Document:

alpinesvbarloan

                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT          THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated  as of  August 26, 2019 (the “Effective Date”) among SILICON VALLEY BANK, a California corporation (“Bank”),  ALPINE  IMMUNE  SCIENCES,  INC.,  a  Delaware  corporation  (“ALPN”), and AIS OPERATING CO., INC., a  Delaware  corporation  (“AIS”,  and  together  with  ALPN,  jointly  and  severally,  individually  and  collectively,  “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank.                                              RECITALS          A.      Bank  and  AIS   previously  entered  into  that  certain  Loan  and  Security  Agreement  dated  as  of  December 16, 2016 (as the same has been amended, modified, supplemented, renewed, or otherwise modified, from  to  time,  the  “Prior  Loan  Agreement”).   Pursuant  to  the  Prior  Loan  Agreement,  Bank  made  certain  credit  accommodations available to AIS, including a term loan facility in the aggregate original principal amount of up to  Five Million Dollars ($5,000,000) (the “Existing Term Loan”).          B.      Borrower has requested that Bank, and Bank has agreed to, replace, amend, and restate the Prior  Loan Agreement in its entirety pursuant to this Agreement.                                            AGREEMENT         The parties hereby agree that the Prior Loan Agreement is hereby amended, restated, and replaced in its  entirety as follows:          1.      ACCOUNTING AND OTHER TERMS          Accounting terms not defined in this Agreement shall be construed following GAAP and calculations and  determinations must be made following GAAP; except with respect to unaudited financial statements (i) for non- compliance with FAS 123R and (ii) for the absence of footnotes and subject to year-end audit adjustments; provided  that if at any time any change in GAAP would affect the computation of any covenant or requirement set forth in any  Loan Document, and either Borrower or Bank shall so request, Borrower and Bank shall negotiate in good faith to  amend such covenant or requirement to preserve the original intent thereof in light of such change in GAAP; provided,  further, that, until so amended (a) such covenant or requirement shall continue to be computed in accordance with  GAAP prior to such change therein and (b) Borrower shall provide Bank financial statements and other documents  required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations  of such ratio or requirement made before and after giving effect to such change in GAAP; provided, further, that all  obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the  issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the  “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions, calculations  and covenants for purposes of this Agreement (other than for purposes of the delivery of financial statements prepared  in  accordance  with  GAAP)  whether  or  not  such  operating  lease  obligations  were  in  effect  on  such  date,  notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive  basis or otherwise) to be treated as capitalized lease obligations in accordance with GAAP.  Notwithstanding the  foregoing, all financial covenant calculations, if any,  shall be computed with respect to Borrower only, and not on a  consolidated basis.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in  Section 13.  All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided  by the Code to the extent such terms are defined therein.          2.      LOAN AND TERMS OF PAYMENT          2.1     Promise to Pay.  Borrower hereby, jointly and severally, unconditionally promises to pay Bank the  outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in  accordance with this Agreement.                                                    1  39271280 

 

       2.2     Outstanding Obligations under Existing Term Loan Facility. Borrower represents and warrants  to Bank that as of the Effective Date, the outstanding principal balance of the Existing Term Loan is Two Million Six  Hundred  Sixty-Six  Thousand  Six  Hundred  Sixty  Six  Dollars  and  Sixty-Seven  Cents  ($2,666,666.67).   Borrower  represents and warrants to Bank that all of such sum is due and owing Bank, without offset or defense of any kind or  nature and in the event Borrower has any offsets or defenses thereto, Borrower hereby irrevocably waives all such  offsets and defenses. Borrower acknowledges and agrees that there is  no further availability to borrow under the  Existing Term Loan and that the provisions of this Agreement and the Loan Documents shall supersede all prior  agreements with respect to the Existing Term Loan.  On the Effective Date, Borrower shall use the proceeds of the  initial Term Loan Advance to repay in full all of the Obligations owing to Bank under the Existing Term Loan Facility,  including but not limited to the Existing Term Loan Final Payment.          2.3     Term Loan.                 (a)    Availability.  Subject to the terms and conditions of this Agreement, Borrower may request  that  Bank  make  certain  term  loan  advances  (each,  a  “Term  Loan  Advance”  and,  collectively,  the  “Term  Loan  Advances”) in three (3) tranches in an aggregate original principal amount not to exceed Fifteen Million Dollars  ($15,000,000), as follows:  (i) the first (1st) tranche shall be made available to Borrower on or about the Effective Date  in a single advance in the aggregate original principal amount not to exceed Five Million Dollars ($5,000,000) (the  “Tranche One Term Loan Advance”), (ii) the second (2nd) tranche shall be available to Borrower from the Effective  Date through the Tranche Two Commitment Termination Date in multiple advances in the aggregate original principal  amount  not  to  exceed  Five  Million  Dollars  ($5,000,000)  (each,  a  “Tranche  Two  Term  Loan  Advance”),  and  (iii) provided that Borrower has achieved the Tranche Three Milestone, the third (3rd) tranche shall be available to  Borrower  from  the  date  on  which  Borrower  achieves  the  Tranche  Three  Milestone  through  the  Tranche  Three  Commitment Termination Date in multiple advances in the aggregate original principal amount not to exceed Five  Million Dollars ($5,000,000) (each, a “Tranche Three Term Loan Advance”).  Each Term Loan Advance, other  than the final Term Loan Advance, must be in an amount of not less than Five Hundred Thousand Dollars ($500,000).   After repayment, no Term Loan Advance may be re-borrowed.                  (b)    Repayment.                         (i)    Interest  Only  Payments.  For  each  Term  Loan  Advance,  Borrower  shall  make         monthly payments of accrued interest-only commencing on the first (1st) calendar day of the first (1st) month         following  the  month  in  which  the  Funding  Date  occurs  with  respect  to  such  Term  Loan  Advance  and         continuing thereafter during the Interest-Only Period on the first (1st) calendar day of each successive month.                         (ii)   Principal and Interest Payments.  For each Term Loan Advance, commencing on         the Term Loan Amortization Date and continuing on the first (1st) calendar day of each month thereafter,         Borrower shall make the Applicable Number of consecutive equal monthly payments of principal each in an         amount which would fully amortize the outstanding Term Loan Advances, as of the Term Loan Amortization         Date, plus accrued interest. All unpaid principal and accrued and unpaid interest on the Term Loan Advances         is due and payable in full on the Term Loan Maturity Date.                   (c)    Permitted Prepayment.  Borrower shall have the option to prepay all, but not less than all,  of the Term Loan Advances, provided Borrower (i) delivers written notice to Bank of its election to prepay the Term  Loan Advances at least three (3) days prior to such prepayment, and (ii) pays, on the date of such prepayment (A) the  outstanding principal plus accrued and unpaid interest with respect to the Term Loan Advances, (B) the Prepayment  Fee, (C) the Final Payment, and (D) all other sums, if any, that shall have become due and payable with respect to the  Term Loan Advances, including interest at the Default Rate with respect to any past due amounts.                  (d)    Mandatory Prepayment Upon an Acceleration.  If the Term Loan Advances are accelerated  by Bank following the occurrence and during the continuance of an Event of Default, Borrower shall immediately pay  to Bank an amount equal to the sum of (i) all outstanding principal plus accrued and unpaid interest with respect to  the Term Loan Advances, (ii) the Prepayment Fee, (iii) the Final Payment, and (iv) all other sums, if any, that shall  have become due and payable with respect to the Term Loan Advances, including interest at the Default Rate with  respect to any past due amounts.                                                   2  39271280 

 

       2.4     Payment of Interest on the Credit Extensions.                  (a)    Interest Rate.  Subject to Section 2.4(b), the principal amount outstanding under each Term  Loan Advance shall accrue interest at a floating per annum rate equal the greater of (A) one-quarter of one percent  (0.25%) above the Prime Rate and (B) five and three-quarters of one percent (5.75%), which interest shall be payable  monthly in accordance with Section 2.4(d) below.                  (b)    Default Rate.  Immediately upon the occurrence and during the continuance of an Event of  Default, Obligations shall bear interest at a rate per annum which is four percent (4.0%) above the rate that is otherwise  applicable thereto (the “Default Rate”).  Fees and expenses which are required to be paid by Borrower pursuant to  the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until  paid at a rate equal to the highest rate applicable to the Obligations.  Payment or acceptance of the increased interest  rate provided in this Section 2.4(b) is not a permitted alternative to timely payment and shall not constitute a waiver  of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.                  (c)    Adjustment to Interest Rate.  Changes to the interest rate of any Credit Extension based on  changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of  any such change.                  (d)    Payment; Interest Computation.  Interest is payable monthly on the Payment Date of each  month and shall be computed on the basis of a 360-day year for the actual number of days elapsed.  In computing  interest, (i) all payments received after 12:00 p.m. Pacific time on any day shall be deemed received at the opening of  business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the  date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which  it is made, such day shall be included in computing interest on such Credit Extension.           2.5     Fees.  Borrower shall pay to Bank:                   (a)    Good Faith Deposit.  Borrower has paid to Bank a deposit of Twenty Thousand Dollars  ($20,000) (the “Good Faith Deposit”) to initiate Bank’s due diligence review process.  Any portion of the Good Faith  Deposit not utilized to pay Bank Expenses on the Effective Date will be deposited into Borrower’s Designated Deposit  Account;                  (b)    Prepayment Fee.  The Prepayment Fee, when due hereunder;                  (c)    Final Payment.  The Final Payment, when due hereunder;                  (d)    Existing Term Loan Final Payment. The Existing Term Loan Final Payment, when due  hereunder;                  (e)    Bank Expenses.  All Bank Expenses (including reasonable attorneys’ fees and expenses  for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due (or, if  no stated due date, upon demand by Bank).                  (f)    Fees Fully Earned.  Unless otherwise provided in this Agreement or in a separate writing  by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this  Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s obligation  to make loans and advances hereunder.  Bank may deduct amounts owing by Borrower under the clauses of this  Section 2.5 pursuant to the terms of Section 2.6(c).  Bank shall provide Borrower written notice of deductions made  from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.5.          2.6     Payments; Application of Payments; Debit of Accounts.                  (a)    All  payments  to  be  made  by  Borrower  under  any  Loan  Document  shall  be  made  in  immediately available funds in Dollars, without setoff or counterclaim, before 12:00 p.m. Pacific time on the date                                                   3  39271280 

