SEC Contract Filing

Filing Date: 2017-02-23

Document Content:
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>4
<FILENAME>obalon-3rdamendmenttolsaxe.htm
<DESCRIPTION>EXHIBIT 10.16
<TEXT>
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<div><a name="sA90D99097323B8B47F7467F072779898"></a></div><div></div><div><br></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Exhibit 10.16</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">THIRD AMENDMENT</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">TO</font></div><div style="line-height:120%;padding-bottom:16px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">LOAN AND SECURITY AGREEMENT</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">This Third Amendment to Loan and Security Agreement (the &#8220;</font><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">Amendment</font><font style="font-family:inherit;font-size:12pt;">&#8221;), is made and entered into as of December 21, 2016, by and among PACIFIC WESTERN BANK, a California state chartered bank (&#8220;</font><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">Bank</font><font style="font-family:inherit;font-size:12pt;">&#8221;) and OBALON THERAPEUTICS, INC. and OBALON THERAPEUTICS, LLC (each a &#8220;</font><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">Borrower</font><font style="font-family:inherit;font-size:12pt;">&#8221;, and collectively, &#8220;</font><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">Borrowers</font><font style="font-family:inherit;font-size:12pt;">&#8221;).</font></div><div style="line-height:120%;padding-bottom:16px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">RECITALS</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of June 14, 2013 (as amended from time to time, with related documents, the &#8220;</font><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">Agreement</font><font style="font-family:inherit;font-size:12pt;">&#8221;). The parties desire to amend the Agreement in accordance with the terms of this Amendment.</font></div><div style="line-height:120%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">NOW, THEREFORE, the parties agree as follows:</font></div><div style="line-height:120%;text-align:justify;padding-left:24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;">1)</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Bank and Borrowers hereby agree that that certain Third Warrant to Purchase Stock issued by Obalon Therapeutics, Inc. to Bank on September 7, 2016 is hereby cancelled without exercise.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;">2)</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.1(b) of the Agreement is hereby amended and restated, as follows:</font></div></td></tr></table><div style="line-height:120%;padding-bottom:16px;text-align:justify;padding-left:24px;text-indent:72px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">(b)&#160;&#160;&#160;&#160;Term Loans</font><font style="font-family:inherit;font-size:12pt;">.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;padding-left:24px;text-indent:120px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">(i)&#160;&#160;&#160;&#160;Term Loan A</font><font style="font-family:inherit;font-size:12pt;">.</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">&#32;&#32;</font><font style="font-family:inherit;font-size:12pt;">Subject to and upon the terms and conditions of this Agreement, on December 21, 2016 or as soon thereafter as all conditions precedent to the making thereof have been met, Bank shall make a term loan to Borrowers in the principal amount of $10,000,000 (the &#8220;Term Loan A&#8221;). The proceeds of the Term Loan A shall be used to refinance the aggregate principal amount of all indebtedness owing from Borrowers to Bank as of December 21, 2016.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;padding-left:24px;text-indent:120px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">(ii)</f