of a chief executive officer) of the
Corporation, and may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of meeting. Notwithstanding any other provisions
of law, this Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least
two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article
TENTH. 
 ELEVENTH: Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State
of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of fiduciary duty owed
by any director, officer, employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of
Delaware or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware or (d) any action asserting a claim governed by the internal affairs doctrine, in each

  
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case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided that, if and only if the Court of Chancery of the State of
Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. To the fullest extent permitted by applicable law, any person or entity
purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article ELEVENTH. Notwithstanding any other provisions of law, this
Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds
in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article ELEVENTH. If any provision or provisions of this
Article ELEVENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such
provisions in any other circumstance and of the remaining provisions of this Article ELEVENTH (including, without limitation, each portion of any sentence of this Article ELEVENTH containing any such provision held to be invalid, illegal or
unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

  
 6 

 IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates, integrates and
amends the certificate of incorporation of the Corporation, and which has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, has been executed by its duly authorized officer this
         day of                 , 2018. 

 

					
	EVELO BIOSCIENCES, INC.
		
	By:	 	  

		 	Name: Balkrishan (Simba) Gill, Ph.D.
		 	Title:   President and Chief Executive Officer

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