 

when due.  Payments of principal and/or interest received after 12:00 p.m. Pacific time are considered received at the  opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the  payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue  until paid.                  (b)    Bank has the exclusive right to determine the order and manner in which all payments with  respect to the Obligations may be applied.  Borrower shall have no right to specify the order or the accounts to which  Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank  under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.                  (c)    Bank  may debit any of Borrower’s deposit accounts, including the Designated Deposit  Account, for principal and interest payments or any other amounts Borrower owes Bank when due.  These debits shall  not constitute a set-off.          2.7     Withholding.  Payments received by Bank from Borrower under this Agreement will be made free  and  clear  of  and  without  deduction  for  any  and  all  present  or  future  taxes,  levies,  imposts,  duties,  deductions,  withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest,  additions to tax or penalties applicable thereto).  Specifically, however, if at any time any Governmental Authority,  applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from  any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and agrees that the amount  due from Borrower  with respect to such payment or other sum payable hereunder will be increased to the extent  necessary to ensure that, after the making of such required withholding or deduction, Bank receives a net sum equal  to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the  full amount withheld or deducted to the relevant Governmental Authority.  Borrower will, upon request, furnish Bank  with proof reasonably satisfactory to Bank indicating that Borrower has made such withholding payment; provided,  however,  that  Borrower  need  not  make  any  withholding  payment  if  the  amount  or  validity  of  such  withholding  payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded  or reserved against by Borrower.  The agreements and obligations of Borrower contained in this Section 2.7 shall  survive the termination of this Agreement.         3.      CONDITIONS OF LOANS          3.1     Conditions Precedent to Initial Credit Extension.  Bank’s obligation to make the initial Credit  Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to  Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate,  including, without limitation:                  (a)    duly executed signatures to the Loan Documents;                  (b)    duly executed original signatures to the Effective Date Warrant, together with copies of  Borrower’s equity documents;                  (c)    the Operating Documents and long-form good standing certificates of Borrower certified  by the Secretary of State (or equivalent agency) of Borrower’s jurisdiction of organization or formation and each  jurisdiction in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior  to the Effective Date;                  (d)    a  secretary’s  certificate  of  Borrower  with  respect  to  such  Borrower’s  Operating  Documents,  incumbency,  specimen  signatures  and  resolutions  authorizing  the  execution  and  delivery  of  this  Agreement and the other Loan Documents to which it is a party;                  (e)    duly executed signatures to the completed Borrowing Resolutions for Borrower;                                                    4  39271280 

 

               (f)    certified copies, dated as of a recent date, of financing statement searches, as Bank may  request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any  such financing statements constitute Permitted Liens;                  (g)    the Perfection Certificate of Borrower, together with the duly executed original signature  thereto; and                  (h)    payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof.          3.2     Conditions  Precedent  to  all  Credit  Extensions.   Bank’s  obligations  to  make  each  Credit  Extension, including the initial Credit Extension, is subject to the following conditions precedent:                  (a)    timely receipt of an executed Payment/Advance Form and any materials and documents  required by Section 3.4;                  (b)    the representations and warranties in this Agreement shall be true, accurate, and complete  in all material respects on the date of the Payment/Advance Form, and on the Funding Date of each Credit Extension;  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, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each  Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this  Agreement  remain  true,  accurate,  and  complete  in  all  material  respects;  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; and                  (c)    Bank determines to its satisfaction that there has not been any material impairment in the  general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations,  or any  material adverse deviation by Borrower from the  most recent business plan of Borrower presented to and  accepted by Bank.          3.3     Covenant to Deliver.                 (a)     Except as otherwise provided in Section 3.3(b), Borrower agrees to deliver to Bank each  item  required  to  be  delivered  to  Bank  under  this  Agreement  as  a  condition  precedent  to  any  Credit  Extension.   Borrower  expressly  agrees  that  a  Credit  Extension  made  prior  to  the  receipt  by  Bank  of  any  such  item  shall  not  constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in  the absence of a required item shall be in Bank’s sole discretion.                  (b)    Unless otherwise provided in writing, Borrower shall deliver to Bank, within thirty (30)  days after the Effective Date, evidence that the insurance policies and endorsements required by Section 6.6 hereof  are in full force and effect, together with appropriate evidence showing lender loss payable, waiver of subrogation and  additional insured clauses or endorsements in favor of Bank.          3.4     Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to  the making of a Term Loan Advance set forth in this Agreement, to obtain a Term Loan Advance, Borrower (via an  individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable) by electronic  mail by 12:00 noon Pacific time on the Funding Date of the Term Loan Advance.  Such notice shall be made by  Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online  banking program, then such notice shall be in a written format acceptable to Bank that is executed by an Authorized  Signer.  Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer may  provide such notices and request Term Loan Advances.  In connection with such notification, Borrower must promptly  deliver to Bank by electronic mail or through Bank’s online banking program a completed Payment/Advance Form  executed by an Authorized Signer.  Bank shall credit proceeds of any Term Loan Advance to the Designated Deposit                                                   5  39271280 

 

Account.  Bank may make Term Loan Advances under this Agreement based on instructions from an Authorized  Signer or without instructions if the Term Loan Advances are necessary to meet Obligations which have become due.         4.      CREATION OF SECURITY INTEREST          4.1     Grant of Security Interest.  Borrower hereby grants Bank, to secure the payment and performance  in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located,  whether now owned or hereafter acquired or arising, and all proceeds and products thereof.            Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services  Agreements with Bank.  Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts  Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and  Bank to have all such Obligations secured by the first priority perfected security interest in the Collateral granted  herein (subject only to Permitted Liens that have superior priority to Bank’s Lien under this Agreement).          If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than  inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of the Obligations (other than  inchoate indemnity obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank  shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to  Borrower.   Bank  shall  cooperate  in  good  faith  and  shall  take  all  actions  reasonably  requested  by  Borrower  to  memorialize the release of its Liens in the Collateral, including, but not limited to, the filing of UCC-3 financing  statements.  In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are  satisfied in full, and (y) this Agreement is terminated, Bank shall terminate the security interest granted herein upon  Borrower providing cash collateral acceptable to Bank in its good faith business judgment for Bank Services, if any.   In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral  in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent  (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten  percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and  costs due or to become due in connection therewith (as estimated by Bank in its business judgment), to secure all of  the Obligations relating to such Letters of Credit.          4.2     Priority  of  Security  Interest.   Borrower  represents,  warrants,  and  covenants  that  the  security  interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral  (subject only to Permitted Liens that have superior priority to Bank’s Lien under this Agreement).  If Borrower shall  acquire a commercial tort claim with demand for recovery exceeding Two Hundred Thousand Dollars ($200,000),  Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank  in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such  writing to be in form and substance reasonably satisfactory to Bank.          4.3     Authorization to File Financing Statements.  Borrower hereby authorizes Bank to file financing  statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights  hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be  deemed to violate the rights of Bank under the Code.           5.      REPRESENTATIONS AND WARRANTIES          Borrower represents and warrants as follows:          5.1     Due Organization, Authorization; Power and Authority.  Borrower is duly existing and in good  standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and  is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it  be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on  Borrower’s business.  In connection with this Agreement, Borrower has delivered to Bank a completed certificate   signed  by  Borrower,  entitled  “Perfection  Certificate”  (the  “Perfection  Certificate”).   Borrower  represents  and  warrants  to  Bank  that,  except  as  may  have  been  updated  by  a  notification  to  Bank  pursuant  to  Section 7.2,                                                   6  39271280 

 

(a) Borrower’s  exact  legal  name  is  that  indicated  on  the  Perfection  Certificate  and  on  the  signature  page  hereof;  (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate;  (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states  that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more  than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office);  (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation,  organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information  set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it  being understood and agreed that (i) Borrower may from time to time update certain information in the Perfection  Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement and  (ii) the Perfection Certificate shall be deemed updated by any notifications delivered to Bank pursuant to Section 7).          The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have  been  duly  authorized,  and  do  not  (i) conflict  with  any  of  Borrower’s  organizational  documents,  (ii) contravene,  conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate  any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by  which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any  action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority  (except such Governmental Approvals which have already been obtained and are in full force and effect, or are being  obtained pursuant to Section 6.1(b)), or (v) conflict with, contravene, constitute a default or breach under, or result in  or permit the termination or acceleration of, any material agreement by which Borrower is bound.  Borrower is not in  default under any agreement to which it is a party or by which it is bound in which the default could reasonably be  expected to have a material adverse effect on Borrower’s business.          5.2     Collateral.  Borrower has good title to, rights in, and the power to transfer each item of the Collateral  upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.  Borrower  has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for  the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which  Borrower has taken such actions as are  necessary to  give  Bank a perfected security interest therein to  the extent  required pursuant to the terms of Section 6.7(b).  The Accounts are bona fide, existing obligations of the Account  Debtors.          The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise  provided in the Perfection Certificate or as permitted pursuant to Section 7.2.  None of the components of the Collateral  shall  be  maintained  at  locations  other  than  as  provided  in  the  Perfection  Certificate  or  as  permitted  pursuant  to  Section 7.2.          All Inventory is in all material respects of good and marketable quality, free from material defects.          Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non- exclusive licenses granted to its customers in the ordinary course of business and licenses that could not result in a  legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may  be exclusive as to territory only as to discreet geographical areas outside of the United States, (b) over-the-counter  software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and  noted on the Perfection Certificate.  To Borrower’s knowledge, each Patent which it owns or purports to own and  which is  material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property  which  Borrower  owns  or  purports  to  own  and  which  is  material  to  Borrower’s  business  has  been  judged  invalid  or  unenforceable, in whole or in part.  To the best of Borrower’s knowledge, no claim has been made that any part of the  Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be  expected to have a material adverse effect on Borrower’s business.          Except as noted on the Perfection Certificate or as notified to Bank pursuant to Section 6.9(b), Borrower is  not a party to, nor is it bound by, any Restricted License.                                                    7  39271280 

 

       5.3     Litigation.   Except  as  disclosed  pursuant  to  Section 6.2(g),  there  are  no  actions  or proceedings  pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its  Subsidiaries involving more than, individually or in the aggregate, Two Hundred Thousand Dollars ($200,000).         5.4     Financial Statements; Financial Condition.  All consolidated financial statements for Borrower  and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial  condition and Borrower’s consolidated results of operations as of the dates and for the periods presented.  There has  not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent  financial statements submitted to Bank.          5.5     Solvency.   The  fair  salable  value  of  Borrower’s  consolidated  assets  (including  goodwill  minus  disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital  after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.          5.6     Regulatory Compliance.  Borrower is not an “investment company” or a company “controlled” by  an “investment company” under the Investment Company Act of 1940, as amended.  Borrower is not engaged as one  of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve  Board of Governors).  Borrower (a) has complied in all material respects with all Requirements of Law, and (b) has  not violated any Requirements of Law the violation of which could reasonably be expected to have a material adverse  effect on its business.  None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower  or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing,  treating,  or  transporting  any  hazardous  substance  other  than  legally.   Borrower  and  each  of  its  Subsidiaries  have  obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to,  all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.          5.7     Subsidiaries; Investments.  Borrower does not own any stock, partnership, or other ownership  interest or other equity securities except for Permitted Investments.          5.8     Tax Returns and Payments; Pension Contributions.  Borrower has timely filed all required tax  returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and  contributions owed by Borrower except (a) to the extent such taxes are being contested in good faith by appropriate  proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if  any, as shall be required in conformity with GAAP shall have been made therefor, or (b) if such taxes, assessments,  deposits and contributions do not, individually or in the aggregate, exceed Fifty Thousand Dollars ($50,000).          To the extent Borrower defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of  the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps  required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the  Collateral that is other than a “Permitted Lien.”  Borrower is unaware of any claims or adjustments proposed for any  of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower that  exceed Fifty Thousand Dollars ($50,000).  Borrower has paid all amounts necessary to fund all present pension, profit  sharing  and  deferred  compensation  plans  in  accordance  with  their  terms,  and  Borrower  has  not  withdrawn  from  participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other  event  with  respect  to,  any  such  plan  which  could  reasonably  be  expected  to  result  in  any  liability  of  Borrower,  including  any  liability  to  the  Pension  Benefit  Guaranty  Corporation  or  its  successors  or  any  other  governmental  agency.          5.9     Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions solely to refinance the  Existing  Term  Loan  and  as  working  capital,  for  general  corporate  purposes  and  to  fund  its  general  business  requirements and not for personal, family, household or agricultural purposes.          5.10    Full  Disclosure.   No  written  representation,  warranty  or  other  statement  of  Borrower  in  any  certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was  made, taken together with all such written certificates and written statements given to Bank and Borrower’s filings  with the SEC, contains any untrue statement of a material fact or omits to state a material fact necessary to make the  statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections                                                   8  39271280 

 

and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and  that actual results during the period or periods covered by such projections and forecasts may differ from the projected  or forecasted results).          5.11    Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or  warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar  qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible  Officer.          6.      AFFIRMATIVE COVENANTS          Borrower shall do all of the following:          6.1     Government Compliance.                  (a)    Maintain its and all its Subsidiaries’ legal existence and good standing in their respective  jurisdictions of formation and maintain qualification in each jurisdiction in  which the failure to so qualify  would  reasonably  be  expected  to  have  a  material  adverse  effect  on  Borrower’s  business  or  operations.   Borrower  shall  comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which  it is subject.                  (b)    Obtain all of the Governmental Approvals necessary for the performance by Borrower of  its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in the  Collateral.   Borrower  shall  promptly,  upon  Bank’s  request,  provide  copies  of  any  such  obtained  Governmental  Approvals to Bank.          6.2     Financial Statements, Reports, Certificates.  Provide Bank with the following:                  (a)    Monthly Financial Statements.  As soon as available, but no later than thirty (30) days after  the last day of each month, a company-prepared non-GAAP consolidated balance sheet and income statement covering  Borrower’s consolidated operations for such month certified by a Responsible Officer in a form reasonably acceptable  to Bank (the “Monthly Financial Statements”);                  (b)    Monthly Compliance Certificate.  Within thirty (30) days after the last day of each month  and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible  Officer,  certifying  that  as  of  the  end  of  such  month,  Borrower  was  in  full  compliance  with  all  of  the  terms  and  conditions of this Agreement, and such other information as Bank may reasonably request;                  (c)    Annual Operating Budget and Financial Projections. Within thirty (30) days after the end  of each fiscal year of Borrower, and promptly following any updates or amendments thereto, (A) annual operating  budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal  year of Borrower, and (B) annual financial projections for the following fiscal year (on a quarterly basis), in each case  as approved by the Board, together with any related business forecasts used in the preparation of such annual financial  projections;                  (d)    Beneficial  Ownership  Information.   Concurrently  with  the  delivery  of  Compliance  Certificates per Section 6.2(b), notice of any changes to the beneficial ownership information set out in Section 2 of  the Perfection Certificate.  Borrower understands and acknowledges that Bank relies on such true, accurate and up-to- date beneficial ownership information to meet Bank’s regulatory obligations to obtain, verify and record information  about the beneficial owners of its legal entity customers.                  (e)    SEC  Filings.   So  long  as  Borrower  is  subject  to  the  reporting  requirements  under  the  Exchange  Act  within  five  (5)  days  of  filing,  copies  of  all  periodic  and  other  reports,  proxy  statements  and  other  materials filed by Borrower and/or any Guarantor with the SEC, any Governmental Authority succeeding to any or  all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case                                                   9  39271280 

 

may  be.   Documents  required  to  be  delivered  pursuant  to  this  Section 6.2  (to  the  extent  any  such  documents  are  included  in  materials  otherwise  filed  with  the  SEC)  may  be  delivered  electronically  and  if  so  delivered,  shall  be  deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on  Borrower’s website on the internet at Borrower’s website address.  As to any information contained in the materials  furnished pursuant to this clause (e), Borrower shall not be required separately to furnish such information under  clauses (f) and (h), but the foregoing shall not be in derogation of Borrower’s obligation to furnish the information  and materials described in such clauses (f) and (h),  at the time specified therein;                  (f)    Other Statements. Within five (5) days of delivery, copies of all statements, reports and  notices made available to all of Borrower’s security holders or to any holders of Subordinated Debt;                  (g)    Legal Action Notice.  A prompt report of any legal actions pending or threatened in writing  against Borrower or any of its Subsidiaries that could reasonably be expected to result in damages or costs to Borrower  or any of its Subsidiaries of, individually or in the aggregate, Two Hundred Thousand Dollars ($200,000) or more;  and                  (h)    Other  Financial  Information.  Promptly,  from  time  to  time,  such  other  information  regarding Borrower or compliance with the terms of any Loan Documents as reasonably requested by Bank.          6.3     Inventory;  Returns.   Keep all  Inventory  in  good  and  marketable  condition,  free  from  material  defects.  Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary  practices as they exist at the Effective Date.  Borrower must promptly notify Bank of all returns, recoveries, disputes  and claims that involve more than Fifty Thousand Dollars ($50,000).         6.4     Taxes; Pensions.  Timely file, and require each of its Subsidiaries to timely file, all required tax  returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and  local  taxes,  assessments,  deposits  and  contributions  owed  by  Borrower  and  each  of  its  Subsidiaries,  except  as  otherwise permitted by Section 5.8 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to  such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation  plans in accordance with their terms.          6.5     Reserved.          6.6     Insurance.                  (a)    Keep  its  business  and  the  Collateral  insured  for  risks  and  in  amounts  standard  for  companies in Borrower’s industry and location as reasonably determined by the Board and as Bank may reasonably  request.  Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not  Affiliates of Borrower, and in amounts that are satisfactory to Bank, in its reasonable discretion.  All property policies  shall have a lender’s loss payable endorsement showing Bank as the sole lender loss payee.  All liability policies shall  show, or have endorsements showing, Bank as an additional insured.  Bank shall be named as lender loss payee and/or  additional insured with respect to any such insurance providing coverage in respect of any Collateral.                  (b)    Ensure that proceeds payable under any property policy are, at Bank’s option, payable to  Bank on account of the Obligations.  Notwithstanding the foregoing, (i) so long as no Event of Default has occurred  and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Two Hundred  Thousand  Dollars  ($200,000)  with  respect  to  any  loss,  but  not  exceeding  Two  Hundred  Fifty  Thousand  Dollars  ($250,000) in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair  of destroyed or damaged property or for other property useful in the business; provided that any such replaced or  repaired property (A) shall be of equal or like value as the replaced or repaired Collateral and (B) shall be deemed  Collateral in which Bank has been granted a first priority security interest, and (ii) after the occurrence and during the  continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be  payable to Bank on account of the Obligations.                                                   10  39271280 

 

               (c)    At  Bank’s  request,  Borrower  shall  deliver  certified  copies  of  insurance  policies  and  evidence of all premium payments.  Each provider of any such insurance required under this Section 6.6 shall agree,  by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will  give Bank thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled.   If Borrower fails to obtain insurance as required under this Section 6.6 or to pay any amount or furnish any required  proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance  policies required in this Section 6.6, and take any action under the policies Bank deems prudent.          6.7     Accounts.                  (a)    Maintain  Borrower’s  primary  banking  relationship,  including,  without  limitation,  its  operating and other deposit accounts, investment management, Letters of Credit, and foreign exchange services, with  Bank and Bank’s Affiliates. Borrower hereby agrees that the aggregate balance in bank accounts of Alpine Immune  Sciences PTY Ltd  (the “Australian Subsidiary”) held at financial institutions other than Bank and Bank’s Affiliates  shall not exceed One Million Dollars ($1,000,000) (the “Threshold Amount”) for more than five (5) consecutive  Business Days ; provided that if at any time the aggregate balance in  bank accounts of the Australian Subsidiary held  at financial institutions other than Bank and Bank’s Affiliates exceeds the Threshold Amount for more than five (5)  consecutive Business Days, then Borrower shall sweep the funds therein to Borrower’s accounts maintained with  Bank and Bank’s Affiliates.                  (b)    In addition to and without limiting the restrictions in (a), Borrower shall provide Bank five  (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution  other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall  cause  the  applicable  bank  or  financial  institution  (other  than  Bank)  at  or  with  which  any  Collateral  Account  is  maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral  Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control  Agreement may not be terminated without the prior written consent of Bank.  The provisions of the previous sentence  shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit  payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.          6.8     Reserved.          6.9     Protection of Intellectual Property Rights.                  (a)    (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property  material to Borrower’s business (with such materiality to be determined in the reasonable discretion of the Board);  (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably be expected  to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any Intellectual Property  material to Borrower’s business (with such materiality to be determined in the reasonable discretion of the Board) to  be abandoned, forfeited or dedicated to the public without Bank’s written consent.                  (b)     Provide written notice to Bank within thirty (30) days of entering or becoming bound by  any Restricted License (other than over-the-counter software that is commercially available to the public).  Borrower  shall take such commercially reasonable steps as Bank reasonably requests to obtain the consent of, or waiver by, any  person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to  have a security interest in  it  that  might otherwise be restricted or prohibited by law or  by the terms of any  such  Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of  a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this  Agreement and the other Loan Documents.          6.10    Litigation  Cooperation.   From  the  date  hereof  and  continuing  through  the  termination  of  this  Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and  Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend  any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.                                                   11  39271280 

 

       6.11    Online Banking.                 (a)    Utilize Bank’s online banking platform for all matters reasonably requested by Bank which  shall  include,  without  limitation  (and  without  request  by  Bank  for  the  following  matters),  uploading  information  pertaining to Accounts and Account Debtors, requesting approval for exceptions, requesting Credit Extensions, and  uploading financial statements and other reports to the extent required to be delivered by this Agreement (including,  without limitation, those described in Section 6.2 of this Agreement); provided, however, that the foregoing shall not  apply to any services that Bank is unable to provide at a given time (including as a result of Bank’s online banking  platform not working properly for a particular service).                  (b)    Comply with the terms of Bank’s Online Banking Agreement as in effect from time to time  and ensure that all persons utilizing Bank’s online banking platform are duly authorized to do so by an Administrator.   Bank shall be entitled to assume the authenticity, accuracy and completeness on any information, instruction or request  for a Credit Extension submitted via Bank’s online banking platform and to further assume that any submissions or  requests made via Bank’s online banking platform have been duly authorized by an Administrator.          6.12    Formation or Acquisition of Subsidiaries.  Notwithstanding and without limiting the negative  covenants contained in Sections 7.3 and 7.7 hereof, within thirty (30) days (or such longer period as Bank may agree)  after Borrower or any Guarantor forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary  after the Effective Date (including, without limitation, pursuant to a Division), Borrower and such Guarantor shall,  upon Bank’s request in its sole and absolute discretion, (a) cause such new Subsidiary to provide to Bank either a  joinder  to  this  Agreement  to  become  a  co-borrower  hereunder  or  a  Guaranty  to  become  a  Guarantor  hereunder,  together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory  to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets  of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing  statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance  satisfactory to Bank; and (c) provide to Bank all other documentation in form and substance satisfactory to Bank,  which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred  to above.  Any document, agreement, or instrument executed or issued pursuant to this Section 6.12 shall be a Loan  Document.          6.13    Further Assurances.  Execute any further instruments and take further action as Bank reasonably  requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.  Deliver to  Bank, within five (5) days after the same are sent or received, copies of all correspondence, reports, documents and  other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals  or Requirements of Law, in each case that could reasonably be expected to have a material adverse effect on any of  the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.          7.      NEGATIVE COVENANTS          Borrower shall not do any of the following without Bank’s prior written consent:          7.1     Dispositions.   Convey,  sell,  lease,  transfer,  assign,  or  otherwise  dispose  of  (including,  without  limitation, pursuant to a Division) (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any  part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn- out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to  maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted  Investments;  (d) consisting  of  the  sale  or  issuance  of  any  stock  of  Borrower  not  prohibited   Section 7.2  of  this  Agreement;  (e) consisting  of  Borrower’s  use  or  transfer  of  money  or  Cash  Equivalents  in  a  manner  that  is  not  prohibited by the terms of this Agreement or the other Loan Documents; (f) of non-exclusive licenses for the use of  the property of Borrower or its Subsidiaries in the ordinary course of business and licenses that could not result in a  legal transfer of title of the licensed property but that may be exclusive in respects other than granting rights to a  specific geographical territory and that may be exclusive as to territory only as to discrete geographical areas outside  of the United States; and (g) other Transfers in an aggregate amount not to exceed One Hundred Thousand Dollars  ($100,000) per fiscal year.                                                  12  39271280 

 

       7.2     Changes in Business, Management, Control, or Business Locations.  (a) Engage in or permit any  of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such  Subsidiary,  as  applicable,  or  reasonably  related  thereto,  as  determined  by  the  Board  in  its  reasonable  discretion;  (b) liquidate or dissolve; (c) fail to provide notice to Bank of the Key Person departing from or ceasing to be employed  by Borrower within five (5) Business Days after his or her departure from Borrower, or (d) permit or suffer any Change  in Control.          Borrower shall not, without at least ten (10) days prior written notice to Bank:  (1) add any new offices or  business  locations,  including  warehouses  (unless  such  new  offices  or  business  locations  contain  less  than  Fifty  Thousand  Dollars  ($50,000)  in  Borrower’s  assets  or  property)  or  deliver  any  portion  of  the  Collateral  valued,  individually or in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee at a location other than to a  bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization,  (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if  any) assigned by its jurisdiction of organization.  If Borrower intends to add any new offices or business locations,  including warehouses, containing in excess of Fifty Thousand Dollars ($50,000) of Borrower’s assets or property,  then Borrower will use commercially reasonable efforts to have the landlord of any such new offices or business  locations,  including  warehouses,  shall  execute  and  deliver  a  landlord  consent  in  form  and  substance  reasonably  satisfactory  to  Bank.   If  Borrower  intends  to  deliver  any  portion  of  the  Collateral  valued,  individually  or  in  the  aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee, and Bank and such bailee are not already parties  to  a  bailee  agreement  governing  both  the  Collateral  and  the  location  to  which  Borrower  intends  to  deliver  the  Collateral, then Borrower will use commercially reasonable efforts to have such bailee shall execute and deliver a  bailee agreement in form and substance reasonably satisfactory to Bank.          7.3     Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or  consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of  the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary or  pursuant to a Division).  A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.          7.4     Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary  to do so, other than Permitted Indebtedness.          7.5     Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey  any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for  Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein (provided  that the Collateral may also be subject to Permitted Liens), or enter into any agreement, document, instrument or other  arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect  of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or  upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property in favor of Bank, except (i) as is  otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein; (ii) customary restrictions  on assignment, transfer and encumbrances in agreements, provided that such restrictions do not prohibit Borrower  from granting a security interest in Borrower’s property in favor of Bank; and (iii) restrictions in merger or acquisition  agreements, provided that such covenants do not prohibit Borrower from granting a security interest in Borrower’s  property in favor of Bank and provided further that the counter-parties to such covenants are not permitted to receive  a security interest in Borrower’s or any Subsidiary’s property.          7.6     Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the  terms of Section 6.7(b) hereof.          7.7     Distributions; Investments.  (a) Pay any dividends or make any distribution or payment or redeem,  retire or purchase any capital stock provided that Borrower may (i) convert any of its convertible securities into other  securities pursuant to the terms of such convertible securities or otherwise in exchange thereof and pay cash in lieu of  the  issuance  of  fractional  shares  in  connection  with  such  conversion,  (ii) pay  dividends  solely  in  common  stock;  (iii) repurchase the stock of former employees or consultants pursuant to stock repurchase agreements so long as an  Event of Default does not exist at the time of any such repurchase and would not exist after giving effect to any such  repurchase, provided that the aggregate amount of all such repurchases does not exceed Two Hundred Fifty Thousand  Dollars ($250,000) per fiscal year; (iv) repurchase equity securities to the extent that such repurchase is deemed to                                                  13  39271280 

 

occur (A) upon “net exercise” of options or warrants if such equity securities represent the exercise price of such  options or warrants or (B) in connection with the retention of equity securities in payment of withholding taxes in  connection  with  equity-based  compensation  plans;  or  (b) directly  or  indirectly  make  any  Investment  (including,  without  limitation,  by  the  formation  of  any  Subsidiary)  other  than  Permitted  Investments,  or  permit  any  of  its  Subsidiaries to do so.          7.8     Transactions  with  Affiliates.   Directly  or  indirectly  enter  into  or  permit  to  exist  any  material  transaction with any Affiliate of Borrower, except for (a) transactions that are in the ordinary course of Borrower’s  business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s  length transaction with a non-affiliated Person; (b) transactions permitted by Sections 7.3 and 7.7; (c) transactions  between or among Borrower and its Subsidiaries that are not otherwise prohibited by this Article 7; (d) reasonable and  customary indemnification arrangements with regard to officers and directors that are approved by the Board; and  (e) reasonable and customary compensation arrangements (including equity-based compensation) with Borrower’s  employees and consultants in the ordinary course of business.          7.9     Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the  terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or  (b) except as permitted pursuant to the terms of the subordination, intercreditor, or other similar agreement in favor of  Bank to which the Subordinated Debt is subject, amend any provision in any document relating to the Subordinated  Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments  thereon, or adversely affect the subordination thereof to Obligations owed to Bank.          7.10    Compliance.   Become  an  “investment  company”  or  a  company  controlled  by  an  “investment  company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities  extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the  Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum  funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur;  fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could  reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to  do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination  of,  or  permit  the  occurrence  of  any  other  event  with  respect  to,  any  present  pension,  profit  sharing  and  deferred  compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability  to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.          8.      EVENTS OF DEFAULT          Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:          8.1     Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit  Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due  and payable (which three (3) Business Day cure period shall not apply to payments due on the Term Loan Maturity  Date).  During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an  Event of Default (but no Credit Extension will be made during the cure period);          8.2     Covenant Default.                 (a)    Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.6, 6.7, 6.8 (if  applicable), 6.9(b), or 6.11, or violates any covenant in Section 7; or                  (b)    Borrower  fails  or  neglects  to  perform,  keep,  or  observe  any  other  term,  provision,  condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other  than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be  cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the  default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be  cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower                                                  14  39271280 

 

shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default,  and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no  Credit Extensions shall be made during such cure period).  Cure periods provided under this section shall not apply,  among other things, to financial covenants (if any) or any other covenants set forth in clause (a) above;          8.3     Material Adverse Change.  A Material Adverse Change occurs;          8.4     Attachment; Levy; Restraint on Business.                  (a)    (i) The service of process seeking to attach, by trustee or similar process, any funds of  Borrower or of any entity under the control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed  against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof  are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond  or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or                  (b)    (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into  possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all  or any material part of its business;          8.5     Insolvency.  (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts)  as they become due or otherwise fails to be solvent as described under Section 5.5 hereof; (b) Borrower or any of its  Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of  its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while  any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);          8.6     Other Agreements.  There is, under any agreement to which Borrower is a party with a third party  or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the  maturity of any Indebtedness in an amount individually or in the aggregate in excess of Two Hundred Thousand  Dollars ($200,000); or (b) any breach or default by Borrower, the result of which could have a material adverse effect  on Borrower’s business;          8.7     Judgments; Penalties.  One or more fines, penalties or final judgments, orders or decrees for the  payment  of  money  in  an  amount,  individually  or  in  the  aggregate,  of  at  least  Two  Hundred  Thousand  Dollars  ($200,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance  carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within ten (10) days  after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or  bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that  no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty,  judgment, order or decree);          8.8     Misrepresentations.   Borrower  or  any  Person  acting  for  Borrower  makes  any  representation,  warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank  or  to  induce  Bank  to  enter  this  Agreement  or  any  Loan  Document,  and  such  representation,  warranty,  or  other  statement is incorrect in any material respect when made;          8.9     Subordinated Debt.  Any document, instrument, or agreement evidencing the subordination of any  Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any  Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any  further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the  priority contemplated by this Agreement or;          8.10    Governmental Approvals.  Any Governmental Approval shall have been (a) revoked, rescinded,  suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any  decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of  such Governmental Approval or that could result in the Governmental Authority taking any of the actions described                                                  15  39271280 

 

in  clause (a)  above,  and  such  decision  or  such  revocation,  rescission,  suspension,  modification  or  non-renewal  (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal  qualifications  of  Borrower  or  any  of  its  Subsidiaries  to  hold  such  Governmental  Approval  in  any  applicable  jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to  cause a Material Adverse Change.          9.      BANK’S RIGHTS AND REMEDIES          9.1     Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default,  Bank may, without notice or demand, do any or all of the following:                  (a)    declare all Obligations immediately due and payable (but if an Event of Default described  in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);                  (b)    stop advancing money or extending credit for Borrower’s benefit under this Agreement or  under any other agreement between Borrower and Bank;                  (c)    demand that Borrower (i) deposit cash with Bank in an amount equal to at least (A) one  hundred  five  percent  (105.0%)  of  the  Dollar  Equivalent  of  the  aggregate  face  amount  of  all  Letters  of  Credit  denominated in Dollars remaining undrawn, and (B) one hundred ten percent (110.0%) of the Dollar Equivalent of  the aggregate face amount of all Letters of Credit denominated in a Foreign Currency remaining undrawn (plus, in  each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good  faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for  the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such  amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of  any Letters of Credit;                  (d)    terminate any FX Contracts;                  (e)    verify the amount of, demand payment of and performance under, and collect any Accounts  and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and  in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest  in such funds;                  (f)    make any payments and do any acts it considers necessary or reasonable to protect the  Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Bank requests and  make it available as Bank designates.  Bank may enter premises where the Collateral is located, take and maintain  possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior  or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy  any of its premises, without charge, to exercise any of Bank’s rights or remedies;                  (g)    apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) amount  held by Bank owing to or for the credit or the account of Borrower;                  (h)    ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale,  and sell the Collateral.  Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without  charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names,  Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production  of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this  Section 9.1, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;                  (i)    place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive  control,  any  entitlement  order,  or  other  directions  or  instructions  pursuant  to  any  Control  Agreement  or  similar  agreements providing control of any Collateral;                                                   16  39271280 

 

               (j)    demand and receive possession of Borrower’s Books; and                  (k)    exercise all rights and remedies available to Bank under the Loan Documents or at law or  equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms  thereof).          9.2     Power  of  Attorney.  Borrower  hereby  irrevocably  appoints  Bank  as  its  lawful  attorney-in-fact,  exercisable upon the occurrence and during the continuance of an Event of Default, to:  (i) endorse Borrower’s name  on any checks or other forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for  any Account or drafts against Account Debtors; (iii) settle and adjust disputes and claims about the Accounts directly  with Account Debtors, for amounts and on terms Bank determines reasonable; (iv) make, settle, and adjust all claims  under Borrower’s insurance policies; (v) pay, contest or settle any Lien, charge, encumbrance, security interest, and  adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or  discharge  the  same;  and  (vi) transfer  the  Collateral  into  the  name  of  Bank  or  a  third  party  as  the  Code  permits.   Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary  to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of  Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and  Bank  is  under  no  further  obligation  to  make  Credit  Extensions  hereunder.   Bank’s  foregoing  appointment  as  Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all  Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation  to provide Credit Extensions terminates.         9.3     Protective Payments.  If Borrower fails to obtain the insurance called for by Section 6.6 or fails to  pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement  or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such insurance or  make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing  interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Bank will make reasonable  efforts to provide Borrower with  notice of Bank obtaining such insurance at the time it is obtained or within a  reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar payments in the future  or Bank’s waiver of any Event of Default.          9.4     Application of Payments and Proceeds Upon Default.  If an Event of Default has occurred and is  continuing, Bank shall have the right to apply in any order any funds in its possession, whether from Borrower account  balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral,  or otherwise, to the Obligations.  Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account  or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If Bank, directly  or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral,  Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the  purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.          9.5     Bank’s  Liability  for  Collateral.   So  long  as  Bank  complies  with  reasonable  banking  practices  regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or  responsible for:  (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in  the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower  bears all risk of loss, damage or destruction of the Collateral.          9.6     No  Waiver;  Remedies  Cumulative.   Bank’s  failure,  at  any  time  or  times,  to  require  strict  performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or  diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith.  No waiver  hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific  instance and purpose for which it is given.  Bank’s rights and remedies under this Agreement and the other Loan  Documents are cumulative.  Bank has all rights and remedies provided under the Code, by law, or in equity.  Bank’s  exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under  this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a  continuing waiver.  Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.                                                  17  39271280 

 

       9.7     Demand Waiver.  Borrower waives demand, notice of default or dishonor, notice of payment and  nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal  of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.          9.8     Borrower Liability.  Any Borrower may, acting singly, request Credit Extensions hereunder.  Each  Borrower  hereby  appoints  each  other  as  agent  for  the  other  for  all  purposes  hereunder,  including  with  respect  to  requesting Credit Extensions hereunder.  Each Borrower hereunder shall be jointly and severally obligated to repay  all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if  each Borrower hereunder directly received all Credit Extensions.  Each Borrower waives (a) any suretyship defenses  available to it under the Code or any other applicable law, including, without limitation, the benefit of California Civil  Code  Section 2815  permitting  revocation  as  to  future  transactions  and  the  benefit  of  California  Civil  Code  Sections 1432, 2809, 2810, 2819, 2839, 2845, 2847, 2848, 2849, 2850, and 2899 and 3433 to the extent permitted  under applicable law, and (b) any right to require Bank to:  (i) proceed against any Borrower or any other person;  (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.  Bank may exercise or not exercise any  right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non- judicial sale) without affecting any Borrower’s liability.  Notwithstanding any other provision of this Agreement or  other related document, so long as any Obligations remain outstanding (other than  inchoate indemnity obligations,  and any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations  under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement) each  Borrower irrevocably waives all rights that it may have at law or in equity, to the extent permitted under applicable  law (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek  contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now  or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect  to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or  to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the  Obligations  in  connection  with  this  Agreement  or  otherwise.   Any  agreement  providing  for  indemnification,  reimbursement or any other arrangement prohibited under this Section 9.8 shall be null and void.  If any payment is  made to a Borrower in contravention of this Section 9.8, such Borrower shall hold such payment in trust for Bank and  such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.          10.     NOTICES          All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement  or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered:   (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered  or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic  mail or facsimile transmission; (c) one (1) Business Day after deposit  with a reputable overnight courier  with all  charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party  to be notified and sent to the address, facsimile number, or email address indicated below.  Bank or Borrower may  change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in  accordance with the terms of this Section 10                  If to Borrower:              If before January 1, 2020, to:                                               Alpine Immune Sciences, Inc.                                              AIS Operating Co., Inc.                                               201 Elliott Ave West, Suite 230                                              Seattle, Washington  98119                                              Attn:   Paul Rickey, Chief Financial Officer                                              Fax:    (206) 316-8383                                              Email:  paul.rickey@AlpineImmuneSciences.com                                                   18  39271280 

 

                                            If on or after January 1, 2020, to:                                               Alpine Immune Sciences, Inc.                                              AIS Operating Co., Inc.                                              188 East Blaine Street,                                               Seattle, Washington  98102                                              Attn:   Paul Rickey, Chief Financial Officer                                              Fax:    (206) 316-8383                                              Email:  paul.rickey@AlpineImmuneSciences.com                 If to Bank:                  Silicon Valley Bank                                              505 Howard Street                                              San Francisco, California 94105                                              Attn:   Peter A. Sletteland, Vice President                                               Email:  PSletteland@svb.com                                              Telephone: (617) 796-6989          11.     CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE          Except as otherwise expressly provided in any of the Loan Documents, California  law governs the Loan  Documents  without  regard  to  principles  of  conflicts  of  law.   Borrower  and  Bank  each  submit  to  the  exclusive  jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this  Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other  jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other  court order in favor of Bank.  Borrower expressly submits and consents in advance to such jurisdiction in any action  or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of  personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or  equitable relief as is deemed appropriate by such court.  Borrower hereby waives personal service of the summons,  complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and  other process may be  made by registered or certified mail addressed to Borrower at the address set forth in, or  subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall  be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in  the U.S. mails, proper postage prepaid.          TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK  EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING  OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED  TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND  ALL OTHER CLAIMS.  THIS  WAIVER  IS  A  MATERIAL  INDUCEMENT  FOR  BOTH  PARTIES  TO  ENTER  INTO  THIS  AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.          WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR  RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable,  the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall  be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding  Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil  Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive  jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby  submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance  with the provisions of California Code of Civil Procedure Sections 638 through 645.1, inclusive.  The private judge  shall  have  the  power,  among  others,  to  grant  provisional  relief,  including  without  limitation,  entering  temporary  restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall  be closed to the public and confidential and all records relating thereto shall be permanently sealed.  If during the  course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant  to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court  for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before                                                  19  39271280 

 

a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which  shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial  proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to  judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private  judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report  a  statement  of  decision  thereon  pursuant  to  California  Code  of  Civil  Procedure  Section 644(a).   Nothing  in  this  paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or  obtain  provisional  remedies.   The  private  judge  shall  also  determine  all  issues  relating  to  the  applicability,  interpretation, and enforceability of this paragraph.          This Section 11 shall survive the termination of this Agreement.          12.     GENERAL PROVISIONS          12.1    Termination Prior to Term Loan Maturity Date; Survival.  All covenants, representations and  warranties made in this Agreement shall continue in full force until this Agreement has terminated pursuant to its  terms and all Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms,  are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash  collateralized in accordance with Section 4.1 of this Agreement) have been satisfied.  So long as Borrower has satisfied  the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to  survive  the  termination  of  this  Agreement,  and  any  Obligations  under  Bank  Services  Agreements  that  are  cash  collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Term  Loan Maturity Date by Borrower pursuant to the terms and conditions set forth in Section 2.3(c).  Those obligations  that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive  notwithstanding this Agreement’s termination.          12.2    Successors  and  Assigns.   This  Agreement  binds  and  is  for  the  benefit  of  the  successors  and  permitted assigns of each party.  Borrower may not assign this Agreement or any rights or obligations under it without  Bank’s prior written consent (which may be granted or withheld in Bank’s discretion).  Bank has the right, without  the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or  any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents (other  than the Warrant, as to which assignment, transfer and other such actions are governed by the terms thereof).          12.3    Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers,  employees,  agents,  attorneys,  or  any  other  Person  affiliated  with  or  representing  Bank  (each,  an  “Indemnified  Person”) harmless against:  (i) all obligations, demands, claims, and liabilities (collectively, “Claims”) claimed or  asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all  losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a  result of, following from, consequential to, or arising from this Agreement and any other transactions between Bank  and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by  such Indemnified Person’s gross negligence or willful misconduct.         This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses  for which indemnity is given shall have run.          12.4    Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.          12.5    Severability  of  Provisions.   Each  provision  of  this  Agreement  is  severable  from  every  other  provision in determining the enforceability of any provision.          12.6    Correction of Loan Documents.  Bank may correct patent errors and fill in any blanks in the Loan  Documents consistent with the agreement of the parties so long as Bank provides Borrower with written notice of  such correction and allows Borrower at least ten (10) days to object to such correction.  In the event of such objection,  such correction shall not be made except by an amendment signed by both Bank and Borrower.                                                   20  39271280 

 

       12.7    Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any  Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable  or  admissible  unless,  and  only  to  the  extent,  expressly  set  forth  in  a  writing  signed  by  the  party  against  which  enforcement or admission is sought.  Without limiting the generality of the foregoing, no oral promise or statement,  nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an  amendment, supplement or waiver or have any other effect on any Loan Document.  Any waiver granted shall be  limited  to  the  specific  circumstance  expressly  described  in  it,  and  shall  not  apply  to  any  subsequent  or  other  circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any  further waiver.  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 the Loan Documents merge into the Loan Documents.          12.8    Counterparts.  This Agreement may be executed in any number of counterparts and by different  parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together,  constitute one Agreement.          12.9    Confidentiality.  In handling any confidential information, Bank shall exercise the same degree of  care that it exercises for its own proprietary information, but disclosure of information may be made:  (a) to Bank’s  Subsidiaries  or  Affiliates  (such  Subsidiaries  and  Affiliates,  together  with  Bank,  collectively,  “Bank  Entities”),  provided that such Bank Entities shall be bound by the confidentiality provisions set forth in this Section 12.9; (b) to  prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use its  best efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this Section 12.9); (c) as  required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection  with  Bank’s  examination  or  audit;  (e) as  Bank  considers  appropriate  in  exercising  remedies  under  the  Loan  Documents;  and  (f) to  third-party  service  providers  of  Bank  so  long  as  such  service  providers  have  executed  a  confidentiality  agreement  with  Bank  with  terms  no  less  restrictive  than  those  contained  herein.   Confidential  information  does  not  include  information  that  is  either:   (i) in  the  public  domain  or  in  Bank’s  possession  when  disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation  of this Agreement) after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know that the  third party is prohibited from disclosing the information.          Bank Entities may use anonymous forms of confidential information for aggregate datasets, for analyses or  reporting, and for any other uses not expressly prohibited in writing by Borrower.  The provisions of the immediately  preceding sentence shall survive the termination of this Agreement.          12.10   Attorneys’ Fees, Costs and Expenses.  In any action or proceeding between Borrower and Bank  arising  out  of  or  relating  to  the  Loan  Documents,  the  prevailing  party  shall  be  entitled  to  recover  its  reasonable  attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled.          12.11   Electronic Execution of Documents.  The words “execution,” “signed,” “signature” and words of  like import in any Loan Document shall be deemed to include electronic signatures or the  keeping of records in  electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed  signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in  any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.          12.12   Right of Setoff.  Borrower hereby grants to Bank a Lien and a right of setoff as security for all  Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and  property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control  of Bank (including a subsidiary of Bank) or in transit to any of them.  At any time after the occurrence and during the  continuance of an Event of Default, without demand or notice, Bank may setoff the same or any part thereof and apply  the same to any liability or Obligation of Borrower even though unmatured and regardless of the adequacy of any  other collateral securing the  Obligations.  ANY  AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS  RIGHTS  OR  REMEDIES  WITH  RESPECT  TO  ANY  OTHER  COLLATERAL  WHICH  SECURES  THE  OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,  CREDITS  OR  OTHER  PROPERTY  OF BORROWER,  ARE  HEREBY  KNOWINGLY,  VOLUNTARILY  AND  IRREVOCABLY WAIVED.                                                  21  39271280 

 

       12.13   Captions.  The headings used in this Agreement are for convenience only and shall not affect the  interpretation of this Agreement.          12.14   Construction of Agreement.  The parties mutually acknowledge that they and their attorneys have  participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall be  construed without regard to which of the parties caused the uncertainty to exist.          12.15   Relationship.   The  relationship  of  the  parties  to  this  Agreement  is  determined  solely  by  the  provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary  or other relationship with duties or incidents different from those of parties to an arm’s-length contract.          12.16   Third Parties.  Nothing in this Agreement, whether express or implied, is intended to:  (a) confer  any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to  it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person  not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of  subrogation or action against any party to this Agreement.          12.17   Transitional  Arrangements.   On  the  Effective  Date,  this  Agreement  shall  amend,  restate  and  supersede the Prior Loan Agreement in its entirety, except as provided in this Section.  On the Effective Date, the  rights and obligations of the parties evidenced by the Prior Loan Agreement shall be evidenced by this Agreement and  the other Loan Documents and the grant of security interest in the Collateral by the Borrower under the Prior Loan  Agreement  and  the  other  “Loan  Documents”  (as  defined  in  the  Prior  Loan  Agreement)  shall  continue  under  this  Agreement and the other Loan Documents, and such security interest and any other rights and obligations which by  their express terms survive the termination of the Loan Documents shall not in any event be terminated, extinguished  or annulled but shall hereafter be governed by this Agreement and the other Loan Documents.  This Agreement is not  intended to, and does not, novate the Prior Loan Agreement and Borrower reaffirms that the existing security interest  created by the Prior Loan Agreement is and remains in full force and effect. All references to the Prior Loan Agreement  in any Loan Document or other document or instrument delivered in connection therewith shall be deemed to refer to  this Agreement and the provisions hereof as amended, restated, or otherwise modified from time to time.          13.     DEFINITIONS          13.1    Definitions.  As used in the Loan Documents, the word “shall” is mandatory, the word “may” is  permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes  the plural, and numbers denoting amounts that are set off in brackets are negative.  As used in this Agreement, the  following capitalized terms have the following meanings:          “Account” is, as to any Person, any “account” of such Person as “account” is defined in the Code with such  additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other  sums owing to such Person.          “Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may  hereafter be made.          “Administrator” is an individual that is named:                  (a)    as an “Administrator” in the “SVB Online Services” form completed by Borrower with the  authority to determine who will be authorized to use SVB Online Services (as defined in Bank’s Online Banking  Agreement as in effect from time to time) on behalf of Borrower; and                   (b)    as an Authorized Signer of Borrower in an approval by the Board.          “Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the  Person, any Person that controls or is controlled by or is under common control with the Person, and each of that                                                   22  39271280 

 

Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that  Person’s managers and members.          “Agreement” is defined in the preamble hereof.          “Applicable Number” means thirty-four (34); provided that if Borrower achieves the Extension Milestone,  Applicable Number will automatically change to twenty-five (25).          “Authorized  Signer”  is  any  individual  listed  in  Borrower’s  Borrowing  Resolution  who  is  authorized  to  execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf  of Borrower.          “Bank” is defined in the preamble hereof.          “Bank Entities” is defined in Section 12.9.          “Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees  and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents  (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise  incurred with respect to Borrower.          “Bank Services”  are any products, credit services, and/or financial accommodations previously, now, or  hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation,  any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of  payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange  services as any such products or services may be identified in Bank’s various agreements related thereto (each, a  “Bank Services Agreement”).          “Bank Services Agreement” is defined in the definition of Bank Services.          “Board” is Borrower’s board of directors.          “Borrower” is defined in the preamble hereof.          “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns,  records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all  computer programs or storage or any equipment containing such information.          “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board  of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by  such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated  thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has  the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party,  (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the  resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such  Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan  Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person,  together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such  certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such  prior certificate.          “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.          “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the  United States or any agency or any State thereof having maturities of not more than one (1) year from the date of                                                  23  39271280 

 

acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating  from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit  issued maturing no more than one (1) year after issue; (d) money market funds at least ninety-five percent (95%) of  the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition, and  (e)  any  Investments  permitted  by  Borrower’s  Board-approved  investment  policy  as  of  the  Effective  Date,  and  as  amended from time to time in a manner acceptable to Bank.          “Change  in  Control”  means  (a) at  any  time,  any  “person”  or  “group”  (as  such  terms  are  used  in  Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (other than  Alpine Immunosciences, L.P., OrbiMed Private Investments VI, LP, Frazier Life Sciences VIII, L.P., and Decheng  Capital LLP) shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the  “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of forty- nine percent (49%) or more of the ordinary voting power for the election of directors of Borrower (determined on a  fully diluted basis) other than by the sale of Borrower’s equity securities in a public offering or to venture capital,  private equity, strategic, family office, or other similar investors in a bona fide equity financing so long as Borrower  identifies to Bank the investors at least seven (7) Business Days prior to the closing of the transaction and provides to  Bank a description of the material terms of the transaction; provided that, Bank hereby acknowledges that such list of  investors provided by Borrower to Bank prior to the closing of such transaction is to the best of Borrower’s knowledge  accurate as of the date it is delivered and that such list of investors may be subject to change prior to closing of such  transaction, and provided further that, Borrower agrees to provide an updated list of investors to Bank promptly upon  the closing of such transaction ; (b) during any period of twelve (12) consecutive months, a majority of the members  of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (i) who  were  members of that board or equivalent  governing body on the  first day of such period, (ii) whose election or  nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above  constituting at the time of such election or nomination at least a majority of that board or equivalent governing body  or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals  referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of  that board or equivalent governing body; or (c)  at any time, Borrower shall cease to own and control, of record and  beneficially, directly or indirectly, one hundred percent (100%) of each class of outstanding capital stock of each  subsidiary of Borrower (other than directors’ qualifying shares or other similar shares as required by applicable law)  free and clear of all Liens (except Liens created by this Agreement).          “Claims” is defined in Section 12.3.          “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in  the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan  Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such  term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory  provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on  any  Collateral  is  governed  by  the  Uniform  Commercial  Code  in  effect  in  a  jurisdiction  other  than  the  State  of  California,  the  term  “Code”  shall  mean  the  Uniform  Commercial  Code  as  enacted  and  in  effect  in  such  other  jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies  and for purposes of definitions relating to such provisions.          “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.          “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.          “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term  as may hereafter be made.          “Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B.          “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person  for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each  case, directly or indirectly guaranteed, endorsed, co made, discounted or sold with recourse by that Person, or for                                                  24  39271280 

 

which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of  that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or  collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates,  currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the  ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary  obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated  liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations  under any guarantee or other support arrangement.          “Control  Agreement”  is  any  control  agreement  entered  into  among  the  depository  institution  at  which  Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower  maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control  (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.          “Copyrights”  are  any  and  all  copyright  rights,  copyright  applications,  copyright  registrations  and  like  protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or  not the same also constitutes a trade secret.          “Credit Extension” is any Term Loan Advance, or any other extension of credit by Bank for Borrower’s  benefit.          “Default Rate” is defined in Section 2.4(b).          “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may  hereafter be made.          “Designated Deposit Account” is the account number ending *****598 (last three digits) maintained by  Borrower with Bank (provided, however, if no such account number is included, then the Designated Deposit Account  shall be any deposit account of Borrower maintained with Bank as chosen by Bank).          “Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or  more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division,  including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act  for  limited  liability  companies  formed  under  Delaware  law,  or  any  analogous  action  taken  pursuant  to  any  other  applicable law with respect to any corporation, limited liability company, partnership or other entity.          “Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other  currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into  lawful money of the United States.          “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount,  and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as  determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for  sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.          “Effective Date” is defined in the preamble hereof.          “Effective Date Warrant” is defined in the definition of Warrant.           “Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter  be  made,  and  includes  without  limitation  all  machinery,  fixtures,  goods,  vehicles  (including  motor  vehicles  and  trailers), and any interest in any of the foregoing.          “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.                                                   25  39271280 

 

       “Event of Default” is defined in Section 8.          “Exchange Act” is the Securities Exchange Act of 1934, as amended.          “Existing Term Loan” is defined in Recital A.           “Existing Term Loan Final Payment” is a payment (in addition to and not a substitution for the regular  monthly payments of principal and accrued interest on the Existing Term Loan) due on the Effective Date in an amount  equal to the original principal amount of the Existing Term Loan, multiplied by seven and one-half of one percent  (7.50%). Notwithstanding the foregoing, Bank has agreed to defer the payment of a portion of such Existing Term  Loan  Final  Payment  in  the  aggregate  amount  equal  to  Seventy  Five  Thousand  Dollars  ($75,000)  (the  “Deferred  Amount”), which Deferred Amount shall be payable by Borrower as the Additional Prepayment Fee when due in  accordance with the provisions of this Agreement.          “Extension Milestone” means the date, no later than June 30, 2020, on which Borrower has delivered to  Bank  evidence  in  the  form  and  substance  acceptable  to  Bank  in  its  sole  discretion,  that  Borrower  has  received  aggregate net new capital of at least Forty Million Dollars ($40,000,000).          “Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of  principal plus accrued interest) due on the earliest to occur of (a) the Term Loan Maturity Date, or (b) the acceleration  of the Term Loan Advances, or (c) the prepayment of the Term Loan Advances in full pursuant to Section 2.3(c) or  2.3(d), equal to the original aggregate principal amount of the Term Loan Advances multiplied by the Final Payment  Percentage.          “Final Payment Percentage” is five and one-half of one percent (5.50%).           “Foreign Currency” means lawful money of a country other than the United States.          “Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which  shall be a Business Day.          “FX Contract” is any foreign exchange contract by and between Borrower and Bank under which Borrower  commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date.          “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the  Accounting  Principles  Board  of  the  American  Institute  of  Certified  Public  Accountants  and  statements  and  pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as  may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as  of the date of determination.          “General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with  such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims,  income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or  sell  real  or  personal  property,  rights  in  all  litigation  presently  or  hereafter  pending  (whether  in  contract,  tort  or  otherwise),  insurance  policies  (including  without  limitation  key  man,  property  damage,  and  business  interruption  insurance), payments of insurance and rights to payment of any kind.          “Good Faith Deposit” is defined in Section 2.5(a).          “Governmental  Approval”  is  any  consent,  authorization,  approval,  order,  license,  franchise,  permit,  certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any  Governmental Authority.          “Governmental Authority” is any nation or government, any state or other political subdivision thereof,  any  agency,  authority,  instrumentality,  regulatory  body,  court,  central  bank  or  other  entity  exercising  executive,                                                  26  39271280 

 

legislative,  judicial,  taxing,  regulatory  or  administrative  functions  of  or  pertaining  to  government,  any  securities  exchange and any self-regulatory organization.          “Guarantor” is any Person providing a Guaranty in favor of Bank.          “Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be  amended, restated, modified or otherwise supplemented.          “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such  as reimbursement and other obligations  for surety bonds  and letters of credit, (b) obligations evidenced by  notes,  bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.          “Indemnified Person” is defined in Section 12.3.          “Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy  Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions,  extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.          “Intellectual Property” means, with respect to any Person, all of such Person’s right, title, and interest in  and to the following:                  (a)    its Copyrights, Trademarks and Patents;                  (b)    any and all trade secrets and trade secret rights, including, without limitation, any rights to  unpatented inventions, know-how and operating manuals;                  (c)    any and all source code;                  (d)    any and all design rights which may be available to such Person;                  (e)    any and all claims for damages by way of past, present and future infringement of any of  the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement  of the Intellectual Property rights identified above; and                  (f)    all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.          “Interest-Only  Period”  means  for each Term  Loan  Advance, the period commencing on the  first (1st)  calendar day of the first (1st) month following the month in which the Funding Date of such Term Loan Advance  occurs and continuing through September 30, 2020; provided that if Borrower archives the Extension Milestone, the  Interest-Only Period will be automatically extended to June 30, 2021.          “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such  term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing  and  shipping  materials,  work  in  process  and  finished  products,  including  without  limitation  such  inventory  as  is  temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents  of title representing any of the above.          “Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or  other securities), and any loan, advance or capital contribution to any Person.          “Key Person” is Borrower’s Chief Executive Officer, who is Mitchell Gold as of the Effective Date.          “Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based  upon an application, guarantee, indemnity, or similar agreement.                                                   27  39271280 

 

       “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of  any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.          “Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and  any  other  documents  related  to  this  Agreement,  the  Warrant,  any  Bank  Services  Agreement,  any  subordination  agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future  agreement by Borrower and/or any Guarantor with or for the benefit of Bank, all as amended, restated, or otherwise  modified.          “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the  Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition  (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the  Obligations.          “Monthly Financial Statements” is defined in Section 6.2(a).           “Obligations”  are  Borrower’s  obligations  to  pay  when  due  any  debts,  principal,  interest,  fees,  Bank  Expenses, the Prepayment Fee, the Final Payment, and other amounts Borrower owes Bank now or later, whether  under this Agreement, the other Loan Documents (other than the Warrant), or otherwise, including, without limitation,  all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin and debts, liabilities,  or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents (other than  the Warrant).          “Operating  Documents”  are,  for  any  Person,  such  Person’s  formation  documents,  as  certified  by  the  Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than  thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if  such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if  such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current  amendments or modifications thereto.          “Patents”  means  all  patents,  patent  applications  and  like  protections  including  without  limitation  improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.          “Payment/Advance Form” is that certain form in the form attached hereto as Exhibit C.          “Payment Date” is with respect to Term Loan Advances, the first (1st) calendar day of each month.          “Perfection Certificate” is defined in Section 5.1.          “Permitted Indebtedness” is:                  (a)    Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;                  (b)    Indebtedness existing on the Effective Date which is shown on the Perfection Certificate;                  (c)    Subordinated Debt;                  (d)    unsecured Indebtedness to trade creditors incurred in the ordinary course of business;                  (e)    Indebtedness  incurred  as  a  result  of  endorsing  negotiable  instruments  received  in  the  ordinary course of business;                  (f)    Indebtedness  secured  by  Liens  permitted  under  clauses (a)  and  (c)  of  the  definition  of  “Permitted Liens” hereunder;                                                   28  39271280 

 

               (g)    Indebtedness or Guarantee that constitutes a Permitted Investment under clauses (f) and (g)  of the definition of Permitted Investments;                  (h)    other Indebtedness not otherwise permitted by Section 7.4 not exceeding One Hundred  Thousand ($100,000) in the aggregate outstanding at any time; and                  (i)    extensions,  refinancings,  modifications,  amendments  and  restatements  of  any  items  of  Permitted Indebtedness (a) through (h) above, provided that the principal amount thereof is not increased or the terms  thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.          “Permitted Investments” are:                  (a)    Investments  (including,  without  limitation,  Subsidiaries)  existing  on  the  Effective  Date  which are shown on the Perfection Certificate;                  (b)     Investments consisting of Cash Equivalents;                  (c)    Investments  consisting  of  the  endorsement  of  negotiable  instruments  for  deposit  or  collection or similar transactions in the ordinary course of Borrower;                  (d)    Investments  consisting  of  deposit  accounts  (but  only  to  the  extent  that  Borrower  or  its  Subsidiaries are permitted to maintain such accounts pursuant to Section 6.7 of this Agreement) in which Bank has a  first priority perfected security interest to the extent required by Section 6.7;                  (e)    Investments accepted in connection with Transfers permitted by Section 7.1;                  (f)    Investments (i) by Borrower or a Guarantor in a co-Borrower or another Guarantor, (ii) by  Borrower  in  Subsidiaries  that  are  not  co-Borrowers  or  Guarantors  (other  than  Investments  permitted  under  sub-clause (g) below) not to exceed Two Hundred Thousand Dollars ($200,000) in the aggregate in any fiscal year  and (h) by Subsidiaries that are not co-Borrowers or Guarantors  in other Subsidiaries or in Borrower;                   (g)    Investments  by  Borrower  in  the  Australian  Subsidiary,  in  an  aggregate  amount  not  to  exceed Four Million Dollars ($4,000,000) at any time (provided that for purposes of determining the amount of any  Investment  outstanding  for  purposes  of  this  clause  (g),  such  amount  shall  be  deemed  to  be  the  amount  of  such  Investment when made, without adjustment for subsequent increases or decreases in the value of such Investment);                  (h)    Investments  consisting  of  (i) travel  advances  and  employee  relocation  loans  and  other  employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors  relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans  or agreements approved by the Board;                  (i)    Investments (including debt obligations) received in connection  with the bankruptcy or  reorganization  of  customers  or  suppliers  and  in  settlement  of  delinquent  obligations  of,  and  other  disputes  with,  customers or suppliers arising in the ordinary course of business;                   (j)    Investments  consisting  of  notes  receivable  of,  or  prepaid  royalties  and  other  credit  extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this  paragraph (k) shall not apply to Investments of Borrower in any Subsidiary; and                  (k)    other  Investments  not  otherwise  permitted  by  Section  7.7  not  exceeding  One  Hundred  Thousand Dollars ($100,000) in the aggregate per fiscal year.                                                   29  39271280 

 

       “Permitted Liens” are:                  (a)    Liens  existing  on  the  Effective  Date  which  are  shown  on  the  Perfection  Certificate  or  arising under this Agreement or the other Loan Documents;                  (b)    Liens for taxes, fees, assessments or other government charges or levies, either (i) not due  and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s  Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986,  as amended, and the Treasury Regulations adopted thereunder;                  (c)    purchase money Liens and Liens securing capital leases (d) on Equipment acquired or held  by Borrower incurred for financing the acquisition of the Equipment securing no more than Fifty Thousand Dollars  ($50,000) in the aggregate amount outstanding, or (e) existing on Equipment when acquired, if the Lien is confined  to the property and improvements and the proceeds of the Equipment;                  (f)    Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature  arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the  aggregate amount not to exceed Fifty Thousand Dollars ($50,000) and which are not delinquent or remain payable  without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have  the effect of preventing the forfeiture or sale of the property subject thereto;                   (g)    Liens  to  secure  payment  of  workers’  compensation,  employment  insurance,  old-age  pensions,  social  security  and  other  like  obligations  incurred  in  the  ordinary  course  of  business  (other  than  Liens  imposed by ERISA);                  (h)    Liens incurred in the extension, renewal or refinancing of the Indebtedness  secured by  Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property  encumbered by the existing Lien and the principal amount of the indebtedness may not increase;                  (i)    leases or subleases of real property granted in the ordinary course of Borrower’s business  (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non- exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course  of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the  leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest therein;                  (j)    non-exclusive  licenses  of  Intellectual  Property  granted  to  third  parties  in  the  ordinary  course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed  property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to  discrete geographical areas outside of the United States;                  (k)    Liens  arising  from  attachments  or  judgments,  orders,  or  decrees  in  circumstances  not  constituting an Event of Default under Sections 8.4 and 8.7;                   (l)    Liens in favor of other financial institutions arising in connection with Borrower’s and its  Subsidiaries’ deposit and/or securities accounts held at such institutions, provided that (i) Bank has a first priority  perfected security interest in the amounts held in such deposit and/or securities accounts to the extent required by  Section 6.7 and (ii) such accounts are permitted to be maintained pursuant to Section 6.7 of this Agreement;                   (m)    deposits to secure the performance of bids, trade contracts and leases, statutory obligations,  surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of  business and which do not represent an obligation for borrowed money; and                  (n)    Liens  in  favor  of  customs  and  revenue  authorities  arising  as  a  matter  of  law  to  secure  payment of customs duties in connection with the importation of goods in an aggregate amount not to exceed One  Hundred Thousand Dollars ($100,000).                                                  30  39271280 

 

       “Person”  is  any  individual,  sole  proprietorship,  partnership,  limited  liability  company,  joint  venture,  company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm,  joint stock company, estate, entity or government agency.          “Prepayment Fee” shall be, for each Term Loan Advance, an amount equal to: (a) (i) two percent (2.0%) of  the  outstanding  principal  amount  of  such  Term  Loan  Advance  if  the  prepayment  date  is  on  or  before  the  first  anniversary of the Effective Date, (ii) one percent (1.0%) of the outstanding principal amount of such Term Loan   Advance  if  the  prepayment  date  is  after  the  first  anniversary  of  the  Effective  Date  but  on  or  before  the  second  anniversary of the Effective Date, or (iii) $0 if the prepayment date is after the second anniversary of the Effective  Date plus (b) Seventy Five Thousand Dollars ($75,000) (such amount in clause (b) is referred to as the “Additional  Prepayment Fee” and constitutes the Deferred Amount from the Existing Term  Loan  Final Payment); provided,  however, that the “Prepayment Fee” shall be $0 if the Term Loan Advances are prepaid through another credit facility  provided to Borrower by Bank.          “Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The  Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that, in the event  such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided  further that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal,  becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum  announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced  Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit  to debtors); provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for  purposes of this Agreement.          “Prior Loan Agreement” is defined in Recital A.           “Registered Organization” is any “registered organization” as defined in the Code with such additions to  such term as may hereafter be made.          “Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and  any  law  (statutory  or  common),  treaty,  rule  or  regulation  or  determination  of  an  arbitrator  or  a  court  or  other  Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which  such Person or any of its property is subject.          “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer, Director of  Finance, VP of Finance, Accounting Manager, Controller and Assistant Controller of Borrower.            “Restricted License” is any material license or other similar agreement with respect to which Borrower is  the licensee (a) that validly prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s  interest in such license or similar agreement or any other property, or (b) for which a default under or termination of  could interfere with Bank’s right to sell any Collateral.          “SEC”  shall  mean  the  Securities  and  Exchange  Commission,  any  successor  thereto,  and  any  analogous  Governmental Authority.          “Securities Account” is any “securities account” as defined in the Code with such additions to such term  as may hereafter be made.          “Subordinated  Debt”  is  indebtedness  incurred  by  Borrower  subordinated  to  all  of  Borrower’s  now  or  hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and  substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.          “Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of  which  shares  of  stock  or  other  ownership  interests  having  ordinary  voting  power  (other  than  stock  or  such  other  ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the                                                  31  39271280 

 

board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the  management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by  such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a  Subsidiary of Borrower.          “Term Loan Advance” and “Term Loan Advances” are each defined in Section 2.3 of this Agreement.          “Term Loan Amortization Date” is, for each Term Loan Advance, September 1, 2020; provided however  that  if  Borrower  achieves  the  Extension  Milestone,  the  Term  Loan  Amortization  Date  will  be  automatically  be  extended to June 1, 2021.          “Term Loan Maturity Date” is July 1, 2023.           “Trademarks”  means  any  trademark  and  servicemark  rights,  whether  registered  or  not,  applications  to  register  and  registrations  of  the  same  and  like  protections,  and  the  entire  goodwill  of  the  business  of  Borrower  connected with and symbolized by such trademarks.          “Tranche One Term Loan Advance” is defined in Section 2.3(a).           “Tranche Two Commitment Termination Date” is April 30, 2020.           “Tranche Two Term Loan Advance” is defined in Section 2.3(a).           “Tranche Three Commitment Termination Date” is July 31, 2020.           “Tranche Three Milestone” means the date on which Bank receives and approves evidence satisfactory to  Bank, in its sole discretion, that on the date of such determination Borrower has initiated the phase-2a trial of ALPN- 101 for treatment of psoriatic arthritis.           “Tranche Three Term Loan Advance” is defined in Section 2.3(a).           “Transfer” is defined in Section 7.1.          “Warrant” means, individually and collectively, that certain (i) Amended and Restated Warrant to Purchase  Stock dated as of  June 28, 2017 between Borrower and Bank, and (ii) Warrant to Purchase Common Stock dated as  of the Effective Date between Borrower and Bank (the “Effective Date Warrant”), each as the same may be amended,  modified, supplemented and/or restated from time to time.                                         [Signature page follows.]                                                   32  39271280 

 

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.                                              BORROWER:                                              AIS OPERATING CO., INC.                                              By________________________________________/s/Paul Rickey                                              Name:_____________________________________Paul Rickey                                              Title:______________________________________Chief Financial Officer                                                                                                                                         ALPINE IMMUNE SCIENCES, INC.                                                                                            By________________________________________/s/Paul Rickey                                                                                                  Paul Rickey                                              Name:_____________________________________                                                                                            Title:______________________________________Chief Financial Officer                                                                                                                                         BANK:                                              SILICON VALLEY BANK                                              By________________________________________/s/Peter Sletteland                                              Name:_____________________________________Peter Sletteland                                              Title:______________________________________Vice President                     Signature Page to Amended and Restated Loan and Security Agreement                     Signature Page to Amended and Restated Loan and Security Agreement 

 

                           EXHIBIT A - COLLATERAL DESCRIPTION          The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:          All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to  payment  of  money,  leases,  license  agreements,  franchise  agreements,  General  Intangibles  (except  for  Intellectual  Property  as  provided  below),  commercial  tort  claims,  documents,  instruments  (including  any  promissory  notes),  chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not  the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and  financial assets, whether now owned or hereafter acquired, wherever located; and          All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the  above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements,  products, proceeds and insurance proceeds of any or all of the foregoing.          Notwithstanding the foregoing, the Collateral does not include any Intellectual Property; provided, however,  the Collateral shall include all Accounts and all proceeds of Intellectual Property.  If a judicial authority (including a  U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have  a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral  shall automatically, and effective as of the Effective Date, include the Intellectual Property solely for the purpose and  to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such other property of  Borrower that are proceeds of the Intellectual Property.          Pursuant  to  the  terms  of  a  certain  negative  pledge  arrangement  with  Bank,  Borrower  has  agreed  not  to  encumber any of its Intellectual Property without Bank’s prior written consent; provided, however, that nothing shall  prohibit or impair Borrower’s ability to license its Intellectual Property, whether on an exclusive or non-exclusive  basis,  in  conjunction  with  third-party  business  development  transactions  intended  to  generate  royalties  or  other  revenues for Borrower.                                                    A-1  39271280 

 

                                               EXHIBIT B                                         COMPLIANCE CERTIFICATE   TO:        SILICON VALLEY BANK                                         Date:   FROM:      AIS OPERATING CO., INC.                   The undersigned authorized officer of AIS OPERATING CO., 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, (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, has timely filed all required tax  returns  and  reports,  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 5.7 of the Agreement, and  (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, 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 (i) as explained in an accompanying letter or footnotes and (ii) with respect for  unaudited  financial  statements,  for  the  absence  of  footnotes  and  subject  to  year-end  audit  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 Covenants                             Required                   Complies    Monthly financial statements with                  Monthly within  30 days                 Yes   No    Compliance Certificate    10-Q, 10-K and 8-K                                 Within 5 days after filing with         Yes   No                                                       SEC    Board approved projections                         FYE within 30  days and as              Yes   No                                                       amended/updated                                                       B-1      39271280 

 

    Other Matters     Have  there  been  any  amendments  of  or  other  changes  to  the  Operating  Documents  of    Borrower or any of its Subsidiaries?  If yes, provide copies of any such amendments or Yes      No    changes with this Compliance Certificate.              The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No      exceptions to note.”)   ------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------        AIS OPERATING CO., INC.                           BANK USE ONLY                                                          Received by: _____________________       By:                                                              AUTHORIZED SIGNER      Name:                                             Date:   _________________________       Title:                                                         Verified: ________________________                                                                        AUTHORIZED SIGNER                                                        Date:   _________________________                                                          Compliance Status:   Yes     No                                                      B-2      39271280 

 

                                                EXHIBIT C                                  LOAN PAYMENT/ADVANCE REQUEST FORM                             DEADLINE FOR SAME DAY PROCESSING IS NOON PACIFIC TIME  Fax To:                                                                 Date: _____________________   LOAN PAYMENT:                                         AIS OPERATING CO., INC.    From Account #________________________________    To Account #__________________________________________                 (Deposit Account #)                                      (Loan Account #)  Principal $____________________________________   and/or Interest $________________________________________   Authorized Signature:                            Phone Number:  Print Name/Title:    LOAN ADVANCE:  Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.   From Account #________________________________    To Account #__________________________________________                 (Loan Account #)                                         (Deposit Account #)   Amount of Term Loan Advance $___________________________   All Borrower’s representations and warranties in the Amended and Restated Loan and Security Agreement are true, correct  and complete in all material respects on the date of the request for an advance; 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:   Authorized Signature:                            Phone Number:  Print Name/Title:    OUTGOING WIRE REQUEST: Complete only if all or a portion of funds from the loan advance above is to be wired. Deadline for same day processing is noon, Pacific Time                                                        C-1       39271280 

 

Beneficiary Name: _____________________________  Amount of Wire: $  Beneficiary Bank: ______________________________  Account Number:  City and State:   Beneficiary Bank Transit (ABA) #:              Beneficiary Bank Code (Swift, Sort, Chip, etc.):                                                      (For International Wire Only)  Intermediary Bank:                             Transit (ABA) #:  For Further Credit to:   Special Instruction:   By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with  and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s)  were previously received and executed by me (us).    Authorized Signature: ___________________________  2nd Signature (if required): _______________________________  Print Name/Title: ______________________________  Print Name/Title: ______________________________________  Telephone #:   Telephone #: _____________________________                                                        C-2       39271280EX-4.4

 Exhibit 4.4 

 

	
	

			
	    RIGHTS CERTIFICATE #:	  	NUMBER OF RIGHTS    

 THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE PARTNERSHIP’S
PROSPECTUS 
 DATED                     ,
2019 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF 
 THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F.
KING & CO., INC., THE INFORMATION AGENT. 
 STONEMOR PARTNERS L.P. 

Organized under the laws of the State of Delaware 

NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE 

Evidencing Non-Transferable Subscription Rights to Purchase Common Units of StoneMor Partners L.P. 

Subscription Price:    $1.20 per Share 

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, 

ON                     , 2019, UNLESS
EXTENDED BY THE COMPANY 
   REGISTERED 

           OWNER: 

 

			
	 THIS CERTIFIES THAT the registered owner whose name is subscribed herein is the owner of the number of non-transferable subscription rights (“Rights”) set forth above. Each whole Right entitles the holder thereof to subscribe for and purchase one common unit of StoneMor Partners L.P., a Delaware limited
partnership, at a subscription price of $1.20 per unit (the “Subscription Right”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus and the
“Instructions for Use of StoneMor Partnership L.P. Subscription Rights Certificates” accompanying this Subscription Rights Certificate. The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1
and any other appropriate forms on the reverse side hereof and by returning the full payment of the subscription price for each common unit in accordance with the “Instructions for Use of StoneMor Partners L.P. Subscription Rights
Certificates” that accompany this Subscription Rights Certificate.
  

This Subscription Rights Certificate is not valid unless countersigned by the subscription agent and registered by the registrar. Witness
the seal of Sample Corporation and the signatures of its duly authorized officers.
  

Dated:                     ,
2019
	  	 

	

  

			
	                                   
                                 	  	                                      
                                    
	  President and Chief Executive Officer	  	   Senior Vice President, Chief Legal Officer

  and Secretary

 

 DELIVERY OPTIONS FOR SUBSCRIPTION RIGHTS CERTIFICATE 

Delivery other than in the manner or to the address listed below will not constitute valid delivery. 

If delivering by mail, hand or overnight courier: 

American Stock Transfer & Trust Company, LLC 

Operations Center 
 Attn:
Reorganization Department 
 6201 15th Avenue 

Brooklyn, New York 11219 
 PLEASE
PRINT ALL INFORMATION CLEARLY AND LEGIBLY. 

 

 FORM 1-EXERCISE OF SUBSCRIPTION RIGHTS 

To subscribe for common units pursuant to your Subscription Right, please complete lines (a) and (b) and sign under Form 3 below. To the extent you
subscribe for more units than you are entitled under the Subscription Right, you will be deemed to have elected to purchase the maximum number of units for which you are entitled to subscribe under the Subscription Right, if applicable. 

(a) EXERCISE OF SUBSCRIPTION RIGHT: 
 I have the right to subscribe
for                units x 1.24 =
                       

                          
                              (no. of current
units)                    (no. of new units) 
  

											
	I apply for	  	 	  	units x $1.20	  		  	=    $	  	 
		  	  
 (no. of new units)
	  		  	  
 (subscription price)
	  		  	  
 (amount enclosed)

 (b) Total Amount of Payment
Enclosed    =    $                     

METHOD OF PAYMENT (CHECK ONE) 
  

	☐	 Check or bank draft payable to “American Stock Transfer & Trust Company, LLC as Subscription
Agent.” 

	☐	 Wire transfer of immediately available funds directly to the account maintained by American Stock
Transfer & Trust Company, LLC, as Subscription Agent, for purposes of accepting subscriptions in this Rights Offering at JPMorgan Chase Bank, 55 Water Street, New York, New York 10005, ABA #021000021, Account # 530-354616 American Stock Transfer FBO StoneMor Partners L.P., with reference to the rights holder’s name.

 FORM 2-DELIVERY TO DIFFERENT ADDRESS 

If you wish for the common units underlying your subscription rights, a certificate representing unexercised subscription rights or the proceeds of any sale of
subscription rights to be delivered to an address different from that shown on the face of this Subscription Rights Certificate, please enter the alternate address below, sign under Form 4 and have your signature guaranteed under Form 5. 

 

	
	  

	
	  

	
	  

 FORM 3-SIGNATURE 

TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this Rights Offering and I hereby irrevocably subscribe for the number of units indicated
above on the terms and conditions specified in the Prospectus. 
  

	
	Signature(s):                                    
                                

 IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of this Subscription Rights Certificate
in every particular, without alteration or enlargement, or any other change whatsoever. 
 FORM 4-SIGNATURE
GUARANTEE 
 This form must be completed if you have completed any portion of Forms 2 or 3. 

 

			
	Signature Guaranteed:	 	  

			
		 	(Name of Bank or Firm)

  

			
	By:	 	  

			
		  	(Signature of Officer)

 IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings &
loan association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

 

  
 FOR INSTRUCTIONS ON THE USE OF STONEMOR
PARTNERS L.P. SUBSCRIPTION RIGHTS CERTIFICATES, CONSULT D.F. KING & CO., INC., THE INFORMATION AGENT, AT 1-800-967-4607.

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